Mortgage

PennyMac Monetary earnings declined within the second quarter

PennyMac Financial Services' earnings in the second quarter saw quarterly and yearly declines, but the $ 204 million record was historically strong thanks to the company's large, diversified business mix, representatives said.

The company's net income for the second quarter declined from $ 353 million last year to nearly $ 377 million in the previous fiscal year.

PennyMac's revenue for the second quarter was nearly $ 742 million, down from nearly $ 822 million a year ago and roughly $ 945 million in the prior fiscal year. While sales fell short of Seeking Alpha's estimate of nearly $ 799 million, they were more than double the company's pre-pandemic levels.

The results of PennyMac, which operates in partnership with an affiliate real estate investment trust, show how publicly traded non-bank mortgage companies may increasingly rely on economies of scale across multiple lines of business to compete in the market when production margins normalize.

“While refinancing issuance is expected to decline significantly over the next few years due to higher interest rates, we believe the outlook for PennyMac Financial remains good given our large, profitable and growing service business; our position as one of the largest producers of purchase money credit in the United States; and the continued expansion of our direct lending business, ”said Chief Operating Officer Andy Chang in an earnings webcast.

Origination pretax income was $ 244 million for the quarter, down from $ 538 million and $ 363 million for the first three months of this year. For operations, pre-tax profit of $ 3.1 million was higher than a loss of $ 6.2 million last year but less than $ 14.2 million for the first quarter of this year. The pre-tax result for servicing would have been higher if it had not been offset by valuation changes.

The company's earnings release and call on late Thursday initially gave its stock a surge from $ 63 to about $ 66 per share, and as of Friday it was still up and hovering near $ 69.

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