PennyMac Financial Services : Reports Fourth Quarter and Full-Year 2021 Results – Form 8-K







PennyMac Financial Services, Inc. Reports

Fourth Quarter and Full-Year 2021 Results

WESTLAKE VILLAGE, Calif. – February 3, 2022 – PennyMac Financial Services, Inc. (NYSE: PFSI) today reported net income of $173.1 million for the fourth quarter of 2021, or $2.79 per share on a diluted basis, on revenue of $693.8 million. Book value per share increased to $60.11 from $58.00 at September 30, 2021.

PFSI’s Board of Directors declared a fourth quarter cash dividend of $0.20 per share, payable on February 25, 2022, to common stockholders of record as of February 15, 2022.

Fourth Quarter 2021 Highlights

· Pretax income was $234.1 million, down 31 percent from the prior quarter and 62 percent from the fourth quarter of 2020
o Repurchased 3.9 million shares of PFSI’s common stock at a cost of $257.3 million; also repurchased an additional 848 thousand shares in January at a cost of $56.0 million
· Production segment pretax income of $106.5 million, down 68 percent from the prior quarter and 81 percent from the fourth quarter of 2020 primarily due to lower volumes and margins resulting from a transitioning mortgage market and a return to more normal seasonal trends
o Consumer direct interest rate lock commitments (IRLCs) were $14.2 billion in unpaid principal balance (UPB), down 13 percent from the prior quarter and up 11 percent from the fourth quarter of 2020
o Broker direct IRLCs were $3.9 billion in UPB, down 21 percent from the prior quarter and 32 percent from the fourth quarter of 2020
o Government correspondent IRLCs totaled $15.5 billion in UPB, down 4 percent from the prior quarter and 21 percent from the fourth quarter of 2020
o Total loan acquisitions and originations, including those fulfilled for PMT, were $47.1 billion in UPB, down 20 percent from the prior quarter and 32 percent from the fourth quarter of 2020
o Correspondent acquisitions of conventional loans fulfilled for PennyMac Mortgage Investment Trust (NYSE: PMT) were $17.2 billion in UPB, down 40 percent from the prior quarter and 55 percent from the fourth quarter of 2020
· Servicing segment pretax income was $126.1 million, up from $8.0 million in the prior quarter and $42.0 million in the fourth quarter of 2020
o Pretax income excluding valuation-related items was $217.9 million, up 47 percent from the prior quarter driven by increased income from loss mitigation activity and higher servicing fees
o Valuation items included:
$58.4 million in MSR fair value declines and $37.7 million in hedging losses
· Net impact on pretax income related to these items was $(96.1) million, or $(1.15) in earnings per share
· $4.3 million of reversals related to provisions for losses on active loans
o Servicing portfolio grew to $509.7 billion in UPB, up 3 percent from September 30, 2021 and 19 percent from December 31, 2020, driven by production volumes which more than offset elevated prepayment activity
· Investment Management segment pretax income was $1.5 million, up from $1.0 million in the prior quarter and down from $2.6 million in the fourth quarter of 2020
o Net assets under management (AUM) were $2.4 billion, down 5 percent from September 30, 2021, and up 3 percent from December 31, 2020

Full-Year 2021 Highlights

· Net income of $1.0 billion, down from a record $1.6 billion in 2020
· Pretax income of $1.4 billion, down from a record $2.2 billion in 2020
· Total net revenue of $3.2 billion, down from a record $3.7 billion in 2020
· Repurchased approximately 15.4 million shares of PFSI’s common stock, or more than 20 percent of the total outstanding at the beginning of the year, for an approximate cost of $958 million
· Record loan production of $234.5 billion in UPB, an increase of 19 percent from 2020
o $59.8 billion in UPB of originations in the direct lending channels, up 68 percent from 2020
· Servicing portfolio UPB of $509.7 billion at year end, up 19 percent from December 31, 2020
· Issued $1.15 billion of long-term senior unsecured notes

“PennyMac Financial’s results in the fourth quarter demonstrate the earnings power of our balanced mortgage banking model, with pretax income from our servicing business exceeding that from our production business,” said Chairman and CEO David Spector. “The strong fourth quarter also culminated another year of outstanding operational performance for the company. In fact, Pennymac’s total production for the year, including acquisitions made by PMT, was a record $234 billion in unpaid principal balance, up nearly 20 percent from the prior year. These production volumes led to servicing portfolio growth of 19 percent despite elevated prepayment activity throughout the year, and we ended 2021 with a servicing portfolio of approximately $510 billion in unpaid principal balance with more than 2.1 million customers. 2021 was also a year of exceptional financial performance, as PennyMac Financial delivered a return on equity of 29 percent and returned more than $1 billion in capital to stockholders through repurchases and cash dividends.”

Mr. Spector continued, “Market share in our most profitable channel, consumer direct, has increased meaningfully since last year, which will improve the long-term earnings profile of our production business over time. Our newly evolved brand and marketing focus along with deployment of transformational technologies in our direct lending channels are key components of multi-year investments to achieve our medium-term goals. At the same time, as the market is transitioning to a higher rate environment with elevated levels of competition, we will remain disciplined, taking advantage of our operational scale, while staying focused on profitability and shareholder returns.”

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

Quarter ended December 31, 2021
Mortgage Banking Investment
Production Servicing Total Management Total
(in thousands)
Revenue
Net gains on loans held for sale at fair value $ 314,826 $ 185,832 $ 500,658 $ $ 500,658
Loan origination fees 88,245 88,245 88,245
Fulfillment fees from PMT 20,150 20,150 20,150
Net loan servicing fees 94,733 94,733 94,733
Management fees 8,919 8,919
Net interest expense:
Interest income 40,038 28,941 68,979 68,979
Interest expense 35,741 54,101 89,842 2 89,844
4,297 (25,160 ) (20,863 ) (2 ) (20,865 )
Other 178 250 428 1,543 1,971
Total net revenue 427,696 255,655 683,351 10,460 693,811
Expenses 321,188 129,599 450,787 8,913 459,700
Pretax income $ 106,508 $ 126,056 $ 232,564 $ 1,547 $ 234,111

Production Segment

The Production segment includes the correspondent acquisition of newly originated government-insured mortgage 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 $47.1 billion in UPB, $29.9 billion of which was for its own account, and $17.2 billion of which was fee-based fulfillment activity for PMT.

Correspondent government and direct lending IRLCs totaled $33.6 billion in UPB, down 10 percent from the prior quarter and 12 percent from the fourth quarter of 2020.

Production segment pretax income was $106.5 million, down 68 percent from the prior quarter and 81 percent from the fourth quarter of 2020 primarily due to lower volumes and margins resulting from a transitioning mortgage market and a return to more normal seasonal trends. Production segment revenue totaled $427.7 million, down 33 percent from the prior quarter and 48 percent from the fourth quarter of 2020. The quarter-over-quarter decrease was driven by a $181.7 million decrease in net gains on loans held for sale primarily as a result of lower margins and lock volumes.

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

Quarter ended
December 31,
2021
September 30,
2021
December 31,
2020
(in thousands)
Receipt of MSRs and recognition of MSLs in loan sale transactions $ 467,141 $ 398,665 $ 367,501
Mortgage servicing rights recapture payable to PennyMac Mortgage Investment Trust (12,701 ) (12,976 ) (11,868 )
Provision of liability for representations and warranties, net (315 ) (2,206 ) (4,667 )
Cash gain (1) 37,537 126,053 459,887
Fair value changes of pipeline, inventory and hedges 8,996 117,218 48,208
Net gains on mortgage loans held for sale $ 500,658 $ 626,754 $ 859,061
Net gains on mortgage loans held for sale by segment:
Production $ 314,826 $ 496,568 $ 659,915
Servicing $ 185,832 $ 130,186 $ 199,146

(1) Net of cash hedging results

Loan origination fees for the quarter totaled $88.2 million, down 7 percent from the prior quarter and 6 percent from the fourth quarter of 2020. The decrease from the prior quarter was driven by lower production volumes.

PennyMac Financial performs fulfillment services for 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 $20.2 million in the fourth quarter, down 54 percent from the prior quarter and 72 percent from the fourth quarter of 2020. The quarter-over-quarter decrease in fulfillment fee revenue was driven by lower conventional acquisition volumes and a decrease in the weighted average fulfillment fee. The weighted average fulfillment fee rate decrease reflects discretionary reductions to facilitate successful loan acquisitions by PMT in a market impacted by significant levels of competition for conventional loans, including from the GSEs.

Net interest income totaled $4.3 million, down from $4.7 million in the prior quarter. Interest income in the fourth quarter totaled $40.0 million, up from $33.3 million in the prior quarter, and interest expense totaled $35.7 million, up from $28.6 million in the prior quarter, due to a higher balance of loans held-for-sale during the quarter.

Production segment expenses were $321.2 million, up 4 percent from the prior quarter driven by our brand and technology initiatives. Production segment expenses were up 28 percent from the fourth quarter of 2020 as a result of higher volumes in the consumer direct channel.

Servicing Segment

The Servicing segment includes income from owned MSRs, subservicing and special servicing activities. Servicing segment pretax income was $126.1 million, up from $8.0 million in the prior quarter and $42.0 million in the fourth quarter of 2020. Servicing segment net revenues totaled $255.7 million, up from $136.8 million in the prior quarter and $207.6 million in the fourth quarter of 2020. The quarter-over-quarter increase was primarily driven by a $55.6 million increase in net gains on loans held for sale and higher net loan servicing fees.

Revenue from net loan servicing fees totaled $94.7 million, up from $33.6 million in the prior quarter primarily driven by lower net valuation related declines and increased loan servicing fees due to a larger servicing portfolio. Revenue from loan servicing fees included $287.9 million in servicing fees, reduced by $97.0 million from the realization of MSR cash flows. Net valuation-related losses totaled $96.1 million, and included MSR fair value declines of $58.4 million, and hedging losses of $37.7 million. The decline in MSR fair value was comprised of $28.1 million in fair value declines due to changes in interest rates, primarily due to a significant flattening of the yield curve and $30.3 million in other valuation declines, primarily due to increases to short-term prepayment projections. The hedging losses were largely driven by elevated hedge costs during the quarter.

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

Quarter ended
December 31,
2021
September 30,
2021
December 31,
2020
(in thousands)
Loan servicing fees (1) $ 287,888 $ 267,758 $ 262,740
Changes in fair value of MSRs and MSLs resulting from:
Realization of cash flows (97,025 ) (82,217 ) (89,611 )
Change in fair value inputs (58,407 ) (65,452 ) (44,163 )
Change in fair value of excess servicing spread financing 6,677
Hedging losses (37,723 ) (86,459 ) (109,147 )
Net change in fair value of MSRs and MSLs (193,155 ) (234,128 ) (236,244 )
Net loan servicing fees $ 94,733 $ 33,630 $ 26,496

(1) Includes contractually-specified servicing fees

Servicing segment revenue included $185.8 million in net gains on loans held for sale related to reperforming government-insured and guaranteed loans purchased out of Ginnie Mae securitizations, or early buy out loans (EBOs). These gains were up from $130.2 million in the prior quarter and down from $199.1 million in the fourth quarter of 2020. These EBOs are previously delinquent loans that were brought back to performing status through PennyMac Financial’s successful servicing efforts, primarily through loan modifications or FHA Partial Claims. With respect to the FHA Partial Claims, the reperforming loans must remain current for a minimum of six months to be eligible for resecuritization.

Net interest expense totaled $25.2 million, versus net interest expense of $27.1 million in the prior quarter and $18.2 million in the fourth quarter of 2020. Interest income was $28.9 million, down from $35.0 million in the prior quarter driven by a decrease in average EBO balances held for sale. Interest expense was $54.1 million, down from $62.1 million in the prior quarter driven by a decrease in average balances of financing for EBO loans.

Servicing segment expenses totaled $129.6 million, essentially unchanged from the prior quarter.

The total servicing portfolio grew to $509.7 billion in UPB at December 31, 2021, an increase of 3 percent from September 30, 2021 and 19 percent from December 31, 2020. PennyMac Financial subservices and conducts special servicing for $221.9 billion in UPB, an increase of 2 percent from September 30, 2021 and 27 percent from December 31, 2020. PennyMac Financial’s owned MSR portfolio grew to $287.8 billion in UPB, an increase of 4 percent from September 30, 2021 and 14 percent from December 31, 2020. Mortgage servicing liabilities decreased substantially from September 30, 2021 due to significant reperformance of previously-delinquent loans sold to third parties.

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

December 31,
2021
September 30,
2021
December 31,
2020
(in thousands)
Prime servicing:
Owned
Mortgage servicing rights and liabilities
Originated $ 254,524,015 $ 241,193,600 $ 199,655,361
Acquisitions 23,861,358 26,913,133 41,612,940
278,385,373 268,106,733 241,268,301
Loans held for sale 9,430,766 9,295,126 11,063,938
287,816,139 277,401,859 252,332,239
Subserviced for PMT 221,864,120 217,984,987 174,360,317
Total prime servicing 509,680,259 495,386,846 426,692,556
Special servicing – subserviced for PMT 28,022 28,801 58,274
Total loans serviced $ 509,708,281 $ 495,415,647 $ 426,750,830
Loans serviced:
Owned
Mortgage servicing rights and liabilities $ 278,385,373 $ 268,106,733 $ 241,268,301
Loans held for sale 9,430,766 9,295,126 11,063,938
287,816,139 277,401,859 252,332,239
Subserviced 221,892,142 218,013,788 174,418,591
Total loans serviced $ 509,708,281 $ 495,415,647 $ 426,750,830

Investment Management Segment

PennyMac Financial manages PMT for which it earns base management fees and may earn incentive compensation. Net AUM were $2.4 billion as of December 31, 2021, down 5 percent from September 30, 2021 and up 3 percent from December 31, 2020.

Pretax income for the Investment Management segment was $1.5 million, up from $1.0 million in the prior quarter and down from $2.6 million in the fourth quarter of 2020. Management fees, which include base management and performance incentive fees from PMT were $8.9 million, up from $8.5 million in the prior quarter and up from $8.7 million in the fourth quarter of 2020. Base management fees were $8.9 million, up from $8.8 million in the prior quarter and $8.7 million in the fourth quarter of 2020.

The following table presents a breakdown of management fees:

Quarter ended
December 31,
2021
September 30,
2021
December 31,
2020
(in thousands)
Management fees:
Base $ 8,919 $ 8,778 $ 8,687
Performance incentive (adjustment) (258 )
Total management fees $ 8,919 $ 8,520 $ 8,687
Net assets of PennyMac Mortgage Investment Trust $ 2,367,518 $ 2,479,327 $ 2,296,859

Investment Management segment expenses totaled $8.9 million, down 2 percent from the prior quarter and up 25 percent from the fourth quarter of 2020.

Consolidated Expenses

Total expenses were $459.7 million, up 3 percent from the prior quarter and up 8 percent from the fourth quarter of 2020. The quarter-over-quarter increase was driven by the increase in production expenses noted above.

***

Management’s slide presentation will be available in the Investor Relations section of the Company’s website at ir.pennymacfinancial.com after the market closes on Thursday, February 3, 2022.

# –

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 approximately 6,800 people across the country. In 2021, PennyMac Financial’s production of newly originated loans totaled $234 billion in unpaid principal balance, making it the second largest mortgage lender in the nation. As of December 31, 2021, PennyMac Financial serviced loans totaling $510 billion in unpaid principal balance, making it a top ten mortgage servicer in the nation. Additional information about PennyMac Financial Services, Inc. is available at ir.pennymacfinancial.com.

Media Investors
Kristyn Clark Kevin Chamberlain
kristyn.clark@pennymac.com Isaac Garden
(805) 395-9943 PFSI_IR@pennymac.com
(818) 224-7028

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: our exposure to risks of loss and disruptions in operations resulting from adverse weather conditions, man-made or natural disasters, climate change and pandemics such as COVID-19; failure to modify, resell or refinance early buyout loans; changes in prevailing interest rates; 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 businesses; 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 the Company’s businesses, 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 growing loan production volume; difficulties inherent in adjusting the size of our operations to reflect changes in business levels; purchase opportunities for mortgage servicing rights and our success in winning bids; our substantial amount of indebtedness; the discontinuation of LIBOR; increases in loan delinquencies and defaults; our reliance on PennyMac Mortgage Investment Trust (NYSE: PMT) as a significant source of financing for, and revenue related to, our mortgage banking business; maintaining sufficient capital and liquidity to support business growth including 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; decreases in the returns on the assets that we select and manage for our clients, and our resulting management and incentive fees; the extensive amount of regulation applicable to our investment management segment; 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 recent growth; our ability to effectively identify, manage, monitor and mitigate financial 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)

December 31,
2021
September 30,
2021
December 31,
2020
(in thousands, except share amounts)
ASSETS
Cash $ 340,069 $ 476,497 $ 532,716
Short-term investments at fair value 6,873 5,046 15,217
Loans held for sale at fair value 9,742,483 9,659,695 11,616,400
Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell pledged to creditors 80,862
Derivative assets 333,695 429,984 711,238
Servicing advances, net 702,160 522,906 579,528
Mortgage servicing rights at fair value 3,878,078 3,611,120 2,581,174
Operating lease right-of-use assets 89,040 85,266 74,934
Investment in PennyMac Mortgage Investment Trust at fair value 1,300 1,477 1,105
Receivable from PennyMac Mortgage Investment Trust 40,091 49,993 87,005
Loans eligible for repurchase 3,026,207 4,335,378 14,625,447
Other 616,616 567,776 692,169
Total assets $ 18,776,612 $ 19,745,138 $ 31,597,795
LIABILITIES
Assets sold under agreements to repurchase $ 7,292,735 $ 6,897,157 $ 9,654,797
Mortgage loan participation and sale agreements 479,845 519,784 521,477
Obligations under capital lease 3,489 5,583 11,864
Notes payable secured by mortgage servicing assets 1,297,622 1,297,176 1,295,840
Unsecured senior notes 1,776,219 1,783,230 645,820
Excess servicing spread financing payable to PennyMac Mortgage
Investment Trust at fair value
131,750
Derivative liabilities 22,606 14,204 42,638
Mortgage servicing liabilities at fair value 2,816 47,567 45,324
Accounts payable and accrued expenses 359,413 358,944 308,398
Operating lease liabilities 110,003 105,452 94,193
Payable to PennyMac Mortgage Investment Trust 228,019 138,972 140,306
Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement 30,530 31,815 35,165
Income taxes payable 685,262 659,768 622,700
Liability for loans eligible for repurchase 3,026,207 4,335,378 14,625,447
Liability for losses under representations and warranties 43,521 45,806 32,688
Total liabilities 15,358,287 16,240,836 28,208,407
STOCKHOLDERS’ EQUITY
Common stock¾authorized 200,000,000 shares of $0.0001 par value; issued and outstanding 56,867,202, 60,419,578, and 70,905,532 shares, respectively 6 6 7
Additional paid-in capital 125,396 372,198 1,047,052
Retained earnings 3,292,923 3,132,098 2,342,329
Total stockholders’ equity 3,418,325 3,504,302 3,389,388
Total liabilities and stockholders’ equity $ 18,776,612 $ 19,745,138 $ 31,597,795

PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Quarter ended
December 31,
2021
September 30,
2021
December 31,
2020
(in thousands, except earnings per share)
Revenue
Net gains on loans held for sale at fair value $ 500,658 $ 626,754 $ 859,061
Loan origination fees 88,245 94,581 93,460
Fulfillment fees from PennyMac Mortgage Investment Trust 20,150 43,922 72,606
Net loan servicing fees:
Loan servicing fees 287,888 267,758 262,740
Change in fair value of mortgage servicing rights, mortgage servicing liabilities and excess servicing spread financing (155,432 ) (147,669 ) (127,097 )
Hedging results (37,723 ) (86,459 ) (109,147 )
Net loan servicing fees 94,733 33,630 26,496
Net interest expense:
Interest income 68,979 68,312 74,192
Interest expense 89,844 90,711 93,653
(20,865 ) (22,399 ) (19,461 )
Management fees from PennyMac Mortgage Investment Trust 8,919 8,520 8,687
Other 1,971 1,604 1,297
Total net revenue 693,811 786,612 1,042,146
Expenses
Compensation 226,723 249,183 187,807
Loan origination 86,789 80,932 69,069
Technology 41,112 32,406 42,594
Professional services 31,734 24,429 19,853
Servicing 31,470 27,892 87,155
Marketing and advertising 16,568 11,360 4,355
Occupancy and equipment 8,354 9,389 8,535
Other 16,950 11,472 5,552
Total expenses 459,700 447,063 424,920
Income before provision for income taxes 234,111 339,549 617,226
Provision for income taxes 61,028 90,239 164,422
Net income $ 173,083 $ 249,310 $ 452,804
Earnings per share
Basic $ 2.97 $ 4.02 $ 6.31
Diluted $ 2.79 $ 3.80 $ 5.97
Weighted-average common shares outstanding
Basic 58,247 62,085 71,793
Diluted 61,944 65,653 75,898
Dividend declared per share $ 0.20 $ 0.20 $ 0.15

PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Year ended December 31,
2021 2020 2019
(in thousands, except earnings per share)
Revenue
Net gains on loans held for sale at fair value $ 2,464,401 $ 2,740,785 $ 725,528
Loan origination fees 384,154 285,551 174,156
Fulfillment fees from PennyMac Mortgage Investment Trust 178,927 222,200 160,610
Net loan servicing fees:
Loan servicing fees:
From non-affiliates 875,570 814,646 730,165
From PennyMac Mortgage Investment Trust 80,658 67,181 48,797
Other fees 118,884 116,464 98,564
1,075,112 998,291 877,526
Change in fair value of mortgage servicing rights, mortgage servicing liabilities and excess servicing spread financing (416,943 ) (1,477,023 ) (979,358 )
Hedging results (475,215 ) 918,180 395,497
Net loan servicing fees 182,954 439,448 293,665
Net interest (expense) income:
Interest income 300,169 247,026 288,700
Interest expense 390,699 271,551 211,979
(90,530 ) (24,525 ) 76,721
Management fees from PennyMac Mortgage Investment Trust 37,801 34,538 36,492
Other 9,654 7,600 10,232
Total net revenue 3,167,361 3,705,597 1,477,404
Expenses
Compensation 999,802 738,569 503,458
Loan origination 330,788 219,746 117,338
Technology 141,426 112,570 67,946
Servicing 109,835 256,934 164,697
Professional services 94,283 64,064 32,859
Marketing and advertising 44,806 8,658 5,165
Occupancy and equipment 35,810 33,357 28,916
Other 51,428 31,090 27,581
Total expenses 1,808,178 1,464,988 947,960
Income before provision for income taxes 1,359,183 2,240,609 529,444
Provision for income taxes 355,693 593,725 136,479
Net income $ 1,003,490 $ 1,646,884 $ 392,965
Earnings per share
Basic $ 15.73 $ 21.91 $ 5.02
Diluted $ 14.87 $ 20.92 $ 4.89
Weighted average shares outstanding
Basic 63,799 75,161 78,466
Diluted 67,471 78,728 81,076

Disclaimer

PennyMac Financial Services Inc. published this content on 03 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 February 2022 21:43:23 UTC.

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Analyst Recommendations on PENNYMAC FINANCIAL SERVICES, INC.

Sales 2021 3 233 M

Net income 2021 1 051 M

Net Debt 2021

P/E ratio 2021 3,78x
Yield 2021 1,36%
Capitalization 3 466 M
3 466 M
Capi. / Sales 2021 1,07x
Capi. / Sales 2022 1,29x
Nbr of Employees 7 261
Free-Float 84,7%

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Number of Analysts 7
Last Close Price
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Average target price
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Spread / Average Target 49,6%


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