Segments

6 Months Ended

Jun. 30, 2023

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 June 30, 2023
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	126,249	$	15,170	$	141,419	$	—	$	141,419
Loan origination fees		38,968		—		38,968		—		38,968
Fulfillment fees from PennyMac Mortgage Investment Trust		5,441		—		5,441		—		5,441
Net loan servicing fees		—		146,078		146,078		—		146,078
Net interest expense:
Interest income		75,423		97,529		172,952		—		172,952
Interest expense		75,994		102,648		178,642		—		178,642
		(571)		(5,119)		(5,690)		—		(5,690)
Management fees		—		—		—		7,078		7,078
Other		528		304		832		2,421		3,253
Total net revenues		170,615		156,433		327,048		9,499		336,547
Expenses		146,200		109,889		256,089		7,541		263,630
Income before provision for income taxes	$	24,415	$	46,544	$	70,959	$	1,958	$	72,917
Segment assets at quarter end	$	4,976,152	$	12,985,134	$	17,961,286	$	23,182	$	17,984,468

(1) All revenues are from external customers.

	Quarter ended June 30, 2022
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	152,895	$	69,672	$	222,567	$	—	$	222,567
Loan origination fees		39,945		—		39,945		—		39,945
Fulfillment fees from PennyMac Mortgage Investment Trust		20,646		—		20,646		—		20,646
Net loan servicing fees		—		238,447		238,447		—		238,447
Net interest expense:
Interest income		28,379		21,485		49,864		—		49,864
Interest expense		19,207		51,920		71,127		—		71,127
		9,172		(30,435)		(21,263)		—		(21,263)
Management fees		—		—		—		7,910		7,910
Other		583		900		1,483		1,780		3,263
Total net revenues		223,241		278,584		501,825		9,690		511,515
Expenses		213,587		110,959		324,546		9,443		333,989
Income before provision for income taxes	$	9,654	$	167,625	$	177,279	$	247	$	177,526
Segment assets at quarter end	$	3,735,706	$	10,509,950	$	14,245,656	$	26,599	$	14,272,255

(1) All revenues are from external customers.

	Six months ended June 30, 2023
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	200,975	$	44,829	$	245,804	$	—	$	245,804
Loan origination fees		70,358		—		70,358		—		70,358
Fulfillment fees from PennyMac Mortgage Investment Trust		17,364		—		17,364		—		17,364
Net loan servicing fees		—		294,915		294,915		—		294,915
Net interest expense:
Interest income		132,416		169,014		301,430		—		301,430
Interest expense		130,077		180,336		310,413		—		310,413
		2,339		(11,322)		(8,983)		—		(8,983)
Management fees		—		—		—		14,335		14,335
Other		1,102		81		1,183		4,433		5,616
Total net revenue		292,138		328,503		620,641		18,768		639,409
Expenses		287,363		224,512		511,875		16,470		528,345
Income before provision for income taxes	$	4,775	$	103,991	$	108,766	$	2,298	$	111,064
Segment assets at period end	$	4,976,152	$	12,985,134	$	17,961,286	$	23,182	$	17,984,468

(1) All revenues are from external customers.

	Six months ended June 30, 2022
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	374,505	$	146,521	$	521,026	$	—	$	521,026
Loan origination fees		107,803		—		107,803		—		107,803
Fulfillment fees from PennyMac Mortgage Investment Trust		37,400		—		37,400		—		37,400
Net loan servicing fees		—		524,756		524,756		—		524,756
Net interest expense:
Interest income		59,320		44,426		103,746		—		103,746
Interest expense		46,266		102,168		148,434		—		148,434
		13,054		(57,742)		(44,688)		—		(44,688)
Management fees		—		—		—		16,027		16,027
Other		1,368		1,516		2,884		3,811		6,695
Total net revenue		534,130		615,051		1,149,181		19,838		1,169,019
Expenses		515,206		222,273		737,479		19,494		756,973
Income before provision for income taxes	$	18,924	$	392,778	$	411,702	$	344	$	412,046
Segment assets at period end	$	3,735,706	$	10,509,950	$	14,245,656	$	26,599	$	14,272,255

(1) All revenues are from external customers.