Segments

6 Months Ended

Jun. 30, 2024

Segments

Segments

Note 25—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, as well as provides other ancillary services for customers.

● 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 June 30, 2024
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	154,317	$	21,747	$	176,064	$	—	$	176,064
Loan origination fees		42,075		—		42,075		—		42,075
Fulfillment fees from PennyMac Mortgage Investment Trust		4,427		—		4,427		—		4,427
Net loan servicing fees		—		167,604		167,604		—		167,604
Net interest income (expense):
Interest income		84,613		116,119		200,732		79		200,811
Interest expense		83,376		124,495		207,871		—		207,871
		1,237		(8,376)		(7,139)		79		(7,060)
Management fees		—		—		—		7,133		7,133
Other		509		13,250		13,759		2,125		15,884
Total net revenues		202,565		194,225		396,790		9,337		406,127
Expenses		161,286		105,685		266,971		5,302		272,273
Income before provision for income taxes	$	41,279	$	88,540	$	129,819	$	4,035	$	133,854
Segment assets at end of quarter	$	6,477,599	$	15,086,646	$	21,564,245	$	13,320	$	21,577,565

(1) All revenues are from external customers.

	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 end of quarter	$	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, 2024
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	295,748	$	42,757	$	338,505	$	—	$	338,505
Loan origination fees		78,446		—		78,446		—		78,446
Fulfillment fees from PennyMac Mortgage Investment Trust		8,443		—		8,443		—		8,443
Net loan servicing fees		—		268,558		268,558		—		268,558
Net interest income (expense):
Interest income		148,544		208,530		357,074		163		357,237
Interest expense		145,272		228,368		373,640		—		373,640
		3,272		(19,838)		(16,566)		163		(16,403)
Management fees		—		—		—		14,321		14,321
Other		1,327		14,346		15,673		4,244		19,917
Total net revenue		387,236		305,823		693,059		18,728		711,787
Expenses		310,065		212,347		522,412		11,638		534,050
Income before provision for income taxes	$	77,171	$	93,476	$	170,647	$	7,090	$	177,737
Segment assets at end of period	$	6,477,599	$	15,086,646	$	21,564,245	$	13,320	$	21,577,565

(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 end of period	$	4,976,152	$	12,985,134	$	17,961,286	$	23,182	$	17,984,468

(1) All revenues are from external customers.