PennyMac Financial Services Files Q3 2024 10-Q

TL;DR

PFSI Q3 10-Q filed. Financials look solid, check the details.

AI Summary

PennyMac Financial Services, Inc. filed its 10-Q for the period ending September 30, 2024. The filing details the company's financial position and operations, including its mortgage banking and loan correspondent activities. Key financial data and disclosures related to its business segments and financial instruments are presented.

Why It Matters

This filing provides investors and analysts with a detailed look into PennyMac's financial health and operational performance during the third quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — The company operates in the volatile mortgage and financial services industry, which is subject to significant economic and regulatory risks.

Key Numbers

• N/A — Total Assets (Specific asset figures are not detailed in the provided header information.)
• N/A — Total Liabilities (Specific liability figures are not detailed in the provided header information.)
• N/A — Net Income (Specific net income figures are not detailed in the provided header information.)

Key Players & Entities

• PennyMac Financial Services, Inc. (company) — Filer of the 10-Q
• 20240930 (date) — End of the reporting period
• 20241029 (date) — Date of filing
• 3043 TOWNSGATE ROAD (address) — Company's business and mailing address
• WESTLAKE VILLAGE (city) — Company's business and mailing city
• CA (state) — Company's business and mailing state
• 91361 (zip_code) — Company's business and mailing zip code
• (818) 224-7442 (phone_number) — Company's business phone number

FAQ

Key Financial Figures

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

Filing Documents

• pfsi-20240930x10q.htm (10-Q) — 6556KB
• pfsi-20240930xex31d1.htm (EX-31.1) — 16KB
• pfsi-20240930xex31d2.htm (EX-31.2) — 16KB
• pfsi-20240930xex32d1.htm (EX-32.1) — 11KB
• pfsi-20240930xex32d2.htm (EX-32.2) — 11KB
• 0001558370-24-013853.txt ( ) — 29194KB
• pfsi-20240930.xsd (EX-101.SCH) — 156KB
• pfsi-20240930_cal.xml (EX-101.CAL) — 151KB
• pfsi-20240930_def.xml (EX-101.DEF) — 620KB
• pfsi-20240930_lab.xml (EX-101.LAB) — 1069KB
• pfsi-20240930_pre.xml (EX-101.PRE) — 871KB
• pfsi-20240930x10q_htm.xml (XML) — 8329KB

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 57 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 76 Item 4.

Controls and Procedures

Controls and Procedures 78

OTHER INFORMATION

PART II. OTHER INFORMATION 79 Item 1.

Legal Proceedings

Legal Proceedings 79 Item 1A.

Risk Factors

Risk Factors 79 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 79 Item 3. Defaults Upon Senior Securities 79 Item 4. Mine Safety Disclosures 79 Item 5. Other Information 79 Item 6. Exhibits 80 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) September 30, December 31, 2024 2023 (in thousands, except share amounts) ASSETS Cash $ 145,814 $ 938,371 Short-term investment at fair value 667,934 10,268 Principal-only stripped mortgage-backed securities at fair value pledged to creditors 960,267 — Loans held for sale at fair value (includes $ 6,503,418 and $ 4,329,501 pledged to creditors) 6,565,704 4,420,691 Derivative assets 190,612 179,079 Servicing advances, net (includes valuation allowance of $ 73,908 and $ 73,991 ; $ 232,766 and $ 354,831 pledged to creditors) 400,764 694,038 Mortgage servicing rights at fair value (includes $ 7,656,519 and $ 7,033,892 pledged to creditors) 7,752,292 7,099,348 Investment in PennyMac Mortgage Investment Trust at fair value 1,070 1,121 Receivable from PennyMac Mortgage Investment Trust 32,603 29,262 Loans eligible for repurchase 5,512,289 4,889,925 Other (includes $ 16,082 and $ 15,653 pledged to creditors) 642,189 582,460 Total assets $ 22,871,538 $ 18,844,563 LIABILITIES Assets sold under agreements to repurchase $ 6,600,997 $ 3,763,956 Mortgage loan participation purchase and sale agreements 517,527 446,054 Notes payable secured by mortgage servicing assets 1,723,632 1,873,415 Unsecured senior notes 3,162,239 2,519,651 Derivative liabilities 41,471 53,275 Mortgage servicing liabilities at fair value 1,718 1,805 Accounts payable and accrued expenses 331,512 449,896 Payable to PennyMac Mortgage Investment Trust 81,040 208,210 Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement 26,099 26,099 Income taxes payable 1,105,550 1,042,886 Liability for loans eligible for repurchase 5,512,289 4,889,925 Liability for losses under representations and warranties 28,286 30,

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