Net Interest Income

9 Months Ended

Sep. 30, 2020

Net Interest Income

Net Interest Income

Note 18—Net Interest Income

Net interest income is summarized below:

	Quarter ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
	(in thousands)
Interest income:
From non-affiliates:
Cash and short-term investments	$	1,259	$	2,894	$	4,863	$	7,533
Loans held for sale at fair value		41,854		35,800		120,866		101,509
Placement fees relating to custodial funds		9,163		43,231		44,419		98,628
		52,276		81,925		170,148		207,670
From PennyMac Mortgage Investment Trust—Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell		676		1,527		2,686		5,015
		52,952		83,452		172,834		212,685
Interest expense:
To non-affiliates:
Assets sold under agreements to repurchase (1)		27,322		19,429		70,493		47,709
Mortgage loan participation purchase and sale agreements		999		2,304		3,870		7,034
Obligations under capital lease		83		274		354		476
Notes payable		10,738		17,525		37,668		53,559
Interest shortfall on repayments of mortgage loans serviced for Agency securitizations		20,711		12,453		54,536		24,978
Interest on mortgage loan impound deposits		1,256		2,104		4,561		4,967
		61,109		54,089		171,482		138,723
To PennyMac Mortgage Investment Trust—Excess servicing spread financing at fair value		2,070		2,291		6,416		8,124
		63,179		56,380		177,898		146,847
	$	(10,227)	$	27,072	$	(5,064)	$	65,838

(1) In 2017, the Company entered into a master repurchase agreement that provided the Company with incentives to finance mortgage loans approved for satisfying certain consumer relief characteristics as provided in the agreement. The Company included $1.6 million and $14.7 million of such incentives as reductions of Interest expense during the quarter and nine months ended September 30, 2019, respectively. The master repurchase agreement expired on August 21, 2019.