PennyMac Financial Services Inc (PFSI) Reports Q3 2023 Earnings
Net income for Q3 2023 reported at $92.9 million, or $1.77 per share on a diluted basis.
Revenue for the quarter stood at $400.3 million.
Book value per share increased to $71.56 from $69.77 at the end of Q2 2023.
Third quarter cash dividend of $0.20 per share declared, payable on November 22, 2023.
On October 26, 2023, PennyMac Financial Services Inc (NYSE:PFSI) released its earnings report for the third quarter of 2023. The company reported a net income of $92.9 million, or $1.77 per share on a diluted basis, on revenue of $400.3 million. The book value per share increased to $71.56 from $69.77 at the end of the second quarter of 2023.
Financial Highlights
PFSI's pretax income was $126.8 million, up 74 percent from the prior quarter but down 32 percent from the third quarter of 2022. The production segment's pretax income was $25.2 million, slightly up from $24.4 million in the prior quarter but down from $38.6 million in the third quarter of 2022. Total loan acquisitions and originations were $25.1 billion in unpaid principal balance (UPB), slightly up from the prior quarter but down 4 percent from the third quarter of 2022.
PennyMac Financial produced outstanding results in the third quarter, returning to a double-digit annualized return on equity," said Chairman and CEO David Spector. "Our results this quarter highlight our management teams ability to successfully navigate this challenging mortgage landscape while also positioning PennyMac Financial to generate increasingly stronger returns over time.
Segment Performance
The Production segment, which includes the correspondent acquisition of newly originated government-insured and certain conventional conforming loans, reported a pretax income of $25.2 million. The Servicing segment, which includes income from owned MSRs, subservicing, and special servicing activities, reported a pretax income of $101.2 million. The Investment Management segment, which manages PMT for which it earns base management fees and may earn incentive compensation, reported a pretax income of $0.4 million.
Consolidated Expenses and Taxes
Total expenses for the quarter were $273.5 million, up 4 percent from the prior quarter and down 6 percent from the third quarter of 2022. PFSI recorded a provision for tax expense of $33.9 million, resulting in an effective tax rate of 26.8 percent during the quarter.
Looking Forward
PennyMac Financial Services Inc (NYSE:PFSI) continues to focus on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market. The company's financial results and future operations will be influenced by various factors, including interest rate changes, changes in real estate values, housing prices and housing sales, and changes in federal, state, and local laws and regulations applicable to the highly regulated industry in which it operates.
Explore the complete 8-K earnings release (here) from PennyMac Financial Services Inc for further details.
This article first appeared on GuruFocus.
