Segments

9 Months Ended

Sep. 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 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. The Company’s chief operating decision maker is its chief executive officer.

Financial performance and results by segment are as follows:

	Quarter ended September 30, 2023
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	127,821	$	23,553	$	151,374	$	—	$	151,374
Loan origination fees		37,701		—		37,701		—		37,701
Fulfillment fees from PennyMac Mortgage Investment Trust		5,531		—		5,531		—		5,531
Net loan servicing fees		—		185,374		185,374		—		185,374
Net interest expense:
Interest income		62,150		104,402		166,552		—		166,552
Interest expense		59,614		97,249		156,863		—		156,863
		2,536		7,153		9,689		—		9,689
Management fees		—		—		—		7,175		7,175
Other		823		1,037		1,860		1,604		3,464
Total net revenues		174,412		217,117		391,529		8,779		400,308
Expenses		149,219		115,913		265,132		8,379		273,511
Income before provision for income taxes	$	25,193	$	101,204	$	126,397	$	400	$	126,797
Segment assets at quarter end	$	5,485,039	$	13,441,925	$	18,926,964	$	22,350	$	18,949,314

(1) All revenues are from external customers.

	Quarter 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	$	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 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 revenues		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.

	Nine months ended September 30, 2023
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	328,796	$	68,382	$	397,178	$	—	$	397,178
Loan origination fees		108,059		—		108,059		—		108,059
Fulfillment fees from PennyMac Mortgage Investment Trust		22,895		—		22,895		—		22,895
Net loan servicing fees		—		480,289		480,289		—		480,289
Net interest expense:
Interest income		194,566		273,416		467,982		—		467,982
Interest expense		189,691		277,585		467,276		—		467,276
		4,875		(4,169)		706		—		706
Management fees		—		—		—		21,510		21,510
Other		1,925		1,118		3,043		6,037		9,080
Total net revenue		466,550		545,620		1,012,170		27,547		1,039,717
Expenses		436,582		340,425		777,007		24,849		801,856
Income before provision for income taxes	$	29,968	$	205,195	$	235,163	$	2,698	$	237,861
Segment assets at period end	$	5,485,039	$	13,441,925	$	18,926,964	$	22,350	$	18,949,314

(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 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.