PennyMac Financial Services Q2 2024 Update

Ticker: PFSI · Form: 10-Q · Filed: 2024-07-31T00:00:00.000Z

Sentiment: neutral

Topics: financials, mortgage, balance-sheet

TL;DR

PFSI's Q2 2024 10-Q shows massive balance sheet: $51B assets vs $50B liabilities.

AI Summary

PennyMac Financial Services, Inc. filed its 10-Q for the period ending June 30, 2024. The company reported total assets of $51.017 billion and total liabilities of $50.178 billion. Key financial metrics include a period increase/decrease in servicing assets at fair value, though specific dollar amounts for this are not detailed in the provided snippet.

Why It Matters

This filing provides insight into PennyMac's financial health and operational scale, crucial for investors and partners in the mortgage industry.

Risk Assessment

Risk Level: medium — The company operates in the volatile mortgage industry, with significant leverage indicated by its asset-to-liability ratio.

Key Numbers

Key Players & Entities

FAQ

What was the net income or loss for PennyMac Financial Services for the quarter ending June 30, 2024?

The provided snippet does not contain information on net income or loss for the quarter ending June 30, 2024.

What is the company's primary business activity as indicated by its SIC code?

The company's Standard Industrial Classification (SIC) code is 6162, which corresponds to MORTGAGE BANKERS & LOAN CORRESPONDENTS.

When was PennyMac Financial Services, Inc. incorporated?

The company was incorporated in Delaware (DE).

What is the total amount of equity reported by PennyMac Financial Services as of June 30, 2024?

The provided snippet does not explicitly state the total equity, but it can be inferred by subtracting total liabilities ($50.178 billion) from total assets ($51.017 billion).

What is the company's fiscal year end date?

The company's fiscal year ends on December 31 (1231).

Filing Stats: 4,288 words · 17 min read · ~14 pages · Grade level 20 · Accepted 2024-07-31 16:05:57

Key Financial Figures

Filing Documents

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 55 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 74 Item 4.

Controls and Procedures

Controls and Procedures 75

OTHER INFORMATION

PART II. OTHER INFORMATION 76 Item 1.

Legal Proceedings

Legal Proceedings 76 Item 1A.

Risk Factors

Risk Factors 76 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 76 Item 3. Defaults Upon Senior Securities 76 Item 4. Mine Safety Disclosures 76 Item 5. Other Information 76 Item 6. Exhibits 77 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) June 30, December 31, 2024 2023 (in thousands, except share amounts) ASSETS Cash $ 595,336 $ 938,371 Short-term investment at fair value 188,772 10,268 Principal-only stripped mortgage-backed securities at fair value pledged to creditors 914,223 — Loans held for sale at fair value (includes $ 6,182,725 and $ 4,329,501 pledged to creditors) 6,238,959 4,420,691 Derivative assets 145,887 179,079 Servicing advances, net (includes valuation allowance of $ 68,671 and $ 73,991 ; $ 232,944 and $ 354,831 pledged to creditors) 414,235 694,038 Mortgage servicing rights at fair value (includes $ 7,831,978 and $ 7,033,892 pledged to creditors) 7,923,078 7,099,348 Investment in PennyMac Mortgage Investment Trust at fair value 1,031 1,121 Receivable from PennyMac Mortgage Investment Trust 29,413 29,262 Loans eligible for repurchase 4,560,058 4,889,925 Other (includes $ 19,834 and $ 15,653 pledged to creditors) 566,573 582,460 Total assets $ 21,577,565 $ 18,844,563 LIABILITIES Assets sold under agreements to repurchase $ 6,408,428 $ 3,763,956 Mortgage loan participation purchase and sale agreements 511,837 446,054 Notes payable secured by mortgage servicing assets 1,723,144 1,873,415 Unsecured senior notes 3,160,226 2,519,651 Derivative liabilities 18,830 53,275 Mortgage servicing liabilities at fair value 1,708 1,805 Accounts payable and accrued expenses 294,812 449,896 Payable to PennyMac Mortgage Investment Trust 100,220 208,210 Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement 26,099 26,099 Income taxes payable 1,082,397 1,042,886 Liability for loans eligible for repurchase 4,560,058 4,889,925 Liability for losses under representations and warranties 28,688 30,788

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, mortgage loan purchase and mortgage servicing rights ("MSRs") 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. D

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