Segments

9 Months Ended

Sep. 30, 2022

Segments

Segments

Note 23—Segments

The Company conducts its business in three segments: production, servicing (together, production and servicing comprise its mortgage banking activities) and investment management:

● The production segment performs loan origination, acquisition and sale activities.

● The servicing segment performs loan servicing for loans held for sale and loans serviced for others, including for PMT.

● The investment management segment represents the Company’s investment management activities relating to PMT, which include the activities associated with investment asset acquisitions and dispositions such as sourcing, due diligence, negotiation and settlement.

The Company’s reportable segments are identified based on their unique activities. The Company’s chief operating decision maker is its chief executive officer. The following disclosures about the Company’s business segments are presented consistent with the way the Company’s chief operating decision maker organizes and evaluates financial information for making operating decisions and assessing performance.

Financial performance and results by segment are as follows:

	Quarter ended September 30, 2022
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenue: (1)
Net gains on loans held for sale at fair value	$	140,683	$	28,011	$	168,694	$	—	$	168,694
Loan origination fees		34,037		—		34,037		—		34,037
Fulfillment fees from PennyMac Mortgage Investment Trust		18,407		—		18,407		—		18,407
Net loan servicing fees		—		243,742		243,742		—		243,742
Net interest income (expense):
Interest income		30,825		52,169		82,994		—		82,994
Interest expense		24,970		57,995		82,965		—		82,965
		5,855		(5,826)		29		—		29
Management fees		—		—		—		7,731		7,731
Other		474		556		1,030		2,620		3,650
Total net revenue		199,456		266,483		465,939		10,351		476,290
Expenses		160,884		121,200		282,084		8,734		290,818
Income before provision for income taxes	$	38,572	$	145,283	$	183,855	$	1,617	$	185,472
Segment assets at quarter end	$	4,708,512	$	11,626,311	$	16,334,823	$	26,988	$	16,361,811

(1) All revenues are from external customers.

	Quarter ended September 30, 2021
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenue: (1)
Net gains on loans held for sale at fair value	$	496,568	$	130,186	$	626,754	$	—	$	626,754
Loan origination fees		94,581		—		94,581		—		94,581
Fulfillment fees from PennyMac Mortgage Investment Trust		43,922		—		43,922		—		43,922
Net loan servicing fees		—		33,630		33,630		—		33,630
Net interest income (expense):
Interest income		33,307		35,005		68,312		—		68,312
Interest expense		28,570		62,139		90,709		2		90,711
		4,737		(27,134)		(22,397)		(2)		(22,399)
Management fees		—		—		—		8,520		8,520
Other		218		148		366		1,238		1,604
Total net revenue		640,026		136,830		776,856		9,756		786,612
Expenses		309,460		128,876		438,336		8,727		447,063
Income before provision for income taxes	$	330,566	$	7,954	$	338,520	$	1,029	$	339,549
Segment assets at quarter end	$	7,926,709	$	11,797,702	$	19,724,411	$	20,727	$	19,745,138

(1) All revenues are from external customers.

	Nine months ended September 30, 2022
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	515,188	$	174,532	$	689,720	$	—	$	689,720
Loan origination fees		141,840		—		141,840		—		141,840
Fulfillment fees from PennyMac Mortgage Investment Trust		55,807		—		55,807		—		55,807
Net loan servicing fees		—		768,498		768,498		—		768,498
Net interest income (expense):
Interest income		90,145		96,595		186,740		—		186,740
Interest expense		71,236		160,163		231,399		—		231,399
		18,909		(63,568)		(44,659)		—		(44,659)
Management fees		—		—		—		23,758		23,758
Other		1,842		2,072		3,914		6,431		10,345
Total net revenue		733,586		881,534		1,615,120		30,189		1,645,309
Expenses		676,090		343,473		1,019,563		28,228		1,047,791
Income before provision for income taxes	$	57,496	$	538,061	$	595,557	$	1,961	$	597,518
Segment assets at period end	$	4,708,512	$	11,626,311	$	16,334,823	$	26,988	$	16,361,811

(1) All revenues are from external customers.

	Nine months ended September 30, 2021
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	1,431,824	$	531,919	$	1,963,743	$	—	$	1,963,743
Loan origination fees		295,909		—		295,909		—		295,909
Fulfillment fees from PennyMac Mortgage Investment Trust		158,777		—		158,777		—		158,777
Net loan servicing fees		—		88,221		88,221		—		88,221
Net interest income (expense):
Interest income		94,668		136,522		231,190		—		231,190
Interest expense		103,555		197,292		300,847		8		300,855
		(8,887)		(60,770)		(69,657)		(8)		(69,665)
Management fees		—		—		—		28,882		28,882
Other		1,445		2,270		3,715		3,968		7,683
Total net revenue		1,879,068		561,640		2,440,708		32,842		2,473,550
Expenses		941,165		381,018		1,322,183		26,295		1,348,478
Income before provision for income taxes	$	937,903	$	180,622	$	1,118,525	$	6,547	$	1,125,072
Segment assets at period end	$	7,926,709	$	11,797,702	$	19,724,411	$	20,727	$	19,745,138

(1) All revenues are from external customers.

(