Pennymac's mortgage division reported a $36.8 million net loss in the fourth quarter that included a one-time accrual expense related to
The quarterly results, which the company reported after the close of the regular trading day, were down from net income of $93 million
"While we disagree with the ruling, we are very pleased with the arbitrators' affirmation that SSE remains our own proprietary technology, as well as providing Pennymac with the ability to utilize it as we see fit to benefit our customers and stakeholders," Chairman and CEO David Spector said during the company's earnings call.
"With this technology now free and clear of any restrictions on use or development, we believe there is potential for additional opportunities for the company and stakeholders over time," he added.
He declined to identify whether these opportunities would be external or internal in response to an analyst's question, noting that the company is still exploring its options in this area.
The company also recorded some negative line items related to adjustments to some hedging costs and to mortgage servicing rights valuations, the latter of which tends to fall when interest rates do. But the arbitration accrual was the biggest factor in the negative $96 million pretax number for servicing. Excluding it and valuation-related items, servicing pretax income was $144 million.
Meanwhile, the relative reduction in rates in the quarter contributed to $39 million in pretax income from mortgage origination, with $26.7 billion in volume that primarily came in through the correspondent channel.
During the previous quarter, pretax income broke down by business line as follows: servicing, $101 million; and production, $25.1 million. A year ago, pretax numbers were: servicing, $145.3 million; and a $9 million loss from originations.
Pennymac's financial services unit was profitable for the full year with net income of $144.7 million, but less so that in 2022. That year, it produced $475.5 million in net income.
Shares of Pennymac's financial services unit at the time of this writing on Thursday were still up slightly from their opening price of $87.21 in after-hours trading at $87.64. However, they were down from the trading day close of $89.02.
Separately, Pennymac's real estate investment trust affiliate reported $42.5 million in net income attributable to common shareholders. That number was down compared to $51 million the previous quarter but up relative to a net loss of $4.7 million a year earlier. For the full-year, the REIT earned $199.7 million in net income. That compared favorably to a net loss of $73.3 million in 2022.
The REIT's trading-day closing price of $14.44 remained unchanged by the release of earnings after hours at the time of this writing. Pennymac Mortgage Trust's shares had opened the day at $14.37.
