Segments

3 Months Ended

Mar. 31, 2025

Segments

Segments

Note 26—Segments

The Company’s reportable segments are identified based on their unique business 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 reportable segments are evaluated based on income or loss before provision for income taxes. The chief operating decision maker uses pre-tax segment results to assess segment performance and allocate operating and capital resources among the two reportable segments. The segments are separately evaluated because they represent different services. The Company’s chief operating decision maker is its chief executive officer.

During the year ended December 31, 2024, the Company adopted ASU 2023-07. Concurrent with the adoption of ASU 2023-07 management reassessed its segment definitions to those shown below. Prior quarter amounts have been recast to conform the prior quarter presentation to the current quarter presentation.

The Company conducts its business in two operating and reportable segments, “production” and “servicing”:

● The production segment performs loan origination, acquisition and sale activities, including the fulfillment of correspondent production activities for PMT.

● The servicing segment performs servicing of loans on behalf of non-affiliate investors, execution and management of early buyout transactions, and servicing of loans and MSRs sourced and managed for PMT.

● Non-segment activities are included under the heading “Corporate and other” and include amounts attributable to corporate activities that are not directly attributable to the production and servicing segments as well as investment management fees earned from PMT. None of the corporate and other items meet the quantitative threshold to be classified as a reportable segment.

Financial performance and results by segment are as follows:

	Quarter ended March 31, 2025
	Production		Servicing		Reportable segment total		Corporate and other		Consolidated Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	187,145	$	33,892	$	221,037	$	—	$	221,037
Loan origination fees		46,611		—		46,611		—		46,611
Fulfillment fees from PennyMac Mortgage Investment Trust		5,290		—		5,290		—		5,290
Net loan servicing fees		—		164,286		164,286		—		164,286
Management fees		—		—		—		7,012		7,012
Net interest income (expense):
Interest income		85,288		104,134		189,422		449		189,871
Interest expense		76,526		131,556		208,082		—		208,082
		8,762		(27,422)		(18,660)		449		(18,211)
Other		131		(173)		(42)		4,920		4,878
Total net revenues		247,939		170,583		418,522		12,381		430,903
Expenses:
Compensation		98,869		52,970		151,839		30,149		181,988
Loan origination		44,096		—		44,096		—		44,096
Technology		25,100		10,385		35,485		4,712		40,197
Servicing		—		21,875		21,875		—		21,875
Marketing and advertising		8,023		373		8,396		1,036		9,432
Professional services		3,134		1,681		4,815		4,222		9,037
Occupancy and equipment		4,128		2,729		6,857		1,525		8,382
Other (2)		2,646		4,569		7,215		4,485		11,700
Total expenses		185,996		94,582		280,578		46,129		326,707
Income before provision for income taxes	$	61,943	$	76,001	$	137,944	$	(33,748)	$	104,196
Segment assets at end of quarter	$	7,346,079	$	16,461,624	$	23,807,703	$	65,173	$	23,872,876
Acquisition of:
Capitalized software	$	5,409	$	1,728	$	7,137	$	—	$	7,137
Furniture, fixtures, equipment and building improvements	$	187	$	29	$	216	$	155	$	371
Amortization of capitalized software	$	10,221	$	1,666	$	11,887	$	94	$	11,981
Depreciation and amortization of furniture, fixtures, equipment and building improvements	$	968	$	645	$	1,613	$	302	$	1,915

(1) All revenues are from external customers. The segments do not recognize intersegment revenues.

(2) Other expense includes smaller balance expense categories not separately provided to the chief operating decision maker such as safekeeping, travel, postage and corporate insurance.

	Quarter ended March 31, 2024
	Production		Servicing		Reportable segment total		Corporate and other		Consolidated Total
	(in thousands)
Revenues: (1)
Net gains on loans held for sale at fair value	$	141,431	$	21,010	$	162,441	$	—	$	162,441
Loan origination fees		36,371		—		36,371		—		36,371
Fulfillment fees from PennyMac Mortgage Investment Trust		4,016		—		4,016		—		4,016
Net loan servicing fees		—		100,954		100,954		—		100,954
Management fees		—		—		—		7,188		7,188
Net interest income (expense):
Interest income		63,371		92,541		155,912		514		156,426
Interest expense		61,896		103,873		165,769		—		165,769
		1,475		(11,332)		(9,857)		514		(9,343)
Other		116		507		623		3,410		4,033
Total net revenues		183,409		111,139		294,548		11,112		305,660
Expenses:
Compensation		70,193		52,400		122,593		23,783		146,376
Loan origination		30,568		—		30,568		—		30,568
Technology		22,768		9,763		32,531		3,436		35,967
Servicing		—		16,104		16,104		—		16,104
Professional services		2,062		1,348		3,410		5,852		9,262
Occupancy and equipment		4,138		2,905		7,043		1,633		8,676
Marketing and advertising		3,596		29		3,625		46		3,671
Other (2)		1,406		4,936		6,342		4,811		11,153
Total expenses		134,731		87,485		222,216		39,561		261,777
Income before provision for income taxes	$	48,678	$	23,654	$	72,332	$	(28,449)	$	43,883
Segment assets at end of quarter	$	5,376,570	$	14,332,919	$	19,709,489	$	92,252	$	19,801,741
Acquisition of:
Capitalized software	$	3,441	$	310	$	3,751	$	113	$	3,864
Furniture, fixtures, equipment and building improvements	$	252	$	609	$	861	$	57	$	918
Amortization of capitalized software	$	9,486	$	2,203	$	11,689	$	492	$	12,181
Depreciation and amortization of furniture, fixtures, equipment and building improvements	$	959	$	697	$	1,656	$	327	$	1,983

(1) All revenues are from external customers. The segments do not recognize intersegment revenues.

(2) Other expense includes smaller balance expense categories not separately provided to the chief operating decision maker such as safekeeping, travel, postage and corporate insurance.