PFSI PennyMac Financial Services Inc

PennyMac Financial Services, Inc. (NYSE: PFSI) today reported net income of $39.3 million for the first quarter of 2024, or $0.74 per share on a diluted basis, on revenue of $305.7 million. Book value per share decreased to $70.13 from $70.52 at December 31, 2023.

PFSI’s Board of Directors declared a first quarter cash dividend of $0.20 per share, payable on May 24, 2024, to common stockholders of record as of May 14, 2024.

First Quarter 2024 Highlights

• Pretax income was $43.9 million, compared to a pretax loss of $54.2 million from the prior quarter and pretax income of $38.1 million from the first quarter of 2023
• Production segment pretax income was $35.9 million, down slightly from $39.4 million in the prior quarter and up from a pretax loss of $19.6 million in the first quarter of 2023
  • Total loan acquisitions and originations, including those fulfilled for PennyMac Mortgage Investment Trust (NYSE: PMT), were $21.7 billion in unpaid principal balance (UPB), down 19 percent from the prior quarter and 5 percent from the first quarter of 2023
  • Broker direct interest rate lock commitments (IRLCs) were $3.4 billion in UPB, up 20 percent from the prior quarter and 31 percent from the first quarter of 2023
  • Consumer direct IRLCs were $2.2 billion in UPB, up 35 percent from the prior quarter and down 2 percent from the first quarter of 2023
  • Government correspondent IRLCs totaled $8.5 billion in UPB, down 24 percent from the prior quarter and 18 percent from the first quarter of 2023
  • Conventional correspondent IRLCs for PFSI’s account totaled $8.6 billion in UPB, down 14 percent from the prior quarter and up 128 percent from the first quarter of 2023
  • Correspondent acquisitions of conventional conforming loans fulfilled for PMT were $1.8 billion in UPB, down 29 percent from the prior quarter and 73 percent from the first quarter of 2023
• Servicing segment pretax income was $4.9 million, compared to a pretax loss of $95.5 million in the prior quarter and pretax income of $57.4 million in the first quarter of 2023
  • Pretax income excluding valuation-related items and non-recurring items was $124.7 million, down 14 percent from the prior quarter as higher net loan servicing fees was more than offset by increased recognition of realization of cash flows
  • Valuation-related and non-recurring items included:
    • $170.0 million in mortgage servicing rights (MSR) fair value gains, before recognition of realization of cash flows, more than offset by $294.6 million in hedging declines
    • $1.6 million arbitration accrual
      • Net impact on pretax income related to these items was $(126.3) million, or $(1.74) in diluted earnings per share
    • $6.6 million of reversals of provisions for losses on active loans
  • Servicing portfolio grew to $617.4 billion in UPB, up 2 percent from December 31, 2023, and 9 percent from March 31, 2023 driven by production volumes which more than offset prepayment activity
• Investment Management segment pretax income was $3.1 million, up from $1.9 million in the prior quarter and $0.3 million in the first quarter of 2023
  • Net assets under management (AUM) were $2.0 billion, essentially unchanged from December 31, 2023, and March 31, 2023
• Issued new, 5-year $425 million term notes secured by Ginnie Mae MSR and servicing advances
  • Redeemed $425 million of term notes due August 2025

“PennyMac Financial reported strong operating earnings in the first quarter, with an annualized operating return on equity of 15 percent in what is expected to be the one of the smallest quarterly origination markets of this cycle,” said Chairman and CEO David Spector. “Strong volume increases in our consumer and broker direct channels drove continued profitability in our production segment. Although net fair value declines on MSRs and hedges impacted our results this quarter, our large and growing servicing portfolio continues to anchor our financial performance, contributing meaningfully to revenue and cash earnings in this higher interest rate environment.”

Mr. Spector continued, “Our long track record of profitability and strong capital structure has enabled this management team to continue developing industry-leading mortgage banking technology. Our proprietary servicing system provides both competitive advantages and opportunities for expansion into additional businesses, which we believe has the potential to unlock additional value for our stakeholders over time. PennyMac Financial has developed into one of the premier mortgage banking companies in the country, distinguished by its balanced business model with leading positions in both loan production and servicing, and I believe we are the best-positioned company in the industry for future growth regardless of the path of interest rates.”

The following table presents the contributions of PennyMac Financial’s segments to pretax income:

Quarter ended March 31, 2024 Mortgage Banking InvestmentManagement Production Servicing Total Total (in thousands) Revenue Net gains on loans held for sale at fair value

$

141,431

$

21,010

 

$

162,441

 

$

-

$

162,441

 

Loan origination fees

 

36,371

 

 

-

 

 

36,371

 

 

-

 

 

36,371

 

Fulfillment fees from PMT

 

4,016

 

 

-

 

 

4,016

 

 

-

 

 

4,016

 

Net loan servicing fees

 

-

 

 

100,954

 

 

100,954

 

 

-

 

 

100,954

 

Management fees

 

-

 

 

-

 

 

-

 

 

7,188

 

 

7,188

 

Net interest expense: Interest income

 

63,931

 

 

92,411

 

 

156,342

 

 

84

 

 

156,426

 

Interest expense

 

61,896

 

 

103,873

 

 

165,769

 

 

-

 

 

165,769

 

 

2,035

 

 

(11,462

)

 

(9,427

)

 

84

 

 

(9,343

)

Other

 

818

 

 

1,096

 

 

1,914

 

 

2,119

 

 

4,033

 

Total net revenue

 

184,671

 

 

111,598

 

 

296,269

 

 

9,391

 

 

305,660

 

Expenses

 

148,779

 

 

106,662

 

 

255,441

 

 

6,336

 

 

261,777

 

Income before provision for income taxes

$

35,892

 

$

4,936

 

$

40,828

 

$

3,055

 

$

43,883

 

Production Segment

The Production segment includes the correspondent acquisition of newly originated government-insured and certain conventional conforming loans for PennyMac Financial’s own account, fulfillment services on behalf of PMT and direct lending through the consumer direct and broker direct channels, including the underwriting and acquisition of loans from correspondent sellers on a non-delegated basis.

PennyMac Financial’s loan production activity for the quarter totaled $21.7 billion in UPB, $19.9 billion of which was for its own account and $1.8 billion of which was fee-based fulfillment activity for PMT. Correspondent locks for PFSI and direct lending IRLCs totaled $22.6 billion in UPB, down 12 percent from the prior quarter and up 20 percent from the first quarter of 2023.

Production segment pretax income was $35.9 million, compared to $39.4 million in the prior quarter and a pretax loss of $19.6 million in the first quarter of 2023. Production segment revenue totaled $184.7 million, up 5 percent from the prior quarter and 52 percent from the first quarter of 2023. The increase from the prior quarter was primarily due to higher net gains on loans held for sale at fair value due to higher volumes in the direct lending channels, and the increase from the first quarter of 2023 was primarily due to higher overall volumes and margins.

The components of net gains on loans held for sale are detailed in the following table:

Quarter ended March 31,2024 December 31,2023 March 31,2023 (in thousands) Receipt of MSRs

$

412,520

 

$

549,965

 

$

286,533

 

Mortgage servicing rights recapture payable to PennyMac Mortgage Investment Trust

 

(353

)

 

(290

)

 

(485

)

Provision for representations and warranties, net

 

(632

)

 

(1,002

)

 

(290

)

Cash loss, including cash hedging results

 

(158,971

)

 

(606,160

)

 

(271,524

)

Fair value changes of pipeline, inventory and hedges

 

(90,123

)

 

206,252

 

 

90,151

 

Net gains on mortgage loans held for sale

$

162,441

 

$

148,765

 

$

104,385

 

Net gains on mortgage loans held for sale by segment: Production

$

141,431

 

$

124,267

 

$

74,726

 

Servicing

$

21,010

 

$

24,498

 

$

29,659

 

PennyMac Financial performs fulfillment services for certain conventional conforming and jumbo loans acquired by PMT from non-affiliates in its correspondent production business. These services include, but are not limited to, marketing, relationship management, correspondent seller approval and monitoring, loan file review, underwriting, pricing, hedging and activities related to the subsequent sale and securitization of loans in the secondary mortgage markets for PMT.

Fees earned from the fulfillment of correspondent loans on behalf of PMT totaled $4.0 million in the first quarter, down 19 percent from the prior quarter and 66 percent from the first quarter of 2023. The decrease from the first quarter of 2023 was driven by lower conventional volumes acquired for PMT’s account. PFSI began acquiring certain conventional loans sourced through PMT’s correspondent production business in the fourth quarter of 2022.

Net interest income in the first quarter totaled $2.0 million, down from $8.2 million in the prior quarter. Interest income totaled $63.9 million, down from $73.4 million in the prior quarter, and interest expense totaled $61.9 million, down from $65.2 million in the prior quarter, both primarily due to lower average balance of loans held for sale and the associated financing during the quarter.

Production segment expenses were $148.8 million, up 8 percent from the prior quarter and 5 percent from the first quarter of 2023, both primarily due to higher overall loan volumes in the direct lending channels.

Servicing Segment

The Servicing segment includes income from owned MSRs and subservicing. The total servicing portfolio grew to $617.4 billion in UPB at March 31, 2024, an increase of 2 percent from December 31, 2023, and 9 percent from March 31, 2023. PennyMac Financial’s owned MSR portfolio grew to $386.6 billion in UPB, up 3 percent from December 31, 2023, and 18 percent from March 31, 2023. PennyMac Financial subservices $230.8 billion in UPB for PMT.

The table below details PennyMac Financial’s servicing portfolio UPB:

March 31,2024 December 31,2023 March 31,2023 (in thousands) Prime servicing: Owned Mortgage servicing rights and liabilities Originated

$

364,441,567

$

352,790,614

$

302,265,588

Purchased

 

17,051,740

 

 

17,478,397

 

 

19,026,774

 

 

381,493,307

 

 

370,269,011

 

 

321,292,362

 

Loans held for sale

 

5,111,719

 

 

4,294,689

 

 

6,692,155

 

 

386,605,026

 

 

374,563,700

 

 

327,984,517

 

Subserviced for PMT

 

230,809,585

 

 

232,643,144

 

 

236,476,714

 

Total prime servicing

 

617,414,611

 

 

607,206,844

 

 

564,461,231

 

Special servicing - subserviced for PMT

 

9,427

 

 

9,925

 

 

13,167

 

Total loans serviced

$

617,424,038

 

$

607,216,769

 

$

564,474,398

 

Servicing segment pretax income was $4.9 million, compared to a pretax loss $95.5 million in the prior quarter and pretax income of $57.4 million in the first quarter of 2023. Servicing segment pretax loss in the fourth quarter of 2023 included a non-recurring arbitration accrual of $158.4 million. Servicing segment net revenues totaled $111.6 million, down from $175.8 million in the prior quarter and $172.1 million in the first quarter of 2023.

Revenue from net loan servicing fees totaled $101.0 million, down from $162.3 million in the prior quarter and $148.8 million in the first quarter of 2023. Loan servicing fees were $424.2 million, up from $402.5 million in the prior quarter primarily due to growth in PFSI’s owned portfolio, reduced by $198.6 million in realization of cash flows, which was up from the prior quarter due to lower average yields during the quarter. Net valuation related declines totaled $124.7 million, compared to $75.9 million of such declines in the prior quarter. MSR fair value gains, before realization of cash flows, were $170.0 million and hedging losses were $294.6 million; hedges were positioned with increased net exposure to interest rate volatility during the quarter to limit elevated hedge costs. We began purchasing principal-only bonds in the first quarter as hedges against prepayment risk.

The following table presents a breakdown of net loan servicing fees:

Quarter ended March 31,2024 December 31,2023 March 31,2023 (in thousands) Loan servicing fees

$

424,184

 

$

402,484

 

$

338,057

 

Changes in fair value of MSRs and MSLs resulting from: Realization of cash flows

 

(198,564

)

 

(164,255

)

 

(146,183

)

Change in fair value inputs

 

169,979

 

 

(370,705

)

 

(90,264

)

Hedging (losses) gains

 

(294,645

)

 

294,787

 

 

47,227

 

Net change in fair value of MSRs and MSLs

 

(323,230

)

 

(240,173

)

 

(189,220

)

Net loan servicing fees

$

100,954

 

$

162,311

 

$

148,837

 

Servicing segment revenue included $21.0 million in net gains on loans held for sale related to early buyout loans (EBOs), down from $24.5 million in the prior quarter and $29.7 million in the first quarter of 2023. These EBOs are previously delinquent loans that were brought back to performing status through PennyMac Financial’s successful servicing efforts.

Net interest expense totaled $11.5 million, compared to $13.7 million in the prior quarter and $6.2 million in the first quarter of 2023. Interest income was $92.4 million, up slightly from $91.6 million in the prior quarter. Interest expense was $103.9 million, down slightly from $105.3 million in the prior quarter.

Servicing segment expenses totaled $106.7 million, down from $271.3 million in the prior quarter which included a non-recurring arbitration accrual of $158.4 million. Excluding the impact of the arbitration accrual in the prior quarter, servicing expenses were down $6.2 million, primarily due to a reversal in the provision for credit losses on active loans.

Investment Management Segment

PennyMac Financial manages PMT for which it earns base management fees and may earn incentive compensation. Net AUM were $2.0 billion as of March 31, 2024, essentially unchanged from December 31, 2023 and March 31, 2023.

Pretax income for the Investment Management segment was $3.1 million, up from $1.9 million in the prior quarter and $0.3 million in the first quarter of 2024. Base management fees from PMT were $7.2 million, essentially unchanged from the prior quarter and first quarter of 2023. No performance incentive fees were earned in the first quarter.

The following table presents a breakdown of management fees:

Quarter ended March 31,2024 December 31,2023 March 31,2023 (in thousands) Management fees: Base

$

7,188

$

7,252

$

7,257

Performance incentive

 

-

 

 

-

 

 

-

 

Total management fees

$

7,188

 

$

7,252

 

$

7,257

 

  Net assets of PennyMac Mortgage Investment Trust

$

1,958,914

 

$

1,957,090

 

$

1,970,734

 

Investment Management segment expenses totaled $6.3 million, down 18 percent from the prior quarter and down 29 percent from the first quarter of 2023.

Consolidated Expenses

Total expenses were $261.8 million, down from $416.2 million in the prior quarter, which included a non-recurring arbitration accrual of $158.4 million. Excluding the impact of the arbitration accrual in the prior quarter, total expenses were up $4.0 million, primarily due to increased production segment expenses arising from higher volumes in the direct lending channels.

Taxes and Other

PFSI recorded a provision for tax expense of $4.6 million, resulting in an effective tax rate of 10.4 percent due to the vesting of certain stock-based compensation awards, which positively impacted PFSI’s tax liability.

Book value per share decreased to $70.13 from $70.52 at December 31, 2023 due to the annual issuance of additional common stock related to our equity compensation awards program, which more than offset the increase in retained earnings.

Management’s slide presentation and accompanying material will be available in the Investor Relations section of the Company’s website at pfsi.pennymac.com after the market closes on Wednesday, April 24, 2024. Management will also host a conference call and live audio webcast at 5:00 p.m. Eastern Time to review the Company’s financial results. The webcast can be accessed at pfsi.pennymac.com, and a replay will be available shortly after its conclusion.

About PennyMac Financial Services, Inc.

PennyMac Financial Services, Inc. is a specialty financial services firm focused on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market. Founded in 2008, the company is recognized as a leader in the U.S. residential mortgage industry and employs over 3,800 people across the country. For the twelve months ended March 31, 2024, PennyMac Financial’s production of newly originated loans totaled $98 billion in unpaid principal balance, making it the second largest mortgage lender in the nation. As of March 31, 2024, PennyMac Financial serviced loans totaling $617 billion in unpaid principal balance, making it a top five mortgage servicer in the nation. Additional information about PennyMac Financial Services, Inc. is available at pfsi.pennymac.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections, and assumptions with respect to, among other things, the Company’s financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like “believe,” “expect,” “anticipate,” “promise,” “project,” “plan,” and other expressions or words of similar meanings, as well as future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: interest rate changes; changes in real estate values, housing prices and housing sales; the continually changing federal, state and local laws and regulations applicable to the highly regulated industry in which we operate; lawsuits or governmental actions that may result from any noncompliance with the laws and regulations applicable to our business; the mortgage lending and servicing-related regulations promulgated by the Consumer Financial Protection Bureau and its enforcement of these regulations; our dependence on U.S. government-sponsored entities and changes in their current roles or their guarantees or guidelines; changes to government mortgage modification programs; the licensing and operational requirements of states and other jurisdictions applicable to our business, to which our bank competitors are not subject; foreclosure delays and changes in foreclosure practices; changes in macroeconomic and U.S. real estate market conditions; difficulties inherent in adjusting the size of our operations to reflect changes in business levels; purchase opportunities for mortgage servicing rights; our substantial amount of indebtedness; increases in loan delinquencies, defaults and forbearances; our reliance on PennyMac Mortgage Investment Trust (NYSE: PMT) as a significant contributor to our mortgage banking business; maintaining sufficient capital and liquidity and compliance with financial covenants; our obligation to indemnify third-party purchasers or repurchase loans if loans that we originate, acquire, service or assist in the fulfillment of, fail to meet certain criteria or characteristics or under other circumstances; our obligation to indemnify PMT if our services fail to meet certain criteria or characteristics or under other circumstances; investment management and incentive fees; conflicts of interest in allocating our services and investment opportunities among us and our advised entities; the effect of public opinion on our reputation; our exposure to risks of loss and disruptions in operations resulting from severe weather events, man-made or other natural conditions, climate change and pandemics; our ability to effectively identify, manage and hedge our credit, interest rate, prepayment, liquidity and climate risks; our initiation or expansion of new business activities or strategies; our ability to detect misconduct and fraud; our ability to mitigate cybersecurity risks and cyber incidents; our ability to pay dividends to our stockholders; and our organizational structure and certain requirements in our charter documents. You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this press release are current as of the date of this release only.

The Company’s earnings materials contain financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”), such as pretax income excluding valuation-related items that provide a meaningful perspective on the Company’s business results since the Company utilizes this information to evaluate and manage the business. Non-GAAP disclosure has limitations as an analytical tool and should not be viewed as a substitute for financial information determined in accordance with GAAP.

PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

  March 31,2024 December 31,2023 March 31,2023 (in thousands, except share amounts) ASSETS Cash

$

927,394

$

938,371

$

1,497,903

Short-term investment at fair value

 

69

 

 

10,268

 

 

3,584

 

Principal-only stripped mortgage-backed securities at fair value pledged to creditors

 

524,576

 

 

-

 

 

-

 

Loans held for sale at fair value

 

5,200,350

 

 

4,420,691

 

 

6,772,423

 

Derivative assets

 

108,987

 

 

179,079

 

 

110,664

 

Servicing advances, net

 

499,955

 

 

694,038

 

 

547,158

 

Mortgage servicing rights at fair value

 

7,483,210

 

 

7,099,348

 

 

6,003,390

 

Investment in PennyMac Mortgage Investment Trust at fair value

 

1,101

 

 

1,121

 

 

925

 

Receivable from PennyMac Mortgage Investment Trust

 

30,835

 

 

29,262

 

 

35,166

 

Loans eligible for repurchase

 

4,401,896

 

 

4,889,925

 

 

4,557,325

 

Other

 

623,368

 

 

582,460

 

 

574,647

 

Total assets

$

19,801,741

 

$

18,844,563

 

$

20,103,185

 

  LIABILITIES Assets sold under agreements to repurchase

$

5,435,354

 

$

3,763,956

 

$

5,764,157

 

Mortgage loan participation purchase and sale agreements

 

363,798

 

 

446,054

 

 

515,358

 

Notes payable secured by mortgage servicing assets

 

1,972,020

 

 

1,873,415

 

 

2,471,930

 

Unsecured senior notes

 

2,521,031

 

 

2,519,651

 

 

1,780,833

 

Derivative liabilities

 

40,784

 

 

53,275

 

 

49,087

 

Mortgage servicing liabilities at fair value

 

1,732

 

 

1,805

 

 

2,011

 

Accounts payable and accrued expenses

 

263,338

 

 

449,896

 

 

300,157

 

Payable to PennyMac Mortgage Investment Trust

 

127,993

 

 

208,210

 

 

142,007

 

Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement

 

26,099

 

 

26,099

 

 

26,099

 

Income taxes payable

 

1,047,337

 

 

1,042,886

 

 

1,010,928

 

Liability for loans eligible for repurchase

 

4,401,896

 

 

4,889,925

 

 

4,557,325

 

Liability for losses under representations and warranties

 

29,976

 

 

30,788

 

 

31,103

 

Total liabilities

 

16,231,358

 

 

15,305,960

 

 

16,650,995

 

  STOCKHOLDERS' EQUITY Common stock—authorized 200,000,000 shares of $0.0001 par value; issued and outstanding 50,907,865, 50,178,963, and 50,097,030 shares, respectively

 

5

 

 

5

 

 

5

 

Additional paid-in capital

 

27,179

 

 

24,287

 

 

-

 

Retained earnings

 

3,543,199

 

 

3,514,311

 

 

3,452,185

 

Total stockholders' equity

 

3,570,383

 

 

3,538,603

 

 

3,452,190

 

Total liabilities and stockholders’ equity

$

19,801,741

 

$

18,844,563

 

$

20,103,185

 

PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

  Quarter ended March 31,2024 December 31,2023 March 31,2023 (in thousands, except per share amounts) Revenues Net gains on loans held for sale at fair value

$

162,441

 

$

148,765

 

$

104,385

 

Loan origination fees

 

36,371

 

 

38,059

 

 

31,390

 

Fulfillment fees from PennyMac Mortgage Investment Trust

 

4,016

 

 

4,931

 

 

11,923

 

Net loan servicing fees: Loan servicing fees

 

424,184

 

 

402,484

 

 

338,057

 

Change in fair value of mortgage servicing rights and mortgage servicing liabilities

 

(28,585

)

 

(534,960

)

 

(236,447

)

Mortgage servicing rights hedging results

 

(294,645

)

 

294,787

 

 

47,227

 

Net loan servicing fees

 

100,954

 

 

162,311

 

 

148,837

 

Net interest expense: Interest income

 

156,426

 

 

164,942

 

 

128,478

 

Interest expense

 

165,769

 

 

170,501

 

 

131,771

 

 

(9,343

)

 

(5,559

)

 

(3,293

)

Management fees from PennyMac Mortgage Investment Trust

 

7,188

 

 

7,252

 

 

7,257

 

Other

 

4,033

 

 

6,180

 

 

2,363

 

Total net revenues

 

305,660

 

 

361,939

 

 

302,862

 

Expenses Compensation

 

146,376

 

 

135,138

 

 

147,935

 

Technology

 

35,967

 

 

32,870

 

 

36,038

 

Loan origination

 

30,568

 

 

26,879

 

 

27,086

 

Servicing

 

16,104

 

 

28,907

 

 

12,632

 

Professional services

 

9,262

 

 

9,684

 

 

21,007

 

Occupancy and equipment

 

8,676

 

 

8,772

 

 

8,820

 

Marketing and advertising

 

3,671

 

 

4,180

 

 

3,241

 

Legal settlements

 

1,542

 

 

160,025

 

 

(4,742

)

Other

 

9,611

 

 

9,714

 

 

12,698

 

Total expenses

 

261,777

 

 

416,169

 

 

264,715

 

Income (loss) before provision for (benefit from) income taxes

 

43,883

 

 

(54,230

)

 

38,147

 

Provision for (benefit from) income taxes

 

4,575

 

 

(17,388

)

 

7,769

 

Net income (loss)

$

39,308

 

$

(36,842

)

$

30,378

 

Earnings (loss) per share Basic

$

0.78

 

$

(0.74

)

$

0.61

 

Diluted

$

0.74

 

$

(0.74

)

$

0.57

 

Weighted-average common shares outstanding Basic

 

50,547

 

 

49,987

 

 

50,154

 

Diluted

 

53,100

 

 

49,987

 

 

53,352

 

Dividend declared per share

$

0.20

 

$

0.20

 

$

0.20

 

PENNYMAC FINANCIAL SERVICES, INC. RECONCILIATION OF

NET INCOME TO OPERATING NET INCOME

  Quarter ended March 31, 2024 (in thousands, except annualizedoperating return on equity) Net income

$

39,308

 

Increase in fair value of MSRs and MSLs due to changes in valuation inputs used in the valuation model

 

(169,979

)

Hedging losses associated with MSRs

 

294,645

 

Non-recurring item - accrual for arbitration result

 

1,600

 

Adjustments

$

126,266

 

Tax impacts of adjustments(1)

 

33,902

 

Operating net income

$

131,672

 

Average stockholders' equity

$

3,552,273

 

Annualized operating return on equity

 

15

%

(1)

Assumes a tax rate of 26.85%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240424827926/en/

Media Lauren Padilla mediarelations@pennymac.com 805.225.8224

Investors Kevin Chamberlain Isaac Garden PFSI_IR@pennymac.com 818.224.7028