“PennyMac
Financial
delivered
solid
first
quarter
financial
results,
demonstrating
our
ability
to
consistently
generate
strong
returns
in
a
volatile
market,”
Pennymac
chairman
and
CEO

David
Spector
said
in
a
statement.

“In
our
production
segment,
we
acquired
or
originated
nearly
$30
billion
in
unpaid
principal
balance
(UPB)
of
loans
at
higher
note
rates,
which
strategically
positions
our
consumer
direct
division
for
significant
growth
when
interest
rates
decline.
This
production
led
to
continued
growth
of
our
servicing
portfolio,
which
ended
the
quarter
at
$680
billion
in
unpaid
principal
balance.”

Loan
acquisitions
and

originations
—
including
those
fulfilled
for
PMT,
the
company’s
mortgage
investment
trust
—
totaled
$28.9
billion
in
unpaid
principal
balance,
down
19%
from
the
prior
quarter
and
up
33%
from
Q1
2024.

“[That’s]
consistent
with
the
decline
in
the
overall
market
of
total
acquisitions
and
origination
volumes,”

Daniel
Perotti,
PennyMac’s
senior
managing
director
and
chief
financial
officer,
said
during
Tuesday’s

earnings
call.

Spector
added
that
the
company
produced
annualized
operating
return
on
equity
of
15%
that
was
“driven
by
continued
strength
in
our
servicing
business
and
a
solid
contribution
from
our
production
segments
despite
elevated

mortgage
rates.”

Fees
from
fulfilling

correspondent
loans
for
PMT
totaled
$5.3
million
in
Q1
2025,
down
17%
from
Q4
2024
but
up
32%
year
over
year.
PennyMac
attributed
the
decline
to
lower
conventional
acquisition
volumes.
In
Q2
2025,
PMT
is
expected
to
retain
all
jumbo
production.

“In
the
second
quarter,
we
expect
PMT
to
retain
approximately
15%
to
25%
of
total
conventional/conforming
correspondent
production,
consistent
with
first
quarter
loans
of
note,”
Perotti
said.
“Pursuant
to
our
renewed
mortgage
banking
agreement
with
PMT,
beginning
in
the
third
quarter
of
2025,
all
correspondent
loans
will
initially
be
acquired
by
PFSI.”

The
company’s

servicing
segment
operating
revenues
saw
pretax
income
of
$76
million
from
January
through
March,
down
from
$87.3
million
in
Q4
2024
and
up
from
$23.7
million
in
Q1
2024.

But
PennyMac’s
servicing
portfolio
also
grew
to
$680.2
billion
in
UPB,
up
2%
from
the
end
of
2024
and
10%
higher
compared
to
March
2024.
The
company
said
this
was
driven
by
production
volumes
that
more
than
offset
prepayment
activity.

PennyMac
had
a
pretax
loss
of
$33.7
million
from
corporate
activities
not
directly
attributable
to
its
production
and
servicing
segments.
This
was
comparable
to
losses
of
$35.9
million
in
the
prior
quarter
and
$28.4
million
in
the
same
period
last
year.

“We
ended
the
quarter
with
$4
billion
of
total
liquidity,
which
includes
cash
and
amounts
available
to
draw
on
facilities
where
we
have
collateral,”
Perotti
said.

Despite
the
lower-performing
numbers
compared
to
last
quarter,
Spector
spoke
positively
about
the
company’s
future
and
touted
its

four-year
partnership
with
the
U.S
Olympic
and
Paralympic
teams.

“This
phased
approach
allows
us
to
strategically
build
brand
relevance,
awareness
and
engagement
without
significant
upfront
costs,”
he
said.

Above
all,
Spector
expressed
promise
about
PennyMac’s
future
performances.

“We
are
uniquely
positioned
in
the
industry.
Our
large
and
growing
portfolio
of
borrowers
who
recently
entered
into
mortgages
at
higher
rates
stands
to

benefit
from
a
refinance
in
the
future
when
interest
rates
decline,”
he
said.

“We
expect
further
market
penetration,
aiming
to
capture
a
broader
share
of
MSR
owners
who
are
seeking
a
best-in-class,
low-cost
sub-servicer.
This
strategic
focus
on
sub-servicing
is
a
testament
to
our
commitment
to
diversify
our
revenue
streams
while
maximizing
the
value
of
our
servicing
platform.”