PennyMac Financial Services, Inc. Segments Disclosure
Note 27—Segments
The Company’s reportable segments are identified based on their unique business activities. The following disclosures about the Company’s business segments are presented consistent with the way the Company’s chief operating decision maker organizes and evaluates financial information for making operating decisions and assessing performance. The Company’s chief operating decision maker is its chief executive officer. The reportable segments are evaluated based on income or loss before provisions for income taxes. The chief operating decision maker uses pre-tax segment results to assess segment performance and allocate operating and capital resources among the two reportable segments described below. The segments are separately evaluated because they represent different services.
The Company conducts its business in two operating and reportable segments, production and servicing:
| ● | The production segment performs loan origination, acquisition and sale activities, including the fulfillment of correspondent production activities for PMT. |
| ● | The servicing segment performs servicing and subservicing of loans on behalf of non-affiliate investors, execution and management of early buyout transactions, and servicing of loans sourced and managed for PMT. |
| ● | Non-segment activities are included under the heading “Corporate and other” and include amounts attributable to corporate activities that are not directly attributable to the production and servicing segments as well as investment management fees earned from PMT. None of the other items meet the quantitative threshold to be classified as a reportable segment. |
Financial performance and results by segment are as follows:
Year ended December 31, 2025 | ||||||||||||||||
| Production | | Servicing | | Reportable segment total | | Corporate | | Consolidated |
| ||||||
(in thousands) | ||||||||||||||||
Revenues: (1) | | | ||||||||||||||
Net gains on loans held for sale at fair value | $ | 947,258 | $ | 124,496 | $ | 1,071,754 | $ | — | $ | 1,071,754 | ||||||
Loan origination fees | 235,835 | — | 235,835 | — | 235,835 | |||||||||||
Fulfillment fees from PennyMac Mortgage Investment Trust | 23,804 | — | 23,804 | — | 23,804 | |||||||||||
Net loan servicing fees | — | 705,699 | 705,699 | — | 705,699 | |||||||||||
Management fees | — | — | — | 27,649 | 27,649 | |||||||||||
Net interest (expense) income: | ||||||||||||||||
Interest income | 429,778 | 492,997 | 922,775 | 1,672 | 924,447 | |||||||||||
Interest expense | 377,017 | 583,538 | 960,555 | — | 960,555 | |||||||||||
52,761 | (90,541) | (37,780) | 1,672 | (36,108) | ||||||||||||
Other | 622 | (2,271) | (1,649) | 19,552 | 17,903 | |||||||||||
Total net revenue | 1,260,280 | 737,383 | 1,997,663 | 48,873 | 2,046,536 | |||||||||||
Expenses: | ||||||||||||||||
Compensation | 441,202 | 207,927 | 649,129 | 133,787 | 782,916 | |||||||||||
Loan origination | 251,990 | — | 251,990 | — | 251,990 | |||||||||||
Technology | 111,691 | 40,867 | 152,558 | 10,046 | 162,604 | |||||||||||
Servicing | — | 122,626 | 122,626 | — | 122,626 | |||||||||||
Marketing and advertising | 39,147 | 1,778 | 40,925 | 5,215 | 46,140 | |||||||||||
Professional services | 14,114 | 7,264 | 21,378 | 16,595 | 37,973 | |||||||||||
Occupancy and equipment | 17,732 | 10,562 | 28,294 | 7,034 | 35,328 | |||||||||||
Other (2) | 14,484 | 21,466 | 35,950 | 19,592 | 55,542 | |||||||||||
Total expenses | 890,360 | 412,490 | 1,302,850 | 192,269 | 1,495,119 | |||||||||||
Income (loss) before provision for income taxes | $ | 369,920 | $ | 324,893 | $ | 694,813 | $ | (143,396) | $ | 551,417 | ||||||
Segment assets at end of year | $ | 9,756,783 | $ | 19,564,252 | $ | 29,321,035 | $ | 67,654 | $ | 29,388,689 | ||||||
Acquisition of: | ||||||||||||||||
Capitalized software | $ | 27,255 | $ | 3,930 | $ | 31,185 | $ | 8,099 | $ | 39,284 | ||||||
Furniture, fixtures, equipment and building improvements | $ | 6,275 | $ | 2,804 | $ | 9,079 | $ | 2,842 | $ | 11,921 | ||||||
Amortization of capitalized software | $ | 40,714 | $ | 6,218 | $ | 46,932 | $ | 412 | $ | 47,344 | ||||||
Impairment of capitalized software | $ | 4,597 | $ | — | $ | 4,597 | $ | — | $ | 4,597 | ||||||
Depreciation and amortization of furniture, fixtures, equipment and building improvements | $ | 3,706 | $ | 2,216 | $ | 5,922 | $ | 1,126 | $ | 7,048 | ||||||
| (1) | All revenues are from external customers. The segments do not recognize intersegment revenues. |
| (2) | Other expense includes smaller balance expense categories not separately provided to the chief operating decision maker such as safekeeping, travel, postage and corporate insurance. |
Year ended December 31, 2024 | ||||||||||||||||
| Production | | Servicing | | Reportable segment total | | Corporate | | Consolidated | | ||||||
(in thousands) | ||||||||||||||||
Revenues: (1) | ||||||||||||||||
Net gains on loans held for sale at fair value | $ | 726,720 | $ | 90,648 | $ | 817,368 | $ | — | $ | 817,368 | ||||||
Loan origination fees | 185,700 | — | 185,700 | — | 185,700 | |||||||||||
Fulfillment fees from PennyMac Mortgage Investment Trust | 26,291 | — | 26,291 | — | 26,291 | |||||||||||
Net loan servicing fees | — | 533,655 | 533,655 | — | 533,655 | |||||||||||
Management fees | — | — | — | 28,623 | 28,623 | |||||||||||
Net interest (expense) income: | ||||||||||||||||
Interest income | 321,210 | 470,492 | 791,702 | 1,864 | 793,566 | |||||||||||
Interest expense | 318,750 | 500,598 | 819,348 | — | 819,348 | |||||||||||
2,460 | (30,106) | (27,646) | 1,864 | (25,782) | ||||||||||||
Other | 531 | 1,167 | 1,698 | 26,178 | 27,876 | |||||||||||
Total net revenue | 941,702 | 595,364 | 1,537,066 | 56,665 | 1,593,731 | |||||||||||
Expenses: | ||||||||||||||||
Compensation | 315,838 | 204,371 | 520,209 | 112,529 | 632,738 | |||||||||||
Loan origination | 164,092 | — | 164,092 | — | 164,092 | |||||||||||
Technology | 95,603 | 39,511 | 135,114 | 14,433 | 149,547 | |||||||||||
Servicing | — | 105,997 | 105,997 | — | 105,997 | |||||||||||
Professional services | 11,206 | 6,906 | 18,112 | 19,880 | 37,992 | |||||||||||
Occupancy and equipment | 15,683 | 11,142 | 26,825 | 6,073 | 32,898 | |||||||||||
Marketing and advertising | 20,138 | 280 | 20,418 | 1,551 | 21,969 | |||||||||||
Legal settlements | — | (30) | (30) | 1,621 | 1,591 | |||||||||||
Other (2) | 7,911 | 22,185 | 30,096 | 15,785 | 45,881 | |||||||||||
Total expenses | 630,471 | 390,362 | 1,020,833 | 171,872 | 1,192,705 | |||||||||||
Income (loss) before provision for income taxes | $ | 311,231 | $ | 205,002 | $ | 516,233 | $ | (115,207) | $ | 401,026 | ||||||
Segment assets at end of year | $ | 8,431,612 | $ | 17,588,018 | $ | 26,019,630 | $ | 67,257 | $ | 26,086,887 | ||||||
Acquisition of: | ||||||||||||||||
Capitalized software | $ | 16,156 | $ | 3,685 | $ | 19,841 | $ | 541 | $ | 20,382 | ||||||
Furniture, fixtures, equipment and building improvements | $ | 465 | $ | 1,039 | $ | 1,504 | $ | 211 | $ | 1,715 | ||||||
Amortization of capitalized software | $ | 39,160 | $ | 7,881 | $ | 47,041 | $ | 1,128 | $ | 48,169 | ||||||
Depreciation and amortization of furniture, fixtures, equipment and building improvements | $ | 3,743 | $ | 2,804 | $ | 6,547 | $ | 1,268 | $ | 7,815 | ||||||
| (1) | All revenues are from external customers. The segments do not recognize intersegment revenues. |
| (2) | Other expense includes smaller balance expense categories not separately provided to the chief operating decision maker such as safekeeping, travel, postage and corporate insurance. |
Year ended December 31, 2023 | ||||||||||||||||
| Production | | Servicing | | Reportable segment total | | Corporate | | Consolidated | | ||||||
(in thousands) | ||||||||||||||||
Revenues: (1) | ||||||||||||||||
Net gains on loans held for sale at fair value | $ | 453,063 | $ | 92,880 | $ | 545,943 | $ | — | $ | 545,943 | ||||||
Loan origination fees | 146,118 | — | 146,118 | — | 146,118 | |||||||||||
Fulfillment fees from PennyMac Mortgage Investment Trust | 27,826 | — | 27,826 | — | 27,826 | |||||||||||
Net loan servicing fees | — | 642,600 | 642,600 | — | 642,600 | |||||||||||
Management fees | — | — | — | 28,762 | 28,762 | |||||||||||
Net interest income (expense): | ||||||||||||||||
Interest income | 272,307 | 358,247 | 630,554 | 2,370 | 632,924 | |||||||||||
Interest expense | 254,890 | 382,887 | 637,777 | — | 637,777 | |||||||||||
17,417 | (24,640) | (7,223) | 2,370 | (4,853) | ||||||||||||
Other | 250 | 3,663 | 3,913 | 11,347 | 15,260 | |||||||||||
Total net revenue | 644,674 | 714,503 | 1,359,177 | 42,479 | 1,401,656 | |||||||||||
Expenses: | ||||||||||||||||
Compensation | 274,447 | 201,002 | 475,449 | 101,515 | 576,964 | |||||||||||
Loan origination | 114,500 | — | 114,500 | — | 114,500 | |||||||||||
Technology | 88,086 | 40,343 | 128,429 | 14,723 | 143,152 | |||||||||||
Servicing | — | 69,433 | 69,433 | — | 69,433 | |||||||||||
Professional services | 10,825 | 7,485 | 18,310 | 42,211 | 60,521 | |||||||||||
Occupancy and equipment | 18,353 | 10,774 | 29,127 | 7,431 | 36,558 | |||||||||||
Marketing and advertising | 16,125 | 178 | 16,303 | 1,328 | 17,631 | |||||||||||
Legal settlements | 853 | — | 853 | 161,917 | 162,770 | |||||||||||
Other (2) | 5,407 | 16,896 | 22,303 | 14,193 | 36,496 | |||||||||||
Total expenses | 528,596 | 346,111 | 874,707 | 343,318 | 1,218,025 | |||||||||||
Income (loss) before provision for income taxes | $ | 116,078 | $ | 368,392 | $ | 484,470 | $ | (300,839) | $ | 183,631 | ||||||
Segment assets at end of year | $ | 4,560,323 | $ | 14,036,203 | $ | 18,596,526 | $ | 248,037 | $ | 18,844,563 | ||||||
Acquisition of: | ||||||||||||||||
Capitalized software | $ | 32,504 | $ | 416 | $ | 32,920 | $ | 1,864 | $ | 34,784 | ||||||
Furniture, fixtures, equipment and building improvements | $ | 199 | $ | 991 | $ | 1,190 | $ | 196 | $ | 1,386 | ||||||
Amortization of capitalized software | $ | 31,285 | $ | 9,934 | $ | 41,219 | $ | 2,243 | $ | 43,462 | ||||||
Depreciation and amortization of furniture, fixtures, equipment and building improvements | $ | 5,225 | $ | 2,965 | $ | 8,190 | $ | 1,562 | $ | 9,752 | ||||||
| (1) | All revenues are from external customers. The segments do not recognize intersegment revenues. |
| (2) | Other expense includes smaller balance expense categories not separately provided to the chief operating decision maker such as safekeeping, travel, postage and corporate insurance. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 5, 2019 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.