PennyMac Financial Services, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>PennyMac Financial Services, Inc. has filed its 2023 annual report on Form 10-K, detailing its financial performance and operations for the fiscal year ending December 31, 2023.</b>

AI Summary

PennyMac Financial Services, Inc. (PFSI) filed a Annual Report (10-K) with the SEC on February 21, 2024. PennyMac Financial Services, Inc. filed its annual report on Form 10-K for the fiscal year ended December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal business is Mortgage Bankers & Loan Correspondents. The filing was made on February 21, 2024. The company is incorporated in Delaware.

Why It Matters

For investors and stakeholders tracking PennyMac Financial Services, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of PFSI's financial health, operational performance, and strategic initiatives throughout 2023, which is crucial for investors to assess the company's current standing and future prospects. The detailed financial statements and risk factors within the report offer insights into the company's exposure to market fluctuations, regulatory changes, and operational challenges within the mortgage industry.

Risk Assessment

Risk Level: medium — PennyMac Financial Services, Inc. shows moderate risk based on this filing. The company operates in the mortgage industry, which is subject to significant regulatory oversight and economic sensitivity, as detailed in the risk factors section of the 10-K.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis in the 10-K to understand PennyMac's performance drivers and potential risks for 2023.

Key Numbers

• 20231231 — Fiscal Year End (Conformed period of report)
• 20240221 — Filing Date (Filed as of date)
• 6162 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• PennyMac Financial Services, Inc. (company) — Filer name
• 3043 TOWNSGATE ROAD (address) — Business and mailing address
• WESTLAKE VILLAGE (location) — City for business and mailing address
• CA (location) — State for business and mailing address
• 91361 (postal_code) — ZIP code for business and mailing address
• DE (location) — State of Incorporation

FAQ

Industry Context

PennyMac Financial Services operates within the mortgage banking and loan correspondent industry, a sector characterized by sensitivity to interest rates and economic conditions.

Regulatory Implications

As a mortgage banker, the company is subject to extensive regulation by federal and state authorities, impacting its lending, servicing, and operational practices.

What Investors Should Do

1. Analyze the company's revenue streams and profitability drivers for fiscal year 2023.
2. Assess the company's balance sheet and debt levels as presented in the financial statements.
3. Review the risk factors section for potential challenges and uncertainties facing the company in the upcoming year.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K
• 2024-02-21: Filing Date — Date the 10-K was officially filed with the SEC

Year-Over-Year Comparison

This filing represents the company's comprehensive annual disclosure for the fiscal year 2023, following previous quarterly and annual filings.

Key Financial Figures

• $0.0001 — ange on which registered Common Stock, $0.0001 par value PFSI New York Stock Excha
• $4.8 b — oans. In 2023, 2022 and 2021, we funded $4.8 billion, $15.4 billion and $43.1 billion
• $15.4 billion — 2022 and 2021, we funded $4.8 billion, $15.4 billion and $43.1 billion of mortgage loans, re
• $43.1 billion — funded $4.8 billion, $15.4 billion and $43.1 billion of mortgage loans, respectively, throug
• $8.1 b — 2023. In 2023, 2022 and 2021, we funded $8.1 billion, $6.9 billion and $16.8 billion o
• $6.9 billion — 2022 and 2021, we funded $8.1 billion, $6.9 billion and $16.8 billion of mortgage loans, re
• $16.8 billion — e funded $8.1 billion, $6.9 billion and $16.8 billion of mortgage loans, respectively, throug

Filing Documents

• pfsi-20231231x10k.htm (10-K) — 7962KB
• pfsi-20231231xex10d81.htm (EX-10.81) — 70KB
• pfsi-20231231xex10d95.htm (EX-10.95) — 97KB
• pfsi-20231231xex10d96.htm (EX-10.96) — 95KB
• pfsi-20231231xex10d97.htm (EX-10.97) — 830KB
• pfsi-20231231xex10d98.htm (EX-10.98) — 739KB
• pfsi-20231231xex21d1.htm (EX-21.1) — 13KB
• pfsi-20231231xex23d1.htm (EX-23.1) — 2KB
• pfsi-20231231xex31d1.htm (EX-31.1) — 16KB
• pfsi-20231231xex31d2.htm (EX-31.2) — 16KB
• pfsi-20231231xex32d1.htm (EX-32.1) — 8KB
• pfsi-20231231xex32d2.htm (EX-32.2) — 8KB
• pfsi-20231231xex97.htm (EX-97) — 46KB
• pfsi-20231231xex97001.jpg (GRAPHIC) — 1KB
• 0001558370-24-001429.txt (&nbsp;) — 35368KB
• pfsi-20231231.xsd (EX-101.SCH) — 179KB
• pfsi-20231231_cal.xml (EX-101.CAL) — 197KB
• pfsi-20231231_def.xml (EX-101.DEF) — 802KB
• pfsi-20231231_lab.xml (EX-101.LAB) — 1267KB
• pfsi-20231231_pre.xml (EX-101.PRE) — 1132KB
• pfsi-20231231x10k_htm.xml (XML) — 8670KB

Business

Business 6 Item 1A

Risk Factors

Risk Factors 17 Item 1B Unresolved Staff Comments 45 Item 1C Cybersecurity 46 Item 2

Properties

Properties 48 Item 3

Legal Proceedings

Legal Proceedings 48 Item 4 Mine Safety Disclosures 48 PART II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 48 Item 6 Reserved 49 Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 49 Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 75 Item 8

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 77 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 77 Item 9A

Controls and Procedures

Controls and Procedures 77 Item 9B Other Information 80 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 80 PART III Item 10 Directors, Executive Officers and Corporate Governance 80 Item 11

Executive Compensation

Executive Compensation 80 Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 80 Item 13 Certain Relationships and Related Transactions, and Director Independence 81 Item 14 Principal Accountant Fees and Services 81 PART IV Item 15 Exhibits and Financial Statement Schedules 82 Item 16 Form 10-K Summary 96

Signatures

Signatures 93 4 2 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K (this "Report") contains certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward- looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "continue," "plan" or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain financial and operating projections or state other forward-looking information. Examples of forward-looking statements include the following: projections of our revenues, income, earnings per share, capital structure or other financial items; descriptions of our plans or objectives for future operations, products or services; forecasts of our future economic performance, interest rates, profit margins and our share of future markets; and descriptions of assumptions underlying or relating to any of the foregoing expectations regarding the timing of generating any revenues. Our ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. There are a number of factors, many of which are beyond our control that could cause actual results to differ significantly from management's expectations. Some of these factors are discussed below. You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertai

Business

Item 1. Business The following description of our business should be read in conjunction with the information included elsewhere in this Report. This description contains forward-looking statements that involve risks and uncertainties. Actual results could differ significantly from the projections and results discussed in the forward-looking statements due to the factors described under the caption "Risk Factors" and elsewhere in this Report. References in this Report to "we," "our," "us," and the "Company" refer to PennyMac Financial Services, Inc. ("PFSI") and its consolidated subsidiaries. Our Company We are a specialty financial services firm with a comprehensive mortgage platform and integrated business primarily focused on the production and servicing of U.S. residential mortgage loans (activities which we refer to as mortgage banking) and the management of investments related to the U.S. mortgage market. We believe that our operating capabilities, specialized expertise, access to long-term investment capital, and our management's experience across all aspects of the mortgage business will allow us to profitably grow these activities over time and capitalize on other related opportunities as they arise. We operate and control all of the business and affairs and consolidate the financial results of Private National Mortgage Acceptance Company, LLC ("PNMAC") and its subsidiaries described below: Our principal mortgage banking subsidiary, PennyMac Loan Services, LLC ("PLS"), is a non-bank producer and servicer of mortgage loans. PLS is a seller/servicer for the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), each of which is a government-sponsored entity ("GSE"). PLS is also an approved issuer of securities guaranteed by the Government National Mortgage Association ("Ginnie Mae"), a lender of the Federal Housing Administration ("FHA"), and a lender/servicer of the U.S. Department of Vet