PennyMac Financial Services, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>PennyMac Financial Services, Inc. filed its Q1 2024 10-Q report detailing financial performance and key balance sheet items.</b>

AI Summary

PennyMac Financial Services, Inc. (PFSI) filed a Quarterly Report (10-Q) with the SEC on May 1, 2024. PennyMac Financial Services, Inc. filed a 10-Q report for the period ending March 31, 2024. The filing details financial information for the first quarter of 2024. Key financial statement items such as common stock, additional paid-in capital, and retained earnings are reported. The company's mortgage servicing liabilities and related fair value inputs are disclosed. The report covers the period from January 1, 2024, to March 31, 2024.

Why It Matters

For investors and stakeholders tracking PennyMac Financial Services, Inc., this filing contains several important signals. This filing provides investors with the latest financial health and operational performance of PennyMac Financial Services, Inc. for the first quarter of 2024. Understanding the details within this 10-Q is crucial for assessing the company's current financial standing, risk exposure, and future prospects in the mortgage industry.

Risk Assessment

Risk Level: — PennyMac Financial Services, Inc. shows moderate risk based on this filing. The company operates in the mortgage industry, which is sensitive to interest rate fluctuations and economic conditions, posing inherent risks to its financial performance and servicing assets.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-Q to understand PennyMac's performance and potential challenges in the current economic environment.

Key Numbers

• 2024-03-31 — Period End Date (Conformed period of report)
• 2024-05-01 — Filing Date (Filed as of date)

Key Players & Entities

• PennyMac Financial Services, Inc. (company) — Filer of the 10-Q report
• 2024-03-31 (date) — Conformed period of report
• 2024-05-01 (date) — Filed as of date
• 3043 TOWNSGATE ROAD (address) — Business and mail address
• WESTLAKE VILLAGE (location) — City for business and mail address
• DE (location) — State of incorporation

FAQ

Risk Factors

• Market Conditions [high — market]: The company's financial results are significantly impacted by prevailing interest rates, economic conditions, and the overall health of the U.S. housing and mortgage markets.
• Interest Rate Risk [high — financial]: Changes in interest rates can affect the fair value of the company's mortgage servicing assets and liabilities, as well as its origination and servicing revenues.
• Servicing Operations [medium — operational]: The company's ability to effectively manage its mortgage servicing operations, including collections and loss mitigation, is critical to its profitability.

Key Dates

• 2024-03-31: Quarterly Period End — Financial results for Q1 2024 are reported.
• 2024-05-01: Filing Date — The 10-Q report was officially filed with the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides a comprehensive overview of a company's financial performance during a specific quarter.)

Mortgage Servicing Liabilities

Obligations related to the servicing of mortgage loans. (Key component of PennyMac's balance sheet, impacting profitability and risk.)

Key Financial Figures

• $0.0001 — ange on which registered Common Stock, $0.0001 par value PFSI New York Stock Excha

Filing Documents

• pfsi-20240331x10q.htm (10-Q) — 4788KB
• pfsi-20240331xex31d1.htm (EX-31.1) — 16KB
• pfsi-20240331xex31d2.htm (EX-31.2) — 16KB
• pfsi-20240331xex32d1.htm (EX-32.1) — 11KB
• pfsi-20240331xex32d2.htm (EX-32.2) — 11KB
• 0001558370-24-006382.txt (&nbsp;) — 22828KB
• pfsi-20240331.xsd (EX-101.SCH) — 151KB
• pfsi-20240331_cal.xml (EX-101.CAL) — 149KB
• pfsi-20240331_def.xml (EX-101.DEF) — 632KB
• pfsi-20240331_lab.xml (EX-101.LAB) — 1004KB
• pfsi-20240331_pre.xml (EX-101.PRE) — 852KB
• pfsi-20240331x10q_htm.xml (XML) — 5939KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 6 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) : 6 Consolidated Balance Sheets 6 Consolidated Statements of Income 7 Consolidated Statements of Changes in Stockholders' Equity 8 Consolidated Statements of Cash Flows 9

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 11 Item 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 51 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 69 Item 4.

Controls and Procedures

Controls and Procedures 70

OTHER INFORMATION

PART II. OTHER INFORMATION 71 Item 1.

Legal Proceedings

Legal Proceedings 71 Item 1A.

Risk Factors

Risk Factors 71 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 71 Item 3. Defaults Upon Senior Securities 71 Item 4. Mine Safety Disclosures 71 Item 5. Other Information 72 Item 6. Exhibits 73 2 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q ("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, plans and strategies, contain financial and operating projections or state other forward-looking information. Examples of forward-looking statements include, but are not limited to, 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 prepayment rates; discussions of our expectations regarding various macroeconomic factors, including variability in the economy or the impact of current and future regulations and legislation on our business; 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

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements PENNYMAC FINANCIAL SERVICES, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 2024 2023 (in thousands, except share amounts) ASSETS Cash $ 927,394 $ 938,371 Short-term investment at fair value 69 10,268 Principal-only stripped mortgage-backed securities at fair value pledged to creditors 524,576 — Loans held for sale at fair value (includes $ 5,127,134 and $ 4,329,501 pledged to creditors) 5,200,350 4,420,691 Derivative assets 108,987 179,079 Servicing advances, net (includes valuation allowance of $ 67,327 and $ 73,991 ; $ 271,947 and $ 354,831 pledged to creditors) 499,955 694,038 Mortgage servicing rights at fair value (includes $ 7,406,892 and $ 7,033,892 pledged to creditors) 7,483,210 7,099,348 Investment in PennyMac Mortgage Investment Trust at fair value 1,101 1,121 Receivable from PennyMac Mortgage Investment Trust 30,835 29,262 Loans eligible for repurchase 4,401,896 4,889,925 Other (includes $ 16,175 and $ 15,653 pledged to creditors) 623,368 582,460 Total assets $ 19,801,741 $ 18,844,563 LIABILITIES Assets sold under agreements to repurchase $ 5,435,354 $ 3,763,956 Mortgage loan participation purchase and sale agreements 363,798 446,054 Notes payable secured by mortgage servicing assets 1,972,020 1,873,415 Unsecured senior notes 2,521,031 2,519,651 Derivative liabilities 40,784 53,275 Mortgage servicing liabilities at fair value 1,732 1,805 Accounts payable and accrued expenses 263,338 449,896 Payable to PennyMac Mortgage Investment Trust 127,993 208,210 Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement 26,099 26,099 Income taxes payable 1,047,337 1,042,886 Liability for loans eligible for repurchase 4,401,896 4,889,925 Liability for losses under representations and warranties 29,976 30,788 To

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1—Organization PennyMac Financial Services, Inc. (together, with its consolidated subsidiaries, unless the context indicates otherwise, "PFSI" or the "Company") is a holding corporation and its primary assets are equity interests in Private National Mortgage Acceptance Company, LLC ("PNMAC"). The Company is the managing member of PNMAC, and it operates and controls all of the businesses and consolidates the financial results of PNMAC and its subsidiaries. PNMAC is a Delaware limited liability company which, through its subsidiaries, engages in mortgage banking and investment management activities. PNMAC's mortgage banking activities consist of residential mortgage loan production and servicing. PNMAC's investment management activities and a portion of its mortgage banking activities are conducted on behalf of PennyMac Mortgage Investment Trust, a real estate investment trust that invests in residential mortgage-related assets and is separately listed on the New York Stock Exchange under the ticker symbol "PMT". PNMAC's primary wholly owned subsidiaries are: PennyMac Loan Services, LLC ("PLS") — a Delaware limited liability company that services portfolios of residential mortgage loans on behalf of non-affiliates and PMT , purchases, originates and sells new prime credit quality residential mortgage loans and engages in other mortgage banking activities for its own account and the account of PMT. PLS has mortgage banking, loan servicing and mortgage loan recapture agreements with PMT. PLS is approved as a seller/servicer of mortgage loans by the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") and as an issuer of securities guaranteed by the Government National Mortgage Association ("Ginnie Mae"). PLS is a licensed Federal Housing Administration Nonsupervised Title II Lender with the U.S. Department of Housing and Urban Development ("