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Wednesday, Apr 24, 2024

PennyMac Made $38M Profit in Q4

Westlake Village-based PennyMac Financial Services turned a $37.6 million profit last quarter, according to its quarterly and full-year financial results.

The company’s net income for the fourth quarter was gained on revenue of $340 million and boosted by servicing earnings. PennyMac’s results were published this month.

“While production activity fell in 2022 our servicing earnings were strong,” PennyMac Chairman and Chief Executive David Spector said in a statement. “In fact, the majority of PennyMac Financial’s income in 2022 was generated by our large and growing servicing portfolio, which totaled more than $550 billion in unpaid principal balance at year end, up 8% from the prior year.”

PennyMac also managed to rake in a 14% return on equity, something Spector attributed to the resilience and scale of the company’s business model and the actions taken throughout last year to adjust PennyMac for the much smaller origination market.

Real estate data curator ATTOM found that the significant decline in residential lending last year resulted from downturns in both refinance and purchase loan activity that far outweighed another increase in home-equity credit lines.

According to ATTOM, lenders issued $637 billion worth of mortgages in the third quarter of last year, a figure down by 22% quarterly and 46% annually.

Alongside PennyMac’s highlights last year came challenges that resulted in a yearly net income of $475.5 million, down from $1 billion in 2021. Additionally, total net revenue last year equaled $2 billion, down from $3.2 billion in 2021.

Last year, the company laid off more than 400 employees, many of whom worked in home loans. PennyMac employs approximately 4,000 people in the United States.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans Welk is a managing editor at the Los Angeles Business Journal and the San Fernando Valley Business Journal. She previously covered real estate for the Los Angeles Business Journal. She has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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