Pennymac Financial Services (PFSI) Misses Q1 EPS by 17c

Pennymac Financial Services (NYSE: PFSI) reported Q1 EPS of $0.47, $0.17 worse than the analyst estimate of $0.64. Revenue for the quarter came in at $204.5 million versus the consensus estimate of $229.56 million.

• Pretax income was $62.0 million, down 52 percent from the prior quarter and up 106 percent from the first quarter of 2016; the quarter-over-quarter decrease reflects lower production earnings, driven by a reduction in refinance volumes due to higher mortgage rates and a seasonally slow purchase market
• Production segment pretax income was $47.5 million, down 49 percent from the prior quarter and down 31 percent from the first quarter of 2016
  • Total loan production activity of $14.9 billion in unpaid principal balance (UPB), down 32 percent from the prior quarter and up 37 percent from the first quarter of 2016
  • $13.9 billion in UPB of correspondent production, down 31 percent from the prior quarter and up 44 percent from the first quarter of 2016
  • $1.0 billion in UPB of consumer direct originations, down 49 percent from the prior quarter and down 14 percent from the first quarter of 2016
  • Interest rate lock commitments (IRLCs) on correspondent government and consumer direct loans totaled $11.1 billion, down 24 percent from the prior quarter and up 27 percent from the first quarter of 2016
• Servicing segment pretax income was $13.4 million, compared with $35.1 million in the prior quarter and a pretax loss of $39.5 million in the first quarter of 2016
  • Servicing segment pretax income excluding valuation-related changes was $22.3 million, down 9 percent from the prior quarter and up 36 percent from the first quarter of 20161
  • Servicing portfolio reached $202.9 billion in UPB, up 4 percent from December 31, 2016, and up 23 percent from March 31, 2016
• Investment Management segment pretax income was $1.1 million, compared with $0.4 million in the prior quarter and $1.1 million in the first quarter of 2016
  • Net assets under management were $1.6 billion, up modestly from $1.5 billion at December 31, 2016 and down 4 percent from $1.6 billion at March 31, 2016
• Issued $400 million in aggregate principal amount of 3-year term notes secured by Ginnie Mae mortgage servicing rights (MSRs) and excess servicing spread (ESS)

For earnings history and earnings-related data on Pennymac Financial Services (PFSI) click here.

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