Note 22—Segments

The Company operates in three segments: production, servicing and investment management.

Two of the segments are in the mortgage banking business: production and servicing. The production segment performs loan origination, acquisition and sale activities. The servicing segment performs servicing of loans, execution and management of early buyout loan transactions and servicing of loans sourced and managed by the investment management segment for PMT, including executing the loan resolution strategy identified by the investment management segment relating to distressed mortgage loans.

The investment management segment represents the activities of the Company’s investment manager, which include sourcing, performing diligence, bidding and closing investment asset acquisitions and managing the acquired assets and correspondent production activities for PMT.

Financial performance and results by segment are as follows:


	Quarter ended March 31, 2020
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenue: (1)
Net gains on loans held for sale at fair value	$	316,635	$	27,647	$	344,282	$	—	$	344,282
Loan origination fees		57,571		—		57,571		—		57,571
Fulfillment fees from PennyMac Mortgage Investment Trust		41,940		—		41,940		—		41,940
Net loan servicing fees		—		257,808		257,808		—		257,808
Net interest income:
Interest income		26,585		45,979		72,564		—		72,564
Interest expense		20,157		41,346		61,503		9		61,512
		6,428		4,633		11,061		(9)		11,052
Management fees		—		—		—		9,055		9,055
Other		(10)		(680)		(690)		807		117
Total net revenue		422,564		289,408		711,972		9,853		721,825
Expenses		182,433		118,566		300,999		6,096		307,095
Income before provision for income taxes	$	240,131	$	170,842	$	410,973	$	3,757	$	414,730
Segment assets at quarter end	$	5,686,878	$	5,186,188	$	10,873,066	$	18,067	$	10,891,133

(1)

All revenues are from external customers.


	Quarter ended March 31, 2019
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenue: (1)
Net gains on loans held for sale at fair value	$	66,721	$	18,055	$	84,776	$	—	$	84,776
Loan origination fees		23,930		—		23,930		—		23,930
Fulfillment fees from PennyMac Mortgage Investment Trust		27,574		—		27,574		—		27,574
Net loan servicing fees		—		80,571		80,571		—		80,571
Net interest income (expense):
Interest income		14,369		43,964		58,333		—		58,333
Interest expense		3,915		33,621		37,536		7		37,543
		10,454		10,343		20,797		(7)		20,790
Management fees		—		—		—		7,248		7,248
Other		488		765		1,253		1,563		2,816
Total net revenue		129,167		109,734		238,901		8,804		247,705
Expenses		82,161		98,571		180,732		6,682		187,414
Income before provision for income taxes	$	47,006	$	11,163	$	58,169	$	2,122	$	60,291
Segment assets at quarter end	$	2,501,468	$	5,299,813	$	7,801,281	$	17,719	$	7,819,000

(1)

All revenues are from external customers.