Pennymac’s 2024 performance powered by a strong service portfolio
The income before tax for the last quarter of 2024 was $ 129.4 million, an increase of $ 93.9 million in the previous quarter and a loss for tax of $ 54.2 million in Q4 2023. Production segment before tax was $ 78 million, a decrease of $ 129.4 million in Q3 2024 and an increase from $ 44.2 Million in Q4 2023.
“Total acquisition and origination volumes were $ 36 billion in unpaid main balance, an increase of 13% compared to the previous quarter, because many loans were originally locked in the third quarter, were financed in the fourth quarter,” Daniel Perotti, Senior Managing Director of Pennymac and Chief Financial Officer, said during Thursday’s win.
Perotti added that the total locking volumes of the $ 36 billion company fell by 7% compared to the previous quarter due to higher mortgage interest. Of this amount, $ 32 billion was linked to Pennymac’s own account. “Pennymac maintained his dominant position in correspondent loans in the fourth quarter, with a total acquisitions of $ 28 billion, an increase of $ 26 billion in the previous quarter,” he said.
Pennymac chairman and CEO David Spector spoke optimistic about the figures of the fourth quarter.
“Pennymac Financial yielded a strong results of the fourth quarter, with an annual operational return on the equity of 16% on equity driven by continuous force in our service company and a solid contribution from our production segment despite higher mortgage interest,” he said During the profit call.
Spector also shared that the total origination volume for the Pennymac production segment was $ 116 billion in UPB, an increase of 17% compared to 2023. “[This was] Driven by an increase of almost 70% in the original credit channels, “he said. “The income of the production segment rose by 47% compared to 2023 and despite the large mixed shift, the costs remain, only 13% rise from 2023.”
The operational turnover of the company was $ 1.5 billion in 2024 $ 1.5 billion, an increase of 19% compared to 2023. “The service segment has included income before taxes of $ 87 million (in Q4 2024). Excluding valuation -related changes were income before taxes $ 168 million or 10.3 basic points of the average UPB service portfolio, “said Perotti.
Spector said he has an optimistic view of the financial performance of the company 2025.
“Our results for the full year show both the ability of our balanced business model to generate work in periods of higher rates in the middle of the teenage years and also a substantial improvement of the operational leverage compared to the previous year,” said he.
“Our best-in-class management team has built a platform with a considerable scale and continues to work for the unlocking of extra efficiency through continuous investments in workflow and technology. It is for all these reasons that I have faith in our ability to continue to stimulate strong financial performance in this higher rate environment, reinforced by an increase in the origin market in periods in which the mortgage interest rate drops. ”
