PennyMac Profits Jump on Loan Servicing, Origination

PennyMac Mortgage Financial Services reported a rise in income Thursday on higher servicing and origination revenue.

During the second quarter, the $3.4 billion-asset PennyMac's net income jumped 29% from the previous year, to $66.2 million. Earnings were 59 cents per share.

Higher servicing fee income and gains on mortgage loans held for sale explained much of the overall jump in profits. Net loan servicing fees increased to $68.5 million from $57 million a year ago.

Moorpark, Calif.-based PennyMac also recorded net gains on mortgage loans held for sale that were more than double their level from the second quarter of 2014, at $84 million.

Expenses also spiked 68%, to $121.6 million, on higher costs associated with employee compensation and servicing.

"PennyMac Financial achieved several significant milestones in the second quarter, including record earnings, record total production volumes and over $1 billion in originations from consumer direct lending," said Chairman and Chief Executive Officer Stanford Kurland.

"Our increases in production were driven by a robust origination market, including strengthening purchase-money demand and successful execution of our initiatives to increase market share."

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