Pennymac Financial Services (“PFS”) reported a robust third quarter of 2023, with most of the profitability seen in the company’s servicing segment. Revenues in the servicing segment increased by 27.4 percent from the same quarter in 2022, thanks to higher production volume and increased fees associated with a growing portfolio. Profitability of the segment was further bolstered by a 6.2 percent decrease in operating expenses compared to the prior year.

PFS continued to show strength in its mortgage banking segment. The segment benefited from strong origination volumes, thanks to a strong purchase market. Unsurprisingly, net gains on sales came in at a record high for the third quarter, driven by significantly higher average sale prices, as well as lower fulfilment costs. Operating expenses also decreased by 7.5 percent compared to the same quarter last year.

Most Important Elements of Summary:
• Servicing segment drove majority of PFS’s earnings in 3Q2023
• 27.4 percent increase in revenues from same quarter in 2022
• 6.2 percent decrease in related operating expenses
• Mortgage banking segment benefited from strong origination volumes
• Record high net gains on sales driven by higher sale prices and lower fulfilment costs
• Operating expenses decreased by 7.5 percent compared to same quarter last year

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