Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 07, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | PENNYMAC FINANCIAL SERVICES, INC. | ||
Entity Central Index Key | 1,568,669 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 334,840,005 | ||
Entity Common Stock, Shares Outstanding | 22,035,491 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash (includes $93,757 pledged to creditors at December 31, 2015) | $ 105,472 | $ 76,256 |
Short-term investments at fair value | 46,319 | 21,687 |
Mortgage loans held for sale at fair value (includes $1,075,909 and $1,124,905 pledged to creditors) | 1,101,204 | 1,147,884 |
Derivative assets | 50,280 | 38,457 |
Servicing advances, net (includes $33,458 and $18,686 valuation allowance) | 299,354 | 228,630 |
Carried Interest due from Investment Funds (pledged to creditors at December 31, 2015) | 69,926 | 67,298 |
Investment in PennyMac Mortgage Investment Trust at fair value | 1,145 | 1,582 |
Mortgage servicing rights (includes $660,247 and $325,383 at fair value; $782,679 and $583,420 pledged to creditors) | 1,411,935 | 730,828 |
Furniture, fixtures, equipment and building improvements, net (includes $14,034 and $0 pledged to creditors) | 16,311 | 11,339 |
Capitalized software, net (includes $783 and $0 pledged to creditors) | 3,025 | 567 |
Deferred tax asset | 18,378 | 46,038 |
Loans eligible for repurchase | 166,070 | 72,539 |
Other | 45,594 | 37,419 |
Total assets | 3,505,294 | 2,506,686 |
LIABILITIES | ||
Assets sold under agreements to repurchase | 1,166,731 | 822,252 |
Mortgage Loan Participation and Sale Agreement | 234,872 | 143,568 |
Note payable | 61,136 | 146,855 |
Obligations under capital lease | 13,579 | |
Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust | 412,425 | 191,166 |
Derivative liabilities | 9,083 | 6,513 |
Accounts payable and accrued expenses | 89,915 | 62,715 |
Mortgage servicing liabilities at fair value | 1,399 | 6,306 |
Liability for loans eligible for repurchase | 166,070 | 72,539 |
Liability for losses under representations and warranties | 20,611 | 13,259 |
Total liabilities | $ 2,442,944 | $ 1,699,420 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Additional paid-in capital | $ 172,354 | $ 162,720 |
Retained earnings | 98,470 | 51,242 |
Total stockholders' equity attributable to PennyMac Financial Services, Inc. common stockholders | 270,826 | 213,964 |
Noncontrolling interest in Private National Mortgage Acceptance Company, LLC | 791,524 | 593,302 |
Total stockholders' equity | 1,062,350 | 807,266 |
Total liabilities and stockholders' equity | 3,505,294 | 2,506,686 |
Class A Common Stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock | $ 2 | $ 2 |
Class B Common Stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock | ||
Investment Funds | ||
ASSETS | ||
Carried Interest due from Investment Funds (pledged to creditors at December 31, 2015) | $ 69,926 | $ 67,298 |
Receivable, from affiliates | 1,316 | 2,291 |
LIABILITIES | ||
Payable to affiliates | 30,429 | 35,908 |
PMT | ||
ASSETS | ||
Investment in PennyMac Mortgage Investment Trust at fair value | 1,145 | 1,582 |
Note receivable from PennyMac Mortgage Investment Trust—secured | 150,000 | |
Receivable, from affiliates | 18,965 | 23,871 |
LIABILITIES | ||
Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust | 412,425 | 191,166 |
Payable to affiliates | 162,379 | 123,315 |
Private National Mortgage Acceptance Company, LLC | ||
LIABILITIES | ||
Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | $ 74,315 | $ 75,024 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Cash pledged to creditors | $ 93,757 | |
Mortgage loans held for sale, pledged to creditors | 1,079,489 | $ 1,124,905 |
Servicing advances, net, valuation allowance | 33,458 | 18,686 |
Mortgage servicing rights, at fair value | 660,247 | 325,383 |
Mortgage servicing rights pledged to creditors | 803,560 | 583,420 |
Furniture, fixtures, equipment and building improvements pledged to creditors | 14,034 | 0 |
Capitalized software pledged to creditors | $ 783 | $ 0 |
Class A Common Stock | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 21,990,831 | 21,577,686 |
Common stock, shares outstanding | 21,990,831 | 21,577,686 |
Class B Common Stock | ||
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 51 | 54 |
Common stock, shares outstanding | 51 | 54 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net gains (losses) on mortgage loans held for sale at fair value: | |||
From non-affiliates | $ 328,551 | $ 174,861 | $ 138,722 |
Net gains (losses) on mortgage loans held for sale at fair value | 320,715 | 167,024 | 138,013 |
Loan origination fees | 91,520 | 41,576 | 23,575 |
Fulfillment fees from PennyMac Mortgage Investment Trust | 58,607 | 48,719 | 79,712 |
Mortgage loan servicing fees | |||
From non-affiliates and affiliates | 290,474 | 173,005 | 61,523 |
Ancillary and other fees | 43,139 | 26,469 | 11,426 |
Net servicing fees | 382,672 | 258,421 | 119,461 |
Amortization, impairment and change in fair value of mortgage servicing rights | (156,939) | (70,165) | (27,028) |
Change in fair value of excess servicing spread payable to PennyMac Mortgage Investment Trust | (153,129) | (41,502) | (29,451) |
Net mortgage loan servicing fees | 229,543 | 216,919 | 90,010 |
Management fees: | |||
Management fees | 28,237 | 42,508 | 40,330 |
Carried Interest from Investment Funds | 2,628 | 6,156 | 13,419 |
Interest income: | |||
From non-affiliates | 45,812 | 27,771 | 15,632 |
Interest income | 49,155 | 27,771 | 15,632 |
Interest expense: | |||
To non-affiliates | 43,172 | 23,965 | 15,582 |
Interest expense | 68,537 | 37,257 | 16,673 |
Net interest expense: | (19,382) | (9,486) | (1,041) |
Other | 1,472 | 4,867 | 2,500 |
Total net revenue | 713,110 | 518,277 | 386,559 |
Expenses | |||
Compensation | 274,262 | 190,707 | 148,576 |
Servicing | 68,085 | 48,430 | 7,028 |
Technology | 25,164 | 15,439 | 9,205 |
Professional services | 15,473 | 11,108 | 10,571 |
Loan origination | 17,396 | 9,554 | 9,943 |
Other | 33,537 | 20,006 | 19,110 |
Total expenses | 433,917 | 295,244 | 204,433 |
Income before provision for income taxes | 279,193 | 223,033 | 182,126 |
Provision for income taxes | 31,635 | 26,722 | 9,961 |
Net income | 247,558 | 196,311 | 172,165 |
Less: Net income attributable to noncontrolling interest | 200,330 | 159,469 | 157,765 |
Net income attributable to PennyMac Financial Services, Inc. common stockholders | $ 47,228 | $ 36,842 | $ 14,400 |
Earnings per common share | |||
Basic (in dollars per share) | $ 2.17 | $ 1.73 | $ 0.83 |
Diluted (in dollars per share) | $ 2.17 | $ 1.73 | $ 0.82 |
Weighted-average common shares outstanding | |||
Basic (in shares) | 21,755 | 21,250 | 17,311 |
Diluted (in shares) | 76,104 | 75,955 | 75,892 |
PMT | |||
Net gains (losses) on mortgage loans held for sale at fair value: | |||
Recapture payable to PennyMac Mortgage Investment Trust | $ (7,836) | $ (7,837) | $ (709) |
Fulfillment fees from PennyMac Mortgage Investment Trust | 58,607 | 48,719 | 79,712 |
Mortgage loan servicing fees | |||
From non-affiliates and affiliates | 46,423 | 52,522 | 39,413 |
Change in fair value of excess servicing spread payable to PennyMac Mortgage Investment Trust | 3,810 | 28,663 | (2,423) |
Management fees: | |||
Management fees | 24,194 | 35,035 | 32,410 |
Interest income: | |||
From PennyMac Mortgage Investment Trust | 3,343 | ||
Interest expense: | |||
To PennyMac Mortgage Investment Trust | 25,365 | 13,292 | 1,091 |
Change in fair value of investment in and dividends received from affiliate | (230) | (6) | 41 |
Investment Funds | |||
Mortgage loan servicing fees | |||
From non-affiliates and affiliates | 2,636 | 6,425 | 7,099 |
Management fees: | |||
Management fees | 4,043 | 7,473 | 7,920 |
Carried Interest from Investment Funds | $ 2,628 | $ 6,156 | $ 13,419 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Class A Common Stock | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Members Equity Component [Member] | Total |
Balance (Private National Mortgage Acceptance Company, LLC) at Dec. 31, 2012 | $ 261,750 | $ 261,750 | ||||
Changes in members' equity | ||||||
Net income | 172,165 | |||||
Balance at Dec. 31, 2013 | $ 2 | $ 153,000 | $ 14,400 | $ 461,802 | 629,204 | |
Balance (in shares) at Dec. 31, 2013 | 20,813 | |||||
Changes in members' equity | ||||||
Net income | 43,538 | |||||
Balance at Mar. 31, 2014 | 675,078 | |||||
Balance at Dec. 31, 2013 | $ 2 | 153,000 | 14,400 | 461,802 | 629,204 | |
Balance (in shares) at Dec. 31, 2013 | 20,813 | |||||
Changes in members' equity | ||||||
Net income | 36,842 | 159,469 | 196,311 | |||
Distributions | (28,298) | (28,298) | ||||
Stock and unit-based compensation | 2,895 | 7,436 | 10,331 | |||
Stock and unit-based compensation (in shares) | 33 | |||||
Issuance of common stock in settlement of director fees | 222 | 222 | ||||
Issuance of common stock in settlement of directors' fees (in shares) | 14 | |||||
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. | 7,107 | (7,107) | ||||
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. (in shares) | 718 | |||||
Tax effect of exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. | (504) | (504) | ||||
Balance at Dec. 31, 2014 | $ 2 | 162,720 | 51,242 | 593,302 | 807,266 | |
Balance (in shares) at Dec. 31, 2014 | 21,578 | |||||
Balance at Mar. 31, 2014 | 675,078 | |||||
Changes in members' equity | ||||||
Net income | 51,417 | |||||
Balance at Jun. 30, 2014 | 721,693 | |||||
Changes in members' equity | ||||||
Net income | 55,460 | |||||
Balance at Sep. 30, 2014 | 766,449 | |||||
Changes in members' equity | ||||||
Net income | 45,896 | |||||
Balance at Dec. 31, 2014 | $ 2 | 162,720 | 51,242 | 593,302 | 807,266 | |
Balance (in shares) at Dec. 31, 2014 | 21,578 | |||||
Changes in members' equity | ||||||
Net income | 47,124 | |||||
Balance at Mar. 31, 2015 | 852,836 | |||||
Balance at Dec. 31, 2014 | $ 2 | 162,720 | 51,242 | 593,302 | 807,266 | |
Balance (in shares) at Dec. 31, 2014 | 21,578 | |||||
Changes in members' equity | ||||||
Net income | 47,228 | 200,330 | 247,558 | |||
Distributions | (9,630) | (9,630) | ||||
Stock and unit-based compensation | 5,017 | 12,504 | 17,521 | |||
Stock and unit-based compensation (in shares) | 77 | |||||
Issuance of common stock in settlement of director fees | 297 | 297 | ||||
Issuance of common stock in settlement of directors' fees (in shares) | 17 | |||||
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. | 4,982 | (4,982) | ||||
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. (in shares) | 319 | |||||
Tax effect of exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. | (662) | (662) | ||||
Balance at Dec. 31, 2015 | $ 2 | 172,354 | 98,470 | 791,524 | 1,062,350 | |
Balance (in shares) at Dec. 31, 2015 | 21,991 | |||||
Balance at Mar. 31, 2015 | 852,836 | |||||
Changes in members' equity | ||||||
Net income | 66,180 | |||||
Balance at Jun. 30, 2015 | 919,473 | |||||
Changes in members' equity | ||||||
Net income | 65,348 | |||||
Balance at Sep. 30, 2015 | 989,307 | |||||
Changes in members' equity | ||||||
Net income | 68,906 | |||||
Balance at Dec. 31, 2015 | $ 2 | $ 172,354 | $ 98,470 | $ 791,524 | $ 1,062,350 | |
Balance (in shares) at Dec. 31, 2015 | 21,991 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flow from operating activities | |||
Net income | $ 247,558 | $ 196,311 | $ 172,165 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Net gains on mortgage loans held for sale at fair value | (320,715) | (167,024) | (138,013) |
Accrual of servicing rebate to Investment Funds | 1,269 | 2,206 | 700 |
Amortization, impairment and change in fair value of mortgage servicing rights and excess servicing spread | 153,129 | 41,502 | 29,451 |
Carried Interest from Investment Funds | (2,628) | (6,156) | (13,419) |
Amortization of debt issuance costs and commitment fees relating to financing facilities | 7,775 | 5,989 | 5,014 |
Capitalization of interest on mortgage loans held for sale at fair value | (16,875) | ||
Accrual of interest on excess servicing spread financing | 25,365 | 13,292 | 1,348 |
Change in fair value of investment in common shares of PennyMac Mortgage Investment Trust | 437 | 140 | 175 |
Change in fair value of real estate acquired in settlement of loans | 22 | ||
Stock and unit-based compensation expense | 17,521 | 10,331 | 3,937 |
Provision for servicing advance losses | 29,782 | 18,686 | |
Depreciation and amortization | 2,423 | 1,365 | 824 |
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | 1,695 | (1,378) | |
Purchase of mortgage loans held for sale from PennyMac Mortgage Investment Trust | (31,490,920) | (16,431,338) | (16,113,806) |
Purchase of mortgage loans from Ginnie Mae securities for modification and subsequent sale | (1,116,700) | (1,049,838) | (30,950) |
Originations of mortgage loans held for sale, net | (4,143,240) | (1,951,070) | (1,104,051) |
Sale and principal payments of mortgage loans held for sale | 36,679,638 | 18,785,683 | 17,105,047 |
Sale of mortgage loans held for sale to Penny Mac Mortgage Investment Trust | 28,445 | 8,081 | 12,339 |
Repurchase of mortgage loans subject to representations and warranties | (22,601) | (4,089) | (7,005) |
Sale of real estate acquired in settlement of loans subject to representations and warranties | 287 | ||
Increase in servicing advances | (100,506) | (98,401) | (60,189) |
Decrease in deferred tax asset | 29,726 | 21,922 | 9,954 |
Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | (5,132) | ||
Increase in other assets | (18,100) | (31,921) | (16,387) |
Increase in accounts payable and accrued expenses | 26,307 | 16,437 | 10,109 |
Net cash provided by (used in) operating activities | 53,144 | (578,954) | (98,390) |
Cash flow from investing activities | |||
Decrease (increase) in short-term investments | (24,632) | 120,895 | (89,418) |
Advance on note receivable from PennyMac Mortgage Investment Trust—secured | (168,546) | ||
Repayment of note receivable from PennyMac Mortgage Investment Trust—secured | 18,546 | ||
Purchase of mortgage servicing rights | (382,824) | (135,480) | (195,871) |
Sale of mortgage servicing rights | 10,916 | 550 | |
Net settlement of derivative financial instruments used for hedging | 2,033 | 18,620 | |
Purchase of furniture, fixtures, equipment and building improvements | (9,122) | (4,613) | (6,615) |
Acquisition of capitalized software | (2,782) | (123) | (343) |
(Increase) decrease in margin deposits and restricted cash | 4,185 | (3,463) | 6,916 |
Net cash provided by (used in) investing activities | (563,142) | 6,752 | (284,781) |
Cash flow from financing activities | |||
Sale of assetss under agreements to repurchase | 33,125,237 | 17,217,767 | 15,805,464 |
Repurchase of assets sold under agreements to repurchase | (33,187,830) | (16,866,738) | (15,727,406) |
Sale of mortgage loan participation certificates | 17,722,964 | 2,817,616 | |
Repayment of mortgage loan participation certificates | (17,631,704) | (2,673,978) | |
Borrowings on notes payable | 352,243 | 274,636 | 211,253 |
Repayments of notes payable | (29,411) | (179,935) | (212,112) |
Issuance of excess servicing spread | 271,554 | 95,892 | 139,028 |
Repayment of excess servicing spread financing to PennyMac Mortgage Investment Trust | (78,578) | (39,256) | (4,076) |
Distributions to Private National Mortgage Acceptance Company, LLC members | (9,630) | (28,185) | (23,432) |
Issuance of obligations under capital lease | 13,579 | ||
Repayment of obligation under capital lease | (1) | ||
Payment of debt issuance costs | (9,210) | ||
Issuance of common stock | 230,000 | ||
Payment of common stock underwriting and offering costs | (13,486) | ||
Payment by noncontrolling interest of common stock issuance costs | (3,745) | ||
Net cash provided by financing activities | 539,214 | 617,819 | 401,487 |
Net increase in cash | 29,216 | 45,617 | 18,316 |
Cash at beginning of year | 76,256 | 30,639 | 12,323 |
Cash at end of year | 105,472 | 76,256 | 30,639 |
Investment Funds | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Carried Interest from Investment Funds | (2,628) | (6,156) | (13,419) |
Decrease (increase) in receivable from affiliates | (294) | (1,582) | 57 |
Increase (decrease) in payable to affiliate | (5,479) | (1,029) | 142 |
PMT | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Amortization, impairment and change in fair value of mortgage servicing rights and excess servicing spread | (3,810) | (28,663) | 2,423 |
Decrease (increase) in receivable from affiliates | 7,637 | 1,280 | 173 |
Increase (decrease) in payable to affiliate | $ 37,627 | $ 41,647 | $ 33,686 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2015 | |
Organization | |
Organization | Note 1—Organization PennyMac Financial Services, Inc. (“PFSI” or the “Company”) was formed as a Delaware corporation on December 31, 2012. Pursuant to a reorganization, the Company became a holding corporation and its primary asset is an equity interest in Private National Mortgage Acceptance Company, LLC (“PennyMac”). The Company is the managing member of PennyMac, and it operates and controls all of the businesses and affairs of PennyMac, subject to the consent rights of other members under certain circumstances, and consolidates the financial results of PennyMac and its subsidiaries. PennyMac is a Delaware limited liability company which, through its subsidiaries, engages in mortgage banking and investment management activities. PennyMac’s mortgage banking activities consist of residential mortgage loan production and mortgage loan servicing. PennyMac’s investment management activities and a portion of its loan servicing activities are conducted on behalf of investment vehicles that invest in residential mortgage loans and related assets. PennyMac’s primary wholly owned subsidiaries are: · PNMAC Capital Management, LLC (“PCM”) —a Delaware limited liability company registered with the Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended. PCM enters into investment management agreements with entities that invest in residential mortgage loans and related assets. Presently, PCM has management agreements with PennyMac Mortgage Investment Trust (“PMT”), a publicly held real estate investment trust (“REIT”), PNMAC Mortgage Opportunity Fund, LLC and PNMAC Mortgage Opportunity Fund, L.P., (the “Master Fund”), both registered under the Investment Company Act of 1940, as amended, an affiliate of these registered funds and PNMAC Mortgage Opportunity Fund Investors, LLC (collectively, the “Investment Funds”). Together, the Investment Funds and PMT are referred to as the “Advised Entities.” · PennyMac Loan Services, LLC (“PLS”) —a Delaware limited liability company that services portfolios of residential mortgage loans on behalf of non-affiliates and the Advised Entities, purchases and originates new prime credit quality residential mortgage loans, and engages in other mortgage banking activities for its own account and the account of PMT . PLS is approved as a seller/servicer of mortgage loans by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and as an issuer of securities guaranteed by the Government National Mortgage Association (“Ginnie Mae”). PLS is a licensed Federal Housing Administration Nonsupervised Title II Lender with the U.S. Department of Housing and Urban Development (“HUD”) and a lender/servicer with the Veterans Administration (“VA”) and U.S. Department of Agriculture (“USDA”) (each an “Agency” and collectively the “Agencies”). · PNMAC Opportunity Fund Associates, LLC (“PMOFA”) —a Delaware limited liability company and the general partner of the Master Fund. PMOFA is entitled to incentive fees representing allocations of profits (“Carried Interest”) from the Master Fund . Initial Public Offering and Recapitalization On May 14, 2013, PFSI completed an initial public offering (“IPO”) in which it sold approximately 12.8 million shares of its Class A common stock, at a public offering price of $18.00 per share. PFSI received net proceeds of $216.8 million, after deducting underwriting discounts and commissions, from sales of its shares in the IPO. PFSI used these net proceeds to purchase approximately 12.8 million Class A units of PennyMac. The purchase of 12.8 million Class A units of PennyMac has been accounted for as a transfer of interests under common control. Accordingly, the accompanying consolidated financial statements reflect a reclassification of members’ equity to noncontrolling interests in the Company of $315.5 million. This amount represents the carrying value in the Company of the existing owners of PennyMac on the date of the IPO. Before the IPO, PennyMac completed a reorganization by amending its limited liability company agreement to convert all classes of ownership interests held by its existing owners to a single class of common units. The conversion of existing interests was based on the various interests’ liquidation priorities as specified in PennyMac’s prior limited liability company agreement. In connection with that reorganization, PFSI became the sole managing member of PennyMac. After the completion of the recapitalization and reorganization transactions, PennyMac became a consolidated subsidiary of the Company. Accordingly, PennyMac’s consolidated financial statements are the Company’s historical financial statements. The historical consolidated financial statements of PennyMac are reflected herein based on the historical ownership interests of the then-existing PennyMac unitholders. Tax Receivable Agreement As part of the IPO, PFSI entered into an Exchange Agreement with PennyMac’s existing unitholders whereby the existing unitholders may exchange their PennyMac units for PFSI stock. PennyMac has made an election pursuant to Section 754 of the Internal Revenue Code which remains in effect. As a result of this election an exchange under the Exchange Agreement results in a special adjustment for PFSI that may increase PFSI’s tax basis of certain assets of PennyMac that otherwise would not have been available. These increases in tax basis may reduce the amount of income tax that PFSI would otherwise be required to pay in the future. These increases in tax basis may also decrease tax gains (or increase tax losses) on future dispositions of certain assets to the extent a portion of the increased tax basis is allocated to those assets. As part of the IPO, PFSI entered into a tax receivable agreement with PennyMac’s existing unitholders that will provide for the payment by PFSI to PennyMac exchanged unitholders in an amount equal to 85% of the amount of the benefits, if any, that PFSI is deemed to realize as a result of (i) increases in tax basis resulting from the exchanges noted above and (ii) certain other tax benefits related to PFSI entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement . The term of the tax receivable agreement will continue until all such tax benefits have been utilized or expired, unless PFSI exercises its right to terminate the tax receivable agreement. In the event of termination of the tax receivable agreement, the Company would be required to make an immediate payment equal to the present value of the anticipated future net tax benefits, which upfront payment may be made years in advance of the actual realization of such future benefits . |
Concentration of Risk
Concentration of Risk | 12 Months Ended |
Dec. 31, 2015 | |
Concentration of Risk | |
Concentration of Risk | Note 2—Concentration of Risk A substantial portion of the Company’s activities relate to the Advised Entities. Revenues generated from these entities (generally comprised of management fees, loan servicing fees, Carried Interest and fulfillment fees) totaled 16% , 32% and 45% of total net revenues for the years ended December 31, 2015, 2014 and 2013, respectively. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 3—Significant Accounting Policies A description of the Company’s significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows. Basis of Presentation The Company’s consolidated financial statements have been prepared in compliance with accounting principles generally accepted in the United States (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (the “Codification”). Principles of Consolidation The consolidated financial statements include the accounts of PFSI, PennyMac and all of its wholly ‑owned subsidiaries. Intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results will likely differ from those estimates. Fair Value The Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the observability of the inputs used to determine fair value. These levels are: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Prices determined or determinable using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing an asset or liability and are developed based on market data obtained from sources independent of the Company. These may include quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk and other inputs. · Level 3—Prices determined using significant unobservable inputs. In situations where observable inputs are unavailable (for example, when there is little or no market activity for an asset or liability at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Company’s own judgments about the factors that market participants use in pricing an asset or liability, and are based on the best information available in the circumstances. As a result of the difficulty in observing certain significant valuation inputs affecting “Level 3” financial statement items, the Company is required to make judgments regarding these items’ fair values. Different persons in possession of the same facts may reasonably arrive at different conclusions as to the inputs to be applied in valuing these financial statement items and their fair values. Likewise, due to the general illiquidity of some of these financial statement items, subsequent transactions may be at values significantly different from those reported. Short ‑Term Investments Short ‑term investments, which represent investments in accounts with a depository institution, are carried at fair value. Changes in fair value are recognized in current period income. The Company classifies its short ‑term investments as “Level 1” fair value financial statement items. Mortgage Loans Held for Sale at Fair Value Management has elected to account for mortgage loans held for sale at fair value, with changes in fair value recognized in current period income, to more timely reflect the Company’s performance. All changes in fair value, including changes arising from the passage of time, are recognized as a component of Net gains on mortgage loans held for sale at fair value . The Company classifies most of the mortgage loans held for sale at fair value as “Level 2” fair value financial statement items. Certain of the Company’s mortgage loans held for sale may not be readily saleable due to identified defects or delinquency. Such mortgage loans are classified as “Level 3” fair value financial statement items. Sale Recognition The Company recognizes transfers of mortgage loans as sales when it surrenders control over the mortgage loans. Control over transferred mortgage loans is deemed to be surrendered when (i) the mortgage loans have been isolated from the Company, (ii) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred mortgage loans, and (iii) the Company does not maintain effective control over the transferred mortgage loans through either (a) an agreement that entitles and obligates the Company to repurchase or redeem them before their maturity or (b) the ability to unilaterally cause the holder to return the specific mortgage loans. Interest Income Recognition Interest income on mortgage loans held for sale at fair value is recognized over the life of the mortgage loans using their contractual interest rates. Income recognition is suspended and the unpaid interest receivable is reversed against interest income when mortgage loans become 90 days delinquent, or when, in management’s opinion, a full recovery of interest and principal becomes doubtful. Income recognition is resumed when the mortgage loan becomes contractually current. Derivative Financial Instruments The Company is exposed to price risk relative to its mortgage loans held for sale as well as to the commitments it makes to loan applicants to originate or to PMT to acquire mortgage loans at specified interest rates (“interest rate lock commitments” or “IRLCs”). The Company bears price risk from the time a commitment to fund a mortgage loan is made to a borrower or to purchase a mortgage loan from PMT, to the time the mortgage loan is sold. During this period, the Company is exposed to losses if mortgage market interest rates increase, because the fair value of the purchase commitment or prospective mortgage loan decreases. The Company also is exposed to risk relative to the fair value of its mortgage servicing rights (“MSRs”). The Company is exposed to loss in fair value of its MSRs when interest rates decrease. The Company engages in interest rate risk management activities in an effort to reduce the variability of earnings caused by changes in market interest rates. To manage this fair value risk resulting from interest rate risk, the Company uses derivative financial instruments acquired with the intention of reducing the risk that changes in market interest rates will result in unfavorable changes in the fair value of the Company’s IRLCs, inventory of mortgage loans held for sale and MSRs. IRLCs are accounted for as derivative financial instruments. The Company manages the risk created by IRLCs relating to mortgage loans held for sale by entering into forward sale agreements to sell the mortgage loans and by the purchase and sale of mortgage ‑backed securities (“MBS”) options and futures. Such agreements are also accounted for as derivative financial instruments. From time to time, these instruments are also used to manage the risk created by changes in prepayment speeds on certain of the MSRs the Company holds. The Company classifies its IRLCs as “Level 3” fair value financial statement items and the derivative financial instruments it acquires to manage the risks created by IRLCs, mortgage loans held for sale and MSRs as “Level 1” or “Level 2” fair value financial statement items. The Company does not use derivative financial instruments for purposes other than in support of its risk management activities. The Company accounts for its derivative financial instruments as free ‑standing derivatives. The Company does not designate its derivative financial instruments for hedge accounting. All derivative financial instruments are recognized on the consolidated balance sheet at fair value with changes in the fair values being reported in current period income. Changes in fair value of derivative financial instruments hedging IRLCs and mortgage loans held for sale at fair value are included in Net gains on mortgage loans held for sale at fair value in the Company’s consolidated statements of income. For derivative financial instruments hedging MSRs, changes in fair value are included in Amortization, impairment and change in fair value of mortgage servicing rights in the Company’s consolidated statements of income. When the Company has multiple derivative instruments with the same counterparty under a master netting arrangement, it offsets the amounts recorded as assets and liabilities and amounts recognized for the right to reclaim cash collateral it has deposited with the counterparty or the obligation to return cash collateral it has collected from the counterparty arising from that master netting arrangement. Such offset amounts are presented as either a net asset or liability by counterparty on the Company’s consolidated balance sheets. Servicing Advances Servicing advances represent advances made on behalf of borrowers and the mortgage loans’ investors to fund delinquent balances for property taxes and insurance premiums and out-of-pocket collection costs (e.g., preservation and restoration of mortgaged or real estate owned property, legal fees, appraisals and insurance premiums). Servicing advances are made in accordance with the Company’s servicing agreements and, when made, are deemed recoverable. The Company periodically reviews servicing advances for collectability and provides a valuation allowance for amounts estimated to be uncollectable. Servicing advances are written off when they are deemed uncollectible. Carried Interest Due from Investment Funds The Company has a general partnership interest or other Carried Interest arrangement with the Investment Funds, and earns Carried Interest thereunder. Carried Interest, in general terms, is the share of any profits that the general partners receive as compensation in excess of specified targeted amounts . The Company determines the amount of Carried Interest to be recorded each period based on the cash flows that would be realized by all partners assuming liquidation of the Investment Funds’ remaining investments as of the measurement date . Investment in PennyMac Mortgage Investment Trust at Fair Value Common shares of beneficial interest in PMT are carried at their fair value with changes in fair value recognized in current period income. Fair value for purposes of the Company’s holdings in PMT is based on the published closing price of the shares as of period end. The Company classifies its investment in common shares of PMT as a “Level 1” fair value financial statement item. Mortgage Servicing Rights and Mortgage Servicing Liabilities MSRs and mortgage servic ing liabilities (“MSLs”) arise from contractual agreements between the Company and investors (or their agents) in mortgage securities and mortgage loans. Under these contracts, the Company performs mortgage loan servicing functions in exchange for fees and other remuneration. The servicing functions typically performed include, among other responsibilities, collecting and remitting loan payments; responding to borrower inquiries; accounting for principal and interest; holding custodial (impound) funds for payment of property taxes and insurance premiums; counseling delinquent mortgagors; supervising the acquisition of real estate in settlement of loans (“REO”) and property disposition. REO represents real estate that collateralized the mortgage loans before the properties were acquired in settlement of loans. The value of MSRs and MSLs is derived from the net positive or negative, respectively, cash flows associated with the servicing contracts. The Company receives a servicing fee ranging generally from 0.19% to 0.57% annually, net of related guarantee fees, on the remaining outstanding principal balances of the mortgage loans subject to the servicing contracts. The servicing fees are collected from the monthly payments made by the mortgagors. The Company is contractually entitled to receive other remuneration including rights to various mortgagor ‑contracted fees such as late charges and collateral reconveyance charges, and the Company is generally entitled to retain the interest earned on funds held pending remittance related to its collection of mortgagor payments. The Company also generally has the right to solicit the mortgagors for other products and services as well as for new mortgages for those considering refinancing or purchasing a new home. The Company recognizes MSRs and MSLs initially at fair value, either as proceeds from or liabilities incurred in, sales of mortgage loans where the Company assumes the obligation to service the mortgage loan in the sale transaction, or from the purchase of MSRs. The Company’s subsequent accounting for MSRs and MSLs is based on the class of MSR or MSL . The Company has identified three classes of MSRs: originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5% ; MSRs backed by mortgage loans with initial interest rates of more than 4.5%; and purchased MSRs financed in part through the transfer of the right to receive excess servicing spread (“ESS”) cash flows.. Originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5% are accounted for using the amortization method. Originated MSRs backed by loans with initial interest rates of more than 4.5% and purchased MSRs financed in part by ESS are accounted for at fair value with changes in fair value recorded in current period income. MSLs are carried at fair value. The fair value of MSRs and MSLs is difficult to determine because MSRs and MSLs are not actively traded in observable stand ‑alone markets. Considerable judgment is required to estimate the fair values of MSRs and MSLs and the exercise of such judgment can significantly affect the Company’s income. Therefore, the Company classifies its MSRs and MSLs as “Level 3” fair value financial statement items. The Company uses a discounted cash flow approach to estimate the fair value of MSRs and MSLs. This approach consists of projecting and discounting projected servicing cash flows. The inputs used in the Company’s discounted cash flow model are based on market factors which management believes are consistent with inputs and data used by market participants valuing similar MSRs and MSLs. The key inputs used in the valuation of MSRs and MSLs include mortgage prepayment speeds, cost to service the mortgage loans and pricing spreads discount rate. These inputs can, and generally do, change from period to period as market conditions change. MSRs and MSLs are generally subject to reduction in fair value when mortgage interest rates decrease. Decreasing mortgage interest rates normally encourage increased mortgage refinancing activity. Increased refinancing activity reduces the expected life of the mortgage loans underlying the MSRs and MSLs, thereby reducing their fair value. Reductions in the fair value of MSRs and MSLs affect earnings primarily through change in fair value and impairment charges. For MSRs backed by mortgage loans with historically low mortgage interest rates, factors other than interest rates (such as housing price changes) take on increasing influence on prepayment behavior of the underlying mortgage loans. MSRs Accounted for Using the Amortization Method The Company amortizes MSRs that are accounted for using the amortization method. MSR amortization is determined by applying the ratio of the net MSR cash flows projected for the current period to the estimated total remaining projected net MSR cash flows. The estimated total net MSR cash flows are determined at the beginning of each month using prepayment inputs applicable at that time. MSRs accounted for using the amortization method are periodically evaluated for impairment. Impairment occurs when the current fair value of the MSRs decreases below the asset’s amortized cost. If MSRs are impaired, the impairment is recognized in current ‑period income and the carrying value (carrying value is the MSR’s amortized cost reduced by any related valuation allowance) of the MSRs is adjusted through a valuation allowance. If the fair value of impaired MSRs subsequently increases, the increase in fair value is recognized in current ‑period income. When an increase in fair value of MSR is recognized, the valuation allowance is adjusted to increase the carrying value of the MSRs only to the extent of the valuation allowance. For impairment evaluation purposes, the Company stratifies its MSRs by predominant risk characteristic when evaluating for impairment. For purposes of performing its MSR impairment evaluation, the Company stratifies its servicing portfolio on the basis of certain risk characteristics including mortgage loan type (fixed ‑rate or adjustable ‑rate) and note interest rate. Fixed ‑rate mortgage loans are stratified into note rate pools of 50 basis points for note rates between 3.0% and 4.5% and a single pool for note rates of less than or equal to 3.0% . If the fair value of MSRs in any of the note interest rate pools is below the carrying value of the MSRs for that pool, impairment is recognized to the extent of the difference between the estimated fair value and the carrying value of that pool. Management periodically reviews the various impairment strata to determine whether the fair value of the impaired MSRs in a given stratum is likely to recover. When management deems recovery of the fair value to be unlikely in the foreseeable future, a write ‑down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance. Both amortization and changes in the amount of the MSR valuation allowance are recorded in current period income in Amortization, impairment and change in fair value of mortgage servicing rights in the consolidated statements of income. MSRs and MSLs Accounted for at Fair Value Changes in fair value of MSLs and MSRs accounted for at fair value are recognized in current period income in Amortization, impairment and change in fair value of mortgage servicing rights in the consolidated statements of income. Furniture, Fixtures, Equipment and Building Improvements Furniture, fixtures, equipment and building improvements are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight ‑line method over the estimated useful lives of the various classes of assets, which range from five to seven years for furniture and equipment and the lesser of the asset’s estimated useful life or the remaining lease term for fixtures and building improvements. Capitalized Software The Company capitalizes certain consulting, payroll, and payroll ‑related cost s related to computer software developed for internal use. Once development is complete and the software is placed in service, the Company amortizes the capitalized costs over five years using the straight ‑line method. The Company also periodically assesses capitalized software for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. If management identifies an indicator of impairment, it assesses recoverability by comparing the carrying amount of the asset to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset. An impairment loss is recognized when the carrying amount is not recoverable and is measured as the excess of carrying value over fair value. No such impairment was recorded during the three years ended December 31, 2015. Mortgage Loans Eligible for Repurchase The terms of the Ginnie Mae MBS program allow, but do not require, the Company to repurchase mortgage loans when the borrower has made no payments for three consecutive months. As a result of this right, the Company recognizes the mortgage loans in Mortgage loans eligible for repurchase at their unpaid principal balances and records a corresponding liability in Liability for mortgage loans eligible for repurchase on its consolidated balance sheet s . Margin Deposits Margin deposits represents deposits that serve as collateral for various agreements the Company has entered into, such as derivative contracts . Margin deposits are included in Other assets in the Company’s consolidated balance sheets. Assets Sold Under Agreements to Repurchase The carrying value of assets sold under agreements to repurchase is based on the accrued cost of the agreements. The costs of creating the facilities underlying the agreements are included in the carrying value of the agreements and are amortized to Interest expense over the term of the borrowing facility. Excess Servicing Spread Financing at Fair Value The Company finances certain of its purchases of Agency MSRs through the sale to PMT of the right to receive the excess of the servicing fee rate over a specified rate of the underlying MSRs. This excess is referred to as the ESS. ESS is carried at its fair value. Changes in fair value are recognized in current period income in Amortization, Impairment and Change in Fair Value of Mortgage Servicing Rights . Because the ESS is a claim to a portion of the cash flows from MSRs, the fair value measurement of the ESS is similar to that of MSRs. The Company uses the same discounted cash flow approach to measuring the ESS as used to measure MSRs except that certain inputs relating to the cost to service the mortgage loans underlying the MSR and certain ancillary income are not included as these cash flows do not accrue to the holder of the ESS. The Company categorizes ESS as a “Level 3” fair value financial statement item. Liability for Losses Under Representations and Warranties The Company provides for its estimate of the losses that it expects to incur in the future as a result of its breach of the representations and warranties it provides to the purchasers and insurers of the mortgage loans the Company sold. The Company’s agreements with the purchaser and insurer include representations and warranties related to the mortgage loans the Company sells to the purchaser. The representations and warranties require adherence to purchaser origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. In the event of a breach of its representations and warranties, the Company may be required to either repurchase the mortgage loans with the identified defects or indemnify the purchaser or insurer for any losses. In such cases, the Company bears any subsequent credit loss on the mortgage loans. The Company’s credit loss may be reduced by any recourse it has to correspondent lenders that sold such mortgage loans and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent lender. The Company includes a provision for losses relating to the representations and warranties it makes as part of its mortgage loan sale transactions as part of its Net gains on mortgage loans held for sale at fair value . The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, estimated future defaults and loan repurchase rates, the potential severity of loss in the event of default and the probability of reimbursement by the correspondent loan seller. The Company establishes a liability at the time mortgage loans are sold and periodically updates its liability estimate. The liability estimate is reviewed and approved by the Company’s senior management credit committee wh ich includes the senior executives of the Company and of the loan production, loan servicing and credit risk management areas. The level of the liability for losses on representations and warranties is difficult to estimate and requires considerable management judgment. The level of mortgage loan repurchase losses is dependent on economic factors, purchaser and insurer loss mitigation strategies, the Company’s ability to recover any losses inherent in repurchased mortgage loans from the correspondent lenders and other external conditions that may change over the lives of the mortgage loans. As economic fundamentals change, as purchaser and insurer evaluation of their loss mitigation strategies (including claims under representations and warranties) change and as the mortgage market and general economic conditions affect the Company’s correspondent lenders, the level of ensuing losses will change. As a result of these changes, the Company may be required to adjust the estimate of its liability for representations and warranties. Such an adjustment may be material to the Company’s financial condition and results of operations. The Company did not record any adjustments to previously recorded liabilities for representations and warranties during any of the periods presented. The Company’s representations and warranties are generally not subject to stated limits of exposure. However, management believes that the current unpaid principal balance (“UPB”) of mortgage loans sold by the Company to date represents the maximum exposure to repurchases related to representations and warranties. Management believes the amount and range of reasonably possible losses in relation to the recorded liability is not material to the Company’s financial condition or results of operations. Mortgage Loan Servicing Fees Mortgage loan servicing fees and other remuneration are received by the Company for servicing residential mortgage loans. Mortgage loan servicing fees are recorded net of Agency guarantee fees paid by the Company. Mortgage l oan servicing fees are recognized as earned over the life of the mortgage loans in the servicing portfolio. Stock ‑Based Compensation The Company’s 2013 Equity Incentive Plan provides for awards of nonstatutory and incentive stock options, time ‑based restricted stock units, performance ‑based restricted stock units, stock appreciation rights, performance units and stock grants. The Company establishes the cost of its share-based awards at the awards’ fair values at the grant date of the awards. The Company estimates the fair value of the stock options, time ‑based restricted stock units and performance ‑based restricted stock units awarded with reference to the fair value of its underlying common stock on the date of the award. Compensation costs are fixed, except for performance ‑based restricted stock units, as of the award date as all grantees are employees of PennyMac or directors of the Company. The Company amortizes the cost of time ‑based restricted stock unit awards to compensation expense over the vesting period using the graded vesting method. The Company amortizes performance ‑based restricted stock unit awards on the straight ‑line basis over the vesting period. Expense relating to awards is included in Compensation expense in the consolidated statements of income. Income Taxes As a result of the PennyMac recapitalization and reorganization, the Company expects to benefit from amortization and other tax deductions due to increases in the tax basis of PennyMac’s assets from the exchange of PennyMac Class A units. Those deductions will be allocated to the Company and will be taken into account in reporting the Company’s taxable income. The Company has entered into an agreement with the unitholders of PennyMac that will provide for the additional payment by the Company to exchanging unitholders of PennyMac equal to 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that PFSI realizes due to (i) increases in tax basis resulting from exchanges of the then ‑existing unitholders and (ii) certain other tax benefits related to PFSI entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. The Company is subject to federal and state income taxes. Income taxes are provided using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which the change occurs. A valuation allowance is established if, in management’s judgment, it is not more likely than not that a deferred tax asset will be realized. The Company recognizes tax benefits relating to its tax positions only if, in the opinion of management, it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority. A tax position that meets this standard is recognized as the largest amount that is greater than 50% likely to be realized upon ultimate settlement with the appropriate taxing authority. The Company will classify any penalties and interest as a component of provision for income taxes. Variable Interest Held in Unconsolidated Variable Interest Entities A Variable Interest Entity (“VIE”) is an entity having either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or equity investors at risk that lack the ability to control the entity’s activities. Variable interests are investments or other interests that will absorb portions of a VIE’s expected losses or receive portions of the VIE’s expected residual returns. PFSI consolidates the assets and liabilities of VIEs of which the Company is the primary beneficiary. The primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE and holds a variable interest that could potentially be significant to the VIE. To determine whether a variable interest the Company holds could potentially be significant to the VIE, the Company considers both quantitative and qualitative factors regarding the nature, size and form of its involvement with the VIE. The Company assesses whether it is the primary beneficiary of a VIE on an ongoing basis. PMOFA is a general partner in the Master Fund. The Master Fund wholly owns PennyMac Mortgage Co. Funding, LLC (“Funding, LLC”) a nd PennyMac Mortgage Co. , LLC . Funding LLC is the majority interest holder in PennyMac Loan Trust 2015 ‑NPL1 (the “Trust”), which holds the mortgage loans for Funding LLC. PLS provides mortgage loan servicing to the loans held by the Trust as well as loans held by the Mortgage Co. The related party group constituting the Company and its affiliates (including PMOFA) has an equity interest in the Master Fund, the ultimate Parent of the Trust, Mortgage Co and Funding, LLC. The direct equity holders in the Trust, Mortgage Co and Funding, LLC, however, do not have power to direct the activities of the respective entities and as such, both the Trust and Mortgage Co are considered to be VIEs as defined in the Consolidations topic of the Codification. The Company is not the primary beneficiary in these VIEs, given it does not represent the enterprise within the related party group that is most closely associated with these VIEs and, as such, the Company does not consolidate these VIEs. Exposure to loss of the related party group from the unconsolidated VIEs is limited to the contributed capital of the related party group in the Master Fund totaling $2,000 which represents the general partnership interest held by PMOFA in the Master Fund. Reclassification of previously presented balances In April of 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability . ASU 2015-03 specifies that its adoption be made on a retrospective basis. Accordingly, the Company has reclassified its debt issuance costs from Other assets as previously presented to Mortgage loans sold under agreements to repurchase and Mortgage loan participat |
Transactions with Affiliates
Transactions with Affiliates | 12 Months Ended |
Dec. 31, 2015 | |
Transactions with Affiliates | |
Transactions with Affiliates | Note 4 — Transactions with Affiliates PennyMac Mortgage Investment Trust Operating Activities Correspondent Production Before February 1, 2013, PMT paid the Company a fulfillment fee of 50 basis points of the unpaid principal balance (“ UPB ”) of mortgage loans sold to non ‑affiliates where PMT is approved or licensed to sell to such non ‑affiliate. Effective February 1, 2013, the mortgage banking and warehouse services agreement provides for a fulfillment fee paid to the Company based on the type of mortgage loan that PMT acquires. The fulfillment fee is equal to a percentage of the UPB of mortgage loans purchased by PMT, with the addition of potential fee rate discounts applicable to PMT’s monthly purchase volume in excess of designated thresholds. The Company has also agreed to provide such services exclusively for PMT’s benefit, and the Company and its affiliates are prohibited from providing such services for any other party. The Company is entitled to a fulfillment fee based on the type of mortgage loan that PMT acquires and equal to a percentage of the UPB of such mortgage loan. Presently, the applicable fulfillment fee percentages are (i) 0.50% for conventional mortgage loans, (ii) 0.88% for loans sold in accordance with the Ginnie Mae Mortgage ‑Backed Securities Guide, and (iii) 0.50% for all other mortgage loans not contemplated above; provided, however, that the Company may, in its sole discretion, reduce the amount of the applicable fulfillment fee and credit the amount of such reduction to the reimbursement otherwise due as described below. This reduction may only be credited to the reimbursement applicable to the month in which the related mortgage loan was funded. PMT does not hold the Ginnie Mae approval required to issue Ginnie Mae MBS and act as a servicer. Accordingly, under the mortgage banking and warehouse services agreement, the Company currently purchases loans saleable in accordance with the Ginnie Mae Mortgage ‑Backed Securities Guide “as is” and without recourse of any kind from PMT at cost less any administrative fees collected by PMT from the seller, plus accrued interest and a sourcing fee of three basis points. I n the event that PMT purchases mortgage loans with an aggregate UPB in any month greater than $2.5 billion and less than $5 billion, the Company has agreed to discount the amount of such fulfillment fees by reimbursing PMT an amount equal to the product of (i) 0.025% , (ii) the amount of UPB in excess of $2.5 billion and (iii) the percentage of the aggregate UPB relating to mortgage loans for which the Company collected fulfillment fees in such month. In the event PMT purchases mortgage loans with an aggregate UPB in any month greater than $5 billion, the Company has agreed to further discount the amount of fulfillment fees by reimbursing PMT an amount equal to the product of (i) 0.05% , (ii) the amount of UPB in excess of $5 billion and (iii) the percentage of the aggregate UPB relating to mortgage loans for which the Company collected fulfillment fees in such month. In consideration for the mortgage banking services provided by the Company with respect to PMT’s acquisition of mortgage loans under the Company ’s early purchase program, the Company is entitled to fees accruing (i) at a rate equal to $1,500 per annum per early purchase facility and (ii) in the amount of $ 35 for each mortgage loan that PMT acquires. In consideration for the warehouse services provided by the Company with respect to mortgage loans that PMT finances for its warehouse lending clients, with respect to each facility, the Company is entitled to fees accruing (i) at a rate equal to $40,000 per annum for each of the first twenty (20) warehouse lending facilities active in any month and $10,000 per annum for each additional warehouse lending facility active in any month, and (ii) in the amount of $50 with respect to each mortgage loan that PMT finances thereunder. Where PMT has entered into both an early purchase agreement and a warehouse lending agreement with the same client, the Company shall only be entitled , with respect to any mortgage loan that becomes subject t o both such agreements, to the $50 per mortgage loan fee provided under the warehouse lending agreement . The term of the mortgage banking and warehouse services agreement expires on February 1, 2017, subject to automatic renewal for additional 18 ‑month periods, unless terminated earlier in accordance with the terms of the agreement. MSR Recapture Agreement Pursuant to the terms of a n MSR recapture agreement, effective February 1, 2013 , if the Company refinances through its consumer direct lending business mortgage loans for which PMT previously held the MSRs, the Company is generally required to transfer and convey to one of PMT’s wholly ‑owned subsidiaries without cost to PMT, the MSRs with respect to new mortgage loans originated in those refinancing s (or, under certain circumstances, other mortgage loans) that have an aggregate UPB that is not less than 30% of the aggregate UPB of all the mortgage loans so originated. Where the fair value of the aggregate MSRs to be transferred for the applicable month is less than $200,000, the Company may, at its option, pay cash to PMT in an amount equal to such fair value instead of transferring such MSRs. The MSR recapture agreement expires, unless terminated earlier in accordance with the agreement, on February 1, 2017, subject to automatic renewal for additional 18 ‑month periods. Following is a summary of correspondent production activity between the Company and PMT: Year ended December 31, 2015 2014 2013 (in thousands) Fulfillment fee revenue $ $ $ Unpaid principal balance of loans fulfilled for PennyMac Mortgage Investment Trust $ $ $ Sourcing fees paid $ $ $ Unpaid principal balance of loans purchased from PennyMac Mortgage Investment Trust $ $ $ Proceeds from sale of mortgage loans held for sale to PennyMac Mortgage Investment Trust $ $ $ Tax service fee from PennyMac Mortgage Investment Trust $ $ $ — Mortgage servicing rights recapture recognized $ $ $ Mortgage banking and warehouse service fees paid by PMT $ — $ — $ Mortgage Loan Servicing The Company has a loan servicing agreement with PMT. Before February 1, 2013, the servicing fee rates were based on the risk characteristics of the mortgage loans serviced and total servicing compensation was established at levels that management believed were competitive with those charged by other servicers or specialty servicers, as applicable. · Servicing fee rates for nonperforming loans ranged between 50 and 100 basis points per year on the UPB of the mortgage loans serviced on PMT’s behalf. The Company was also entitled to certain customary market ‑based fees and charges, including boarding and deboarding fees, liquidation and disposition fees, assumption, modification and origination fees and late charges, as well as interest on funds on deposit in custodial accounts. In the event the Company either effected a refinancing of a mortgage loan on PMT’s behalf and not through a third party lender and the resulting mortgage loan was readily saleable, or originated a mortgage loan to facilitate the disposition of real estate that PMT had acquired in settlement of a mortgage loan, the Company was entitled to receive market ‑based fees and compensation from PMT. · For mortgage loans serviced by PMT as a result of acquisitions and sales with servicing rights retained in connection with PMT’s correspondent production business, the Company was entitled to base subservicing fees and other customary market ‑based fees and charges as described above. Effective February 1, 2013, the servicing agreement was amended to provide for servicing fees payable to the Company that changed from being based on a percentage of the mortgage loan’s UPB to fixed per ‑loan monthly amounts based on the delinquency, bankruptcy and/or foreclosure status of the serviced mortgage loan or the REO. The Company also remains entitled to customary ancillary income and market-based fees and charges , including boarding and deboarding fees , liquidation and disposition fees, assumption, modification and origination fees and late charges relating to mortgage loans it services for the PMT . · The base servicing fee s for distressed mortgage loans are calculated based on a monthly per ‑loan dollar amount, with the actual dollar amount for each mortgage loan based on the delinquency, bankruptcy and/or foreclosure status of such mortgage loan or the related underlying real estate. Presently, the base servicing fee s for distressed mortgage loans range from $30 per month for current mortgage loans up to $125 per month for mortgage loans that are severely delinquent and in foreclosure. The base servicing fee for REO is $75 per month. To the extent that REO properties are leased and receive rent under PMT’s REO rental program, the Company will also receive an REO rental fee of $30 per month per REO and a property management fee in a n amount equal to either (i) the Company’s actual cost to outsource services to a third party property management firm or (ii) 9% of gross rental income (as defined) if the Company provides property management services directly. · The base servicing fee s for non ‑distressed mortgage loans subserviced by the Company on PMT’s behalf are also calculated through a monthly per ‑loan dollar amount, with the actual dollar amount for each mortgage loan based on whether the mortgage loan is a fixed ‑rate or adjustable ‑rate loan. The base servicing fee s for mortgage loans subserviced on PMT’s behalf are $7.50 per month for fixed ‑rate mortgage loans and $8.50 per month for adjustable - rate mortgage loans. To the extent that these mortgage loans become delinquent, the Company is entitled to an additional servicing fee per mortgage loan ranging from $10 to $75 per month based on the delinquency, bankruptcy and foreclosure status of the mortgage loan or the related underlying real estate. · The Company is required to provide a range of services and activities significantly greater in scope than the services provided in connection with a customary servicing arrangement because PMT does not have any employees or infrastructure. For these services, the Company receive d a supplemental fee of $25 per month for each distressed whole mortgage loan and , through August 31, 2015, a fee of $3.25 per month for each non ‑distressed subserviced mort gage loan. With respect to non ‑ distressed subserviced mortgage loans, from and after January 1, 2014, the aggregate supp lemental servicing fees were subject to a cap of $700,000 per fiscal quarter and, in recognition of the increased size of PMT ’s mortgage loan servicing portfolio , such supplemental fee was eliminated, effective September 1, 2015. T he Company is also entitled to reimbursement for all customary, good faith reasonable and necessary out ‑of ‑pocket expenses incurred in performance of its servicing obligations . · The Company, on behalf of PMT, currently participates in the Home Affordable Modification Program (“HAMP”) of the U.S. Department of the Treasury and U.S. Department of Housing and Urban Development (“HUD”) (and other similar mortgage loan modification programs). HAMP establishes standard loan modification guidelines for “at risk” homeowners and provides incentive payments to certain participants, including mortgage loan servicers, for achieving modifications and successfully remaining in the program. The mortgage loan servicing agreement entitles the Company to retain any incentive payments made to it and to which it is entitled under HAMP; provided, however, that with respect to any such incentive payments paid to the Company under HAMP in connection with a mortgage loan modification for which PMT previously paid the Company a modification fee, the Company shall reimburse PMT an amount equal to the incentive payments. Following is a summary of mortgage loan servicing fees earned from PMT: Year ended December 31, 2015 2014 2013 (in thousands) Loan servicing fees relating to PennyMac Mortgage Investment Trust: Mortgage loans acquired for sale at fair value: Base and supplemental $ $ $ Activity-based Mortgage loans at fair value: Base and supplemental Activity-based Mortgage servicing rights: Base and supplemental Activity-based $ $ $ Management Fees Before February 1, 2013, under a management agreement, the Company received a base management fee which was calculated at 1.5% per year of PMT’s shareholders’ equity. The management agreement also provided for a performance incentive fee, which was calculated at 20% per year of the amount by which PMT’s “core earnings,” on a rolling four ‑quarter basis and before the incentive fee, exceeded an 8% “hurdle rate” as defined in the management agreement. The Company did not earn a performance incentive fee before February 1, 2013. Effective February 1, 2013, the management agreement was amended to provide that: · The base management fee is calculated quarterly and is equal to the sum of (i) 1.5% per year of PMT’s average shareholders’ equity up to $2 billion, (ii) 1.375% per year of PMT’s average shareholders’ equity in excess of $2 billion and up to $5 billion, and (iii) 1.25% per year of PMT’s average shareholders’ equity in excess of $5 billion. · The performance incentive fee is calculated at a defined annualized percentage of the amount by which PMT’s “ net income,” on a rolling four ‑ quarter basis and before deducting the incentive fee, exceeds certain levels of return on “equity.” The performance incentive fee is calculated quarterly and is equal to the sum of: (a) 10% of the amount by which PMT’s net income for the quarter exceeds (i) an 8% return on equity plus the “high watermark,” up to (ii) a 12% return on PMT’s equity; plus (b) 15% of the amount by which PMT’s net income for the quarter exceeds (i) a 12% return on PMT’s equity plus the “high watermark,” up to (ii) a 16% return on PMT’s equity; plus (c) 20% of the amount by which PMT’s net income for the quarter exceeds a 16% return on equity plus the “high watermark.” For the purpose of determining the amount of the performance incentive fee: “Net income” is defined as net income or loss computed in accordance with GAAP and certain other non ‑cash charges determined after discussions between the Company and PMT’s independent trustees and approval by a majority of PMT’s independent trustees. “Equity” is the weighted average of the issue price per common share of all of PMT’s public offerings, multiplied by the weighted average number of common shares outstanding (including restr icted share units) in the rolling four ‑ quarter period. The “high watermark” starts at zero and is adjusted quarterly. The quarterly adjustment reflects the amount by which the net income (stated as a percentage of return on equity) in that quarter exceeds or falls short of the lesser of 8% and the average Fannie Mae 30 ‑year MBS yield (the “ Target Yield ”) for the four quarters then ended. If the net income is lower than the Target Yield , the high watermark is increased by the difference. If the net income is higher than the Target Yield , the high watermark is reduced by the difference. Each time a performance incentive fee is earned, the high watermark returns to zero. As a result, the threshold amounts required for the Company to earn a performance incentive fee are adjusted cumulatively based on the performance of PMT’s net income over (or under) the Target Yield , until the net income in excess of the Target Yield exceeds the then ‑current cumulative high watermark amount, and a performance incentive fee is earned. The base management fee and the performance incentive fee are both receivable quarterly in arrears. The performance incentive fee may be paid in cash or a combination of cash and PMT’s common shares (subject to a limit of no more than 50% paid in common shares), at PMT’s option. Following is a summary of the base management and performance incentive fees earned from PMT: Year ended December 31, 2015 2014 2013 (in thousands) Management fees: Base $ $ $ Performance incentive $ $ $ The term of the management agreement, as amended, expires on February 1, 2017, subject to automatic renewal for additional 18 ‑month periods, unless terminated earlier in accordance with the terms of the management agreement. In the event of termination of the management agreement between PMT and the Company, the Company may be entitled to a termination fee in certain circumstances. The termination fee is equal to three times the sum of (a) the average annual base management fee, and (b) the average annual performance incentive fee earned by the Company, in each case during the 24 -month period before termination. Expense Reimbursement PMT reimburses the Company for other expenses, including common overhead expenses incurred on its behalf by the Company, in accordance with the terms of its management agreement. Such amounts are summarized below: Year ended December 31, 2015 2014 2013 (in thousands) Reimbursement of: Common overhead incurred by the Company (1) $ $ $ Expenses incurred on PMT's behalf $ $ $ Payments and settlements during the year (2) $ $ $ (1) For the year ended December 31, 2015, in accordance with the terms of its management agreement with PMT, the Company provided PMT discretionary waivers of overhead expenses otherwise allocable to PMT totaling $1.6 million. On December 15, 2015, the Company amended the management agreement to provide that the total costs and expenses incurred by the Company in any quarter and reimbursable by PMT is capped at an amount equal to the product of (A) 70 basis points, multiplied by (B) shareholders’ equity (as defined in the management agreement) as of the last day of such quarter, divided by four . (2) Payments and settlements include payments for management fees and correspondent production activities itemized in the preceding tables and netting settlements made pursuant to master netting agreements between the Company and PMT. Amounts due from PMT are summarized below: December 31, 2015 2014 (in thousands) Management fees $ $ Servicing fees Expenses incurred on PMT's behalf — Correspondent production origination fees — Fulfillment fees Conditional Reimbursement Allocated expenses Unsettled excess servicing spread issuance — $ $ Of the $1 62. 4 million payable to PMT as of December 31, 2015, $153.6 million represents deposits made by PMT to fund servicing advances made by the Company, $8.0 million represents other expenses, and $781,000 represents MSR recapture. Of the $123.3 million payable to PMT as of December 31, 2014, $116.7 million represents deposits made by PMT to fund servicing advances made by the Company, $6.2 million represents other expenses, including common overhead expenses, and $460,000 represents MSR recapture payable. Conditional Reimbursement of Underwriting Fees In connection with the IPO of PMT’s common shares on August 4, 2009, the Company entered into an agreement with PMT pursuant to which PMT agreed to reimburse the Company for the $2.9 million payment that it made to the underwriters in such offering if PMT satisfied certain performance measures over a specified period (the “Conditional Reimbursement”). Effective February 1, 2013, the parties amended the terms of the reimbursement agreement to provide for the reimbursement to the Company of the Conditional Reimbursement if PMT is required to pay the Company performance incentive fees under the management agreement at a rate of $10 in reimbursement for every $100 of performance incentive fees earned. The reimbursement of the Conditional Reimbursement is subject to a maximum reimbursement in any particular 12 month period of $1.0 million and the maximum amount that may be reimbursed under the agreement is $2.9 million. The Company received Conditional Reimbursements totaling $237,000 , $651,000 and $944,000 during the years ended December 31, 2015, 2014 and 2013, respectively. In the event a termination fee is pa yable to the Company under the managemen t agreement , and the Company has not received the full amount of the reimbursements and payments under the reimbursement agreement, such amount will be paid in full. The term of the reimbursement agreement expires on February 1, 2019. Investing Activities Note Receivable The Company is a party to a repurchase agreement with Credit Suisse First Boston Mortgage Capital LLC (“CSFB”) (the “MSR Repo”), pursuant to which it finances Ginnie Mae MSRs and servicing advance receivables and pledges to CSFB all of its rights and interests in any Ginnie Mae MSRs it owns or acquires, and a separate acknowledgement agreement with respect thereto, by and among Ginnie Mae, CSFB and the Company. In connection with the MSR Repo described above, the Company and PMT entered into an underlying loan and security agreement, dated as of April 30, 2015, pursuant to which PMT may borrow up to $150 million from the Company for the purpose of financing ESS (the “Underlying LSA”). In order to secure its borrowings PMT pledged its ESS to the Company under the Underlying LSA and the Company, in turn, re-pledged such ESS to CSFB under the MSR Repo. The principal amount of the borrowings under the Underlying LSA is based upon a percentage of the market value of the ESS pledged by PMT, subject to the $150 million sublimit described above. Pursuant to the Underlying LSA, PMT granted to the Company a security interest in all of its right, title and interest in, to and under the ESS pledged to secure the borrowings. The Company and PMT have agreed in connection with the Underlying LSA that PMT is required to repay the Company the principal amount of borrowings plus accrued interest to the date of such repayment, and the Company is required to repay CSFB the corresponding amount under the MSR Repo. Interest accrues on PMT’s note relating to the Underlying LSA at a rate based on CSFB’s cost of funds under the MSR Repo. PMT was also required to pay the Company a fee for the structuring of the Underlying LSA in an amount equal to the portion of the corresponding fee paid by the Company to CSFB and allocable to the $150 million relating to the ESS financing. Following is a summary of investing activities between the Company and PMT: Year ended December 31, 2015 2014 (in thousands) Note receivable from PennyMac Mortgage Investment Trust—secured: Activity during the year: Advances $ $ — Repayments $ $ — Interest income $ $ — Balance at end of year $ $ — Common shares of beneficial interest of PennyMac Mortgage Investment Trust held at year end Number of shares Fair value $ $ Financing Activities Spread Acquisition and MSR Servicing Agreements Effective February 1, 2013, the Company entered into a master spread acquisition and MSR servicing agreement (the “2/1/13 Spread Acquisition Agreement”), pursuant to which it may sell to PMT or one of its wholly-owned subsidiaries the rights to receive certain ESS from MSRs acquired by the Company from banks and other third party financial institutions. The Company is generally required to service or subservice the related mortgage loans for the applicable agency or investor. The terms of each transaction under the 2/1/13 Spread Acquisition Agreement are subject to the terms thereof, as modified and supplemented by the terms of a confirmation executed in connection with such transaction. To the extent the Company refinances any of the mortgage loans relating to the ESS sold to PMT, the 2/1/13 Spread Acquisition Agreement contains recapture provisions requiring that the Company transfer to PMT, at no cost, the ESS relating to a certain percentage of the UPB of the newly originated mortgage loans. To the extent the fair value of the aggregate ESS to be transferred for the applicable month is less than $200,000 , the Company may, at its option, pay cash to PMT in an amount equal to such fair value instead of transferring such ESS. On December 19, 2014, the Company entered into a second master spread acquisition and MSR servicing agreement with PMT (the “12/19/14 Spread Acquisition Agreement”). The terms of the 12/19/14 Spread Acquisition Agreement are substantially similar to the terms of the 2/1/13 Spread Acquisition Agreement, except that the Company only intends to sell ESS relating to Freddie Mac MSRs under the 12/19/14 Spread Acquisition Agreement. T o t h e e x t e n t the Company r e f i n a n c e s a n y o f t h e m or t g a g e l o a n s r e l at i n g t o t h e E S S it sells to PMT , t h e 12 / 19 / 1 4 S pr e a d A c q u i s i t i o n A gr e e m e n t a l s o c on t a i n s r e c a p t ur e p r ov i s i on s r e qu i r i n g t h a t the Company t r a n s f e r t o PMT , a t n o c o s t , t h e E S S r e l a t i n g t o a c e r t ai n p e r c e n t a g e o f t h e UPB o f t h e n e w l y o r i g i n a t e d m o r t g a g e l o a n s . T o t h e e x t e n t t h e f a i r m a rk e t v al u e o f t h e a ggr e g a t e E S S t o b e t r a n s f e rr e d fo r t h e a pp l i c a b l e m on t h i s l e s s t h a n $20 0 , 00 0 , the Company m a y , a t i t s op t i on , pay c a s h t o PMT i n a n a m ou n t e qu a l t o s u c h f a i r m a rk e t v a l u e i n l i e u o f t r a n s f e rr i n g s u c h E SS . On April 30, 2015, the Company amended and restated a third master spread acquisition and MSR servicing agreement with PMT (the “4/30/15 Spread Acquisition Agreement”). The terms of the 4/30/15 Spread Acquisition Agreement are substantially similar to the terms of the 2/1/13 Spread Acquisition Agreement and the 12/19/14 Spread Acquisition Agreement, except that PMT only intends to purchase ESS relating to Ginnie Mae MSRs under the 4/30/15 Spread Acquisition Agreement. To the extent the Company refinances any of the mortgage loans relating to the ESS it sells to PMT, the 4/30/15 Spread Acquisition Agreement also contains recapture provisions requiring that the Company transfer to PMT, at no cost, the ESS relating to a certain percentage of the unpaid principal balance of the newly originated mortgage loans. However, under the 4/30/15 Spread Acquisition Agreement, in any month where the transferred ESS relating to newly originated Ginnie Mae mortgage loans is not equivalent to at least 90% of the product of the excess servicing fee rate and the unpaid principal balance of the refinanced mortgage loans, the Company is also required to transfer additional ESS or cash in the amount of such shortfall. Similarly, in any month where the transferred ESS relating to modified Ginnie Mae mortgage loans is not equivalent to at least 90% of the product of the excess servicing fee rate and the unpaid principal balance of the modified mortgage loans, the 4/30/15 Spread Acquisition Agreement contains provisions that require the Company to transfer additional ESS or cash in the amount of such shortfall. To the extent the fair market value of the aggregate ESS to be transferred for the applicable month is less than $200,000 the Company may, at its option, wire cash to PMT in an amount equal to such fair market value in lieu of transferring such ESS. In connection with the Company’s entry into the 4/30/15 Spread Acquisition Agreement, PMT was also required to amend and restate the terms of a Security and Subordination Agreement (the “Security Agreement”) with CSFB. Under the terms of the Security Agreement, PMT pledged to CSFB its rights under the 4/30/15 Spread Acquisition Agreement and its interest in any ESS purchased thereunder. The Security Agreement is required as a result of the MSR Repo Agreement, pursuant to which the Company finances Ginnie Mae MSRs and servicing advance receivables and pledges to CSFB all rights and interests in any Ginnie Mae MSRs owned or acquired, and a separate acknowledgement agreement with respect thereto, by and among Ginnie Mae, CSFB and the Company. The Security Agreement also permits CSFB to liquidate PMT’s ESS along with the related MSRs to the extent there exists an event of default under the MSR Repo Agreement, and it contains certain trigger events, including breaches of representations, warranties or covenants and defaults under other of PMT’s credit facilities, that would require the Company to either (i) repay in full the outstanding loan amount under the MSR Repo Agreement or (ii) repurchase the ESS from PMT at fair market value. To the extent the Company is unable to repay the loan under the MSR Repo Agreement or repurchase the ESS, an event of default would exist under the MSR Repo Agreement, thereby entitling CSFB to liquidate the ESS and the related MSRs. Following is a summary of financing activity between the Company and PMT: Year ended December 31, 2015 2014 (in thousands) Excess servicing spread financing: Issuance $ $ Repayment $ $ Change in fair value $ $ Interest expense $ $ Excess servicing spread recapture recognized $ $ Investment Funds Amounts due from and payable to the Investment Funds are summarized below: December 31, 2015 2014 (in thousands) Carried Interest due from Investment Funds: PNMAC Mortgage Opportunity Fund, LLC $ $ PNMAC Mortgage Opportunity Fund Investors, LLC $ $ Receivable from Investment Funds: Management fees $ $ Loan servicing fees Loan servicing rebate Expense reimbursements $ $ Payable to Investment Funds—Servicing advances $ $ Exchanged Private National Mortgage Acceptance Company, LLC Unitholders As discussed in Note 1, Organization and Basis of Presentation, the Company entered into a tax receivable agreement with PennyMac’s existing unitholders on the date of the IPO that will provide for the payment by the Company to PennyMac’s exchanged unitholders in an amount equal to 85% of the amount of the benefits, if any, that the Company is deemed to realize as a result of (i) increases in tax basis resulting from such unitholders’ exchanges and (ii) certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. Based on the PennyMac unitholder exchanges, the Company has recorded a $7 4.3 million and $7 5.0 million Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement as of December 31, 201 5 and 201 4 , respec tively, and it has made $5.1 million in payments under such agreement during 2015 . |
Earnings Per Share of Common St
Earnings Per Share of Common Stock | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share of Common Stock | |
Earnings Per Share of Common Stock | Note 5 — Earnings Per Share of Common Stock Basic earnings per share of common stock is determined using net income attributable to the Company’s common stockholders divided by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock is determined by dividing net income attributable to the Company’s common stockholders by the weighted average number of shares of common stoc k outstanding during the period. The Company applies the treasury stock method to determine the dilutive weighted average shares of common stock represented by the unvested stock-based compensation awards and the exchangeable PennyMac Class A units. The diluted earnings per share calculation assumes the exchange of these PennyMac Class A units for shares of common stock. Accordingly, earnings attributable to the Company’s common stockholders is also adjusted to include the earnings allocated to the PennyMac Class A units after taking into account the income taxes applicable to the shares of common stock assumed to be exchanged. The following table summarizes the basic and diluted earnings per share calculations: Year ended December 31, 2015 2014 2013 (in thousands, except per share data) Basic earnings per share of common stock: Net income attributable to PennyMac Financial Services, Inc. common stockholders $ $ $ Weighted average shares of common stock outstanding Basic earnings per share of common stock $ $ $ Diluted earnings per share of common stock: Net income attributable to PennyMac Financial Services, Inc. common stockholders $ $ $ Effect of net income attributable to PennyMac Class A units exchangeable to common stock, net of income taxes Diluted net income attributable to common stockholders $ $ $ Weighted average shares of common stock outstanding Dilutive shares: PennyMac Class A units exchangeable to common stock Non-vested PennyMac Class A units issuable under unit-based stock compensation plan and exchangeable to common stock Shares issuable under stock-based compensation plans Diluted weighted average shares of common stock outstanding Diluted earnings per share of common stock $ $ $ The following table summarizes the anti-dilutive weighted-average number of outstanding stock options and performance-based RSUs: Year ended December 31, 2015 2014 2013 Stock options (1) — Performance-based RSUs (2) Total potentially dilutive common stock equivalents (1) During the years ended December 31, 2015 and 2014, certain stock options were outstanding but not included in the computation of earnings per share because the weighted-average exercise prices of $18.17 and $18.23 per share respectively, were anti-dilutive. (2) During the years ended December 31, 2015, 2014 and 2013, certain performance-based RSUs were outstanding but not included in the computation of earnings per share because management concluded the performance thresholds would not be satisfied. |
Loan Sales and Servicing Activi
Loan Sales and Servicing Activities | 12 Months Ended |
Dec. 31, 2015 | |
Loan Sales and Servicing Activities | |
Loan Sales and Servicing Activities | Note 6 — Loan Sales and Servicing Activities The Company originates or purchases and sells mortgage loans in the secondary mortgage market without recourse for credit losses. However, the Company maintains continuing involvement with the loans in the form of servicing arrangements and the liability under representations and warranties it makes to purchasers and insurers of the loans. The following table summarizes cash flows between the Company and transferees as a result of the sale of mortgage loans in transactions where the Company maintains continuing involvement with the mortgage loans: Year ended December 31, 2015 2014 2013 (in thousands) Cash flows: Sales proceeds $ $ $ Servicing fees received (1) $ $ $ Net servicing advances $ $ $ Period end information: Unpaid principal balance of mortgage loans outstanding at end of period $ $ $ Delinquencies: 30-89 days $ $ $ 90 days or more or in foreclosure or bankruptcy $ $ $ (1) Net of guarantees paid to the Agencies The Company’s mortgage servicing portfolio in UPB is summarized as follows: December 31, 2015 Contract Servicing servicing and Total rights owned subservicing loans serviced (in thousands) Investor: Non-affiliated entities $ $ — $ Affiliated entities — Mortgage loans held for sale — $ $ $ Amount subserviced for the Company (1) $ $ — $ Delinquent mortgage loans: 30 days $ $ $ 60 days 90 days or more : Not in foreclosure In foreclosure Foreclosed $ $ $ Custodial funds managed by the Company (2) $ $ $ (1) Certain of the mortgage loans serviced by the Company are subserviced on the Company’s behalf by other mortgage loan servicers. Mortgage l oans are subserviced for the Company on a transitional basis for loans where the Company has obtained the rights to service the mortgage loans but servicing of the loans has not yet transferred to the Company’s servicing system. (2) Borrower and investor custodial cash accounts relate to mortgage loans serviced under the servicing agreements and are not recorded on the Company’s consolidated bal ance sheets. The Company earns i nterest on certain of the custodial funds it manages on behalf of the loans’ investors, which is recorded as part of the Interest income in the Company’s consolidated statements of income. December 31, 2014 Contract Servicing servicing and Total rights owned subservicing loans serviced (in thousands) Investor: Non-affiliated entities $ $ — $ Affiliated entities — Mortgage loans held for sale — $ $ $ Amount subserviced for the Company (1) $ — $ $ Delinquent mortgage loans: 30 days $ $ $ 60 days 90 days or more Not in foreclosure In foreclosure Foreclosed $ $ Custodial funds managed by the Company (2) $ $ $ (1) Certain of the loans serviced by the Company are subserviced on the Company’s behalf by other mortgage loan servicers. Loans are subserviced for the Company on a transitional basis for loans where the Company has obtained the rights to service the loans but servicing of the loans has not yet transferred to the Company’s servicing system. (2) Borrower and investor custodial cash accounts relate to loans serviced under the servicing agreements and are not recorded on the Company’s consolidated balance sheets. The Company earns interest on certain of the custodial funds it manages on behalf of the loans’ investors, which is recorded as part of the interest income in the Company’s consolidated statements of income. Following is a summary of the geographical distribution of loans included in the Company’s servicing portfolio for the top five and all other states as measured by UPB: December 31, State 2015 2014 (in thousands) California $ $ Texas Virginia Florida Maryland * Washington * All other states $ $ * Not included in the top five states as measured by UPB as of the date presented. |
Netting of Financial Instrument
Netting of Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Netting of Financial Instruments | |
Netting of Financial Instruments | Note 7 — Netting of Financial Instruments The Company uses derivative financial instruments to manage exposure to interest rate risk for the IRLCs it makes to purchase or originate mortgage loans at specified interest rates, its inventory of mortgage loans held for sale and MSRs. The Company has elected to present net derivative asset and liability positions, and cash collateral obtained from (or posted to) its counterparties when subject to a master netting arrangement that is legally enforceable on all counterparties in the event of default. The derivatives that are not subject to a master netting arrangement are IRLCs. Following are summaries of derivative assets and related netting amounts. Offsetting of Derivative Asset s December 31, 2015 December 31, 2014 Gross Gross amount Net amount Gross Gross amount Net amount amount of offset in the of assets in the amount of offset in the of assets in the recognized consolidated consolidated recognized consolidated consolidated assets balance sheet balance sheet assets balance sheet balance sheet (in thousands) Derivatives subject to a master netting arrangement: Forward purchase contracts $ $ — $ $ $ — $ Forward sale contracts — — MBS put options — — Put options on interest rate futures purchase contracts — — Call options on interest rate futures purchase contracts — — Netting — — Derivatives not subject to a master netting arrangement - IRLCs — — $ $ $ $ $ $ Derivative Assets, Financial Assets, and Collateral Held by Counterparty The following table summarizes by significant counterparty the amount of derivative asset positions after considering master netting arrangements and financial instruments or cash pledged that do not meet the accounting guidance qualifying for netting. December 31, 2015 December 31, 2014 Gross amount not Gross amount not offset in the offset in the consolidated consolidated balance sheet balance sheet Net amount Net amount of assets in the Cash of assets in the Cash consolidated Financial collateral Net consolidated Financial collateral Net balance sheet instruments received amount balance sheet instruments received amount (in thousands) Interest rate lock commitments $ $ — $ — $ $ $ — $ — $ RJ O'Brien — — — — Jefferies & Co. — — — — Nomura — — — — — — Fannie Mae — — — — — — Wells Fargo Bank, N.A. — — — — Goldman Sachs — — — — JP Morgan — — — — — — Others — — — — $ $ — $ — $ $ $ — $ — $ Offsetting of Derivative Liabilities and Financial Liabilities Following is a summary of net derivative liabilities and assets sold under agreements to repurchase and related netting amounts. As discussed above, all derivatives with the exception of IRLCs are subject to master netting arrangements. The assets sold under agreements to repurchase do not qualify for netting. December 31, 2015 December 31, 2014 Net Net amount amount Gross Gross amount of liabilities Gross Gross amount of liabilities amount of offset in the in the amount of offset in the in the recognized consolidated consolidated recognized consolidated consolidated liabilities balance sheet balance sheet liabilities balance sheet balance sheet (in thousands) Derivatives subject to a master netting arrangement: Forward purchase contracts $ $ — $ $ $ — $ Forward sale contracts — — Put options on interest rate futures sale contracts — — — — Put options on interest rate futures purchase contracts — — — — Call options on interest rate futures purchase contracts — — — — Netting — — Derivatives not subject to a master netting arrangement - IRLCs — — Total derivatives Mortgage loans sold under agreements to repurchase: Amount outstanding — — Unamortized debt issuance costs — — — — $ $ $ $ $ $ Derivative Liabilities, Financial Liabilities, and Collateral Held by Counterparty The following table summarizes by significant counterparty the amount of derivative liabilities and assets sold under agreements to repurchase after considering master netting arrangements and financial instruments or cash pledged that does not qualify under the accounting guidance for netting. All assets sold under agreements to repurchase are secured by sufficient collateral or have fair value that exceeds the liability amount recorded on the consolidated balance sheets. December 31, 2015 December 31, 2014 Gross amount Gross amount not offset in the not offset in the consolidated consolidated balance sheet balance sheet Net amount Net amount Net amount Net amount of liabilities of liabilities of liabilities of liabilities in the Cash in the in the Cash in the consolidated Financial collateral consolidated consolidated Financial collateral consolidated balance sheet instruments pledged balance sheet balance sheet instruments pledged balance sheet (in thousands) Interest rate lock commitments $ $ — $ — $ $ $ — $ — $ Credit Suisse First Boston Mortgage Capital LLC — — Bank of America, N.A. — — Morgan Stanley Bank, N.A. — — Citibank, N.A. — — Bank of Oklahoma — — — — BNP Paribas — — — — — — JP Morgan — — — — — — Bank of New York Mellon — — — — Others — — — — $ $ $ — $ $ $ $ — $ |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value | |
Fair Value | Note 8—Fair Value The Company’s consolidated financial statements include assets and liabilities that are measured based on their fair values. The application of fair value may be on a recurring or nonrecurring basis depending on the accounting principles applicable to the specific asset or liability and whether management has elected to carry the item at its fair value as discussed in the following paragraphs. Fair Value Accounting Elections Management identified all of its non-cash financial assets and its originated MSRs relating to loans with initial interest rates of more than 4.5% and purchased MSRs subject to ESS financing to be accounted for at fair value so changes in fair value will be reflected in income as they occur and more timely reflect the results of the Company’s performance. Management has also identified its ESS financing to be accounted for at fair value as a means of hedging the related MSR s’ fair value risk. The Company’s subsequent accounting for MSRs and MSLs is based on the class of MSR or MSL. Originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5% are accounted for using the amortization method. Originated MSRs backed by loans with initial interest rates of more than 4.5% and purchased MSRs financed in part by ESS are accounted for at fair value with changes in fair value recorded in current period income. MSLs are carried at fair value. Financial Statement Items Measured at Fair Value on a Recurring Basis Following is a summary of financial statement items that are measured at fair value on a recurring basis: December 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Assets: Short-term investments $ $ — $ — $ Mortgage loans held for sale at fair value — Derivative assets: Interest rate lock commitments — — Forward purchase contracts — — Forward sales contracts — — MBS put options — — Put options on interest rate futures purchase contracts — — Call options on interest rate futures purchase contracts — — Total derivative assets before netting Netting (1) — — — Total derivative assets Investment in PennyMac Mortgage Investment Trust — — Mortgage servicing rights at fair value — — $ $ $ $ Liabilities: Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust $ — $ — $ $ Derivative liabilities: Interest rate lock commitments — — Forward purchase contracts — — Forward sales contracts — — Put options on interest rate futures purchase contracts — — Call options on interest rate futures purchase contracts — — Total derivative liabilities before netting Netting (1) — — — Total derivative liabilities Mortgage servicing liabilities — — $ $ $ $ (1) Derivatives are reported net of cash collateral received and paid and, to the extent that the criteria of the accounting guidance covering the offsetting of amounts related to certain contracts are met, positions with the same counterparty are netted as part of a legally enforceable master netting agreement. December 31, 2014 Level 1 Level 2 Level 3 Total (in thousands) Assets: Short-term investments $ $ — $ — $ Mortgage loans held for sale at fair value — Derivative assets: Interest rate lock commitments — — Forward purchase contracts — — Forward sales contracts — — MBS put options — — Put options on interest rate futures purchase contracts — — Call options on interest rate futures purchase contracts — — Total derivative assets before netting Netting (1) — — — Total derivative assets Investment in PennyMac Mortgage Investment Trust — — Mortgage servicing rights at fair value — — $ $ $ $ Liabilities: Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust $ — $ — $ $ Derivative liabilities: Interest rate lock commitments — — Forward purchase contracts — — Forward sales contracts — — Put options on interest rate futures sale contracts — — Total derivative liabilities before netting Netting (1) — — — Total derivative liabilities Mortgage servicing liabilities — — $ $ $ $ (1) Derivatives are reported net of cash collateral received and paid and, to the extent that the criteria of the accounting guidance covering the offsetting of amounts related to certain contracts are met, positions with the same counterparty are netted as part of a legally enforceable master netting agreement. As shown above, certain of the Company’s mortgage loans held for sale, IRLCs, MSRs at fair value, and ESS financing at fair value are measured using Level 3 inputs. Following are roll forwards of these items for each of the thr ee years ended December 31, 2015 where Level 3 significant inputs were used: Year ended December 31, 2015 Mortgage Net interest Mortgage loans held rate lock servicing for sale commitments (1) rights Total (in thousands) Assets: Balance, December 31, 2014 $ $ $ $ Purchases — Sales — — Repayments — — Interest rate lock commitments issued, net — — Mortgage servicing rights resulting from mortgage loan sales — — Changes in fair value included in income arising from: Changes in instrument-specific credit risk — — Other factors — Transfers of mortgage loans held for sale from Level 3 to Level 2 (2) — — Transfers of interest rate lock commitments to mortgage loans held for sale — — Balance, December 31, 2015 $ $ $ $ Changes in fair value recognized during the period relating to assets still held at December 31, 2015 $ $ $ $ (1) For the purpose of this table, the interest rate lock asset and liability positions are shown net. (2) Mortgage loans held for sale are transferred from Level 3 to Level 2 as a result of the mortgage loan becoming saleable into active mortgage markets pursuant to a loan modification or borrower reperformance. Year ended December 31, 2015 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance, December 31, 2014 $ $ $ Issuance of excess servicing spread financing — Excess servicing spread financing issued pursuant to a recapture agreement with PennyMac Mortgage Investment Trust — Accrual of interest on excess servicing spread — Repayments — Mortgage servicing liabilities resulting from mortgage loan sales — Changes in fair value included in income Balance, December 31, 2015 $ $ $ Changes in fair value recognized during the period relating to liabilities still held at December 31, 2015 $ $ $ Year ended December 31, 2014 Mortgage Net interest Mortgage loans held rate lock servicing for sale commitments (1) rights Total (in thousands) Assets: Balance, December 31, 2013 $ $ $ $ Purchases — Repayments — — Interest rate lock commitments issued, net — — Mortgage servicing rights resulting from mortgage loan sales — — Sales — Changes in fair value included in income arising from: Changes in instrument-specific credit risk — — — — Other factors Transfers of mortgage loans held for sale from Level 3 to Level 2 (2) — — Transfers of interest rate lock commitments to mortgage loans held for sale — — Balance, December 31, 2014 $ $ $ $ Changes in fair value recognized during the period relating to assets still held at December 31, 2014 $ $ $ $ (1) For the purpose of this table, the interest rate lock asset and liability positions are shown net. (2) Mortgage loans held for sale are transferred from Level 3 to Level 2 as a result of the mortgage loan becoming saleable into active mortgage markets pursuant to a loan modification or borrower reperformance. Year ended December 31, 2014 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance, December 31, 2013 $ $ — $ Issuance of excess servicing spread financing — Excess servicing spread financing issued pursuant to a recapture agreement with PennyMac Mortgage Investment — Mortgage servicing liabilities resulting from mortgage loan sales — Accrual of interest on excess servicing spread — Repayments — Changes in fair value included in income Balance, December 31, 2014 $ $ $ Changes in fair value recognized during the period relating to liabilities still held at December 31, 2014 $ $ $ Year ended December 31, 2013 Mortgage Net interest Mortgage loans held rate lock servicing for sale commitments (1) rights Total (in thousands) Assets: Balance December 31, 2012 $ — $ $ $ Purchases — — Repurchases of mortgage loans subject to representations and warranties — — Repayments — — Interest rate lock commitments issued, net — — Mortgage servicing rights resulting from mortgage loan sales — — Sales — — Changes in fair value included in income arising from: Changes in instrument-specific credit risk — — — — Other factors Transfers of interest rate lock commitments to mortgage loans held for sale — — Balance, December 31, 2013 $ $ $ $ Changes in fair value recognized during the period relating to assets still held at December 31, 2013 $ $ $ $ Year ended December 31, 2013 Excess servicing spread financing (in thousands) Liabilities: Balance December 31, 2012 $ — Issuance of excess servicing spread financing Excess servicing spread financing issued pursuant to a recapture agreement with PennyMac Mortgage Investment Trust — Accrual of interest on excess servicing spread financing Repayments Changes in fair value included in income Balance, December 31, 2013 $ Changes in fair value recognized during the period relating to liabilities still held at December 31, 2013 $ The information used i n the preceding roll forwards represents activity for any financial statement items identified as using Level 3 significant inputs at either the beginning or the end of the periods presented. The Company had transfers among the levels arising from transfers of IRLCs to mortgage loans held for sale at fair value upon purchase or funding of the respective mortgage loans and from the return to salability in the active secondary market of certain mortgage loans held for sale. Such mortgage loans became sal e able into the active secondary market due to curing of the loans’ defects through borrower reperformance, modification of the loan or resolution of deficiencies contained in the borrowers’ credit file. Financial Statement Items Measured at Fair Value for under the Fair Value Option Net changes in fair values included in income for financial statement items carried at fair value as a result of management’s election of the fair value option by income statement line item are summarized below: Year ended December 31, 2015 2014 2013 Net gains on Net Net gains on Net Net gains on Net mortgage mortgage mortgage mortgage mortgage mortgage loans held loan loans held loan loans held loan for sale at servicing for sale at servicing for sale at servicing fair value fees Total fair value fees Total fair value fees Total (in thousands) Assets: Mortgage loans held for sale at fair value $ $ — $ $ $ — $ $ $ — $ Mortgage servicing rights at fair value — — — $ $ $ $ $ $ $ $ $ Liabilities: Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust $ — $ $ $ — $ $ $ — $ $ Mortgage servicing liabilities at fair value — — — — — $ — $ $ $ — $ $ $ — $ $ Following are the fair va lue and related principal amounts due upon maturity of assets and liabilities accounted for under the fair value option: December 31, 2015 Principal amount Fair due upon value maturity Difference (in thousands) Mortgage loans held for sale: Current through 89 days delinquent $ $ $ 90 days or more delinquent: Not in foreclosure In foreclosure $ $ $ December 31, 2014 Principal amount Fair due upon value maturity Difference (in thousands) Mortgage loans held for sale: Current through 89 days delinquent $ $ $ 90 days or more delinquent: Not in foreclosure In foreclosure $ $ $ Financial Statement Items Mea sured at Fair Value on a Nonrecurring Basis Following is a summary o f financial statement items that are measured at fair value on a nonrecurring basis: December 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ — $ — $ $ $ — $ — $ $ December 31, 2014 Level 1 Level 2 Level 3 Total (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ — $ — $ $ $ — $ — $ $ The following table summarizes the total gains (losses) on assets measured at fair values on a nonrecurring basis: Year ended December 31, 2015 2014 2013 (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ $ $ $ $ $ Fair Value of Financial Instruments Carried at Amortized Cost The Company’s Cash as well as its Carried Interest due from Investment Funds , Assets sold under agreements to repurchase , Note s payable , Obligations under capital leases and amounts receivable from and payable to the Advised Entities are carried at amortized cost. Cash is measured using a “Level 1” input. The Company has concluded that the carrying value of the Carried Interest due from Investment Funds approximates its fair value as the balance represents the amount distributable to the Company at the balance sheet date assuming liquidation of the Investment Funds. The Company’s borrowings carried at amortized cost do not have observable inputs and the fair value is measured using management’s estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. The Company has classified these financial instruments as “Level 3” financial stateme nt items as of December 31, 2015 and 2014 due to the lack of observable inputs to estimate the fair value. The Company also carries the receivables from and payables to the Advised Entities and the note receivable from PMT – secured at cost. The Company has concluded that the fair value of such balances approximates the carrying value due to their short terms and/or variable interest rates . Valuation Techniques and Assumptions Most of the Company’s financial assets , a portion of its MSRs and its MSLs and ESS liabilit ies are carried at fair value with changes in fair value recognized in current period income. Certain of the Company’s financial assets and all of its MSRs , ESS and MSLs are “Level 3” fair value financial statement items which require the use of unobservable inputs that are significant to the estimation of the items’ fair values. Unobservable inputs refle ct the Company’s own judgments about the factors that market participants use in pricing an asset or liability, and are based on the best information available under the circumstances. Due to the difficulty in estimating the fair values of “Level 3” fair value financial statement items, management has assigned the responsibility for estimating the fair value of these items to specialized staff and subjects the valuation process to significant senior management oversight. The Company’s Financial Analysis and Valuation group (the “FAV group”) is responsible for estimating the fair values of “Level 3” financial statement items other than IRLCs and maintaining its valuation policies and procedures. With respect to the non-IRLC “Level 3” valuations, the FAV group reports to the Company’s senior management valuation committee, which oversees and approves the valuations. The FAV group monitors the models used for valuation of the Company’s “Level 3” financial statement items, including the models’ performance versus actual results, and reports those results to the Company’s senior management valuation committee. The Company’s senior management valuation committee includes PFSI’s chief executive, financial, operating, risk and asset/liability management officers. The FAV group is responsible for reporting to the Company’s senior management valuation committee on a monthly basis on the changes in the valuation of the “Level 3” fair value financial statement items, including major factors affecting the valuation and any changes in model methods and inputs. To assess the reasonableness of its valuations, the FAV group presents an analysis of the effect on the valuation of changes to the significant inputs to the models. With respect to IRLCs, the Company has assigned responsibility for developing fair values to its Capital Markets Risk Management staff. The fair values developed by the Capital Markets Risk Management staff are reviewed by the Company’s Capital Markets Operations group in the exercise of their internal control activities. Following is a description of the techniques and inputs used in estimating the fair values of “Level 2” and “Level 3” fair value financial statement items: Mortgage Loans Held for Sale Most of the Company’s mortgage loans held for sale at fair value are sal e able into active markets and are therefore categorized as “Level 2” fair value financial statement items and their fair values are determined using their quoted market or contracted selling price or market price equivalent. Certain of the Company’s mortgage loans may become non-sal e able into active markets due to identification of a defect by the Company or to the repurchase by the Company of a mortgage loan with an identified defect. The Company may also purchase certain delinquent government guaranteed or insured mortgage loans from Ginnie Mae guaranteed pools in its mortgage loan servicing portfolio. The Company’s right to purchase such mortgage loans arises as the result of the borrower’s failure to make payments for at least three consecutive months preceding the month of repurchase by the Company and provides an alternative to the Company’s obligation to continue advancing principal and interest at the coupon rate of the related Ginnie Mae security. To the extent such mortgage loans have not become sal e able into another Ginnie Mae guaranteed security by becoming current either through the borrower’s reperformance or through completion of a modification of the loan’s terms, the Company measures such loans along with other mortgage loans with identified defects using “Level 3” fair value inputs. The significant unobservable inputs used in the fair value measurement of the Company’s “Level 3” mortgage loans held for sale at fair value are discount rates, home price projections, voluntary prepayment speeds and total prepayment speeds. Significant changes in any of those inputs in isolation could result in a significant change to the mortgage loans’ fair value measurement. Increases in home price projections are generally accompanied by an increase in voluntary prepayment speeds. Following is a quantitative su mmary of key “Level 3” inputs used in the valuation of mortgage loans held for sale at fair value: December 31, Key inputs 2015 2014 Discount rate Range 2.5% – 9.1% 2.3% – 9.6% Weighted average 2.8% 2.4% Twelve-month projected housing price index change Range 1.8% – 5.0% 4.2% – 5.4% Weighted average 3.7% 4.5% Voluntary prepayment/resale speed (1) Range 0.6% – 20.1% 1.3% – 15.5% Weighted average 16.6% 15.1% Total prepayment speed (2) Range 0.7% – 37.6% 2.1% – 38.1% Weighted average 30.9% 35.7% (1) Voluntary prepayment/resale speed is measured using Life Voluntary Conditional Prepayment Rate (“CPR”). (2) Total prepayment speed is measured using Life Total CPR. Changes in fair value attributable to changes in instrument specific credit risk are measured by the change in the respective mortgage loan’s delinquency status at period end from the later of the beginning of the period or acquisition date. All c hanges in fair value of mortgage loans held for sale are included in Net gains on mortgage loans held for sale at fair value in the consolidated statements of income. Derivative Financial Instruments The Company categorizes IRLCs as a “Level 3” fair value financial statement item. The Company estimates the fair value of an IRLC based on quoted Agency MBS prices, its estimate of the fair value of the M SRs it expects to receive in the sale of the loans and the probability that the mortgage loan will fund or be purchased (the “pull-through rate”). The significant unobservable inputs used in the fair value measurement of the Company’s IRLCs are the pull-through rate and the MSR component of the Company’s estimate of the fair value of the mortgage loans it has committed to purchase. Significant changes in the pull-through rate or the MSR component of the IRLCs, in isolation, could result in significant changes in fair value measurement. The financial effects of changes in these inputs are generally inversely correlated as increasing interest rates have a positive effect on the fair value of the MSR component of IRLC value, but increase the pull-through rate for the principal and interest payment components that have decreased in fair value. Following is a quantitative summary of key unobservable inputs used in the valuation of IRLCs: December 31, Key inputs 2015 2014 Pull-through rate Range 54.1% – 100.0% 55.4% – 99.9% Weighted average 90.1% 85.5% Mortgage servicing rights value expressed as: Servicing fee multiple Range 1.0 – 5.8 2.0 – 5.0 Weighted average 4.4 3.7 Percentage of unpaid principal balance Range 0.2% – 3.8% 0.4% – 3.1% Weighted average 1.5% 1.2% Hedging Derivatives T he remaining derivative financial instruments held or issued by the Company are categorized as “Level 1” or “Level 2” financial statement items. The Company estimates the fair value of commitments to sell and purchase mortgage loans based on observable MBS prices. The Company estimates the fair value of MBS options based on observed interest rate volatilities in the MBS market. Changes in fair value of IRLCs and related hedging derivatives are included in Net gains on mortgage loans held for sale at fair value in the consolidated statements of income. Mortgage Servicing Rights MSRs are categorized as “Level 3” fair value financial statement items. The Company uses a discounted cash flow approach to estimate the fair value of MSRs. This approach consists of projecting net servicing cash flows discounted at a rate that management believes market participants would use in their determinations of fair value. The key inputs used in the estimation of the fair value of MSRs include the prepayment rates of the underlying loans, the applicable discount rate or pricing spread, and the per-loan annual cost to service the respective mortgage loans. Changes in the fair value of MSRs are included in Net servicing fees — Amortization, impairment and change in fair value of mortgage servicing rights in the consolidated statements of income. Following are the key inputs used in determining the fair value of MSRs at the time of initial recognition, excluding M SR purchases: Year ended December 31, 2015 2014 2013 Fair Amortized Fair Amortized Fair Amortized value cost value cost value cost (Amount recognized and unpaid principal balance of underlying mortgage loans in thousands) MSR and pool characteristics: Amount recognized $18,013 $454,840 $24,698 $185,152 $14,636 $190,469 Unpaid principal balance of underlying mortgage loans $1,463,150 $32,849,718 $1,982,505 $15,362,240 $1,055,797 $15,316,315 Weighted average servicing fee rate (in basis points) 33 34 33 31 33 29 Inputs: Pricing spread (1) Range 7.0% - 14.4% 6.8% - 16.2% 7.8% - 16.2% 6.8% - 15.7% 7.4% - 14.4% 5.4% - 15.9% Weighted average 9.3% 9.2% 11.4% 10.8% 10.2% 8.5% Annual total prepayment speed (2) Range 1.9% - 62.4% 2.5% - 50.0% 7.6% - 46.1% 7.6% - 47.8% 7.8% - 25.5% 7.6% - 42.5% Weighted average 11.8% 8.9% 9.3% 8.3% 9.2% 8.8% Life (in years) Range 1.1 – 12.3 1.3 – 12.0 1.5 – 7.5 1.4 – 7.5 2.5 – 7.3 1.5 – 7.5 Weighted average 6.5 7.2 6.9 7.0 6.9 6.7 Per-loan annual cost of servicing Range $59 – $101 $59 – $95 $53 – $100 $53 – $100 $68 – $120 $68 – $120 Weighted average $77 $78 $86 $84 $98 $102 (1) Pricing spread represents a margin that is applied to a reference interest rate s forward rate curve to develop periodic discount rates. The Company applies a pricing spread to the United States Dollar London Interbank Offered Rate (“ LIBOR ”) curve for purposes of discounting cash flows relating to MSRs. (2) Prepayment speed is measured using Life Total CPR. Following is a quantitative summary of key inputs used in the valuation of the Company’s MSRs at year end and the effect on the estimated fair value from adverse changes in those assumptions (weighted averages are based upon UPB): December 31, 2015 December 31, 2014 Fair Amortized Fair Amortized value cost value cost (Carrying value, unpaid principal balance of underlying mortgage loans and effect on fair value amounts in thousands) MSR and pool characteristics: Carrying value $660,247 $751,688 $325,383 $405,445 Unpaid principal balance of underlying mortgage loans $54,182,477 $56,420,227 $30,945,000 $33,745,613 Weighted average note interest rate 4.13% 3.83% 4.24% 3.82% Weighted average servicing fee rate (in basis points) 32 32 31 30 Key inputs: Pricing spread (1) (2) Range 7.2% – 14.1% 7.2% – 12.8% 2.9% – 21.3% 6.3% – 15.3% Weighted average 8.9% 8.9% 9.2% 9.7% Effect on fair value of: 5% adverse change ($11,115) ($13,467) ($5,550) ($8,710) 10% adverse change ($21,857) ($26,472) ($10,908) ($17,083) 20% adverse change ($42,293) ($51,183) ($21,084) ($32,890) Average life (in years) Range 1.9 – 9.0 1.8 – 9.1 0.4 – 8.2 1.6 – 7.3 Weighted average 6.9 7.4 5.8 6.8 Prepayment speed (1) (3) Range 5.3% – 43.8% 5.7% – 46.7% 7.6% – 60.5% 7.6% – 42.8% Weighted average 9.7% 9.5% 11.2% 8.5% Effect on fair value of: 5% adverse change ($12,475) ($14,360) ($7,052) ($7,359) 10% adverse change ($24,499) ($28,197) ($13,835) ($14,494) 20% adverse change ($47,286) ($54,406) ($26,654) ($28,132) Annual per-loan cost of servicing (1) Range $68 – $97 $68 – $95 $59 – $109 $59 – $81 Weighted average $86 $84 $76 $75 Effect on fair value of: 5% adverse change ($6,812) ($5,725) ($2,910) ($2,992) 10% adverse change ($13,624) ($11,451) ($5,819) ($5,983) 20% adverse change ($27,247) ($22,901) ($11,638) ($11,967) (1) For MSRs carried at amortized cost t he effect on fair value of an adverse change in one of the above-mentioned key inputs may result in recognition of MSR impairment. The extent of impairment recognized will depend on the relationship of fair value to the carrying value of MSRs. (2) Pricing spread represents a margin that is applied to a reference interest rate’s forward curve to develop periodic discount rates. The Company applies a pricing spread to the United States Dollar LIBOR curve for purposes of discounting cash flows relating to MSRs acquired as proceeds from the sale of mortgage loans and purchased MSRs not backed by pools of distressed mortgage loans. (3) Prepayment speed is measured using Life Total CPR. The preceding sensitivity analyses are limited in that they were performed at a particular point in time; only contemplate the movements in the indicated variables; do not incorporate changes to other variables; are subject to the accuracy o f various models and inputs used; and do not incorporate other factors that would affect the Company’s overall financial performance in such events , including operational adjustments made by management to account for changing circumstances. For these reasons, the preceding estimates should not be viewed as earnings forecasts. Excess Servicing Spread Financing at Fair Value The Company categorizes ESS financing as a “Level 3” fair value financial statement item. The Company uses a discounted cash flow approach to estimate the fair value of ESS financing. The key inputs used in the estimation of ESS fair value include pricing spread and prepayment speed. Significant changes to either of those inputs in isolation could result in a significant change in the fair value of ESS . Changes in these key inputs are not necessarily directly related. ESS is generally subject to fair value increases when mortgage interest rates increase. Increasing mortgage interest rates normally slow mortgage refinancing activity. Decreased refinancing activity increases the life of the loans underlying the ESS, thereby increasing ESS’ fair value, which is owed to PMT. Increases in the fair value of ESS financing decrease income and are included in Amortization, impairment and change in fair value of mortgage servicing rights . Interest expense for ESS is accrued using the interest method based upon the expected cash flows from the ESS through the expected life of the underlying mortgage loans. Other changes in fair value are recorded in Amortization, impairment and change in fair value of mortgage servicing rights . Following are the key inputs used in determining the fair value of ESS financing: December 31, 2015 2014 Carrying value (in thousands) $412,425 $191,166 ESS and pool characteristics: Unpaid principal balance of underlying mortgage loans (in thousands) $51,966,405 $28,227,340 Average servicing fee rate (in basis points) 32 31 Average excess servicing spread (in basis points) 17 16 Key inputs: Pricing spread (1) Range 4.8% – 6.5% 1.7% – 12.0% Weighted average 5.7% 5.3% Average life (in years) Range 1.4 – 9.0 0.4 – 7.3 Weighted average 6.9 5.8 Annualized prepayment speed (2) Range 5.2% – 52.4% 7.6% – 74.6% Weighted average 9.6% 11.2% (1) Pricing spread represents a margin that is applied to a reference interest rate’s forward rate curve to develop periodic discount rates. The Company applies a pricing spread to the United States Dollar LIBOR curve for purposes of discounting cash flows relating to ESS. (2) Prepayment speed is measured using Life Total CPR. |
Mortgage Loans Held for Sale at
Mortgage Loans Held for Sale at Fair Value | 12 Months Ended |
Dec. 31, 2015 | |
Mortgage Loans Held for Sale at Fair Value | |
Mortgage Loans Held for Sale at Fair Value | Note 9 — Mortgage Loans Held for Sale at Fair Value Mortgage loans held for sale at fair value include the following: December 31, 2015 2014 (in thousands) Government-insured or guaranteed $ $ Conventional conforming Jumbo — Delinquent mortgage loans purchased from Ginnie Mae pools serviced by the Company Mortgage loans repurchased pursuant to representations and warranties $ $ Fair value of mortgage loans pledged to secure: Mortgage loans sold under agreements to repurchase $ $ Mortgage loan participation and sale agreements $ $ |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 10 — Derivative Financial Instruments The Company had the following derivative financial instruments recorded on its consolidated balance sheets: December 31, 2015 December 31, 2014 Fair value Fair value Notional Derivative Derivative Notional Derivative Derivative Instrument amount assets liabilities amount assets liabilities (in thousands) Derivatives not designated as hedging instruments Free-standing derivatives: Interest rate lock commitments $ $ $ $ Forward purchase contracts Forward sales contracts MBS put options — — Put options on interest rate futures purchase contracts — Call options on interest rate futures purchase contracts — Put options on interest rate futures sale contracts — — — — Total derivatives before netting Netting $ $ $ $ Collateral received from derivative counterparties, net $ $ The following table summarizes the notional value activity for derivative contracts used in the Company’s hedging activities: Year ended December 31, 2015 Balance Balance beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts Forward sale contracts MBS put options MBS call options — — Put options on interest rate futures purchase contracts Call options on interest rate futures purchase contracts Put options on interest rate futures sale contracts — Call options on interest rate futures sale contracts — — Year ended December 31, 2014 Balance Balance beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts Forward sale contracts MBS put options MBS call options — Put options on interest rate futures purchase contracts — Call options on interest rate futures purchase contracts — Put options on interest rate futures sale contracts — Call options on interest rate futures sale contracts — — Treasury futures purchase contracts — — Treasury futures sale contracts — — Eurodollar futures purchase contracts — — Eurodollar futures sales contracts — — Year ended December 31, 2013 Balance Balance beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts Forward sale contracts MBS put options MBS call options — Following are the gains (losses) recognized by the Company on derivative financial instruments and the income statement line items where such gains and losses are included: Year ended December 31, Hedged item Income statement line 2015 2014 2013 (in thousands) Interest rate lock commitments and mortgage loans held for sale Net gains on mortgage loans held for sale $ $ $ Mortgage servicing rights Net loan servicing fees $ $ $ |
Mortgage Servicing Rights
Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 2015 | |
Mortgage Servicing Rights | |
Mortgage Servicing Assets and Liabilities | Note 11 — Mortgage Servicing Rights Carried at Fair Value: The activity in MSRs carried at fair value is as follows: Year ended December 31, 2015 2014 2013 (in thousands) Balance at beginning of year $ $ $ Additions: Purchases Mortgage servicing rights resulting from mortgage loan sales Sales — Change in fair value due to: Changes in valuation inputs used in valuation model (1) Other changes in fair value (2) Total change in fair value Balance at end of year $ $ $ (1) Principally reflects changes in discount rates and prepayment speed inputs , primarily due to changes in interest rates. (2) Represents changes due to realization of cash flows. Carried at Lower of Amortized Cost or Fair Value: The activity in MSRs carried at the lower of amortized cost or fair value is summarized below: Year ended December 31, 2015 2014 2013 (in thousands) Amortized cost: Balance at beginning of year $ $ $ Mortgage servicing rights resulting from mortgage loan sales Amortization Application of valuation allowance to write down mortgage servicing rights with other-than-temporary impairment — — — Balance at end of year Valuation allowance: Balance at beginning of year Additions Application of valuation allowance to write down mortgage servicing rights with other-than-temporary impairment — — — Balance at end of year Mortgage servicing rights, net $ $ $ Fair value of mortgage servicing rights at end of year $ $ $ Fair value of mortgage servicing rights at beginning of year $ $ $ The following table summarizes the Company’s estimate of future amortization of its existing MSRs. This projection was developed using the inputs used by management in its December 31, 2015 valuation of MSRs. The inputs underlying the following estimate will change as market conditions and portfolio composition and behavior change, causing both actual and projected amortization levels to change over time. Estimated MSR Year ending December 31, amortization (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter $ Servicing fees relating to MSRs are recorded in Net mortgage loan servicing fees—Loan servicing fees—From non-affiliates on the consolidated statements of income; late charges and other ancillary fees relating to MSRs are recorded in Net mortgage loan servicing fees—Loan servicing fees—Ancillary and other fees on the consolidated statements of income. The fees are summarized below: Year ended December 31, 2015 2014 2013 (in thousands) Contractual servicing fees $ $ $ Ancillary and other fees: Late charges Other $ $ $ Mortgage servicing rights pledged as collateral at year end $ $ $ Mortgage Servicing Liabilities at Fair Value: The activity in mortgage servicing liability carried at fair value is summarized below: Year ended December 31, 2015 2014 (in thousands) Balance at beginning of year $ $ — Mortgage servicing liabilities resulting from mortgage loan sales Change in fair value Balance at end of year $ $ |
Carried Interest Due from Inves
Carried Interest Due from Investment Funds | 12 Months Ended |
Dec. 31, 2015 | |
Carried Interest Due from Investment Funds | |
Carried Interest Due from Investment Funds | Note 12 — Carried Interest Due from Investment Funds The activity in the Company’s Carried Interest due from Investment Funds is summarized as follows: Year ended December 31, 2015 2014 2013 (in thousands) Balance at beginning of year $ $ $ Carried Interest recognized during the year Proceeds received during the year — — — Balance at end of year $ $ $ The amount of the Carried Interest that will be received by the Company depends on the Investment Funds’ future performance. T he amount of Carried Interest recorded by the Company is based on the cash flows that would be produced assuming termination of the Investment Funds at period end and may be reduced in future periods based on the performance of the Investment Funds in those periods . However, the Company is not required to pay guaranteed returns to the Investment Funds and the amount of any reduction to Carried Interest will be limited to the extent of amounts previously recognized. Management expects the Carried Interest to be collected by the Company when the Investment Funds liquidate. The commitment period for the Investment Funds ended on December 31, 2011. The Investment Fund limited liability company and limited partnership agreements specify that the funds will continue in existence through December 31, 2016, subject to three one -year extensions by PCM at its discretion. |
Investment in PennyMac Mortgage
Investment in PennyMac Mortgage Investment Trust at Fair Value | 12 Months Ended |
Dec. 31, 2015 | |
Investment in PennyMac Mortgage Investment Trust at Fair Value | |
Investment in PennyMac Mortgage Investment Trust at Fair Value | Note 13 — Investment in PennyMac Mortgage Investment Trust at Fair Value Following is a summary of Change in fair value of investment in and dividends received from PennyMac Mortgage Investment Trust: Year ended December 31, 2015 2014 2013 (in thousands) Dividends received from PennyMac Mortgage Investment Trust $ $ $ Change in fair value of investment in PennyMac Mortgage Investment Trust $ $ $ Fair value of PennyMac Mortgage Investment Trust shares at year end $ $ $ |
Furniture, Fixtures, Equipment
Furniture, Fixtures, Equipment and Building Improvements | 12 Months Ended |
Dec. 31, 2015 | |
Furniture, Fixtures, Equipment and Building Improvements [Member] | |
Furniture, fixtures, equipment and building improvements | |
Property, Plant and Equipment Disclosure [Text Block] | Note 14 — Furniture, Fixtures, Equipment and Building Improvements Furniture, fixtures, equipment and building improvements is summarized below: December 31, 2015 2014 (in thousands) Furniture, fixtures, equipment and building improvements $ $ Less: Accumulated depreciation and amortization $ $ Fixed assets pledged to secure obligations under capital lease $ $ — Depreciation and amortization expense totaled $ 4.1 million, $3.1 million and $1.8 million for t he years ended December 31, 2015, 2014 and 2013 , respectively, of which $ 2.1 million, $2.1 million and $1.4 million, respectively, were allocated to PMT as called for in its management agreement. |
Capitalized Software
Capitalized Software | 12 Months Ended |
Dec. 31, 2015 | |
Capitalized Software | |
Long-lived asset disclosures | |
Capitalized Software | Note 15 — Capitalized Software Capitalized software is summarized below: December 31, 2015 2014 (in thousands) Cost $ $ Less: Accumulated amortization $ $ Capitalized software pledged to secure obligation under capital lease $ $ — Software amortization expenses totaled $324,000 , $320,000 and $374,000 for t he years ended December 31, 2015, 2014 and 2013 , respectively. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2015 | |
Borrowings | |
Borrowings | Note 16 — Borrowings As of December 31, 2015, the Company maintained multiple borrowing facilities: six facilities that provide fun ding for sales of assets under agreements to repurchase; two facilities that provide for sales of mortgage loan participation certificates; one note payable secured by MSRs made relating to certain loans in the Company’s loan servicing portfolio; one revolving credit agreement classified as a note payable; and one facility classified as obligations under capital lease. The borrowing facilities contain various covenants, including financial covenants governing the Company’s net worth, debt-to-equity ratio, profitability and liquidity. Management believes that the Company was in compliance with these covenants as of December 31, 2015. Assets Sold Under Agreements to Repurchase The borrowing facilities secured by mortgage loans held for sale at fair value and MSRs are in the form of asset sale and repurchase agreements. Eligible loans and MSRs are sold at advance rates based on the loan type. Interest is charged at a rate based on the buyer’s overnight cost of funds rate for one agreement and on LIBOR for the other three agreements. Loans and MSRs financed under these agreements may be re-pledged by the lenders. Assets sold under agreements to repurchase are summarized below: Year ended December 31, 2015 2014 2013 (in thousands) Year end: Unpaid principal balance $ $ $ Unamortized issuance costs $ $ $ Unused amount (1) $ $ $ Weighted average interest rate % % % Fair value of assets securing repurchase agreements Mortgage loans $ $ $ Mortgage servicing rights $ $ — $ — Margin deposits placed with counterparties (2) $ $ $ During the year: Average balance of assets sold under agreements to repurchase $ $ $ Weighted average interest rate (3) % % % Total interest expense $ $ $ Maximum daily amount outstanding $ $ $ (1) The amount the Company is able to borrow under loan repurchase agreements is tied to the fair value of unencumbered mortgage loans eligible to secure those agreements and the Company’s ability to fund the agreements’ margin requirements relating to the mortgage loans sold. (2) Margin deposits are included in Other Assets on the Company’s consolidated balance sheets. (3) Excludes the effect of amortization of commitment fees totaling $ 7.4 million, $4.7 million and $4.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. Following is a summary of maturities of outstanding advances under repurchase agreements by maturity date: Remaining maturity at December 31, 2015 Balance (in thousands) Within 30 days $ Over 30 to 90 days Over 90 days — Unamortized issuance costs Total loans sold under agreements to repurchase $ Weighted average maturity (in months) The amount at risk (the fair value of the assets pledged plus the related margin deposit, less the amount advanced by the counterparty and interest payable) relating to the Company’s mortgage loans held for sale sold under agreements to repurchase is summarized by counterparty below as of December 31, 2015: Weighted average maturity of advances under repurchase Counterparty Amount at risk agreement Facility maturity (in thousands) Credit Suisse First Boston Mortgage Capital LLC $ January 29, 2016 January 29, 2016 Credit Suisse First Boston Mortgage Capital LLC $ January 29, 2016 January 29, 2016 Bank of America, N.A. $ March 24, 2016 March 29, 2016 Morgan Stanley Bank, N.A. $ February 23, 2016 July 26, 2016 Citibank, N.A. $ February 10, 2016 October 20, 2016 The Company is subject to margin calls during the period the agreements are outstanding and therefore may be required to repay a portion of the borrowings before the respective agreements mature if the fair value (as determined by the applicable lender) of the mortgage loans securing those agreements decreases. Mortgage Loan Participation and Sale Agreements Two of the borrowing facilities secured by mortgage loans held for sale are in the form of mortgage loan participation and sale agreements. Participation certificates, each of which represents an undivided beneficial ownership interest in mortgage loans that have been pooled with Fannie Mae, Freddie Mac or Ginnie Mae, are sold to the lender pending the securitization of the mortgage loans and sale of the resulting securities. A commitment to sell the securities resulting from the pending securitization between the Company and a non-affiliate is also assigned to the lender at the time a participation certificate is sold. The purchase price paid by the lender for each participation certificate is based on the trade price of the security, plus an amount of interest expected to accrue on the security to its anticipated delivery date, minus a present value adjustment, any related hedging costs and a holdback amount that is based on a percentage of the purchase price and is not required to be paid to the Company until the settlement of the security and its delivery to the lender. The mortgage loan participation and sale agreements are summarized below: Year ended December 31, 2015 2014 (in thousands) Year end: Unpaid principal balance $ $ Unamortized issuance costs $ $ Mortgage loans pledged to secure mortgage loan participation and sale agreement $ $ During the year: Average balance $ $ Weighted average interest rate (1) % % Total interest expense $ $ (1) Excludes the effect of amortization of commitment fees totaling $ 355,000 . Notes Payable Notes payable are summarized below: Year ended December 31, 2015 2014 2013 (in thousands) Year end: Unpaid principal balance $ $ $ Unamortized issuance costs — — $ $ $ Assets pledged to secure notes payable: Mortgage servicing rights $ $ $ Servicing advances $ — $ — $ Cash $ $ — $ — Carried interest $ $ — $ — During the year: Average balance $ $ $ Weighted average interest rate % % % Total interest expense $ $ $ The Company entered into a revolving credit agreement, dated as of December 30, 2015, pursuant to which the lenders have agreed to make revolving loans in an amount not to exceed $100,000,000 . Interest on the loans accrues at an annual rate of interest equal to, at the election of the Company , either an alternate base rate or LIBOR plus the applicable margin. The maturity date of the loans is 364 days following the date of the revolving c redit a greement. The proceeds of the loans are to be used solely for working capital and general co rporate purposes of the Company and its subsidiaries . As of December 31, 2014, the notes payable are secured by MSRs relating to certain loans in the Company’s servicing portfolio, and provide for advance rates ranging from 50% to 85% of the amount of the carrying value of the MSR or servicing advances pledged. Interest is charged at a rate based on the lender’s overnight cost of funds. Obligations Under Capital Lease In December of 2015, the Company entered into a sale-leaseback transaction secured by certain fixed assets and capitalized software. The capital lease matures on December 9, 2019 and bears interest at a spread over one month LIBOR. As of December 31, 2015, $14.0 million of fixed assets and $783,000 of capitalized software were pledged to secure the Company’s obligation under the capital lease. Excess Servicing Spread Financing In conjunction with the Company’s purchase from non-affiliates of certain MSRs on pools of Agency-backed residential mortgage loans, the Company has entered into sale and assignment agreements with PMT which are treated as financings and are carried at fair value with changes in fair value recognized in current period income. Under these agreements, the Company sold to PMT the right to receive ESS cash flows relating to certain MSRs. The Company retained all ancillary income associated with servicing the loans and a fixed base servicing fee. The Company continues to be the servicer of the mortgage loans and retains all servicing obligations, including responsibility to make servicing advances. Following is a summary of ESS: Year ended December 31, 2015 2014 2013 (in thousands) Balance at beginning of year $ $ $ — Issuances of excess servicing spread to PennyMac Mortgage Investment Trust: For cash Pursuant to a recapture agreement with PennyMac Mortgage Investment Trust — Accrual of interest Repayments Change in fair value Balance at end of year $ $ $ |
Liability for Losses Under Repr
Liability for Losses Under Representations and Warranties | 12 Months Ended |
Dec. 31, 2015 | |
Liability for Losses Under Representations and Warranties | |
Liability for Losses Under Representations and Warranties | Note 17 — Liability for Losses Under Representations and Warranties Following is a summary of activity in the Company’s liability for representations and warranties: Year ended December 31, 2015 2014 2013 (in thousands) Balance at beginning of year $ $ $ Provision for losses on loans sold Incurred losses Balance at end of year $ $ $ Unpaid principal balance of mortgage loans subject to representations and warranties at year end $ $ $ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | Note 18—Income Taxes The Company files U.S. federal and state corporate income tax returns for PFSI and partnership returns for PennyMac. Before the IPO, the Company did not have a provision for income taxes as PennyMac is a pass ‑through taxable entity. PFSI’s tax returns are subject to examination for 2012 and forward. PennyMac’s federal partnership returns are subject to examination for 2012 and forward, and its state tax returns are generally subject to examination for 2011 and forward. No returns are currently under examination. The following table details the Company’s income tax expense. Year ended December 31, 2015 2014 2013 (in thousands) Current expense: Federal $ — $ $ — State — — Total current expense — — Deferred expense: Federal State Total deferred expense Total provision for income taxes $ $ $ The provision for deferred income taxes for the years ended December 31, 2015, 2014 and 2013 primarily relates to the Company’s investment in PennyMac partially offset by the Company’s generation and utilization of a net operating loss. The portion attributable to its investment in PennyMac primarily relates to MSRs that PennyMac received pursuant to sales of mortgage loans held for sale at fair value and Carried Interest from the Investment Funds. The following table is a reconciliation of the Company’s provision for income taxes at statutory rates to the provision for income taxes at the Company’s effective tax rate: Year ended December 31, 2015 2014 2013 Federal income tax statutory rate % % % Less: Rate attributable to noncontrolling interest % % % State income taxes, net of federal benefit % % % Other % % % Valuation allowance % % % Effective tax rate % % % The components of the Company’s provision for deferred income taxes are as follows: Year ended December 31, 2015 2014 2013 (in thousands) Investment in PennyMac $ $ $ Net operating loss Valuation allowance — — — Total provision for deferred income taxes $ $ $ The components of Deferred tax asset are as follows: December 31, 2015 2014 (in thousands) Taxes currently receivable $ $ Deferred income tax asset, net Deferred tax asset $ $ The tax effects of temporary differences that gave rise to deferred income tax assets and liabilities are presented below: December 31, 2015 2014 (in thousands) Deferred income tax assets: Investment in PennyMac $ $ Net operating loss carryforward — Deferred income tax asset, net The Company’s deferred income tax asset is recorded in Deferred tax asset in the consolidated balan ce sheet as of December 31, 2015 and 2014 . I ncrease s in the Company’s ownership of PennyMac as a result of members exchanging PennyMac Class A units for PFSI Class A common stock result in an increase in deferred tax asset . As existing members exchange their units, the Company records a deferred tax asset related to PennyMac’s election pursuant to Section 754 of the Internal Revenue Code. The current year’s decrease in deferred tax asset is attributable to the results of operations partially offset by an increase in the Company’s ownership of PennyMac as a result of members exchanging their units. The portion of the deferred tax asset relating to the Company’s investment in PennyMac is net of deferred tax liabilities primarily related to deferred income from MSRs and Carried Interest from the Investment Funds. The Company recorded a deferred tax asset of $8.6 million related to a net operating loss of approximately $21.3 million which generally expires in 2035. At December 31, 201 5 and 201 4 , the Company had no unrecognized tax benefits and does not anticipate any unrecognized tax benefits. Should the recognition of any interest or penalties relative to unrecognized tax benefits be necessary, it is the Company’s policy to record such expenses in the Company’s income tax accounts. No such accruals existed at December 31, 201 5 and 201 4 . |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest | |
Noncontrolling Interest | Note 19—Noncontrolling Interest During the year ended December 31, 2015, PennyMac unitholders exchanged 319,518 Class A units for the Company’s Class A common stock. The effect of the exchanges reduced the percentage of the Noncontrolling interest in Private National Mortgage Acceptance Company, L LC from 71.6% at December 31, 2014 to 71.1% at December 31, 2015 . During the year ended December 31, 2014 , PennyMac unitholders exchanged 718,039 Class A units for the Company’s Class A common stock. The effect of the exchanges reduced the percentage of the Noncontrolling interest in Private National Mortgage Acceptance Company, LLC from 72.6% at December 31, 2013 to 71.6% at December 31, 2014 . Net income attributable to the Company’s common stockholders and the effects of changes in noncontrolling ownership interest in PennyMac is summarized below: Year ended December 31, 2015 2014 2013 (in thousands, except share amounts) Net income attributable to PennyMac Financial Services, Inc. common stockholders $ $ $ Decrease in the Company's additional paid-in capital for initial recognition of noncontrolling interest (12,778 Class A units) $ — $ — $ Increase in the Company's additional paid-in capital for exchanges of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. (Class A shares issued, 319 , 516 , and 8,035 during the years ended December 31, 2015, 2014 and 2013, respectively) $ $ $ |
Net Gains on Mortgage Loans Hel
Net Gains on Mortgage Loans Held for Sale | 12 Months Ended |
Dec. 31, 2015 | |
Net Gains on Mortgage Loans Held for Sale | |
Net Gains on Mortgage Loans Held for Sale | Note 20—Net Gains on Mortgage Loans Held for Sale Net gains on mortgage loans held for sale at fair value is summarized below: Year ended December 31, 2015 2014 2013 (in thousands) Cash (loss) gain: Mortgage loans $ $ $ Hedging activities Non-cash gain: Mortgage servicing rights resulting from mortgage loan sales Mortgage servicing liabilities resulting from mortgage loan sales — MSR and ESS recapture payable to PennyMac Mortgage Investment Trust Provision for losses relating to representations and warranties on loans sold Change in fair value relating to loans and hedging derivatives held at period end: Interest rate lock commitments Mortgage loans Hedging derivatives $ $ $ |
Net Interest Expense
Net Interest Expense | 12 Months Ended |
Dec. 31, 2015 | |
Net Interest Expense | |
Net Interest Expense | Note 21—Net Interest Expense Net interest expense is summarized below: Year ended December 31, 2015 2014 2013 (in thousands) Interest income: From non-affiliates: Short-term investments $ $ $ Mortgage loans held for sale at fair value From PennyMac Mortgage Investment Trust — — Interest expense: To non-affiliates: Assets sold under agreements to repurchase Mortgage loan participation and sale agreements — Notes payable Interest shortfall on repayments of mortgage loans serviced for Agency securitizations Interest on mortgage loan impound deposits Other To PennyMac Mortgage Investment Trust—Excess servicing spread financing at fair value $ $ $ |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-based Compensation | |
Stock-based Compensation | Note 22—Stock ‑based Compensation The Company’s 2013 Equity Incentive Plan provides for grants of stock options, time-based and performance-based restricted stock units (“RSUs”), stock appreciation rights, performance units and stock grants. As of December 31, 2015, the Company has 2.6 million units available for future awards. The Company estimates the cost of the stock options, time-based restricted stock units and performance-based restricted stock units awarded with reference to the fair value of PFSI’s common stock on the date of the award. Compensation costs are fixed, except for the performance-based restricted stock units, at the grant’s estimated fair value on the grant date as all grantees are employees of PennyMac or directors of the Company. Expense relating to awards is included in Compensation in the consolidated statements of income. Following is a summary of the stock-based compensation expense by instrument awarded: Year ended December 31, 2015 2014 2013 (in thousands) Performance-based RSUs $ $ $ Stock options Time-based RSUs Exchangeable PNMAC units $ $ $ Stock Options The stock option award agreements provide for the award of Stock Options to purchase the optioned common stock. In general, and except as otherwise provided by the agreement, one ‑third of the stock option awards vests on each of the first, second, and third anniversaries of the grant date, subject to the recipient’s continued service through each anniversary. Compensation cost relating to stock options is charged to expense using the graded vesting method. Each stock option has a term of ten years from the date of grant but expires (1) immediately upon termination of the holder’s employment or other association with the Company for cause, (2) one year after the holder’s employment or other association is terminated due to death or disability and (3) three months after the holder’s employment or other association is terminated for any other reason. The fair value of each stock option award is estimated on the date of grant using a variant of the Black Scholes model based on the assumptions noted in the following table: Year ended December 31, 2015 2014 2013 Expected volatility (1) 41% 42% 45% Expected dividends 0% 0% 0% Risk-free rate 0.1% - 2.3% 0.1% - 2.9% 0.3% - 2.3% Expected grantee forfeiture rate 0.0% -18.7% 4.3% - 20.2% 6.2% - 19.2% (1) Based on historical volatilities of comparable companies’ common stock. The Company uses its historical data to estimate employee departure behavior used in the option ‑pricing model; groups of employees (employee classification) that have similar historical behavior are considered separately for valuation purposes. The expected term of common stock options granted is derived from the option pricing model and represents the period of time that common stock options granted are expected to be outstanding. The risk ‑free rate for periods within the contractual term of the common stock option is based on the U.S. Treasury yield curve in effect at the time of grant. The table below summarizes stock option award activity and compensation expense: Year ended December 31, 2015 2014 2013 Number of Stock Options Outstanding at beginning of year — Granted Exercised — — Forfeited Outstanding at end of year Number of options exercisable at end of year — Weighted average exercise price per share: Outstanding at beginning of year $ $ $ — Granted Exercised — — Forfeited Outstanding at end of year $ $ $ Weighted average remaining contractual term (in years): Outstanding at end of year Exercisable at end of year — Aggregate intrinsic value: Outstanding at end of year $ — $ $ — Exercisable at end of year $ — $ — $ — Expected vesting amounts at year end: Number of options expected to vest at end of year Weighted average vesting period (in months) Time ‑Based RSUs The RSU grant agreements provide for the award of time ‑based RSUs, entitling the award recipient to one share of the Company’s Class A common stock for each RSU. One ‑third of the time ‑based RSUs vest on each of the first, second, and third anniversaries of the date, subject to the recipient’s continued service through each anniversary. Compensation cost relating to time ‑based RSUs is based on the grant date fair value of the Company’s Class A common stock and the number of shares expected to vest. For purposes of estimating the cost of the time ‑based RSUs granted, the Company assumes turnover rates of 4.3% ‑ 20.2% per year based on the grantees’ employee classification. Compensation cost relating to time ‑based RSUs is amortized to expense using the graded vesting method and is included in Compensation expense on the accompanying consolidated statements of income. Following is a summary of time ‑based RSU activity: Year ended December 31, 2015 2014 2013 Number of units Outstanding at beginning of year — Granted Vested — Forfeited Outstanding at end of year Weighted average grant date fair value per unit: Outstanding at beginning of year $ $ $ — Granted Vested — Forfeited Outstanding at end of year $ $ $ Compensation expense recorded during the year (in thousands) $ $ $ Year end: Unamortized compensation cost (in thousands) $ $ $ Number of shares expected to vest Weighted average remaining vesting period (in months) Performance ‑Based RSUs The performance ‑based RSUs provide for the issuance of shares of the Company’s Class A common stock based equally on the attainment of earnings per share and total shareholder return goals and are generally adjusted for grantee job performance ratings. The performance periods for these grants are measured through December 31, 2015 and 2016. The grantees’ satisfaction of the performance goals will be established by review of a committee of PFSI’s board of directors. Shares vested under these two grants will be issued to the grantees no later than December 31, 2015 and 2016, respectively. The performance ‑based RSUs contain both performance goals (attainment of earnings per share) and market goals (total shareholder return). The Company separately accounts for the performance and market goals when recognizing compensation expense relating to performance ‑based RSUs. The grant date fair value of the market goal component of the performance ‑based RSUs is measured using a variant of the Black ‑Scholes model. Key inputs are the expected volatility of the Company’s Class A common stock, the risk ‑free interest rate and expected grantee forfeiture rates. Following are the inputs for grants made: 2014 2013 Expected volatility (1) 42% 45% Expected dividends 0% 0% Risk-free rate 0.1% - 0.7% 0.3% - 2.3% Expected grantee forfeiture rate 4.3% - 20.2% 6.2% - 19.2% (1) Based on historical volatilities of comparable companies’ common stock. The fair value of the performance goal component of the performance ‑based RSUs is measured based on the fair value of the Company’s common stock at the grant date, taking into consideration management’s estimate of the most probable outcome of the performance goal, and the number of shares to be forfeited during the vesting period. The cost of the performance ‑based RSUs is amortized to Compensation expense using the straight line method over the performance period. Following is a summary of performance ‑based RSU activity: Year ended December 31, 2015 2014 2013 Number of units Outstanding at beginning of year — Granted Vested — — — Forfeited Outstanding at end of year Weighted average grant date fair value per unit: Outstanding at beginning of year $ $ $ — Granted Vested — — — Forfeited Outstanding at end of year $ $ $ Compensation expense recorded during the year (in thousands) $ $ $ Year end: Unamortized compensation cost (in thousands) $ $ $ Number of shares expected to vest Weighted average remaining vesting period (in months) |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | Note 23—Supplemental Cash Flow Information Year ended December 31, 2015 2014 2013 (in thousands) Cash paid for interest $ $ $ Cash paid for income taxes $ $ $ Non-cash investing activity: Mortgage servicing rights resulting from mortgage loan sales $ $ $ Mortgage servicing liabilities resulting from mortgage loan sales $ $ $ — Mortgage servicing rights recapture incurred $ $ $ Non-cash financing activity: Transfer of excess servicing spread pursuant to recapture agreement with PennyMac Mortgage Investment Trust $ $ $ — Issuance of common stock in settlement of director fees $ $ $ — Conversion of note payable to assets sold under agreements to repurchase $ $ — $ — |
Regulatory Capital and Liquidit
Regulatory Capital and Liquidity Requirements | 12 Months Ended |
Dec. 31, 2015 | |
Regulatory Capital and Liquidity Requirements | |
Regulatory Capital and Liquidity Requirements | Note 24—Regulatory Capital and Liquidity Requirements The Company, through PLS and PennyMac, is required to maintain specified levels of equity to remain a seller/servicer in good standing with the Agencies. Such equity requirements generally are tied to the size of the Company’s loan servicing portfolio or loan origination volume. Effective December 31, 2015, the Federal Housing Finance Agency issued new operational and financial eligibility requirements for sellers/servicers eligible to sell or service mortgage loans with Fannie Mae and Freddie Mac. The eligibility requirements include tangible net worth of $2.5 million plus 25 basis of the Company’s total 1-4 unit servicing portfolio, excluding mortgage loans subserviced for others. The Federal Housing Finance Agency also introduced a new liquidity requirement equal to 3.5 basis points of the aggregate UPB serviced for the Agencies plus 200 basis points of total nonperforming Agency UPB in excess of 6.0%. The amounts in the following table reflect the Company’s compliance with these requirements. The Agencies’ capital requirements, the calculations of which are specified by each Agency, are summarized below: Agency capital / liquidity December 31, 2015 December 31, 2014 Agency–company subject to requirement Balance (1) Requirement Balance (1) Requirement (in thousands) Capital Fannie Mae - PLS $ $ $ $ Freddie Mac - PLS $ $ $ $ Ginnie Mae - PLS $ $ $ $ Ginnie Mae - PennyMac $ $ $ $ HUD - PLS $ $ $ $ Liquidity Fannie Mae / Freddie Mac - PLS $ $ $ — $ — Ginnie Mae - PLS $ $ $ — $ — (1) Calculated in compliance with the respective Agency’s requirements. Noncompliance with the respective Agencies’ capital requirements can result in the respective Agency taking various remedial actions up to and including removing PennyMac’s ability to sell loans to and service loans on behalf of the respective Agency. Management believes that PennyMac and PLS had Agency capital in excess of the respective Agencies’ requirements at December 31, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitment and Contingencies. | |
Commitments and Contingencies | Note 25—Commitments and Contingencies Litigation The business of the Company involves the collection of numerous accounts, as well as the validation of liens and compliance with various state and federal lending and servicing laws. Accordingly, the Company may be involved in proceedings, claims, and legal actions arising in the ordinary course of business. As of December 31, 2015, the Company was not involved in any legal proceedings, claims, or actions that in management’s view would be reasonably likely to have a material adverse effect on the Company . Commitments to Fund and Sell Mortgage Loans December 31, 2015 (in thousands) Commitments to purchase mortgage loans from PennyMac Mortgage Investment Trust $ Commitments to fund mortgage loans $ Commitments to sell mortgage loans $ |
Segments and Related Informatio
Segments and Related Information | 12 Months Ended |
Dec. 31, 2015 | |
Segments and Related Information | |
Segments and Related Information | Note 26—Segments and Related Information The Company operates in three segments: loan production, loan servicing and investment management. Two of the segments are in the mortgage banking business: loan production and loan servicing. The loan production segment performs mortgage loan origination, acquisition and sale activities. The loan servicing segment performs servicing of newly originated mortgage loans, execution and management of EBOs and servicing of mortgage loans sourced and managed by the investment management segment, including executing the loan resolution strategy identified by the investment management segment relating to distressed mortgage loans. The investment management segment represents the activities of the Company’s investment manager, which include sourcing, performing diligence, bidding and closing investment asset acquisitions, managing correspondent production activities for PMT and managing the acquired assets for the Advised Entities. Financial highlights by segment are as follows: Year ended December 31, 2015 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenues: (1) Net gains (losses) on mortgage loans held for sale at fair value $ $ $ $ — $ Loan origination fees — — Fulfillment fees from PennyMac Mortgage Investment Trust — — Net servicing fees — — Management fees — — — Carried Interest from Investment Funds — — — Net interest income (expense): Interest income — Interest expense — — Other Total net revenue Expenses Income (loss) before provision for income taxes and non-segment activities Non-segment activities (2) Income (loss) before provision for income taxes $ $ $ $ $ Segment assets at year end (3) $ (1) All revenues are from external customers. (2) Represents repricing of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement and adjustments related to parent Company interest expense. (3) Excludes parent Company assets, which consist primar ily of deferred tax asset of $18.4 million. Year ended December 31, 2014 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenues: (1) Net gains on mortgage loans held for sale at fair value $ $ $ $ — $ Loan origination fees — — Fulfillment fees from PennyMac Mortgage Investment Trust — — Net servicing fees — — Management fees — — — Carried Interest from Investment Funds — — — Net interest income (expense): Interest income Interest expense — Other Total net revenue Expenses Income (loss) before provision for income taxes and non-segment activities Non-segment activities (2) Income before provision for income taxes $ $ $ $ $ Segment assets at year end (3) $ $ $ $ $ (1) All revenues are from external customers (2) Represents repricing Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement. (3) Excludes parent company assets, which consist primarily of deferred tax asset of $46.0 million. Year ended December 31, 2013 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenues: (1) Net gains on mortgage loans held for sale at fair value $ $ — $ $ — $ Loan origination fees — — Fulfillment fees from PennyMac Mortgage Investment Trust — — Net servicing fees — — Management fees — — — Carried Interest from Investment Funds — — — Net interest income (expense): Interest income — Interest expense — Other Total net revenue Expenses Income before provision for income taxes $ $ $ $ $ Segment assets at year end (2) $ $ $ $ $ (1) All revenues are from external customers. (2) Excludes parent Company assets, which consist primarily of deferred tax asset of $63.1 million |
Selected Quarterly Results (Una
Selected Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Results (Unaudited) | |
Selected Quarterly Results (Unaudited) | Note 27—Selected Quarterly Results (Unaudited) Following is a presentation of selected quarterly financial data: Quarter ended 2015 2014 Dec. 31 Sept. 30 June. 30 Mar. 31 Dec. 31 Sept. 30 June. 30 Mar. 31 (in thousands, except per share data) During the quarter: Net gains on mortgage loans held for sale at fair value $ $ $ $ $ $ $ $ Fulfillment fees from PennyMac Mortgage Investment Trust Net servicing fees Management fees and Carried Interest Other income Expenses Income before provision for income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interest Net income attributable to PennyMac Financial Services, Inc. common stockholders $ $ $ $ $ $ $ $ Earnings per share of Common Stock: Basic $ $ $ $ $ $ $ $ Diluted $ $ $ $ $ $ $ $ Quarter end: Mortgage loans held for sale at fair value $ $ $ $ $ $ $ $ Mortgage servicing rights Carried Interest from Investment Funds Servicing advances, net Other assets Total assets $ $ $ $ $ $ $ $ Assets sold under agreements to repurchase $ $ $ $ $ $ $ $ Mortgage loan participation and sale agreements — — — Notes payable Excess servicing spread financing at fair value to PennyMac Mortgage Investment Trust Other liabilities Total liabilities Total equity Total liabilities and equity $ $ $ $ $ $ $ $ |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2015 | |
Recently Issued Accounting Pronouncements. | |
Recently Issued Accounting Pronouncements | Note 29—Recently Issued Accounting Pronouncements In Fe bruary 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”). ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership and affects the consolidation analysis of reporting entities that are involved with variable interest entities (“VIEs”), particularly those that have fee arrangements and related party relationships. ASU 2015-02 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. A reporting entity may apply the amendments in ASU 2015-02 using: (a) a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption; or (b) by applying the amendments retrospectively. The Company is currently assessing the potential effect that the adoption of ASU 2015-02 will have on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. ASU 2015-03 should be applied on a retrospective basis and is effective for the Company for financial statements issued for fiscal years and interim periods within those fiscal years beginning after December 15, 2015. The Company adopted ASU 2015-03 during the quarter ended June 30, 2015. As a result of the adoption of ASU 2015-03, the Company, on its September 30, 2015 consolidated balance sheet, reclassified $716,000 in debt issuance costs from Other assets and allocated such costs in the amount of $715,000 to Assets sold under agreements to repurchase ; $1,000 to Mortgage loan participation and sale agreement; and $10,000 to Note s payable . There were no changes to the Company’s consolidated statements of income or consolidated statements of cash flows as a result of the Company’s adoption of ASU 2015-03. On January 5, 2016, the FASB issued ASU No. 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 affects the accounting for equity investments, financial liabilities under the fair value option, the presentation and disclosure requirements for financial instruments, and the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. ASU 2016 requires that: · All equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) with readily determinable fair values will generally be measured at fair value through earnings. · When the fair value option has been elected for financial liabilities, changes in fair value due to instrument-specific credit risk will be recognized separately in other comprehensive income. The accumulated gains and losses due to these changes will be reclassified from accumulated other comprehensive income to earnings if the financial liability is settled before maturity. · For financial instruments measured at amortized cost, public business entities will be required to use the exit price when measuring the fair value of financial instruments for disclosure purposes. · Financial assets and financial liabilities shall be presented separately in the notes to the financial statements, grouped by measurement category (e.g., fair value, amortized cost, lower of cost or fair value) and form of financial asset (e.g., loans, securities). · Public business entities will no longer be required to disclose the methods and significant assumptions used to estimate the fair value of financial instruments carried at amortized cost. · Entities will have to assess the realizability of a deferred tax asset related to a debt secur ity classified as available-for- sale in combination with the entity’s other deferred tax assets. The classification and measurement guidance will be effective for the Company in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. All entities can early adopt the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. Early adoption of these provisions can be elected for all financial statements of fiscal years and interim periods that have not yet been issued or that have not yet been made available for issuance. The Company is currently assessing the potential effe ct that the adoption of ASU 2016 -0 1 will have on its consolidated financial statements. On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 will require organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU 2016-02 requires that a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financing or operating lease. However, unlike current GAAP—which requires only capital leases to be recognized on the balance sheet—ASU 2016-02 will require both types of leases to be recognized on the balance sheet. ASU 2016-02 also require s disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The accounting by organizations that own the assets leased by the lessee—also known as lessor accounting—will remain largely unchanged from current GAAP. However, ASU 2016-02 contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014. ASU 2016-02 will take effect for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. ASU 2016-02 requires reporting organizations to take a modified retrospective transition approach . Early adoption of these provisions can be elected for all financial statements of fiscal years and interim periods that have not yet been issued or that have not yet been made available for issuance. The Company is currently assessing the potential effe ct that the adoption of ASU 2016 -0 1 will have on its consolidated financial statements. |
Parent Company Information
Parent Company Information | 12 Months Ended |
Dec. 31, 2015 | |
Parent Company Information | |
Parent Company Information | Note 28—Parent Company Information The Company’s debt financing agreements require PLS, PFSI’s controlled subsidiary, to comply with financial covenants that include a minimum tangible net worth of $90 million. PLS is limited from transferring funds to the Parent by this minimum tangible net worth requirement. PENNYMAC FINANCIAL SERVICES, INC. CONDENSED BALANCE SHEET December 31, 2015 2014 (in thousands) ASSETS Cash $ $ Investments in subsidiaries Deferred tax asset Due from subsidiaries — Total assets $ $ LIABILITIES AND STOCKHOLDERS' EQUITY Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement $ $ Payable to subsidiaries — Total liabilities Stockholders' equity Total liabilities and stockholders' equity $ $ PENNYMAC FINANCIAL SERVICES, INC. CONDENSED STATEMENT OF INCOME Year ended December 31, 2015 2014 2013 (in thousands) Revenues Dividends from subsidiaries $ $ $ Interest — — Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — Total revenue Expenses Interest — — Total expenses — — Income before provision for income taxes and equity in undistributed earnings in subsidiaries Provision for income taxes Income before equity in undistributed earnings of subsidiaries Equity in undistributed earnings of subsidiaries Net income $ $ $ PENNYMAC FINANCIAL SERVICES, INC. CONDENSED STATEMENT OF CASH FLOWS Year ended December 31, 2015 2014 2013 (in thousands) Cash flows from operating activities Net income $ $ $ Adjustments to reconcile net income to net cash (used in ) provided by operating activities Equity in undistributed earnings of subsidiaries (Decrease) increase in payables to subsidiaries — Decrease in deferred tax asset Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — — Increase in intercompany receivable — — Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — Net cash (used in) provided by operating activities Cash flows from investing activities Increase in investments in subsidiaries — — Net cash used by investing activities — — Cash flows from financing activities Issuance of common shares — — Payment of common share underwriting and offering costs — — Net cash provided by financing activities — — Net change in cash Cash at beginning of year — Cash at end of year $ $ $ |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | |
Subsequent Events | Note 30—Subsequent Events On February 26, 2016, the Company amended its loan and security agreement with Barclays Bank PLC, by increasing from $20 million to $100 million the aggregate loan amount available to finance certain of its MSRs relating to mortgage loans pooled into Fannie Mae and Freddie Mac securities. On February 29, 2016, the Company terminated the 2/1/13 Spread Acquisition Agreement pursuant to which it had previously sold to PennyMac Holdings, LLC, a wholly-owned subsidiary of PMT, ESS relating to Fannie Mae MSRs. On February 29, 2016, in connection with the Company’s termination of the 2/1/13 Spread Acquisition Agreement, the Company reacquired from PMH all of its right, title and interest in and to all of the Fannie Mae ESS previously sold by the Company to PMH and then subject to such 2/1/13 Spread Acquisition Agreement and the related amended and restated subordination of interest agreement with Fannie Mae. At settlement, the Company reacquired the Fannie Mae ESS at fair value for a purchase price of approximately $52 million. On February 29, 2016, the Company reacquired from PMH all of its right, title and interest in and to all of the Freddie Mac ESS previously sold by the Company to PMH and then subject to the 12/19/14 Spread Acquisition Agreement, pursuant to which the Company had previously sold to PMH ESS relating to Freddie Mac MSRs, and the related acknowledgement agreement with Freddie Mac. At settlement, the Company reacquired the Freddie Mac ESS from PMH at fair value for a purchase price of approximately $7 million. |
Significant Accounting Polici37
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in compliance with accounting principles generally accepted in the United States (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (the “Codification”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of PFSI, PennyMac and all of its wholly ‑owned subsidiaries. Intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results will likely differ from those estimates. |
Fair Value | Fair Value The Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the observability of the inputs used to determine fair value. These levels are: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Prices determined or determinable using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing an asset or liability and are developed based on market data obtained from sources independent of the Company. These may include quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk and other inputs. · Level 3—Prices determined using significant unobservable inputs. In situations where observable inputs are unavailable (for example, when there is little or no market activity for an asset or liability at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Company’s own judgments about the factors that market participants use in pricing an asset or liability, and are based on the best information available in the circumstances. As a result of the difficulty in observing certain significant valuation inputs affecting “Level 3” financial statement items, the Company is required to make judgments regarding these items’ fair values. Different persons in possession of the same facts may reasonably arrive at different conclusions as to the inputs to be applied in valuing these financial statement items and their fair values. Likewise, due to the general illiquidity of some of these financial statement items, subsequent transactions may be at values significantly different from those reported. |
Short-Term Investments | Short ‑Term Investments Short ‑term investments, which represent investments in accounts with a depository institution, are carried at fair value. Changes in fair value are recognized in current period income. The Company classifies its short ‑term investments as “Level 1” fair value financial statement items. |
Mortgage Loans Held for Sale at Fair Value | Mortgage Loans Held for Sale at Fair Value Management has elected to account for mortgage loans held for sale at fair value, with changes in fair value recognized in current period income, to more timely reflect the Company’s performance. All changes in fair value, including changes arising from the passage of time, are recognized as a component of Net gains on mortgage loans held for sale at fair value . The Company classifies most of the mortgage loans held for sale at fair value as “Level 2” fair value financial statement items. Certain of the Company’s mortgage loans held for sale may not be readily saleable due to identified defects or delinquency. Such mortgage loans are classified as “Level 3” fair value financial statement items. Sale Recognition The Company recognizes transfers of mortgage loans as sales when it surrenders control over the mortgage loans. Control over transferred mortgage loans is deemed to be surrendered when (i) the mortgage loans have been isolated from the Company, (ii) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred mortgage loans, and (iii) the Company does not maintain effective control over the transferred mortgage loans through either (a) an agreement that entitles and obligates the Company to repurchase or redeem them before their maturity or (b) the ability to unilaterally cause the holder to return the specific mortgage loans. |
Interest Income Recognition | Interest Income Recognition Interest income on mortgage loans held for sale at fair value is recognized over the life of the mortgage loans using their contractual interest rates. Income recognition is suspended and the unpaid interest receivable is reversed against interest income when mortgage loans become 90 days delinquent, or when, in management’s opinion, a full recovery of interest and principal becomes doubtful. Income recognition is resumed when the mortgage loan becomes contractually current. |
Derivative Financial Instruments | Derivative Financial Instruments The Company is exposed to price risk relative to its mortgage loans held for sale as well as to the commitments it makes to loan applicants to originate or to PMT to acquire mortgage loans at specified interest rates (“interest rate lock commitments” or “IRLCs”). The Company bears price risk from the time a commitment to fund a mortgage loan is made to a borrower or to purchase a mortgage loan from PMT, to the time the mortgage loan is sold. During this period, the Company is exposed to losses if mortgage market interest rates increase, because the fair value of the purchase commitment or prospective mortgage loan decreases. The Company also is exposed to risk relative to the fair value of its mortgage servicing rights (“MSRs”). The Company is exposed to loss in fair value of its MSRs when interest rates decrease. The Company engages in interest rate risk management activities in an effort to reduce the variability of earnings caused by changes in market interest rates. To manage this fair value risk resulting from interest rate risk, the Company uses derivative financial instruments acquired with the intention of reducing the risk that changes in market interest rates will result in unfavorable changes in the fair value of the Company’s IRLCs, inventory of mortgage loans held for sale and MSRs. IRLCs are accounted for as derivative financial instruments. The Company manages the risk created by IRLCs relating to mortgage loans held for sale by entering into forward sale agreements to sell the mortgage loans and by the purchase and sale of mortgage ‑backed securities (“MBS”) options and futures. Such agreements are also accounted for as derivative financial instruments. From time to time, these instruments are also used to manage the risk created by changes in prepayment speeds on certain of the MSRs the Company holds. The Company classifies its IRLCs as “Level 3” fair value financial statement items and the derivative financial instruments it acquires to manage the risks created by IRLCs, mortgage loans held for sale and MSRs as “Level 1” or “Level 2” fair value financial statement items. The Company does not use derivative financial instruments for purposes other than in support of its risk management activities. The Company accounts for its derivative financial instruments as free ‑standing derivatives. The Company does not designate its derivative financial instruments for hedge accounting. All derivative financial instruments are recognized on the consolidated balance sheet at fair value with changes in the fair values being reported in current period income. Changes in fair value of derivative financial instruments hedging IRLCs and mortgage loans held for sale at fair value are included in Net gains on mortgage loans held for sale at fair value in the Company’s consolidated statements of income. For derivative financial instruments hedging MSRs, changes in fair value are included in Amortization, impairment and change in fair value of mortgage servicing rights in the Company’s consolidated statements of income. When the Company has multiple derivative instruments with the same counterparty under a master netting arrangement, it offsets the amounts recorded as assets and liabilities and amounts recognized for the right to reclaim cash collateral it has deposited with the counterparty or the obligation to return cash collateral it has collected from the counterparty arising from that master netting arrangement. Such offset amounts are presented as either a net asset or liability by counterparty on the Company’s consolidated balance sheets. |
Servicing Advances | Servicing Advances Servicing advances represent advances made on behalf of borrowers and the mortgage loans’ investors to fund delinquent balances for property taxes and insurance premiums and out-of-pocket collection costs (e.g., preservation and restoration of mortgaged or real estate owned property, legal fees, appraisals and insurance premiums). Servicing advances are made in accordance with the Company’s servicing agreements and, when made, are deemed recoverable. The Company periodically reviews servicing advances for collectability and provides a valuation allowance for amounts estimated to be uncollectable. Servicing advances are written off when they are deemed uncollectible. |
Carried Interest Due from Investment Funds | Carried Interest Due from Investment Funds The Company has a general partnership interest or other Carried Interest arrangement with the Investment Funds, and earns Carried Interest thereunder. Carried Interest, in general terms, is the share of any profits that the general partners receive as compensation in excess of specified targeted amounts . The Company determines the amount of Carried Interest to be recorded each period based on the cash flows that would be realized by all partners assuming liquidation of the Investment Funds’ remaining investments as of the measurement date . |
Investment in PennyMac Mortgage Investment Trust at Fair Value | Investment in PennyMac Mortgage Investment Trust at Fair Value Common shares of beneficial interest in PMT are carried at their fair value with changes in fair value recognized in current period income. Fair value for purposes of the Company’s holdings in PMT is based on the published closing price of the shares as of period end. The Company classifies its investment in common shares of PMT as a “Level 1” fair value financial statement item. |
Mortgage Servicing Rights and Mortgage Servicing Liabilities | Mortgage Servicing Rights and Mortgage Servicing Liabilities MSRs and mortgage servic ing liabilities (“MSLs”) arise from contractual agreements between the Company and investors (or their agents) in mortgage securities and mortgage loans. Under these contracts, the Company performs mortgage loan servicing functions in exchange for fees and other remuneration. The servicing functions typically performed include, among other responsibilities, collecting and remitting loan payments; responding to borrower inquiries; accounting for principal and interest; holding custodial (impound) funds for payment of property taxes and insurance premiums; counseling delinquent mortgagors; supervising the acquisition of real estate in settlement of loans (“REO”) and property disposition. REO represents real estate that collateralized the mortgage loans before the properties were acquired in settlement of loans. The value of MSRs and MSLs is derived from the net positive or negative, respectively, cash flows associated with the servicing contracts. The Company receives a servicing fee ranging generally from 0.19% to 0.57% annually, net of related guarantee fees, on the remaining outstanding principal balances of the mortgage loans subject to the servicing contracts. The servicing fees are collected from the monthly payments made by the mortgagors. The Company is contractually entitled to receive other remuneration including rights to various mortgagor ‑contracted fees such as late charges and collateral reconveyance charges, and the Company is generally entitled to retain the interest earned on funds held pending remittance related to its collection of mortgagor payments. The Company also generally has the right to solicit the mortgagors for other products and services as well as for new mortgages for those considering refinancing or purchasing a new home. The Company recognizes MSRs and MSLs initially at fair value, either as proceeds from or liabilities incurred in, sales of mortgage loans where the Company assumes the obligation to service the mortgage loan in the sale transaction, or from the purchase of MSRs. The Company’s subsequent accounting for MSRs and MSLs is based on the class of MSR or MSL . The Company has identified three classes of MSRs: originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5% ; MSRs backed by mortgage loans with initial interest rates of more than 4.5%; and purchased MSRs financed in part through the transfer of the right to receive excess servicing spread (“ESS”) cash flows.. Originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5% are accounted for using the amortization method. Originated MSRs backed by loans with initial interest rates of more than 4.5% and purchased MSRs financed in part by ESS are accounted for at fair value with changes in fair value recorded in current period income. MSLs are carried at fair value. The fair value of MSRs and MSLs is difficult to determine because MSRs and MSLs are not actively traded in observable stand ‑alone markets. Considerable judgment is required to estimate the fair values of MSRs and MSLs and the exercise of such judgment can significantly affect the Company’s income. Therefore, the Company classifies its MSRs and MSLs as “Level 3” fair value financial statement items. The Company uses a discounted cash flow approach to estimate the fair value of MSRs and MSLs. This approach consists of projecting and discounting projected servicing cash flows. The inputs used in the Company’s discounted cash flow model are based on market factors which management believes are consistent with inputs and data used by market participants valuing similar MSRs and MSLs. The key inputs used in the valuation of MSRs and MSLs include mortgage prepayment speeds, cost to service the mortgage loans and pricing spreads discount rate. These inputs can, and generally do, change from period to period as market conditions change. MSRs and MSLs are generally subject to reduction in fair value when mortgage interest rates decrease. Decreasing mortgage interest rates normally encourage increased mortgage refinancing activity. Increased refinancing activity reduces the expected life of the mortgage loans underlying the MSRs and MSLs, thereby reducing their fair value. Reductions in the fair value of MSRs and MSLs affect earnings primarily through change in fair value and impairment charges. For MSRs backed by mortgage loans with historically low mortgage interest rates, factors other than interest rates (such as housing price changes) take on increasing influence on prepayment behavior of the underlying mortgage loans. MSRs Accounted for Using the Amortization Method The Company amortizes MSRs that are accounted for using the amortization method. MSR amortization is determined by applying the ratio of the net MSR cash flows projected for the current period to the estimated total remaining projected net MSR cash flows. The estimated total net MSR cash flows are determined at the beginning of each month using prepayment inputs applicable at that time. MSRs accounted for using the amortization method are periodically evaluated for impairment. Impairment occurs when the current fair value of the MSRs decreases below the asset’s amortized cost. If MSRs are impaired, the impairment is recognized in current ‑period income and the carrying value (carrying value is the MSR’s amortized cost reduced by any related valuation allowance) of the MSRs is adjusted through a valuation allowance. If the fair value of impaired MSRs subsequently increases, the increase in fair value is recognized in current ‑period income. When an increase in fair value of MSR is recognized, the valuation allowance is adjusted to increase the carrying value of the MSRs only to the extent of the valuation allowance. For impairment evaluation purposes, the Company stratifies its MSRs by predominant risk characteristic when evaluating for impairment. For purposes of performing its MSR impairment evaluation, the Company stratifies its servicing portfolio on the basis of certain risk characteristics including mortgage loan type (fixed ‑rate or adjustable ‑rate) and note interest rate. Fixed ‑rate mortgage loans are stratified into note rate pools of 50 basis points for note rates between 3.0% and 4.5% and a single pool for note rates of less than or equal to 3.0% . If the fair value of MSRs in any of the note interest rate pools is below the carrying value of the MSRs for that pool, impairment is recognized to the extent of the difference between the estimated fair value and the carrying value of that pool. Management periodically reviews the various impairment strata to determine whether the fair value of the impaired MSRs in a given stratum is likely to recover. When management deems recovery of the fair value to be unlikely in the foreseeable future, a write ‑down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance. Both amortization and changes in the amount of the MSR valuation allowance are recorded in current period income in Amortization, impairment and change in fair value of mortgage servicing rights in the consolidated statements of income. MSRs and MSLs Accounted for at Fair Value Changes in fair value of MSLs and MSRs accounted for at fair value are recognized in current period income in Amortization, impairment and change in fair value of mortgage servicing rights in the consolidated statements of income. |
Furniture, Fixtures, Equipment and Building Improvements | Furniture, Fixtures, Equipment and Building Improvements Furniture, fixtures, equipment and building improvements are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight ‑line method over the estimated useful lives of the various classes of assets, which range from five to seven years for furniture and equipment and the lesser of the asset’s estimated useful life or the remaining lease term for fixtures and building improvements. |
Capitalized Software | Capitalized Software The Company capitalizes certain consulting, payroll, and payroll ‑related cost s related to computer software developed for internal use. Once development is complete and the software is placed in service, the Company amortizes the capitalized costs over five years using the straight ‑line method. The Company also periodically assesses capitalized software for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. If management identifies an indicator of impairment, it assesses recoverability by comparing the carrying amount of the asset to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset. An impairment loss is recognized when the carrying amount is not recoverable and is measured as the excess of carrying value over fair value. No such impairment was recorded during the three years ended December 31, 2015. |
Mortgage Loans Eligible for Repurchase | Mortgage Loans Eligible for Repurchase The terms of the Ginnie Mae MBS program allow, but do not require, the Company to repurchase mortgage loans when the borrower has made no payments for three consecutive months. As a result of this right, the Company recognizes the mortgage loans in Mortgage loans eligible for repurchase at their unpaid principal balances and records a corresponding liability in Liability for mortgage loans eligible for repurchase on its consolidated balance sheet s . |
Margin Deposits | Margin Deposits Margin deposits represents deposits that serve as collateral for various agreements the Company has entered into, such as derivative contracts . Margin deposits are included in Other assets in the Company’s consolidated balance sheets. |
Assets Sold Under Agreements to Repurchase | Assets Sold Under Agreements to Repurchase The carrying value of assets sold under agreements to repurchase is based on the accrued cost of the agreements. The costs of creating the facilities underlying the agreements are included in the carrying value of the agreements and are amortized to Interest expense over the term of the borrowing facility. |
Excess Servicing Spread Financing at Fair Value | Excess Servicing Spread Financing at Fair Value The Company finances certain of its purchases of Agency MSRs through the sale to PMT of the right to receive the excess of the servicing fee rate over a specified rate of the underlying MSRs. This excess is referred to as the ESS. ESS is carried at its fair value. Changes in fair value are recognized in current period income in Amortization, Impairment and Change in Fair Value of Mortgage Servicing Rights . Because the ESS is a claim to a portion of the cash flows from MSRs, the fair value measurement of the ESS is similar to that of MSRs. The Company uses the same discounted cash flow approach to measuring the ESS as used to measure MSRs except that certain inputs relating to the cost to service the mortgage loans underlying the MSR and certain ancillary income are not included as these cash flows do not accrue to the holder of the ESS. The Company categorizes ESS as a “Level 3” fair value financial statement item. |
Liability for Losses Under Representations and Warranties | Liability for Losses Under Representations and Warranties The Company provides for its estimate of the losses that it expects to incur in the future as a result of its breach of the representations and warranties it provides to the purchasers and insurers of the mortgage loans the Company sold. The Company’s agreements with the purchaser and insurer include representations and warranties related to the mortgage loans the Company sells to the purchaser. The representations and warranties require adherence to purchaser origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. In the event of a breach of its representations and warranties, the Company may be required to either repurchase the mortgage loans with the identified defects or indemnify the purchaser or insurer for any losses. In such cases, the Company bears any subsequent credit loss on the mortgage loans. The Company’s credit loss may be reduced by any recourse it has to correspondent lenders that sold such mortgage loans and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent lender. The Company includes a provision for losses relating to the representations and warranties it makes as part of its mortgage loan sale transactions as part of its Net gains on mortgage loans held for sale at fair value . The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, estimated future defaults and loan repurchase rates, the potential severity of loss in the event of default and the probability of reimbursement by the correspondent loan seller. The Company establishes a liability at the time mortgage loans are sold and periodically updates its liability estimate. The liability estimate is reviewed and approved by the Company’s senior management credit committee wh ich includes the senior executives of the Company and of the loan production, loan servicing and credit risk management areas. The level of the liability for losses on representations and warranties is difficult to estimate and requires considerable management judgment. The level of mortgage loan repurchase losses is dependent on economic factors, purchaser and insurer loss mitigation strategies, the Company’s ability to recover any losses inherent in repurchased mortgage loans from the correspondent lenders and other external conditions that may change over the lives of the mortgage loans. As economic fundamentals change, as purchaser and insurer evaluation of their loss mitigation strategies (including claims under representations and warranties) change and as the mortgage market and general economic conditions affect the Company’s correspondent lenders, the level of ensuing losses will change. As a result of these changes, the Company may be required to adjust the estimate of its liability for representations and warranties. Such an adjustment may be material to the Company’s financial condition and results of operations. The Company did not record any adjustments to previously recorded liabilities for representations and warranties during any of the periods presented. The Company’s representations and warranties are generally not subject to stated limits of exposure. However, management believes that the current unpaid principal balance (“UPB”) of mortgage loans sold by the Company to date represents the maximum exposure to repurchases related to representations and warranties. Management believes the amount and range of reasonably possible losses in relation to the recorded liability is not material to the Company’s financial condition or results of operations. |
Mortgage Loan Servicing Fees | Mortgage Loan Servicing Fees Mortgage loan servicing fees and other remuneration are received by the Company for servicing residential mortgage loans. Mortgage loan servicing fees are recorded net of Agency guarantee fees paid by the Company. Mortgage l oan servicing fees are recognized as earned over the life of the mortgage loans in the servicing portfolio. |
Stock-Based Compensation | Stock ‑Based Compensation The Company’s 2013 Equity Incentive Plan provides for awards of nonstatutory and incentive stock options, time ‑based restricted stock units, performance ‑based restricted stock units, stock appreciation rights, performance units and stock grants. The Company establishes the cost of its share-based awards at the awards’ fair values at the grant date of the awards. The Company estimates the fair value of the stock options, time ‑based restricted stock units and performance ‑based restricted stock units awarded with reference to the fair value of its underlying common stock on the date of the award. Compensation costs are fixed, except for performance ‑based restricted stock units, as of the award date as all grantees are employees of PennyMac or directors of the Company. The Company amortizes the cost of time ‑based restricted stock unit awards to compensation expense over the vesting period using the graded vesting method. The Company amortizes performance ‑based restricted stock unit awards on the straight ‑line basis over the vesting period. Expense relating to awards is included in Compensation expense in the consolidated statements of income. |
Income Taxes | Income Taxes As a result of the PennyMac recapitalization and reorganization, the Company expects to benefit from amortization and other tax deductions due to increases in the tax basis of PennyMac’s assets from the exchange of PennyMac Class A units. Those deductions will be allocated to the Company and will be taken into account in reporting the Company’s taxable income. The Company has entered into an agreement with the unitholders of PennyMac that will provide for the additional payment by the Company to exchanging unitholders of PennyMac equal to 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that PFSI realizes due to (i) increases in tax basis resulting from exchanges of the then ‑existing unitholders and (ii) certain other tax benefits related to PFSI entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. The Company is subject to federal and state income taxes. Income taxes are provided using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which the change occurs. A valuation allowance is established if, in management’s judgment, it is not more likely than not that a deferred tax asset will be realized. The Company recognizes tax benefits relating to its tax positions only if, in the opinion of management, it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority. A tax position that meets this standard is recognized as the largest amount that is greater than 50% likely to be realized upon ultimate settlement with the appropriate taxing authority. The Company will classify any penalties and interest as a component of provision for income taxes. |
Variable Interest Held in Unconsolidated Variable Interest Entities | Variable Interest Held in Unconsolidated Variable Interest Entities A Variable Interest Entity (“VIE”) is an entity having either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or equity investors at risk that lack the ability to control the entity’s activities. Variable interests are investments or other interests that will absorb portions of a VIE’s expected losses or receive portions of the VIE’s expected residual returns. PFSI consolidates the assets and liabilities of VIEs of which the Company is the primary beneficiary. The primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE and holds a variable interest that could potentially be significant to the VIE. To determine whether a variable interest the Company holds could potentially be significant to the VIE, the Company considers both quantitative and qualitative factors regarding the nature, size and form of its involvement with the VIE. The Company assesses whether it is the primary beneficiary of a VIE on an ongoing basis. PMOFA is a general partner in the Master Fund. The Master Fund wholly owns PennyMac Mortgage Co. Funding, LLC (“Funding, LLC”) a nd PennyMac Mortgage Co. , LLC . Funding LLC is the majority interest holder in PennyMac Loan Trust 2015 ‑NPL1 (the “Trust”), which holds the mortgage loans for Funding LLC. PLS provides mortgage loan servicing to the loans held by the Trust as well as loans held by the Mortgage Co. The related party group constituting the Company and its affiliates (including PMOFA) has an equity interest in the Master Fund, the ultimate Parent of the Trust, Mortgage Co and Funding, LLC. The direct equity holders in the Trust, Mortgage Co and Funding, LLC, however, do not have power to direct the activities of the respective entities and as such, both the Trust and Mortgage Co are considered to be VIEs as defined in the Consolidations topic of the Codification. The Company is not the primary beneficiary in these VIEs, given it does not represent the enterprise within the related party group that is most closely associated with these VIEs and, as such, the Company does not consolidate these VIEs. Exposure to loss of the related party group from the unconsolidated VIEs is limited to the contributed capital of the related party group in the Master Fund totaling $2,000 which represents the general partnership interest held by PMOFA in the Master Fund. |
Reclassification of Previously Presented Balances | Reclassification of previously presented balances In April of 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability . ASU 2015-03 specifies that its adoption be made on a retrospective basis. Accordingly, the Company has reclassified its debt issuance costs from Other assets as previously presented to Mortgage loans sold under agreements to repurchase and Mortgage loan participation and sale agreement s to conform its December 31, 2014 balance sheet to the current presentation . The adoption of ASU 2015-03 did not result in changes to the Company’s previously presented consolidated statements of income or consolidated statements of cash flows. Following is a summary of the balance sheet reclassifications: December 31, 2014 As reported As previously reported Reclassification (in thousands) Assets: Other $ $ $ Total assets $ $ $ Liabilities: Assets sold under agreements to repurchase $ $ $ Mortgage loan participation and sale agreement $ $ $ Total liabilities $ $ $ Total liabilities and stockholders' equity $ $ $ |
Significant Accounting Polici38
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Summary of the reclassifications | December 31, 2014 As reported As previously reported Reclassification (in thousands) Assets: Other $ $ $ Total assets $ $ $ Liabilities: Assets sold under agreements to repurchase $ $ $ Mortgage loan participation and sale agreement $ $ $ Total liabilities $ $ $ Total liabilities and stockholders' equity $ $ $ |
Transactions with Affiliates (T
Transactions with Affiliates (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PMT | |
Transactions with Affiliates | |
Summary of lending activity between the Company and affiliate | Year ended December 31, 2015 2014 2013 (in thousands) Fulfillment fee revenue $ $ $ Unpaid principal balance of loans fulfilled for PennyMac Mortgage Investment Trust $ $ $ Sourcing fees paid $ $ $ Unpaid principal balance of loans purchased from PennyMac Mortgage Investment Trust $ $ $ Proceeds from sale of mortgage loans held for sale to PennyMac Mortgage Investment Trust $ $ $ Tax service fee from PennyMac Mortgage Investment Trust $ $ $ — Mortgage servicing rights recapture recognized $ $ $ Mortgage banking and warehouse service fees paid by PMT $ — $ — $ |
Summary of mortgage loan servicing fees earned from PMT | Year ended December 31, 2015 2014 2013 (in thousands) Loan servicing fees relating to PennyMac Mortgage Investment Trust: Mortgage loans acquired for sale at fair value: Base and supplemental $ $ $ Activity-based Mortgage loans at fair value: Base and supplemental Activity-based Mortgage servicing rights: Base and supplemental Activity-based $ $ $ |
Summary of management fees earned | Year ended December 31, 2015 2014 2013 (in thousands) Management fees: Base $ $ $ Performance incentive $ $ $ |
Summary of investing activity between the Company and affiliate | Year ended December 31, 2015 2014 (in thousands) Note receivable from PennyMac Mortgage Investment Trust—secured: Activity during the year: Advances $ $ — Repayments $ $ — Interest income $ $ — Balance at end of year $ $ — Common shares of beneficial interest of PennyMac Mortgage Investment Trust held at year end Number of shares Fair value $ $ |
Summary of financing acitivty between the Company and affiliate | Year ended December 31, 2015 2014 (in thousands) Excess servicing spread financing: Issuance $ $ Repayment $ $ Change in fair value $ $ Interest expense $ $ Excess servicing spread recapture recognized $ $ |
Summary of reimbursement of expenses | Year ended December 31, 2015 2014 2013 (in thousands) Reimbursement of: Common overhead incurred by the Company (1) $ $ $ Expenses incurred on PMT's behalf $ $ $ Payments and settlements during the year (2) $ $ $ (1) For the year ended December 31, 2015, in accordance with the terms of its management agreement with PMT, the Company provided PMT discretionary waivers of overhead expenses otherwise allocable to PMT totaling $1.6 million. On December 15, 2015, the Company amended the management agreement to provide that the total costs and expenses incurred by the Company in any quarter and reimbursable by PMT is capped at an amount equal to the product of (A) 70 basis points, multiplied by (B) shareholders’ equity (as defined in the management agreement) as of the last day of such quarter, divided by four . (2) Payments and settlements include payments for management fees and correspondent production activities itemized in the preceding tables and netting settlements made pursuant to master netting agreements between the Company and PMT. |
Summary of amounts due from and payable to affiliate | December 31, 2015 2014 (in thousands) Management fees $ $ Servicing fees Expenses incurred on PMT's behalf — Correspondent production origination fees — Fulfillment fees Conditional Reimbursement Allocated expenses Unsettled excess servicing spread issuance — $ $ |
Investment Funds | |
Transactions with Affiliates | |
Summary of amounts due from and payable to affiliate | December 31, 2015 2014 (in thousands) Carried Interest due from Investment Funds: PNMAC Mortgage Opportunity Fund, LLC $ $ PNMAC Mortgage Opportunity Fund Investors, LLC $ $ Receivable from Investment Funds: Management fees $ $ Loan servicing fees Loan servicing rebate Expense reimbursements $ $ Payable to Investment Funds—Servicing advances $ $ |
Earnings Per Share of Common 40
Earnings Per Share of Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share of Common Stock | |
Summary of basic and diluted earnings per share calculations | Year ended December 31, 2015 2014 2013 (in thousands, except per share data) Basic earnings per share of common stock: Net income attributable to PennyMac Financial Services, Inc. common stockholders $ $ $ Weighted average shares of common stock outstanding Basic earnings per share of common stock $ $ $ Diluted earnings per share of common stock: Net income attributable to PennyMac Financial Services, Inc. common stockholders $ $ $ Effect of net income attributable to PennyMac Class A units exchangeable to common stock, net of income taxes Diluted net income attributable to common stockholders $ $ $ Weighted average shares of common stock outstanding Dilutive shares: PennyMac Class A units exchangeable to common stock Non-vested PennyMac Class A units issuable under unit-based stock compensation plan and exchangeable to common stock Shares issuable under stock-based compensation plans Diluted weighted average shares of common stock outstanding Diluted earnings per share of common stock $ $ $ |
Schedule of anti-dilutive shares outstanding | Year ended December 31, 2015 2014 2013 Stock options (1) — Performance-based RSUs (2) Total potentially dilutive common stock equivalents |
Loan Sales and Servicing Acti41
Loan Sales and Servicing Activities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Loan Sales and Servicing Activities | |
Summary of cash flows between the Company and transferees upon sale of mortgage loans in transactions | Year ended December 31, 2015 2014 2013 (in thousands) Cash flows: Sales proceeds $ $ $ Servicing fees received (1) $ $ $ Net servicing advances $ $ $ Period end information: Unpaid principal balance of mortgage loans outstanding at end of period $ $ $ Delinquencies: 30-89 days $ $ $ 90 days or more or in foreclosure or bankruptcy $ $ $ (1) Net of guarantees paid to the Agencies |
Summary of mortgage servicing portfolio | December 31, 2015 Contract Servicing servicing and Total rights owned subservicing loans serviced (in thousands) Investor: Non-affiliated entities $ $ — $ Affiliated entities — Mortgage loans held for sale — $ $ $ Amount subserviced for the Company (1) $ $ — $ Delinquent mortgage loans: 30 days $ $ $ 60 days 90 days or more : Not in foreclosure In foreclosure Foreclosed $ $ $ Custodial funds managed by the Company (2) $ $ $ (1) Certain of the mortgage loans serviced by the Company are subserviced on the Company’s behalf by other mortgage loan servicers. Mortgage l oans are subserviced for the Company on a transitional basis for loans where the Company has obtained the rights to service the mortgage loans but servicing of the loans has not yet transferred to the Company’s servicing system. (2) Borrower and investor custodial cash accounts relate to mortgage loans serviced under the servicing agreements and are not recorded on the Company’s consolidated bal ance sheets. The Company earns i nterest on certain of the custodial funds it manages on behalf of the loans’ investors, which is recorded as part of the Interest income in the Company’s consolidated statements of income. December 31, 2014 Contract Servicing servicing and Total rights owned subservicing loans serviced (in thousands) Investor: Non-affiliated entities $ $ — $ Affiliated entities — Mortgage loans held for sale — $ $ $ Amount subserviced for the Company (1) $ — $ $ Delinquent mortgage loans: 30 days $ $ $ 60 days 90 days or more Not in foreclosure In foreclosure Foreclosed $ $ Custodial funds managed by the Company (2) $ $ $ (1) Certain of the loans serviced by the Company are subserviced on the Company’s behalf by other mortgage loan servicers. Loans are subserviced for the Company on a transitional basis for loans where the Company has obtained the rights to service the loans but servicing of the loans has not yet transferred to the Company’s servicing system. (2) Borrower and investor custodial cash accounts relate to loans serviced under the servicing agreements and are not recorded on the Company’s consolidated balance sheets. The Company earns interest on certain of the custodial funds it manages on behalf of the loans’ investors, which is recorded as part of the interest income in the Company’s consolidated statements of income. |
Netting of Financial Instrume42
Netting of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Netting of Financial Instruments | |
Summaries of derivative assets and related netting amounts | December 31, 2015 December 31, 2014 Gross Gross amount Net amount Gross Gross amount Net amount amount of offset in the of assets in the amount of offset in the of assets in the recognized consolidated consolidated recognized consolidated consolidated assets balance sheet balance sheet assets balance sheet balance sheet (in thousands) Derivatives subject to a master netting arrangement: Forward purchase contracts $ $ — $ $ $ — $ Forward sale contracts — — MBS put options — — Put options on interest rate futures purchase contracts — — Call options on interest rate futures purchase contracts — — Netting — — Derivatives not subject to a master netting arrangement - IRLCs — — $ $ $ $ $ $ |
Summary of the amount of derivative asset positions by significant counterparty after considering master netting arrangements and financial instruments or cash pledged | December 31, 2015 December 31, 2014 Gross amount not Gross amount not offset in the offset in the consolidated consolidated balance sheet balance sheet Net amount Net amount of assets in the Cash of assets in the Cash consolidated Financial collateral Net consolidated Financial collateral Net balance sheet instruments received amount balance sheet instruments received amount (in thousands) Interest rate lock commitments $ $ — $ — $ $ $ — $ — $ RJ O'Brien — — — — Jefferies & Co. — — — — Nomura — — — — — — Fannie Mae — — — — — — Wells Fargo Bank, N.A. — — — — Goldman Sachs — — — — JP Morgan — — — — — — Others — — — — $ $ — $ — $ $ $ — $ — $ |
Summary of net derivative liabilities and assets sold under agreements to repurchase and related netting amounts | December 31, 2015 December 31, 2014 Net Net amount amount Gross Gross amount of liabilities Gross Gross amount of liabilities amount of offset in the in the amount of offset in the in the recognized consolidated consolidated recognized consolidated consolidated liabilities balance sheet balance sheet liabilities balance sheet balance sheet (in thousands) Derivatives subject to a master netting arrangement: Forward purchase contracts $ $ — $ $ $ — $ Forward sale contracts — — Put options on interest rate futures sale contracts — — — — Put options on interest rate futures purchase contracts — — — — Call options on interest rate futures purchase contracts — — — — Netting — — Derivatives not subject to a master netting arrangement - IRLCs — — Total derivatives Mortgage loans sold under agreements to repurchase: Amount outstanding — — Unamortized debt issuance costs — — — — $ $ $ $ $ $ |
Summary of amount of derivative liabilities and assets sold under agreements to repurchase by significant counterparty after considering master netting arrangements and financial instruments or cash pledged | December 31, 2015 December 31, 2014 Gross amount Gross amount not offset in the not offset in the consolidated consolidated balance sheet balance sheet Net amount Net amount Net amount Net amount of liabilities of liabilities of liabilities of liabilities in the Cash in the in the Cash in the consolidated Financial collateral consolidated consolidated Financial collateral consolidated balance sheet instruments pledged balance sheet balance sheet instruments pledged balance sheet (in thousands) Interest rate lock commitments $ $ — $ — $ $ $ — $ — $ Credit Suisse First Boston Mortgage Capital LLC — — Bank of America, N.A. — — Morgan Stanley Bank, N.A. — — Citibank, N.A. — — Bank of Oklahoma — — — — BNP Paribas — — — — — — JP Morgan — — — — — — Bank of New York Mellon — — — — Others — — — — $ $ $ — $ $ $ $ — $ |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value | |
Summary of financial statement items measured at estimated fair value on a recurring basis | December 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Assets: Short-term investments $ $ — $ — $ Mortgage loans held for sale at fair value — Derivative assets: Interest rate lock commitments — — Forward purchase contracts — — Forward sales contracts — — MBS put options — — Put options on interest rate futures purchase contracts — — Call options on interest rate futures purchase contracts — — Total derivative assets before netting Netting (1) — — — Total derivative assets Investment in PennyMac Mortgage Investment Trust — — Mortgage servicing rights at fair value — — $ $ $ $ Liabilities: Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust $ — $ — $ $ Derivative liabilities: Interest rate lock commitments — — Forward purchase contracts — — Forward sales contracts — — Put options on interest rate futures purchase contracts — — Call options on interest rate futures purchase contracts — — Total derivative liabilities before netting Netting (1) — — — Total derivative liabilities Mortgage servicing liabilities — — $ $ $ $ (1) Derivatives are reported net of cash collateral received and paid and, to the extent that the criteria of the accounting guidance covering the offsetting of amounts related to certain contracts are met, positions with the same counterparty are netted as part of a legally enforceable master netting agreement. December 31, 2014 Level 1 Level 2 Level 3 Total (in thousands) Assets: Short-term investments $ $ — $ — $ Mortgage loans held for sale at fair value — Derivative assets: Interest rate lock commitments — — Forward purchase contracts — — Forward sales contracts — — MBS put options — — Put options on interest rate futures purchase contracts — — Call options on interest rate futures purchase contracts — — Total derivative assets before netting Netting (1) — — — Total derivative assets Investment in PennyMac Mortgage Investment Trust — — Mortgage servicing rights at fair value — — $ $ $ $ Liabilities: Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust $ — $ — $ $ Derivative liabilities: Interest rate lock commitments — — Forward purchase contracts — — Forward sales contracts — — Put options on interest rate futures sale contracts — — Total derivative liabilities before netting Netting (1) — — — Total derivative liabilities Mortgage servicing liabilities — — $ $ $ $ (1) Derivatives are reported net of cash collateral received and paid and, to the extent that the criteria of the accounting guidance covering the offsetting of amounts related to certain contracts are met, positions with the same counterparty are netted as part of a legally enforceable master netting agreement. |
Summary of roll forward of items measured using Level 3 inputs on a recurring basis | Year ended December 31, 2015 Mortgage Net interest Mortgage loans held rate lock servicing for sale commitments (1) rights Total (in thousands) Assets: Balance, December 31, 2014 $ $ $ $ Purchases — Sales — — Repayments — — Interest rate lock commitments issued, net — — Mortgage servicing rights resulting from mortgage loan sales — — Changes in fair value included in income arising from: Changes in instrument-specific credit risk — — Other factors — Transfers of mortgage loans held for sale from Level 3 to Level 2 (2) — — Transfers of interest rate lock commitments to mortgage loans held for sale — — Balance, December 31, 2015 $ $ $ $ Changes in fair value recognized during the period relating to assets still held at December 31, 2015 $ $ $ $ (1) For the purpose of this table, the interest rate lock asset and liability positions are shown net. (2) Mortgage loans held for sale are transferred from Level 3 to Level 2 as a result of the mortgage loan becoming saleable into active mortgage markets pursuant to a loan modification or borrower reperformance. Year ended December 31, 2015 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance, December 31, 2014 $ $ $ Issuance of excess servicing spread financing — Excess servicing spread financing issued pursuant to a recapture agreement with PennyMac Mortgage Investment Trust — Accrual of interest on excess servicing spread — Repayments — Mortgage servicing liabilities resulting from mortgage loan sales — Changes in fair value included in income Balance, December 31, 2015 $ $ $ Changes in fair value recognized during the period relating to liabilities still held at December 31, 2015 $ $ $ Year ended December 31, 2014 Mortgage Net interest Mortgage loans held rate lock servicing for sale commitments (1) rights Total (in thousands) Assets: Balance, December 31, 2013 $ $ $ $ Purchases — Repayments — — Interest rate lock commitments issued, net — — Mortgage servicing rights resulting from mortgage loan sales — — Sales — Changes in fair value included in income arising from: Changes in instrument-specific credit risk — — — — Other factors Transfers of mortgage loans held for sale from Level 3 to Level 2 (2) — — Transfers of interest rate lock commitments to mortgage loans held for sale — — Balance, December 31, 2014 $ $ $ $ Changes in fair value recognized during the period relating to assets still held at December 31, 2014 $ $ $ $ (1) For the purpose of this table, the interest rate lock asset and liability positions are shown net. (2) Mortgage loans held for sale are transferred from Level 3 to Level 2 as a result of the mortgage loan becoming saleable into active mortgage markets pursuant to a loan modification or borrower reperformance. Year ended December 31, 2014 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance, December 31, 2013 $ $ — $ Issuance of excess servicing spread financing — Excess servicing spread financing issued pursuant to a recapture agreement with PennyMac Mortgage Investment — Mortgage servicing liabilities resulting from mortgage loan sales — Accrual of interest on excess servicing spread — Repayments — Changes in fair value included in income Balance, December 31, 2014 $ $ $ Changes in fair value recognized during the period relating to liabilities still held at December 31, 2014 $ $ $ Year ended December 31, 2013 Mortgage Net interest Mortgage loans held rate lock servicing for sale commitments (1) rights Total (in thousands) Assets: Balance December 31, 2012 $ — $ $ $ Purchases — — Repurchases of mortgage loans subject to representations and warranties — — Repayments — — Interest rate lock commitments issued, net — — Mortgage servicing rights resulting from mortgage loan sales — — Sales — — Changes in fair value included in income arising from: Changes in instrument-specific credit risk — — — — Other factors Transfers of interest rate lock commitments to mortgage loans held for sale — — Balance, December 31, 2013 $ $ $ $ Changes in fair value recognized during the period relating to assets still held at December 31, 2013 $ $ $ $ Year ended December 31, 2013 Excess servicing spread financing (in thousands) Liabilities: Balance December 31, 2012 $ — Issuance of excess servicing spread financing Excess servicing spread financing issued pursuant to a recapture agreement with PennyMac Mortgage Investment Trust — Accrual of interest on excess servicing spread financing Repayments Changes in fair value included in income Balance, December 31, 2013 $ Changes in fair value recognized during the period relating to liabilities still held at December 31, 2013 $ |
Summary of net gains (losses) from changes in fair values included in earnings for financial statement items carried at fair value | Year ended December 31, 2015 2014 2013 Net gains on Net Net gains on Net Net gains on Net mortgage mortgage mortgage mortgage mortgage mortgage loans held loan loans held loan loans held loan for sale at servicing for sale at servicing for sale at servicing fair value fees Total fair value fees Total fair value fees Total (in thousands) Assets: Mortgage loans held for sale at fair value $ $ — $ $ $ — $ $ $ — $ Mortgage servicing rights at fair value — — — $ $ $ $ $ $ $ $ $ Liabilities: Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust $ — $ $ $ — $ $ $ — $ $ Mortgage servicing liabilities at fair value — — — — — $ — $ $ $ — $ $ $ — $ $ |
Schedule of fair value and related principal amounts due upon maturity of assets and liabilities accounted for under the fair value option | December 31, 2015 Principal amount Fair due upon value maturity Difference (in thousands) Mortgage loans held for sale: Current through 89 days delinquent $ $ $ 90 days or more delinquent: Not in foreclosure In foreclosure $ $ $ December 31, 2014 Principal amount Fair due upon value maturity Difference (in thousands) Mortgage loans held for sale: Current through 89 days delinquent $ $ $ 90 days or more delinquent: Not in foreclosure In foreclosure $ $ $ |
Summary of financial statement items measured at estimated fair value on a nonrecurring basis | December 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ — $ — $ $ $ — $ — $ $ December 31, 2014 Level 1 Level 2 Level 3 Total (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ — $ — $ $ $ — $ — $ $ |
Summary of total gains (losses) on assets measured at estimated fair values on a nonrecurring basis | Year ended December 31, 2015 2014 2013 (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ $ $ $ $ $ |
Schedule of key inputs used in determining the fair value of ESS financing | December 31, 2015 2014 Carrying value (in thousands) $412,425 $191,166 ESS and pool characteristics: Unpaid principal balance of underlying mortgage loans (in thousands) $51,966,405 $28,227,340 Average servicing fee rate (in basis points) 32 31 Average excess servicing spread (in basis points) 17 16 Key inputs: Pricing spread (1) Range 4.8% – 6.5% 1.7% – 12.0% Weighted average 5.7% 5.3% Average life (in years) Range 1.4 – 9.0 0.4 – 7.3 Weighted average 6.9 5.8 Annualized prepayment speed (2) Range 5.2% – 52.4% 7.6% – 74.6% Weighted average 9.6% 11.2% (1) Pricing spread represents a margin that is applied to a reference interest rate’s forward rate curve to develop periodic discount rates. The Company applies a pricing spread to the United States Dollar LIBOR curve for purposes of discounting cash flows relating to ESS. Prepayment speed is measured using Life Total CPR. |
Interest rate lock commitments | |
Fair Value | |
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | December 31, Key inputs 2015 2014 Pull-through rate Range 54.1% – 100.0% 55.4% – 99.9% Weighted average 90.1% 85.5% Mortgage servicing rights value expressed as: Servicing fee multiple Range 1.0 – 5.8 2.0 – 5.0 Weighted average 4.4 3.7 Percentage of unpaid principal balance Range 0.2% – 3.8% 0.4% – 3.1% Weighted average 1.5% 1.2% |
Mortgage servicing rights | |
Fair Value | |
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items, excluding MSR purchases | Year ended December 31, 2015 2014 2013 Fair Amortized Fair Amortized Fair Amortized value cost value cost value cost (Amount recognized and unpaid principal balance of underlying mortgage loans in thousands) MSR and pool characteristics: Amount recognized $18,013 $454,840 $24,698 $185,152 $14,636 $190,469 Unpaid principal balance of underlying mortgage loans $1,463,150 $32,849,718 $1,982,505 $15,362,240 $1,055,797 $15,316,315 Weighted average servicing fee rate (in basis points) 33 34 33 31 33 29 Inputs: Pricing spread (1) Range 7.0% - 14.4% 6.8% - 16.2% 7.8% - 16.2% 6.8% - 15.7% 7.4% - 14.4% 5.4% - 15.9% Weighted average 9.3% 9.2% 11.4% 10.8% 10.2% 8.5% Annual total prepayment speed (2) Range 1.9% - 62.4% 2.5% - 50.0% 7.6% - 46.1% 7.6% - 47.8% 7.8% - 25.5% 7.6% - 42.5% Weighted average 11.8% 8.9% 9.3% 8.3% 9.2% 8.8% Life (in years) Range 1.1 – 12.3 1.3 – 12.0 1.5 – 7.5 1.4 – 7.5 2.5 – 7.3 1.5 – 7.5 Weighted average 6.5 7.2 6.9 7.0 6.9 6.7 Per-loan annual cost of servicing Range $59 – $101 $59 – $95 $53 – $100 $53 – $100 $68 – $120 $68 – $120 Weighted average $77 $78 $86 $84 $98 $102 (1) Pricing spread represents a margin that is applied to a reference interest rate s forward rate curve to develop periodic discount rates. The Company applies a pricing spread to the United States Dollar London Interbank Offered Rate (“ LIBOR ”) curve for purposes of discounting cash flows relating to MSRs. (2) Prepayment speed is measured using Life Total CPR. |
Other Mortgage Servicing Rights | |
Fair Value | |
Quantitative summary of key inputs used in the valuation of the MSRs at year end and the effect on estimated fair value from adverse changes in those inputs | December 31, 2015 December 31, 2014 Fair Amortized Fair Amortized value cost value cost (Carrying value, unpaid principal balance of underlying mortgage loans and effect on fair value amounts in thousands) MSR and pool characteristics: Carrying value $660,247 $751,688 $325,383 $405,445 Unpaid principal balance of underlying mortgage loans $54,182,477 $56,420,227 $30,945,000 $33,745,613 Weighted average note interest rate 4.13% 3.83% 4.24% 3.82% Weighted average servicing fee rate (in basis points) 32 32 31 30 Key inputs: Pricing spread (1) (2) Range 7.2% – 14.1% 7.2% – 12.8% 2.9% – 21.3% 6.3% – 15.3% Weighted average 8.9% 8.9% 9.2% 9.7% Effect on fair value of: 5% adverse change ($11,115) ($13,467) ($5,550) ($8,710) 10% adverse change ($21,857) ($26,472) ($10,908) ($17,083) 20% adverse change ($42,293) ($51,183) ($21,084) ($32,890) Average life (in years) Range 1.9 – 9.0 1.8 – 9.1 0.4 – 8.2 1.6 – 7.3 Weighted average 6.9 7.4 5.8 6.8 Prepayment speed (1) (3) Range 5.3% – 43.8% 5.7% – 46.7% 7.6% – 60.5% 7.6% – 42.8% Weighted average 9.7% 9.5% 11.2% 8.5% Effect on fair value of: 5% adverse change ($12,475) ($14,360) ($7,052) ($7,359) 10% adverse change ($24,499) ($28,197) ($13,835) ($14,494) 20% adverse change ($47,286) ($54,406) ($26,654) ($28,132) Annual per-loan cost of servicing (1) Range $68 – $97 $68 – $95 $59 – $109 $59 – $81 Weighted average $86 $84 $76 $75 Effect on fair value of: 5% adverse change ($6,812) ($5,725) ($2,910) ($2,992) 10% adverse change ($13,624) ($11,451) ($5,819) ($5,983) 20% adverse change ($27,247) ($22,901) ($11,638) ($11,967) (1) For MSRs carried at amortized cost t he effect on fair value of an adverse change in one of the above-mentioned key inputs may result in recognition of MSR impairment. The extent of impairment recognized will depend on the relationship of fair value to the carrying value of MSRs. (2) Pricing spread represents a margin that is applied to a reference interest rate’s forward curve to develop periodic discount rates. The Company applies a pricing spread to the United States Dollar LIBOR curve for purposes of discounting cash flows relating to MSRs acquired as proceeds from the sale of mortgage loans and purchased MSRs not backed by pools of distressed mortgage loans. (3) Prepayment speed is measured using Life Total CPR. |
Mortgage loans held for sale | |
Fair Value | |
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | December 31, Key inputs 2015 2014 Discount rate Range 2.5% – 9.1% 2.3% – 9.6% Weighted average 2.8% 2.4% Twelve-month projected housing price index change Range 1.8% – 5.0% 4.2% – 5.4% Weighted average 3.7% 4.5% Voluntary prepayment/resale speed (1) Range 0.6% – 20.1% 1.3% – 15.5% Weighted average 16.6% 15.1% Total prepayment speed (2) Range 0.7% – 37.6% 2.1% – 38.1% Weighted average 30.9% 35.7% (1) Voluntary prepayment/resale speed is measured using Life Voluntary Conditional Prepayment Rate (“CPR”). (2) Total prepayment speed is measured using Life Total CPR. |
Mortgage Loans Held for Sale 44
Mortgage Loans Held for Sale at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Mortgage Loans Held for Sale at Fair Value | |
Summary of mortgage loans held for sale at fair value | December 31, 2015 2014 (in thousands) Government-insured or guaranteed $ $ Conventional conforming Jumbo — Delinquent mortgage loans purchased from Ginnie Mae pools serviced by the Company Mortgage loans repurchased pursuant to representations and warranties $ $ Fair value of mortgage loans pledged to secure: Mortgage loans sold under agreements to repurchase $ $ Mortgage loan participation and sale agreements $ $ |
Derivative Financial Instrume45
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Financial Instruments | |
Summary of derivative financial instruments | December 31, 2015 December 31, 2014 Fair value Fair value Notional Derivative Derivative Notional Derivative Derivative Instrument amount assets liabilities amount assets liabilities (in thousands) Derivatives not designated as hedging instruments Free-standing derivatives: Interest rate lock commitments $ $ $ $ Forward purchase contracts Forward sales contracts MBS put options — — Put options on interest rate futures purchase contracts — Call options on interest rate futures purchase contracts — Put options on interest rate futures sale contracts — — — — Total derivatives before netting Netting $ $ $ $ Collateral received from derivative counterparties, net $ $ |
Summary of the notional value activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans held for sale at fair value and MSRs | Year ended December 31, 2015 Balance Balance beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts Forward sale contracts MBS put options MBS call options — — Put options on interest rate futures purchase contracts Call options on interest rate futures purchase contracts Put options on interest rate futures sale contracts — Call options on interest rate futures sale contracts — — Year ended December 31, 2014 Balance Balance beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts Forward sale contracts MBS put options MBS call options — Put options on interest rate futures purchase contracts — Call options on interest rate futures purchase contracts — Put options on interest rate futures sale contracts — Call options on interest rate futures sale contracts — — Treasury futures purchase contracts — — Treasury futures sale contracts — — Eurodollar futures purchase contracts — — Eurodollar futures sales contracts — — Year ended December 31, 2013 Balance Balance beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts Forward sale contracts MBS put options MBS call options — |
Summary of gains (losses) recognized on derivative financial instruments and the respective income statement line items | Year ended December 31, Hedged item Income statement line 2015 2014 2013 (in thousands) Interest rate lock commitments and mortgage loans held for sale Net gains on mortgage loans held for sale $ $ $ Mortgage servicing rights Net loan servicing fees $ $ $ |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Mortgage Servicing Rights | |
Schedule of activity in MSRs carried at fair value | Year ended December 31, 2015 2014 2013 (in thousands) Balance at beginning of year $ $ $ Additions: Purchases Mortgage servicing rights resulting from mortgage loan sales Sales — Change in fair value due to: Changes in valuation inputs used in valuation model (1) Other changes in fair value (2) Total change in fair value Balance at end of year $ $ $ (1) Principally reflects changes in discount rates and prepayment speed inputs , primarily due to changes in interest rates. (2) Represents changes due to realization of cash flows. |
Schedule of activity in MSRs carried at lower of amortized cost or fair value | Year ended December 31, 2015 2014 2013 (in thousands) Amortized cost: Balance at beginning of year $ $ $ Mortgage servicing rights resulting from mortgage loan sales Amortization Application of valuation allowance to write down mortgage servicing rights with other-than-temporary impairment — — — Balance at end of year Valuation allowance: Balance at beginning of year Additions Application of valuation allowance to write down mortgage servicing rights with other-than-temporary impairment — — — Balance at end of year Mortgage servicing rights, net $ $ $ Fair value of mortgage servicing rights at end of year $ $ $ Fair value of mortgage servicing rights at beginning of year $ $ $ |
Summary of estimate of future amortization of existing MSRs | Estimated MSR Year ending December 31, amortization (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter $ |
Summary of servicing fees, late fees and ancillary and other fees relating to MSRs recorded on the consolidated statements of income | Year ended December 31, 2015 2014 2013 (in thousands) Contractual servicing fees $ $ $ Ancillary and other fees: Late charges Other $ $ $ Mortgage servicing rights pledged as collateral at year end $ $ $ |
Schedule of activity in mortgage servicing liability carried at fair value | Year ended December 31, 2015 2014 (in thousands) Balance at beginning of year $ $ — Mortgage servicing liabilities resulting from mortgage loan sales Change in fair value Balance at end of year $ $ |
Carried Interest Due from Inv47
Carried Interest Due from Investment Funds (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Carried Interest Due from Investment Funds | |
Summary of activity in the Company's Carried interest due from Investment Funds | Year ended December 31, 2015 2014 2013 (in thousands) Balance at beginning of year $ $ $ Carried Interest recognized during the year Proceeds received during the year — — — Balance at end of year $ $ $ |
Investment in PennyMac Mortga48
Investment in PennyMac Mortgage Investment Trust at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investment in PennyMac Mortgage Investment Trust at Fair Value | |
Summary of change in fair value of investment in and dividends received from PennyMac Mortgage Investment Trust | Year ended December 31, 2015 2014 2013 (in thousands) Dividends received from PennyMac Mortgage Investment Trust $ $ $ Change in fair value of investment in PennyMac Mortgage Investment Trust $ $ $ Fair value of PennyMac Mortgage Investment Trust shares at year end $ $ $ |
Furniture, Fixtures, Equipmen49
Furniture, Fixtures, Equipment and Building Improvements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Furniture, Fixtures, Equipment and Building Improvements [Member] | |
Furniture, fixtures, equipment and building improvements | |
Schedule of furniture, fixtures, equipment and building improvements | December 31, 2015 2014 (in thousands) Furniture, fixtures, equipment and building improvements $ $ Less: Accumulated depreciation and amortization $ $ Fixed assets pledged to secure obligations under capital lease $ $ — |
Capitalized Software (Tables)
Capitalized Software (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Capitalized Software | |
Long-lived asset disclosures | |
Summary of capitalized software | December 31, 2015 2014 (in thousands) Cost $ $ Less: Accumulated amortization $ $ Capitalized software pledged to secure obligation under capital lease $ $ — |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Borrowings | |
Summary of financial data pertaining to mortgage loans sold under agreements to repurchase | Year ended December 31, 2015 2014 2013 (in thousands) Year end: Unpaid principal balance $ $ $ Unamortized issuance costs $ $ $ Unused amount (1) $ $ $ Weighted average interest rate % % % Fair value of assets securing repurchase agreements Mortgage loans $ $ $ Mortgage servicing rights $ $ — $ — Margin deposits placed with counterparties (2) $ $ $ During the year: Average balance of assets sold under agreements to repurchase $ $ $ Weighted average interest rate (3) % % % Total interest expense $ $ $ Maximum daily amount outstanding $ $ $ (1) The amount the Company is able to borrow under loan repurchase agreements is tied to the fair value of unencumbered mortgage loans eligible to secure those agreements and the Company’s ability to fund the agreements’ margin requirements relating to the mortgage loans sold. (2) Margin deposits are included in Other Assets on the Company’s consolidated balance sheets. (3) Excludes the effect of amortization of commitment fees totaling $ 7.4 million, $4.7 million and $4.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Summary of maturities of outstanding advances under repurchase agreements by maturity date | Remaining maturity at December 31, 2015 Balance (in thousands) Within 30 days $ Over 30 to 90 days Over 90 days — Unamortized issuance costs Total loans sold under agreements to repurchase $ Weighted average maturity (in months) |
Summary of amount at risk relating to the mortgage loans held for sale sold under agreements to repurchase by counterparty | Weighted average maturity of advances under repurchase Counterparty Amount at risk agreement Facility maturity (in thousands) Credit Suisse First Boston Mortgage Capital LLC $ January 29, 2016 January 29, 2016 Credit Suisse First Boston Mortgage Capital LLC $ January 29, 2016 January 29, 2016 Bank of America, N.A. $ March 24, 2016 March 29, 2016 Morgan Stanley Bank, N.A. $ February 23, 2016 July 26, 2016 Citibank, N.A. $ February 10, 2016 October 20, 2016 |
Summary of participating mortgage loans | Year ended December 31, 2015 2014 (in thousands) Year end: Unpaid principal balance $ $ Unamortized issuance costs $ $ Mortgage loans pledged to secure mortgage loan participation and sale agreement $ $ During the year: Average balance $ $ Weighted average interest rate (1) % % Total interest expense $ $ (1) Excludes the effect of amortization of commitment fees totaling $ 355,000 . |
Summary of note payable | Year ended December 31, 2015 2014 2013 (in thousands) Year end: Unpaid principal balance $ $ $ Unamortized issuance costs — — $ $ $ Assets pledged to secure notes payable: Mortgage servicing rights $ $ $ Servicing advances $ — $ — $ Cash $ $ — $ — Carried interest $ $ — $ — During the year: Average balance $ $ $ Weighted average interest rate % % % Total interest expense $ $ $ |
Summary of roll forward of Excess Servicing Spread Financing | Year ended December 31, 2015 2014 2013 (in thousands) Balance at beginning of year $ $ $ — Issuances of excess servicing spread to PennyMac Mortgage Investment Trust: For cash Pursuant to a recapture agreement with PennyMac Mortgage Investment Trust — Accrual of interest Repayments Change in fair value Balance at end of year $ $ $ |
Liability for Losses Under Re52
Liability for Losses Under Representations and Warranties (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Liability for Losses Under Representations and Warranties | |
Summary of repurchase activity | Year ended December 31, 2015 2014 2013 (in thousands) Balance at beginning of year $ $ $ Provision for losses on loans sold Incurred losses Balance at end of year $ $ $ Unpaid principal balance of mortgage loans subject to representations and warranties at year end $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of the Company's income tax expense (benefit) | Year ended December 31, 2015 2014 2013 (in thousands) Current expense: Federal $ — $ $ — State — — Total current expense — — Deferred expense: Federal State Total deferred expense Total provision for income taxes $ $ $ |
Schedule of reconciliation of the Company's provision for income taxes at statutory rates to the provision for income taxes at the Company's effective tax rate | Year ended December 31, 2015 2014 2013 Federal income tax statutory rate % % % Less: Rate attributable to noncontrolling interest % % % State income taxes, net of federal benefit % % % Other % % % Valuation allowance % % % Effective tax rate % % % |
Schedule of components of the Company's provision for deferred income taxes | Year ended December 31, 2015 2014 2013 (in thousands) Investment in PennyMac $ $ $ Net operating loss Valuation allowance — — — Total provision for deferred income taxes $ $ $ |
Schedule of components of Deferred tax asset | December 31, 2015 2014 (in thousands) Taxes currently receivable $ $ Deferred income tax asset, net Deferred tax asset $ $ |
Schedule of tax effects of temporary differences that gave rise to deferred income tax assets and liabilities | December 31, 2015 2014 (in thousands) Deferred income tax assets: Investment in PennyMac $ $ Net operating loss carryforward — Deferred income tax asset, net |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest | |
Noncontrolling Interest | Year ended December 31, 2015 2014 2013 (in thousands, except share amounts) Net income attributable to PennyMac Financial Services, Inc. common stockholders $ $ $ Decrease in the Company's additional paid-in capital for initial recognition of noncontrolling interest (12,778 Class A units) $ — $ — $ Increase in the Company's additional paid-in capital for exchanges of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. (Class A shares issued, 319 , 516 , and 8,035 during the years ended December 31, 2015, 2014 and 2013, respectively) $ $ $ |
Net Gains on Mortgage Loans H55
Net Gains on Mortgage Loans Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Gains on Mortgage Loans Held for Sale | |
Net Gains on Mortgage Loans Held for Sale | Year ended December 31, 2015 2014 2013 (in thousands) Cash (loss) gain: Mortgage loans $ $ $ Hedging activities Non-cash gain: Mortgage servicing rights resulting from mortgage loan sales Mortgage servicing liabilities resulting from mortgage loan sales — MSR and ESS recapture payable to PennyMac Mortgage Investment Trust Provision for losses relating to representations and warranties on loans sold Change in fair value relating to loans and hedging derivatives held at period end: Interest rate lock commitments Mortgage loans Hedging derivatives $ $ $ |
Net Interest Expense (Tables)
Net Interest Expense (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Interest Expense | |
Summary of net interest income (expense) | Year ended December 31, 2015 2014 2013 (in thousands) Interest income: From non-affiliates: Short-term investments $ $ $ Mortgage loans held for sale at fair value From PennyMac Mortgage Investment Trust — — Interest expense: To non-affiliates: Assets sold under agreements to repurchase Mortgage loan participation and sale agreements — Notes payable Interest shortfall on repayments of mortgage loans serviced for Agency securitizations Interest on mortgage loan impound deposits Other To PennyMac Mortgage Investment Trust—Excess servicing spread financing at fair value $ $ $ |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of the stock-based compensation expense by instrument awarded | Year ended December 31, 2015 2014 2013 (in thousands) Performance-based RSUs $ $ $ Stock options Time-based RSUs Exchangeable PNMAC units $ $ $ |
Summary of assumption used utilizing the options pricing model | Year ended December 31, 2015 2014 2013 Expected volatility (1) 41% 42% 45% Expected dividends 0% 0% 0% Risk-free rate 0.1% - 2.3% 0.1% - 2.9% 0.3% - 2.3% Expected grantee forfeiture rate 0.0% -18.7% 4.3% - 20.2% 6.2% - 19.2% (1) Based on historical volatilities of comparable companies’ common stock. |
Summary of Stock Option award activity and compensation expense | Year ended December 31, 2015 2014 2013 Number of Stock Options Outstanding at beginning of year — Granted Exercised — — Forfeited Outstanding at end of year Number of options exercisable at end of year — Weighted average exercise price per share: Outstanding at beginning of year $ $ $ — Granted Exercised — — Forfeited Outstanding at end of year $ $ $ Weighted average remaining contractual term (in years): Outstanding at end of year Exercisable at end of year — Aggregate intrinsic value: Outstanding at end of year $ — $ $ — Exercisable at end of year $ — $ — $ — Expected vesting amounts at year end: Number of options expected to vest at end of year Weighted average vesting period (in months) |
Schedule of inputs for grants | 2014 2013 Expected volatility (1) 42% 45% Expected dividends 0% 0% Risk-free rate 0.1% - 0.7% 0.3% - 2.3% Expected grantee forfeiture rate 4.3% - 20.2% 6.2% - 19.2% (1) Based on historical volatilities of comparable companies’ common stock. |
Performance-based RSUs | |
Summary of RSU activity | Year ended December 31, 2015 2014 2013 Number of units Outstanding at beginning of year — Granted Vested — — — Forfeited Outstanding at end of year Weighted average grant date fair value per unit: Outstanding at beginning of year $ $ $ — Granted Vested — — — Forfeited Outstanding at end of year $ $ $ Compensation expense recorded during the year (in thousands) $ $ $ Year end: Unamortized compensation cost (in thousands) $ $ $ Number of shares expected to vest Weighted average remaining vesting period (in months) |
Time-based RSUs | |
Summary of RSU activity | Year ended December 31, 2015 2014 2013 Number of units Outstanding at beginning of year — Granted Vested — Forfeited Outstanding at end of year Weighted average grant date fair value per unit: Outstanding at beginning of year $ $ $ — Granted Vested — Forfeited Outstanding at end of year $ $ $ Compensation expense recorded during the year (in thousands) $ $ $ Year end: Unamortized compensation cost (in thousands) $ $ $ Number of shares expected to vest Weighted average remaining vesting period (in months) |
Supplemental Cash Flow Inform58
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Information | |
Schedule of supplemental cash flow information | Year ended December 31, 2015 2014 2013 (in thousands) Cash paid for interest $ $ $ Cash paid for income taxes $ $ $ Non-cash investing activity: Mortgage servicing rights resulting from mortgage loan sales $ $ $ Mortgage servicing liabilities resulting from mortgage loan sales $ $ $ — Mortgage servicing rights recapture incurred $ $ $ Non-cash financing activity: Transfer of excess servicing spread pursuant to recapture agreement with PennyMac Mortgage Investment Trust $ $ $ — Issuance of common stock in settlement of director fees $ $ $ — Conversion of note payable to assets sold under agreements to repurchase $ $ — $ — |
Regulatory Net Worth and Agency
Regulatory Net Worth and Agency Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Regulatory Capital and Liquidity Requirements | |
Summary of agencies' capital and liquidity requirements by each agency | Agency capital / liquidity December 31, 2015 December 31, 2014 Agency–company subject to requirement Balance (1) Requirement Balance (1) Requirement (in thousands) Capital Fannie Mae - PLS $ $ $ $ Freddie Mac - PLS $ $ $ $ Ginnie Mae - PLS $ $ $ $ Ginnie Mae - PennyMac $ $ $ $ HUD - PLS $ $ $ $ Liquidity Fannie Mae / Freddie Mac - PLS $ $ $ — $ — Ginnie Mae - PLS $ $ $ — $ — (1) Calculated in compliance with the respective Agency’s requirements. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitment and Contingencies. | |
Schedule of commitments to fund and sell mortgage loans | December 31, 2015 (in thousands) Commitments to purchase mortgage loans from PennyMac Mortgage Investment Trust $ Commitments to fund mortgage loans $ Commitments to sell mortgage loans $ |
Segments and Related Informat61
Segments and Related Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segments and Related Information | |
Summary of financial highlights by segment | Year ended December 31, 2015 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenues: (1) Net gains (losses) on mortgage loans held for sale at fair value $ $ $ $ — $ Loan origination fees — — Fulfillment fees from PennyMac Mortgage Investment Trust — — Net servicing fees — — Management fees — — — Carried Interest from Investment Funds — — — Net interest income (expense): Interest income — Interest expense — — Other Total net revenue Expenses Income (loss) before provision for income taxes and non-segment activities Non-segment activities (2) Income (loss) before provision for income taxes $ $ $ $ $ Segment assets at year end (3) $ (1) All revenues are from external customers. (2) Represents repricing of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement and adjustments related to parent Company interest expense. (3) Excludes parent Company assets, which consist primar ily of deferred tax asset of $18.4 million. Year ended December 31, 2014 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenues: (1) Net gains on mortgage loans held for sale at fair value $ $ $ $ — $ Loan origination fees — — Fulfillment fees from PennyMac Mortgage Investment Trust — — Net servicing fees — — Management fees — — — Carried Interest from Investment Funds — — — Net interest income (expense): Interest income Interest expense — Other Total net revenue Expenses Income (loss) before provision for income taxes and non-segment activities Non-segment activities (2) Income before provision for income taxes $ $ $ $ $ Segment assets at year end (3) $ $ $ $ $ (1) All revenues are from external customers (2) Represents repricing Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement. (3) Excludes parent company assets, which consist primarily of deferred tax asset of $46.0 million. Year ended December 31, 2013 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenues: (1) Net gains on mortgage loans held for sale at fair value $ $ — $ $ — $ Loan origination fees — — Fulfillment fees from PennyMac Mortgage Investment Trust — — Net servicing fees — — Management fees — — — Carried Interest from Investment Funds — — — Net interest income (expense): Interest income — Interest expense — Other Total net revenue Expenses Income before provision for income taxes $ $ $ $ $ Segment assets at year end (2) $ $ $ $ $ (1) All revenues are from external customers. Excludes parent Company assets, which consist primarily of deferred tax asset of $63.1 million |
Selected Quarterly Results (U62
Selected Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Results (Unaudited) | |
Schedule of selected quarterly financial data | Quarter ended 2015 2014 Dec. 31 Sept. 30 June. 30 Mar. 31 Dec. 31 Sept. 30 June. 30 Mar. 31 (in thousands, except per share data) During the quarter: Net gains on mortgage loans held for sale at fair value $ $ $ $ $ $ $ $ Fulfillment fees from PennyMac Mortgage Investment Trust Net servicing fees Management fees and Carried Interest Other income Expenses Income before provision for income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interest Net income attributable to PennyMac Financial Services, Inc. common stockholders $ $ $ $ $ $ $ $ Earnings per share of Common Stock: Basic $ $ $ $ $ $ $ $ Diluted $ $ $ $ $ $ $ $ Quarter end: Mortgage loans held for sale at fair value $ $ $ $ $ $ $ $ Mortgage servicing rights Carried Interest from Investment Funds Servicing advances, net Other assets Total assets $ $ $ $ $ $ $ $ Assets sold under agreements to repurchase $ $ $ $ $ $ $ $ Mortgage loan participation and sale agreements — — — Notes payable Excess servicing spread financing at fair value to PennyMac Mortgage Investment Trust Other liabilities Total liabilities Total equity Total liabilities and equity $ $ $ $ $ $ $ $ |
Parent Company Information (Tab
Parent Company Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Parent Company Information | |
Schedule of condensed balance sheets | December 31, 2015 2014 (in thousands) ASSETS Cash $ $ Investments in subsidiaries Deferred tax asset Due from subsidiaries — Total assets $ $ LIABILITIES AND STOCKHOLDERS' EQUITY Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement $ $ Payable to subsidiaries — Total liabilities Stockholders' equity Total liabilities and stockholders' equity $ $ |
Schedule of condensed statements of income | Year ended December 31, 2015 2014 2013 (in thousands) Revenues Dividends from subsidiaries $ $ $ Interest — — Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — Total revenue Expenses Interest — — Total expenses — — Income before provision for income taxes and equity in undistributed earnings in subsidiaries Provision for income taxes Income before equity in undistributed earnings of subsidiaries Equity in undistributed earnings of subsidiaries Net income $ $ $ |
Schedule of condensed statements of cash flows | Year ended December 31, 2015 2014 2013 (in thousands) Cash flows from operating activities Net income $ $ $ Adjustments to reconcile net income to net cash (used in ) provided by operating activities Equity in undistributed earnings of subsidiaries (Decrease) increase in payables to subsidiaries — Decrease in deferred tax asset Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — — Increase in intercompany receivable — — Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — Net cash (used in) provided by operating activities Cash flows from investing activities Increase in investments in subsidiaries — — Net cash used by investing activities — — Cash flows from financing activities Issuance of common shares — — Payment of common share underwriting and offering costs — — Net cash provided by financing activities — — Net change in cash Cash at beginning of year — Cash at end of year $ $ $ |
Organization (Details)
Organization (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | May. 14, 2013 | May. 13, 2013 | Dec. 31, 2015 |
Organization and Basis of Presentation | |||
Amount of tax benefits under the tax sharing agreement (as a percent) | 85.00% | 85.00% | |
Class A Common Stock | |||
Organization and Basis of Presentation | |||
Issuance of common shares in initial public offering, net of issuance costs (in shares) | 12.8 | ||
Public offering price (in dollars per share) | $ 18 | ||
Net proceeds from initial public offering, after deducting net underwriting discounts and commissions | $ 216,800 | ||
Number of Class A common units purchased | 12.8 | ||
Shares purchased accounted for as a transfer of interests under common control | 12.8 | ||
Private National Mortgage Acceptance Company, LLC | Members Equity Component [Member] | |||
Organization and Basis of Presentation | |||
Reclassification of members' equity to non-controlling interest | $ 315,454 | ||
Private National Mortgage Acceptance Company, LLC | Noncontrolling Interest [Member] | |||
Organization and Basis of Presentation | |||
Reclassification of members' equity to non-controlling interest | $ (315,454) |
Concentration of Risk (Details)
Concentration of Risk (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Sales Revenue, Services, Net [Member] | Customer Concentration Risk [Member] | |||
Concentration of Risk | |||
Percentage of total net revenue | 16.00% | 32.00% | 45.00% |
Significant Accounting Polici66
Significant Accounting Policies - Mortgage Servicing Rights and Mortgage Servicing Liabilities (Details) | 12 Months Ended |
Dec. 31, 2015item | |
Mortgage servicing rights | |
Mortgage Servicing Rights | |
Number of classes of MSRs | 3 |
Mortgage servicing rights | Minimum | |
Mortgage Servicing Rights | |
Servicing fee (as a percent) | 0.19% |
Mortgage servicing rights | Maximum | |
Mortgage Servicing Rights | |
Servicing fee (as a percent) | 0.57% |
Mortgage servicing rights | Fixed Rate Stratified Mortgage Pool [Member] | |
Mortgage Servicing Rights | |
Stratification range, as a percent | 0.50% |
Mortgage servicing rights | Fixed Rate Stratified Mortgage Pool [Member] | Minimum | |
Mortgage Servicing Rights | |
Note rates (as a percent) | 3.00% |
Mortgage servicing rights | Fixed Rate Stratified Mortgage Pool [Member] | Maximum | |
Mortgage Servicing Rights | |
Note rates (as a percent) | 4.50% |
Mortgage servicing rights | Fixed Rate Single Mortgage Pool [Member] | Maximum | |
Mortgage Servicing Rights | |
Note rates (as a percent) | 3.00% |
Mortgage Servicing Rights Class One [Member] | |
Mortgage Servicing Rights | |
Interest rate (as a percent) | 4.50% |
Mortgage Servicing Rights Class Two [Member] | |
Mortgage Servicing Rights | |
Interest rate (as a percent) | 4.50% |
Significant Accounting Polici67
Significant Accounting Policies - Long-lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Long-lived asset disclosures | |||
Period of payment default | 3 months | ||
Furniture, Fixtures, Equipment and Building Improvements [Member] | Minimum | |||
Long-lived asset disclosures | |||
Estimated useful lives | 5 years | ||
Furniture, Fixtures, Equipment and Building Improvements [Member] | Maximum | |||
Long-lived asset disclosures | |||
Estimated useful lives | 7 years | ||
Capitalized Software | |||
Long-lived asset disclosures | |||
Estimated useful lives | 5 years | ||
Impairment of capitalized software | $ 0 | $ 0 | $ 0 |
Significant Accounting Polici68
Significant Accounting Policies - Income Taxes (Details) | May. 14, 2013 | Dec. 31, 2015 |
Income Taxes | ||
Amount of tax benefits under the tax sharing agreement (as a percent) | 85.00% | 85.00% |
Significant Accounting Polici69
Significant Accounting Policies - Variable Interest (Details) $ in Thousands | Dec. 31, 2015USD ($) |
PNMAC Opportunity Fund Associates [Member] | |
Variable Interest Held in Unconsolidated Variable Interest Entities | |
Maximum exposure of loss from the unconsolidated VIEs | $ 2,000 |
Significant Accounting Polici70
Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
Assets: | ||||||||
Other | $ 45,594 | $ 37,419 | ||||||
Total assets | 3,505,294 | $ 3,815,322 | $ 3,430,605 | $ 2,858,001 | 2,506,686 | $ 2,538,627 | $ 2,182,194 | $ 1,760,545 |
Liabilities: | ||||||||
Assets sold under agreements to repurchase | 1,166,731 | 1,286,411 | 1,263,248 | 992,187 | 822,252 | 929,747 | 825,267 | 567,737 |
Mortgage loans participation and sale agreement | 234,872 | 247,410 | 195,959 | 190,762 | 143,568 | |||
Total liabilities | 2,442,944 | 2,826,015 | 2,511,132 | 2,005,165 | 1,699,420 | 1,772,178 | 1,460,501 | 1,085,467 |
Total liabilities and stockholders' equity | 3,505,294 | $ 3,815,322 | $ 3,430,605 | $ 2,858,001 | 2,506,686 | $ 2,538,627 | $ 2,182,194 | $ 1,760,545 |
Parent Company [Member] | ||||||||
Assets: | ||||||||
Total assets | 367,044 | 298,609 | ||||||
Liabilities: | ||||||||
Total liabilities | 74,315 | 75,025 | ||||||
Total liabilities and stockholders' equity | $ 367,044 | 298,609 | ||||||
As previously reported | ||||||||
Assets: | ||||||||
Other | 37,858 | |||||||
Total assets | 2,507,125 | |||||||
Liabilities: | ||||||||
Assets sold under agreements to repurchase | 822,621 | |||||||
Mortgage loans participation and sale agreement | 143,638 | |||||||
Total liabilities | 1,699,859 | |||||||
Total liabilities and stockholders' equity | 2,507,125 | |||||||
Reclassification | ||||||||
Assets: | ||||||||
Other | (439) | |||||||
Total assets | (439) | |||||||
Liabilities: | ||||||||
Assets sold under agreements to repurchase | (369) | |||||||
Mortgage loans participation and sale agreement | (70) | |||||||
Total liabilities | (439) | |||||||
Total liabilities and stockholders' equity | $ (439) |
Transactions with Affiliates -
Transactions with Affiliates - Correspondent Production (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015USD ($) | Jan. 31, 2013 | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Lending activity between the entity and affiliate | |||||||||||||
Fulfillment fee revenue | $ 58,607,000 | $ 48,719,000 | $ 79,712,000 | ||||||||||
Proceeds from sale of mortgage loans held for sale to PennyMac Mortgage Investment Trust | $ 78,736,000 | $ 82,646,000 | $ 83,955,000 | $ 75,378,000 | $ 44,649,000 | $ 48,133,000 | $ 39,704,000 | $ 34,538,000 | 320,715,000 | 167,024,000 | 138,013,000 | ||
MSR recapture recognized | 787,000 | 9,000 | 709,000 | ||||||||||
PMT | |||||||||||||
Lending activity between the entity and affiliate | |||||||||||||
Fulfillment fee revenue | $ 12,855,000 | $ 17,553,000 | $ 15,333,000 | $ 12,866,000 | $ 11,887,000 | $ 15,497,000 | $ 12,433,000 | $ 8,902,000 | $ 58,607,000 | 48,719,000 | 79,712,000 | ||
PMT | Correspondent Lending | |||||||||||||
Transactions with Affiliates | |||||||||||||
Fulfillment fee as a percentage of unpaid principal balance of mortgage loans sold to non-affiliates | 0.50% | ||||||||||||
Fulfillment fee as a percent of UPB for conventional mortgage loans | 0.50% | ||||||||||||
Fulfillment fee as a percent of UPB of loans sold in accordance with Ginne Mae Mortgage-Backed Securities Guide | 0.88% | ||||||||||||
Fulfillment fee as a percent of UPB of all other mortgage loans | 0.50% | ||||||||||||
PMT | Correspondent Lending | Purchases mortgage loans with an aggregate unpaid principal balance in any month greater than $2.5 billion and less than $5 billion | |||||||||||||
Transactions with Affiliates | |||||||||||||
Fulfillment fee as a percentage of unpaid principal balance of mortgage loans sold to non-affiliates | 0.025% | ||||||||||||
PMT | Correspondent Lending | Purchases mortgage loans with an aggregate unpaid principal balance in any month greater than $2.5 billion and less than $5 billion | Minimum | |||||||||||||
Transactions with Affiliates | |||||||||||||
Threshold unpaid principal balance of mortgage loans sold to non-affiliates for calculation of fulfillment fee | $ 2,500,000,000 | ||||||||||||
Threshold unpaid principal balance of mortgage loans sold to non-affiliates | 2,500,000,000 | ||||||||||||
PMT | Correspondent Lending | Purchases mortgage loans with an aggregate unpaid principal balance in any month greater than $2.5 billion and less than $5 billion | Maximum | |||||||||||||
Transactions with Affiliates | |||||||||||||
Threshold unpaid principal balance of mortgage loans sold to non-affiliates | $ 5,000,000,000 | ||||||||||||
PMT | Correspondent Lending | Purchases mortgage loans with an aggregate unpaid principal balance in any month $5 billion | |||||||||||||
Transactions with Affiliates | |||||||||||||
Fulfillment fee as a percentage of unpaid principal balance of mortgage loans sold to non-affiliates | 0.05% | ||||||||||||
PMT | Correspondent Lending | Purchases mortgage loans with an aggregate unpaid principal balance in any month $5 billion | Minimum | |||||||||||||
Transactions with Affiliates | |||||||||||||
Threshold unpaid principal balance of mortgage loans sold to non-affiliates for calculation of fulfillment fee | $ 5,000,000,000 | ||||||||||||
Threshold unpaid principal balance of mortgage loans sold to non-affiliates | $ 5,000,000,000 | ||||||||||||
PMT | Mortgage Banking Services Member | |||||||||||||
Transactions with Affiliates | |||||||||||||
Early purchase program facility fee per loan | $ 1,500 | ||||||||||||
Early purchase facility fee per loan | 35 | ||||||||||||
PMT | Warehouse Services [Member] | |||||||||||||
Transactions with Affiliates | |||||||||||||
Warehouse facility fee per year for the first tier of active warehouse lending facilities | $ 40,000 | ||||||||||||
Number of active warehouse lending facilities that constitute the first tier | item | 20 | ||||||||||||
Warehouse facility fee per year for each additional warehouse lending facility | $ 10,000 | ||||||||||||
Warehouse facility fee per loan | 50 | ||||||||||||
PMT | Mortgage Banking And Warehouse Services [Member] | |||||||||||||
Transactions with Affiliates | |||||||||||||
Limit for both warehouse and early purchase facility fee per loan | $ 50 | ||||||||||||
PMT | MSR Recapture Agreement | |||||||||||||
Lending activity between the entity and affiliate | |||||||||||||
Number of subsidiaries of related party to which MSR of loan originated through refinancing must be transferred to, if related party previously held the refinanced loan's MSR | item | 1 | ||||||||||||
Minimum percent of total UPB of loans originated from refinancing of loans which a related party previously held the MSR required to be transferred | 30.00% | ||||||||||||
PMT | Mortgage Lending | |||||||||||||
Lending activity between the entity and affiliate | |||||||||||||
Fulfillment fee revenue | $ 58,607,000 | 48,719,000 | 79,712,000 | ||||||||||
Unpaid principal balance of loans fulfilled for PennyMac Mortgage Investment Trust | 14,014,603,000 | 11,476,448,000 | 15,225,153,000 | ||||||||||
Sourcing fees paid | 8,966,000 | 4,676,000 | 4,611,000 | ||||||||||
Unpaid principal balance of loans purchased from PennyMac Mortgage Investment Trust | 29,867,580,000 | 16,431,338,000 | 16,113,806,000 | ||||||||||
Proceeds from sale of mortgage loans held for sale to PennyMac Mortgage Investment Trust | 28,445,000 | 8,081,000 | 12,339,000 | ||||||||||
Tax service fee | 4,390,000 | 2,080,000 | |||||||||||
Mortgage banking and warehouse service fees paid by PMT | 313,000 | ||||||||||||
MSR recapture recognized | $ 787,000 | $ 9,000 | $ 709,000 |
Transactions with Affiliates 72
Transactions with Affiliates - Mortgage Loan Servicing (Details) - PMT - USD ($) | Jan. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of mortgage loan servicing fees earned | ||||
Loan servicing fees | $ 46,423,000 | $ 52,522,000 | $ 39,413,000 | |
Mortgage Loan Servicing | ||||
Transactions with Affiliates | ||||
Base servicing fees per month for REO | 75 | |||
Rental fee per month per REO | $ 30 | |||
Property management fees on REOs, as a percent of gross rental income | 9.00% | |||
Base servicing fees per month for fixed-rate non-distressed loans subserviced | 7.50 | |||
Base servicing fees per month for adjustable rate non-distressed loans subserviced | 8.50 | |||
Supplemental fee per month for each distressed whole loan | 25 | |||
Supplemental fee per month for each non-distressed subserviced loan | 3.25 | |||
Supplemental fee quarterly cap for each non-distressed subserviced loan | 700,000 | |||
Maximum | Mortgage Loan Servicing | ||||
Transactions with Affiliates | ||||
Servicing fee rates per year for nonperforming loans (as a percent) | 1.00% | |||
Servicing fees amount per month for severely delinquent loans | 125 | |||
Additional servicing fee amount per month for delinquent loans | 75 | |||
Minimum | Mortgage Loan Servicing | ||||
Transactions with Affiliates | ||||
Servicing fee rates per year for nonperforming loans (as a percent) | 0.50% | |||
Servicing fees amount per month for current loans | 30 | |||
Additional servicing fee amount per month for delinquent loans | 10 | |||
Mortgage loans acquired for sale at fair value | ||||
Summary of mortgage loan servicing fees earned | ||||
Base and supplemental | $ 260,000 | 103,000 | 262,000 | |
Activity-based | 371,000 | 149,000 | 300,000 | |
Loan servicing fees | 631,000 | 252,000 | 562,000 | |
Mortgage servicing rights | ||||
Summary of mortgage loan servicing fees earned | ||||
Base and supplemental | 16,911,000 | 13,515,000 | 10,274,000 | |
Activity-based | 321,000 | 194,000 | 305,000 | |
Loan servicing fees | 17,232,000 | 13,709,000 | 10,579,000 | |
Purchased MSRs Backed by Distressed Mortgage Loans | ||||
Summary of mortgage loan servicing fees earned | ||||
Base and supplemental | 16,123,000 | 18,953,000 | 16,458,000 | |
Activity-based | 12,437,000 | 19,608,000 | 11,814,000 | |
Loan servicing fees | $ 28,560,000 | $ 38,561,000 | $ 28,272,000 |
Transactions with Affiliates 73
Transactions with Affiliates - Management Fees (Details) | Dec. 15, 2015item | Jan. 31, 2013 | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Summary of management fees earned | |||||
Management fees | $ 28,237,000 | $ 42,508,000 | $ 40,330,000 | ||
PMT | |||||
Summary of management fees earned | |||||
Management fees | $ 24,194,000 | 35,035,000 | $ 32,410,000 | ||
Period for calculating average annual fees | 24 months | ||||
Multiplier for calculating the termination fee | item | 3 | ||||
Denominator for calculating maximum costs and expenses eligible for reimbursement to the Company | item | 4 | ||||
PMT | Management Fees | |||||
Transactions with Affiliates | |||||
Base management fee annual rate (as a percent) | 1.50% | ||||
Percentage of net income for calculation of performance incentive fees | 20.00% | ||||
Hurdle rate (as a percent) | 8.00% | ||||
Percentage of change in net income due to quarterly adjustments | 8.00% | ||||
Summary of management fees earned | |||||
Base | $ 22,851,000 | 23,330,000 | $ 19,644,000 | ||
Performance incentive | 1,343,000 | 11,705,000 | 12,766,000 | ||
Management fees | $ 24,194,000 | 35,035,000 | $ 32,410,000 | ||
PMT | Management Fees | Shareholders Equity in Excess of 2 Billion Dollars and upto 5 Billion Dollars | |||||
Transactions with Affiliates | |||||
Base management fee annual rate (as a percent) | 1.375% | ||||
PMT | Management Fees | Shareholders Equity in Excess of 5 Billion Dollars | |||||
Transactions with Affiliates | |||||
Base management fee annual rate (as a percent) | 1.25% | ||||
PMT | Management Fees | Maximum | |||||
Transactions with Affiliates | |||||
Percentage of performance incentive fee payable by issuance of common shares | 50.00% | ||||
PMT | Management Fees | Maximum | Shareholders Equity up to 2 Billion Dollars | |||||
Transactions with Affiliates | |||||
Base management fee annual rate (as a percent) | 1.50% | ||||
Base management fee shareholders' equity limit | 2,000,000,000 | ||||
PMT | Management Fees | Maximum | Shareholders Equity in Excess of 2 Billion Dollars and upto 5 Billion Dollars | |||||
Transactions with Affiliates | |||||
Base management fee shareholders' equity limit | 5,000,000,000 | ||||
PMT | Management Fees | Maximum | Shareholders Equity in Excess of 5 Billion Dollars | |||||
Transactions with Affiliates | |||||
Base management fee shareholders' equity limit | $ 5,000,000,000 | ||||
PMT | Management Fees | Minimum | |||||
Transactions with Affiliates | |||||
High watermark | $ 0 | ||||
PMT | Management Fees | Minimum | Shareholders Equity in Excess of 2 Billion Dollars and upto 5 Billion Dollars | |||||
Transactions with Affiliates | |||||
Base management fee shareholders' equity limit | $ 2,000,000,000 | ||||
Return on Shareholders Equity 8 Percent | PMT | Management Fees | |||||
Transactions with Affiliates | |||||
Percentage of net income for calculation of performance incentive fees | 10.00% | ||||
Return on Shareholders Equity 8 Percent | PMT | Management Fees | Maximum | |||||
Transactions with Affiliates | |||||
Percentage of return on affiliate's equity | 12.00% | ||||
Return on Shareholders Equity 8 Percent | PMT | Management Fees | Minimum | |||||
Transactions with Affiliates | |||||
Percentage of return on affiliate's equity | 8.00% | ||||
Return on Shareholders Equity12 Percent | PMT | Management Fees | |||||
Transactions with Affiliates | |||||
Percentage of net income for calculation of performance incentive fees | 15.00% | ||||
Percentage of return on affiliate's equity | 12.00% | ||||
Return on Shareholders Equity12 Percent | PMT | Management Fees | Maximum | |||||
Transactions with Affiliates | |||||
Percentage of return on affiliate's equity | 16.00% | ||||
Return on Shareholders Equity in Excess of 16 Percent | PMT | Management Fees | |||||
Transactions with Affiliates | |||||
Percentage of net income for calculation of performance incentive fees | 20.00% | ||||
Percentage of return on affiliate's equity | 16.00% |
Transactions with Affiliates 74
Transactions with Affiliates - Investing and Financing Activities (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investing activities: | |||
Advance on note receivable from PennyMac Mortgage Investment Trust | $ 168,546 | ||
Repayment of note receivable from PennyMac Mortgage Investment Trust | 18,546 | ||
Financing activities: | |||
Issuance of excess servicing spread | 271,554 | $ 95,892 | $ 139,028 |
Changes in fair value included in income | (24,322) | ||
Interest expense from excess servicing spread financing | 25,365 | $ 13,292 | 1,348 |
PMT | |||
Investing activities: | |||
Interest income on note receivable from PennyMac Mortgage Investment Trust | 3,343 | ||
Note receivable from PennyMac Mortgage Investment Trust—secured | 150,000 | ||
PMT | Investing and Financing Activity | |||
Investing activities: | |||
Advance on note receivable from PennyMac Mortgage Investment Trust | 168,546 | ||
Repayment of note receivable from PennyMac Mortgage Investment Trust | 18,546 | ||
Interest income on note receivable from PennyMac Mortgage Investment Trust | 3,343 | ||
Note receivable from PennyMac Mortgage Investment Trust—secured | $ 150,000 | ||
Investment in affiliate, common shares of beneficial interest (in shares) | 75 | 75 | |
Investment in affiliates, at fair value | $ 1,145 | $ 1,582 | |
Financing activities: | |||
Issuance of excess servicing spread | 271,554 | 99,728 | |
Repayments of excess servicing spread | 78,578 | 39,256 | |
Interest expense from excess servicing spread financing | 25,365 | 13,292 | |
Excess servicing spread recapture recognized | 7,049 | 7,828 | |
Excess servicing spread financing | |||
Financing activities: | |||
Changes in fair value included in income | (28,663) | $ 2,423 | |
Excess servicing spread financing | PMT | Investing and Financing Activity | |||
Financing activities: | |||
Changes in fair value included in income | $ (3,810) | $ (28,663) |
Transactions with Affiliates 75
Transactions with Affiliates - Investing and Financing Activities - additional information (Details) - USD ($) | Apr. 30, 2015 | Dec. 31, 2015 | Feb. 01, 2013 |
PMT | |||
Note Receivable | |||
Maximum loan amount | $ 150,000,000 | ||
Note receivable, related party | $ 150,000,000 | ||
MSR Recapture Agreement | PMT | Maximum | |||
Transactions with Affiliates | |||
Fair market value of the aggregate MSRs to be transferred | $ 200,000 | ||
2/1/13 Spread Acquisition Agreement | PMT | |||
Transactions with Affiliates | |||
Maximum ESS recapture obligation | $ 200,000 | ||
Ginnie Mae Mortgage Backed Securities Guide Loan | |||
Transactions with Affiliates | |||
Percentage of the product of excess servicing fee rate and unpaid principal balance of refinanced mortgage loans considered for transfer of additional ESS | 90.00% |
Transactions with Affiliates 76
Transactions with Affiliates - Other transactions, Conditional Reimbursement (Details) - PMT - Conditional Reimbursement - USD ($) | 12 Months Ended | 23 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Aug. 04, 2009 | |
Conditional reimbursement | |||||
Conditional reimbursement | $ 2,900,000 | ||||
Performance incentive fees reimbursement under the management agreement for every $100 of performance incentive fees earned | $ 10 | ||||
Maximum performance incentive fees reimbursement within 12-month period | $ 1,000,000 | ||||
Payments received | $ 237,000 | $ 651,000 | $ 944,000 | ||
Maximum | |||||
Conditional reimbursement | |||||
Conditional reimbursement | $ 2,900,000 |
Transactions with Affiliates 77
Transactions with Affiliates - Other Transactions, Reimbursement of common overhead expenses (Details) - PMT - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reimbursement of common overhead and expenses incurred on behalf of affiliates | |||
Reimbursement of common overhead and expenses incurred by the Company | $ 11,324 | $ 11,642 | $ 15,627 |
Payments and settlements during the period | 99,967 | 99,987 | 121,230 |
Common overhead incurred | |||
Reimbursement of common overhead and expenses incurred on behalf of affiliates | |||
Reimbursement of common overhead and expenses incurred by the Company | 10,742 | 10,850 | 10,989 |
Expenses incurred | |||
Reimbursement of common overhead and expenses incurred on behalf of affiliates | |||
Reimbursement of common overhead and expenses incurred by the Company | 582 | $ 792 | $ 4,638 |
Discretionary Waiver of Overhead Expenses [Member] | |||
Reimbursement of common overhead and expenses incurred on behalf of affiliates | |||
Discretionary waiver of overhead expenses | $ 1,600 |
Transactions with Affiliates 78
Transactions with Affiliates - Amounts due from affilate (Details) - PMT - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Amounts due from affiliate | ||
Management fees | $ 5,670,000 | $ 8,426,000 |
Servicing fees | 3,682,000 | 3,385,000 |
Expenses incurred on PMT's behalf | 3,447,000 | |
Correspondent lending origination fees | 2,729,000 | |
Fulfillment fees | 1,082,000 | 506,000 |
Conditional Reimbursement | 900,000 | 1,137,000 |
Allocated expenses | 1,455,000 | 6,581,000 |
Unsettled excess servicing spread issuance | 3,836,000 | |
Total due from affiliate | 18,965,000 | 23,871,000 |
Amounts due from affiliate, additional infomation | ||
Amounts due to affiliates | 162,379,000 | 123,315,000 |
Servicing advances | 153,600,000 | 116,700,000 |
Other expenses | 8,000,000 | 6,200,000 |
MSR recapture payable to PMT | $ 781,000 | $ 460,000 |
Transactions with Affiliates 79
Transactions with Affiliates - Amounts due from Investment Funds (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Amounts due from affiliate | ||||||||||
Carried Interest due from Investment Funds (pledged to creditors at December 31, 2015) | $ 69,926 | $ 70,196 | $ 68,713 | $ 68,531 | $ 67,298 | $ 67,035 | $ 65,133 | $ 63,299 | ||
Investment Funds | ||||||||||
Amounts due from affiliate | ||||||||||
Carried Interest due from Investment Funds (pledged to creditors at December 31, 2015) | 69,926 | 67,298 | $ 61,142 | $ 47,723 | ||||||
Management fees | 655 | 1,596 | ||||||||
Loan servicing fees | 392 | 476 | ||||||||
Loan servicing rebate | 224 | 189 | ||||||||
Expense reimbursements | 45 | 30 | ||||||||
Total due from affiliate | 1,316 | 2,291 | ||||||||
Due to Affiliate | 30,429 | 35,908 | ||||||||
PNMAC Mortgage Opportunity Fund, LLC | ||||||||||
Amounts due from affiliate | ||||||||||
Carried Interest due from Investment Funds (pledged to creditors at December 31, 2015) | 41,893 | 40,771 | ||||||||
PNMAC Mortgage Opportunity Fund Investors, LLC | ||||||||||
Amounts due from affiliate | ||||||||||
Carried Interest due from Investment Funds (pledged to creditors at December 31, 2015) | $ 28,033 | $ 26,527 |
Transactions with Affiliates 80
Transactions with Affiliates - Exchanged Private National Mortgage Acceptance Company, LLC Unitholders (Details) - USD ($) $ in Millions | May. 14, 2013 | Dec. 31, 2015 | Dec. 31, 2014 |
Transactions with Affiliates | |||
Amount of tax benefits under the tax sharing agreement (as a percent) | 85.00% | 85.00% | |
Amount of tax liability under the tax sharing agreement | $ 74.3 | $ 75 | |
Payment of liability to exchange PNMAC unit holders under tax receivable agreement | $ 5.1 |
Earnings Per Share of Common 81
Earnings Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Basic earnings per share of common stock: | |||||||||||
Net income attributable to PennyMac Financial Services, Inc common stockholders | $ 12,771 | $ 12,680 | $ 12,749 | $ 9,028 | $ 8,763 | $ 10,489 | $ 9,618 | $ 7,972 | $ 47,228 | $ 36,842 | $ 14,400 |
Weighted-average common stock outstanding | 21,755,000 | 21,250,000 | 17,311,000 | ||||||||
Basic earnings per share of common stock (in dollars per share) | $ 0.58 | $ 0.58 | $ 0.59 | $ 0.42 | $ 0.41 | $ 0.49 | $ 0.45 | $ 0.38 | $ 2.17 | $ 1.73 | $ 0.83 |
Diluted earnings per share of common stock: | |||||||||||
Net income attributable to PennyMac Financial Services, Inc common stockholders | $ 12,771 | $ 12,680 | $ 12,749 | $ 9,028 | $ 8,763 | $ 10,489 | $ 9,618 | $ 7,972 | $ 47,228 | $ 36,842 | $ 14,400 |
Effect of net income attributable to noncontrolling interest, net of tax | 119,697 | 95,283 | 47,838 | ||||||||
Diluted net income attributable to common stockholders | $ 166,925 | $ 132,125 | $ 62,238 | ||||||||
Weighted-average common stock outstanding | 21,755,000 | 21,250,000 | 17,311,000 | ||||||||
Dilutive shares: | |||||||||||
PennyMac Class A units exchangeable to common stock | 53,803,000 | 53,550,000 | 57,206,000 | ||||||||
Non-vested PennyMac Class A units issuable under unit-based stock compensation plan and exchangeable to common stock | 427,000 | 1,083,000 | 1,347,000 | ||||||||
Shares issuable under stock-based compensation plans (in shares) | 119,000 | 72,000 | 28,000 | ||||||||
Diluted weighted-average common stock outstanding | 76,104,000 | 75,955,000 | 75,892,000 | ||||||||
Diluted earnings per share of common stock (in dollars per share) | $ 0.58 | $ 0.58 | $ 0.59 | $ 0.42 | $ 0.41 | $ 0.49 | $ 0.45 | $ 0.38 | $ 2.17 | $ 1.73 | $ 0.82 |
Total potentially dilutive common stock equivalents | 4,105,853 | 2,031,210 | 278,185 | ||||||||
Stock Options | |||||||||||
Dilutive shares: | |||||||||||
Total potentially dilutive common stock equivalents | 1,747,857 | 976,183 | |||||||||
Potentially dilutive common stock weighted average exercise price (per share) | $ 18.17 | $ 18.23 | $ 18.17 | $ 18.23 | |||||||
Performance-based RSUs | |||||||||||
Dilutive shares: | |||||||||||
Total potentially dilutive common stock equivalents | 2,357,996 | 1,055,027 | 278,185 |
Loan Sales and Servicing Acti82
Loan Sales and Servicing Activities - Summary of cash flows with transferees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows: | |||
Sales proceeds | $ 36,679,638 | $ 18,793,619 | $ 17,006,460 |
Servicing fees received | 140,767 | 113,364 | 56,066 |
Net servicing (recoveries) advances | 9,842 | 16,796 | 4,207 |
Period end information: | |||
Unpaid principal balance of mortgage loans outstanding at end of period | 60,687,246 | 36,564,434 | 23,640,261 |
30-89 days | 1,539,568 | 840,387 | 410,927 |
90 days or more or in foreclosure or bankruptcy | $ 568,093 | $ 255,835 | $ 143,022 |
Loan Sales and Servicing Acti83
Loan Sales and Servicing Activities - Summary of mortgage servicing portfolio (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Mortgage servicing portfolio | ||
Mortgage loans held for sale | $ 1,052,485 | $ 1,100,910 |
Total loans serviced | 160,272,718 | 105,980,049 |
Amount subserviced for the Company | 14,454 | 330,768 |
Delinquent mortgage loans: | ||
30 days | 3,016,294 | 1,675,006 |
60 days | 971,541 | 570,205 |
90 days or more - Not in foreclosure | 2,058,646 | 1,837,102 |
90 days or more - In foreclosure | 1,836,631 | 1,967,092 |
90 days or more - Foreclosed | 565,403 | 565,511 |
Total delinquent mortgage loans | 8,448,515 | 6,614,916 |
Custodial funds managed by the Company | 2,744,897 | 1,910,793 |
Non affiliated entities | ||
Mortgage servicing portfolio | ||
Total loans serviced, excluding loans held for sale | 111,409,601 | 65,169,194 |
Affiliated entities | ||
Mortgage servicing portfolio | ||
Total loans serviced, excluding loans held for sale | 47,810,632 | 39,709,945 |
Servicing rights owned | ||
Mortgage servicing portfolio | ||
Mortgage loans held for sale | 1,052,485 | 1,100,910 |
Total loans serviced | 112,462,086 | 66,270,104 |
Amount subserviced for the Company | 14,454 | |
Delinquent mortgage loans: | ||
30 days | 2,666,435 | 1,372,915 |
60 days | 834,617 | 434,428 |
90 days or more - Not in foreclosure | 1,270,236 | 779,129 |
90 days or more - In foreclosure | 656,617 | 422,330 |
90 days or more - Foreclosed | 23,372 | 32,444 |
Total delinquent mortgage loans | 5,451,277 | 3,041,246 |
Custodial funds managed by the Company | 2,242,146 | 1,522,295 |
Servicing rights owned | Non affiliated entities | ||
Mortgage servicing portfolio | ||
Total loans serviced, excluding loans held for sale | 111,409,601 | 65,169,194 |
Contract servicing and subservicing | ||
Mortgage servicing portfolio | ||
Total loans serviced | 47,810,632 | 39,709,945 |
Amount subserviced for the Company | 330,768 | |
Delinquent mortgage loans: | ||
30 days | 349,859 | 302,091 |
60 days | 136,924 | 135,777 |
90 days or more - Not in foreclosure | 788,410 | 1,057,973 |
90 days or more - In foreclosure | 1,180,014 | 1,544,762 |
90 days or more - Foreclosed | 542,031 | 533,067 |
Total delinquent mortgage loans | 2,997,238 | 3,573,670 |
Custodial funds managed by the Company | 502,751 | 388,498 |
Contract servicing and subservicing | Affiliated entities | ||
Mortgage servicing portfolio | ||
Total loans serviced, excluding loans held for sale | $ 47,810,632 | $ 39,709,945 |
Loan Sales and Servicing Acti84
Loan Sales and Servicing Activities - Geographical distriubtion of loans (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Loan Sales and Servicing Activities | ||
Total loans serviced | $ 160,272,718 | $ 105,980,049 |
California | ||
Loan Sales and Servicing Activities | ||
Total loans serviced | 39,007,363 | 33,751,630 |
Texas | ||
Loan Sales and Servicing Activities | ||
Total loans serviced | 12,191,722 | 6,954,778 |
Virginia | ||
Loan Sales and Servicing Activities | ||
Total loans serviced | 9,816,114 | 6,360,171 |
Florida | ||
Loan Sales and Servicing Activities | ||
Total loans serviced | 9,709,940 | 5,573,215 |
Maryland | ||
Loan Sales and Servicing Activities | ||
Total loans serviced | 6,151,945 | |
Washington | ||
Loan Sales and Servicing Activities | ||
Total loans serviced | 3,830,587 | |
All other states | ||
Loan Sales and Servicing Activities | ||
Total loans serviced | $ 83,395,634 | $ 49,509,668 |
Netting of Financial Instrume85
Netting of Financial Instruments - Offsetting of derivative assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivatives subject to master netting arrangements: | ||
Gross amounts of recognized assets | $ 12,937 | $ 12,911 |
Gross amounts offset in the consolidated balance sheet | (8,542) | (7,807) |
Net amounts of assets presented in the consolidated balance sheet | 4,395 | 5,104 |
Total | ||
Gross amounts of recognized assets | 58,822 | 46,264 |
Net amounts of assets presented in the balance sheet | 50,280 | 38,457 |
Margin Deposits | ||
Total | ||
Gross amounts of recognized assets | 1,238 | 2,891 |
MBS put options | ||
Derivatives subject to master netting arrangements: | ||
Gross amounts of recognized assets | 404 | 476 |
Net amounts of assets presented in the consolidated balance sheet | 404 | 476 |
Forward contracts | Purchases | ||
Derivatives subject to master netting arrangements: | ||
Gross amounts of recognized assets | 4,181 | 9,060 |
Net amounts of assets presented in the consolidated balance sheet | 4,181 | 9,060 |
Forward contracts | Sales | ||
Derivatives subject to master netting arrangements: | ||
Gross amounts of recognized assets | 4,965 | 320 |
Net amounts of assets presented in the consolidated balance sheet | 4,965 | 320 |
Interest rate lock commitments | ||
Derivatives not subject to master netting arrangements | ||
Gross amounts of recognized assets | 45,885 | 33,353 |
Total | ||
Net amounts of assets presented in the balance sheet | 45,885 | 33,353 |
Put options on interest rate futures | ||
Derivatives subject to master netting arrangements: | ||
Gross amounts of recognized assets | 1,832 | 862 |
Net amounts of assets presented in the consolidated balance sheet | 1,832 | 862 |
Call options on interest rate futures | ||
Derivatives subject to master netting arrangements: | ||
Gross amounts of recognized assets | 1,555 | 2,193 |
Net amounts of assets presented in the consolidated balance sheet | $ 1,555 | $ 2,193 |
Netting of Financial Instrume86
Netting of Financial Instruments - Derivative assets, financial assets, and collateral held by counterparty (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Total | ||
Net amounts of assets presented in the balance sheet | $ 50,280 | $ 38,457 |
Net amount | 50,280 | 38,457 |
RJ O'Brien | ||
Total | ||
Net amounts of assets presented in the balance sheet | 2,246 | 2,005 |
Net amount | 2,246 | 2,005 |
Jefferies & Co. | ||
Total | ||
Net amounts of assets presented in the balance sheet | 888 | 764 |
Net amount | 888 | 764 |
Nomura | ||
Total | ||
Net amounts of assets presented in the balance sheet | 322 | |
Net amount | 322 | |
Fannie Mae | ||
Total | ||
Net amounts of assets presented in the balance sheet | 453 | |
Net amount | 453 | |
Wells Fargo Bank, N.A. | ||
Total | ||
Net amounts of assets presented in the balance sheet | 53 | 379 |
Net amount | 53 | 379 |
Goldman Sachs | ||
Total | ||
Net amounts of assets presented in the balance sheet | 471 | 600 |
Net amount | 471 | 600 |
JP Morgan | ||
Total | ||
Net amounts of assets presented in the balance sheet | 526 | |
Net amount | 526 | |
Other | ||
Total | ||
Net amounts of assets presented in the balance sheet | 284 | 508 |
Net amount | 284 | 508 |
Interest rate lock commitments | ||
Total | ||
Net amounts of assets presented in the balance sheet | 45,885 | 33,353 |
Net amount | $ 45,885 | $ 33,353 |
Netting of Financial Instrume87
Netting of Financial Instruments - Offsetting of derivative and financial liabilites (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Derivatives: Subject to a master netting arrangement: | |||||||||
Gross amounts of recognized liabilities | $ 16,751 | $ 16,259 | |||||||
Netting | (9,780) | (10,698) | |||||||
Net amounts of liabilities presented in the balance sheet | 6,971 | 5,561 | |||||||
Total | |||||||||
Gross amounts of recognized liabilities | 18,863 | 17,211 | |||||||
Net amounts of liabilities presented in the consolidated balance sheet | 9,083 | 6,513 | |||||||
Mortgage loans sold under agreements to repurchase | |||||||||
Net amounts of liabilities presented in the consolidated balance sheet | 1,167,405 | ||||||||
Debt Issuance Costs | |||||||||
Debt issuance costs | (674) | ||||||||
Gross amounts of recognized liabilities | 1,166,731 | 822,252 | |||||||
Net amount of liabilities in the consolidated balance sheet | 1,166,731 | 822,252 | $ 1,286,411 | $ 1,263,248 | $ 992,187 | $ 929,747 | $ 825,267 | $ 567,737 | |
Total | |||||||||
Gross amounts of recognized liabilities | 1,185,594 | 839,463 | |||||||
Gross amounts offset in the consolidated balance sheet | (9,780) | (10,698) | |||||||
Net amounts of liabilities presented in the consolidated balance sheet | 1,176,488 | 829,134 | |||||||
Net amount of liabilities in the consolidated balance sheet | 9,083 | 6,513 | |||||||
Receivable from Counterparties | |||||||||
Total | |||||||||
Net amounts of liabilities presented in the consolidated balance sheet | 1,175,814 | 828,765 | |||||||
Assets sold under agreements to repurchase | |||||||||
Mortgage loans sold under agreements to repurchase | |||||||||
Gross amounts of recognized liabilities | 1,167,405 | 822,621 | |||||||
Net amounts of liabilities presented in the consolidated balance sheet | 1,167,405 | 822,621 | $ 471,592 | ||||||
Debt Issuance Costs | |||||||||
Debt issuance costs, gross | (674) | (369) | |||||||
Debt issuance costs | (674) | (369) | (88) | ||||||
Net amount of liabilities in the consolidated balance sheet | 1,166,731 | 822,252 | $ 471,504 | ||||||
Forward contracts | Purchases | |||||||||
Derivatives: Subject to a master netting arrangement: | |||||||||
Gross amounts of recognized liabilities | 9,004 | 141 | |||||||
Net amounts of liabilities presented in the balance sheet | 9,004 | 141 | |||||||
Forward contracts | Sales | |||||||||
Derivatives: Subject to a master netting arrangement: | |||||||||
Gross amounts of recognized liabilities | 7,497 | 16,110 | |||||||
Net amounts of liabilities presented in the balance sheet | 7,497 | 16,110 | |||||||
Interest rate lock commitments | |||||||||
Derivatives not subject to a master netting arrangement | |||||||||
Gross amounts of recognized liabilities | 2,112 | 952 | |||||||
Total | |||||||||
Net amounts of liabilities presented in the consolidated balance sheet | 2,112 | 952 | |||||||
Total | |||||||||
Net amounts of liabilities presented in the consolidated balance sheet | 2,112 | 952 | |||||||
Net amount of liabilities in the consolidated balance sheet | 2,112 | 952 | |||||||
Put options on interest rate futures | Purchases | |||||||||
Derivatives: Subject to a master netting arrangement: | |||||||||
Gross amounts of recognized liabilities | 203 | ||||||||
Net amounts of liabilities presented in the balance sheet | 203 | ||||||||
Put options on interest rate futures | Sales | |||||||||
Derivatives: Subject to a master netting arrangement: | |||||||||
Gross amounts of recognized liabilities | 8 | ||||||||
Net amounts of liabilities presented in the balance sheet | $ 8 | ||||||||
Call options on interest rate futures | Purchases | |||||||||
Derivatives: Subject to a master netting arrangement: | |||||||||
Gross amounts of recognized liabilities | 47 | ||||||||
Net amounts of liabilities presented in the balance sheet | $ 47 |
Netting of Financial Instrume88
Netting of Financial Instruments - Derivative liabilites, financial liabilities, and collateral held by counterparty (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | $ 1,176,488 | $ 829,134 |
Financial instruments | (1,167,405) | (822,621) |
Net amount of liabilities in the consolidated balance sheet | 9,083 | 6,513 |
Credit Suisse First Boston Mortgage Capital LLC | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 795,179 | 464,737 |
Financial instruments | (794,470) | (463,541) |
Net amount of liabilities in the consolidated balance sheet | 709 | 1,196 |
Bank of America, N.A. | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 271,130 | 236,909 |
Financial instruments | (269,510) | (236,771) |
Net amount of liabilities in the consolidated balance sheet | 1,620 | 138 |
Morgan Stanley Bank | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 49,763 | 122,148 |
Financial instruments | (49,521) | (122,031) |
Net amount of liabilities in the consolidated balance sheet | 242 | 117 |
Citibank, N.A. | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 55,948 | 699 |
Financial instruments | (53,904) | (278) |
Net amount of liabilities in the consolidated balance sheet | 2,044 | 421 |
Bank of Oklahoma | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 135 | 486 |
Net amount of liabilities in the consolidated balance sheet | 135 | 486 |
BNP Paribas | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 738 | |
Net amount of liabilities in the consolidated balance sheet | 738 | |
JP Morgan | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 672 | |
Net amount of liabilities in the consolidated balance sheet | 672 | |
Bank of NY Mellon | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 154 | 1,552 |
Net amount of liabilities in the consolidated balance sheet | 154 | 1,552 |
Other | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 657 | 1,651 |
Net amount of liabilities in the consolidated balance sheet | 657 | 1,651 |
Interest rate lock commitments | ||
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheet | 2,112 | 952 |
Net amount of liabilities in the consolidated balance sheet | $ 2,112 | $ 952 |
Fair Value - Financial Statemen
Fair Value - Financial Statement Items Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Fair value | |||||||||
Interest rate threshold used in determination of accounting for loans underlying mortgage servicing rights (as a percent) | 4.50% | ||||||||
Assets: | |||||||||
Short-term investments at fair value | $ 46,319 | $ 21,687 | |||||||
Mortgage loans held for sale at fair value | 1,101,204 | $ 1,696,980 | $ 1,594,262 | $ 1,353,944 | 1,147,884 | $ 1,259,991 | $ 1,000,415 | $ 717,476 | |
Derivative assets: | |||||||||
Derivative asset, before netting | 58,822 | 46,264 | |||||||
Netting | (8,542) | (7,807) | |||||||
Total derivative assets | 50,280 | 38,457 | |||||||
Investment in PennyMac Mortgage Investment Trust | 1,145 | 1,582 | |||||||
Mortgage servicing rights at fair value | 660,247 | 325,383 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 18,863 | 17,211 | |||||||
Netting | (9,780) | (10,698) | |||||||
Total derivative liabilities | 9,083 | 6,513 | |||||||
Mortgage servicing liabilities | 1,399 | 6,306 | |||||||
PMT | |||||||||
Derivative assets: | |||||||||
Investment in PennyMac Mortgage Investment Trust | 1,145 | 1,582 | $ 1,722 | ||||||
Recurring basis | |||||||||
Assets: | |||||||||
Short-term investments at fair value | 46,319 | 21,687 | |||||||
Mortgage loans held for sale at fair value | 1,101,204 | 1,147,884 | |||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 58,822 | 46,264 | |||||||
Netting | (8,542) | (7,807) | |||||||
Total derivative assets | 50,280 | 38,457 | |||||||
Mortgage servicing rights at fair value | 660,247 | 325,383 | |||||||
Total assets | 1,859,195 | 1,534,993 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 18,863 | 17,211 | |||||||
Netting | (9,780) | (10,698) | |||||||
Total derivative liabilities | 9,083 | 6,513 | |||||||
Mortgage servicing liabilities | 1,399 | 6,306 | |||||||
Total liabilities | 422,907 | 203,985 | |||||||
Recurring basis | PMT | |||||||||
Derivative assets: | |||||||||
Investment in PennyMac Mortgage Investment Trust | 1,145 | 1,582 | |||||||
Derivative liabilities: | |||||||||
Excess servicing spread financing at fair value to affiliate | 412,425 | 191,166 | |||||||
Recurring basis | Interest rate lock commitments | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 45,885 | 33,353 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 2,112 | 952 | |||||||
Recurring basis | Forward contracts | Purchases | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 4,181 | 9,060 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 9,004 | 141 | |||||||
Recurring basis | Forward contracts | Sales | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 4,965 | 320 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 7,497 | 16,110 | |||||||
Recurring basis | MBS put options | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 404 | 476 | |||||||
Recurring basis | Put options on interest rate futures | Purchases | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 1,832 | 862 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 203 | ||||||||
Recurring basis | Put options on interest rate futures | Sales | |||||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | (8) | ||||||||
Recurring basis | Call options on interest rate futures | Purchases | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 1,555 | 2,193 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 47 | ||||||||
Recurring basis | Level 1 | |||||||||
Assets: | |||||||||
Short-term investments at fair value | 46,319 | 21,687 | |||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 3,387 | 3,055 | |||||||
Total derivative assets | 3,387 | 3,055 | |||||||
Total assets | 50,851 | 26,324 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 250 | 8 | |||||||
Total derivative liabilities | 250 | 8 | |||||||
Total liabilities | 250 | 8 | |||||||
Recurring basis | Level 1 | PMT | |||||||||
Derivative assets: | |||||||||
Investment in PennyMac Mortgage Investment Trust | 1,145 | 1,582 | |||||||
Recurring basis | Level 1 | Put options on interest rate futures | Purchases | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 1,832 | 862 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 203 | ||||||||
Recurring basis | Level 1 | Put options on interest rate futures | Sales | |||||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | (8) | ||||||||
Recurring basis | Level 1 | Call options on interest rate futures | Purchases | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 1,555 | 2,193 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 47 | ||||||||
Recurring basis | Level 2 | |||||||||
Assets: | |||||||||
Mortgage loans held for sale at fair value | 1,052,673 | 937,976 | |||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 9,550 | 9,856 | |||||||
Total derivative assets | 9,550 | 9,856 | |||||||
Total assets | 1,062,223 | 947,832 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 16,501 | 16,251 | |||||||
Total derivative liabilities | 16,501 | 16,251 | |||||||
Total liabilities | 16,501 | 16,251 | |||||||
Recurring basis | Level 2 | Forward contracts | Purchases | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 4,181 | 9,060 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 9,004 | 141 | |||||||
Recurring basis | Level 2 | Forward contracts | Sales | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 4,965 | 320 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 7,497 | 16,110 | |||||||
Recurring basis | Level 2 | MBS put options | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 404 | 476 | |||||||
Recurring basis | Level 3 | |||||||||
Assets: | |||||||||
Mortgage loans held for sale at fair value | 48,531 | 209,908 | |||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 45,885 | 33,353 | |||||||
Total derivative assets | 45,885 | 33,353 | |||||||
Mortgage servicing rights at fair value | 660,247 | 325,383 | |||||||
Total assets | 754,663 | 568,644 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | 2,112 | 952 | |||||||
Total derivative liabilities | 2,112 | 952 | |||||||
Mortgage servicing liabilities | 1,399 | 6,306 | |||||||
Total liabilities | 415,936 | 198,424 | |||||||
Recurring basis | Level 3 | PMT | |||||||||
Derivative liabilities: | |||||||||
Excess servicing spread financing at fair value to affiliate | 412,425 | 191,166 | |||||||
Recurring basis | Level 3 | Interest rate lock commitments | |||||||||
Derivative assets: | |||||||||
Derivative asset, before netting | 45,885 | 33,353 | |||||||
Derivative liabilities: | |||||||||
Derivative liability, before netting | $ 2,112 | $ 952 |
Fair Value - Level 3 Input Roll
Fair Value - Level 3 Input Roll Forward, Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | $ 235,607 | $ 43,738 | |
Purchases | 195,871 | ||
Repurchases of mortgage loans subject to representations and warranties | 5,529 | ||
Sales | (550) | ||
Sales of mortgage loans held for sale | $ 36,679,638 | 18,785,683 | 17,105,047 |
Repayments | (1,364) | ||
Interest rate lock commitments issued, net | 101,179 | ||
Mortgage servicing rights resulting from mortgage loan sales | 14,636 | ||
Changes in fair value included in income arising from: | |||
Other factors | (20,756) | ||
Total changes in fair value included in income | (20,756) | ||
Transfers of interest rate lock commitments to mortgage loans held for sale | (102,676) | ||
Balance at the end of the year | 235,607 | ||
Changes in fair value recognized during the period relating to assets still held at the end of the period | 1,529 | ||
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 197,472 | 138,723 | |
Issuance of excess servicing spread financing | 99,728 | ||
ESS issued pursuant to a recapture agreement with PennyMac Mortgage Investment Trust | 7,342 | ||
Accrual of interest on excess servicing spread | 13,292 | ||
Repayments | (39,256) | ||
Mortgage servicing liabilities resulting from mortgage loan sales | 1,965 | ||
Mortgage servicing liabilities resulting from mortgage loan sales | 20,442 | 1,965 | |
Changes in fair value included in income | (24,322) | ||
Balance at the end of the year | 197,472 | 138,723 | |
Changes in fair value recognized during the period relating to liability still held at the end of the period | (24,322) | ||
Excess servicing spread financing | |||
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 191,166 | 138,723 | |
Issuance of excess servicing spread financing | 99,728 | 139,028 | |
ESS issued pursuant to a recapture agreement with PennyMac Mortgage Investment Trust | 7,342 | ||
Accrual of interest on excess servicing spread | 13,292 | 1,348 | |
Repayments | (39,256) | (4,076) | |
Changes in fair value included in income | (28,663) | 2,423 | |
Balance at the end of the year | 191,166 | 138,723 | |
Changes in fair value recognized during the period relating to liability still held at the end of the period | (28,663) | 2,423 | |
Mortgage servicing liabilities | |||
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 6,306 | ||
Mortgage servicing liabilities resulting from mortgage loan sales | 1,965 | ||
Changes in fair value included in income | 4,341 | ||
Balance at the end of the year | 6,306 | ||
Changes in fair value recognized during the period relating to liability still held at the end of the period | 4,341 | ||
Mortgage loans held for sale | |||
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 3,933 | ||
Repurchases of mortgage loans subject to representations and warranties | 5,529 | ||
Repayments | (1,364) | ||
Changes in fair value included in income arising from: | |||
Other factors | (232) | ||
Total changes in fair value included in income | (232) | ||
Balance at the end of the year | 3,933 | ||
Changes in fair value recognized during the period relating to assets still held at the end of the period | (390) | ||
Interest rate lock commitments | |||
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 32,401 | 6,761 | 23,940 |
Interest rate lock commitments issued, net | 271,692 | 101,179 | |
Changes in fair value included in income arising from: | |||
Other factors | 73,068 | (15,682) | |
Total changes in fair value included in income | 73,068 | (15,682) | |
Transfers of interest rate lock commitments to mortgage loans held for sale | (333,388) | (102,676) | |
Balance at the end of the year | 43,773 | 32,401 | 6,761 |
Changes in fair value recognized during the period relating to assets still held at the end of the period | 43,773 | 6,761 | |
Mortgage servicing rights | |||
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 325,383 | 224,913 | 19,798 |
Purchases | 382,824 | 195,871 | |
Sales | (550) | ||
Mortgage servicing rights resulting from mortgage loan sales | 18,013 | 14,636 | |
Changes in fair value included in income arising from: | |||
Other factors | (65,973) | (4,842) | |
Total changes in fair value included in income | (65,973) | (4,842) | |
Balance at the end of the year | 660,247 | 325,383 | 224,913 |
Changes in fair value recognized during the period relating to assets still held at the end of the period | (65,973) | (4,842) | |
Recurring basis | |||
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 567,692 | 235,607 | |
Purchases | 1,293,948 | 1,185,318 | |
Sales | (803,424) | (588,849) | |
Repayments | (40,995) | (22,016) | |
Interest rate lock commitments issued, net | 271,692 | 181,159 | |
Mortgage servicing rights resulting from mortgage loan sales | 18,013 | 22,733 | |
Changes in fair value included in income arising from: | |||
Changes in instrument specific credit risk | 4,233 | ||
Other factors | 7,095 | (27,655) | |
Total changes in fair value included in income | 11,328 | (27,655) | |
Transfers of mortgage loans held for sale from Level 3 to Level 2 | (232,315) | (240,345) | |
Transfers of interest rate lock commitments to mortgage loans held for sale | (333,388) | (178,260) | |
Balance at the end of the year | 752,551 | 567,692 | 235,607 |
Changes in fair value recognized during the period relating to assets still held at the end of the period | (17,895) | (18,594) | |
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 197,472 | ||
Issuance of excess servicing spread financing | 271,554 | ||
ESS issued pursuant to a recapture agreement with PennyMac Mortgage Investment Trust | 6,728 | ||
Accrual of interest on excess servicing spread | 25,365 | ||
Repayments | (78,578) | ||
Mortgage servicing liabilities resulting from mortgage loan sales | 20,442 | ||
Changes in fair value included in income | (29,159) | ||
Balance at the end of the year | 413,824 | 197,472 | |
Changes in fair value recognized during the period relating to liability still held at the end of the period | (29,159) | ||
Recurring basis | Excess servicing spread financing | |||
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 191,166 | 138,723 | |
Issuance of excess servicing spread financing | 271,554 | ||
ESS issued pursuant to a recapture agreement with PennyMac Mortgage Investment Trust | 6,728 | 7,342 | |
Accrual of interest on excess servicing spread | 25,365 | 13,292 | 1,348 |
Repayments | (78,578) | (39,256) | (4,076) |
Changes in fair value included in income | (3,810) | (28,663) | 2,423 |
Balance at the end of the year | 412,425 | 191,166 | 138,723 |
Changes in fair value recognized during the period relating to liability still held at the end of the period | (3,810) | ||
Recurring basis | Mortgage servicing liabilities | |||
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 6,306 | ||
Mortgage servicing liabilities resulting from mortgage loan sales | 20,442 | ||
Changes in fair value included in income | (25,349) | ||
Balance at the end of the year | 1,399 | 6,306 | |
Changes in fair value recognized during the period relating to liability still held at the end of the period | (25,349) | ||
Recurring basis | Mortgage loans held for sale | |||
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 209,908 | 3,933 | |
Purchases | 911,124 | 1,049,838 | |
Sales | (803,424) | ||
Repayments | (40,995) | (22,016) | |
Changes in fair value included in income arising from: | |||
Changes in instrument specific credit risk | 4,233 | ||
Other factors | (3,534) | ||
Total changes in fair value included in income | 4,233 | (3,534) | |
Transfers of mortgage loans held for sale from Level 3 to Level 2 | (232,315) | (240,345) | |
Balance at the end of the year | 48,531 | 209,908 | 3,933 |
Changes in fair value recognized during the period relating to assets still held at the end of the period | 4,305 | (3,377) | |
Recurring basis | Mortgage loans held for sale | Level 3 | |||
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Sales of mortgage loans held for sale | (577,968) | ||
Recurring basis | Interest rate lock commitments | |||
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 32,401 | 6,761 | |
Interest rate lock commitments issued, net | 181,159 | ||
Changes in fair value included in income arising from: | |||
Other factors | 22,741 | ||
Total changes in fair value included in income | 22,741 | ||
Transfers of interest rate lock commitments to mortgage loans held for sale | (178,260) | ||
Balance at the end of the year | 32,401 | 6,761 | |
Changes in fair value recognized during the period relating to assets still held at the end of the period | 32,401 | ||
Recurring basis | Mortgage servicing rights | |||
Roll forward of assets measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | $ 325,383 | 224,913 | |
Purchases | 135,480 | ||
Sales | (10,881) | ||
Mortgage servicing rights resulting from mortgage loan sales | 22,733 | ||
Changes in fair value included in income arising from: | |||
Other factors | (46,862) | ||
Total changes in fair value included in income | (46,862) | ||
Balance at the end of the year | 325,383 | $ 224,913 | |
Changes in fair value recognized during the period relating to assets still held at the end of the period | $ (47,618) |
Fair Value - Changes in Fair Va
Fair Value - Changes in Fair Value, Fair Value Option, Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Liabilities. | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | $ 29,159 | $ 24,322 | $ (2,423) |
Liabilities. | Net loan servicing fees | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 29,159 | 24,322 | (2,423) |
Excess servicing spread financing | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 3,810 | 28,663 | (2,423) |
Excess servicing spread financing | Net loan servicing fees | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 3,810 | 28,663 | (2,423) |
Mortgage servicing liabilities | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 25,349 | (4,341) | |
Mortgage servicing liabilities | Net loan servicing fees | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 25,349 | (4,341) | |
Assets | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 306,166 | 210,107 | 44,717 |
Assets | Net gains on mortgage loans held for sale at fair value | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 372,139 | 264,312 | 49,559 |
Assets | Net loan servicing fees | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | (65,973) | (54,205) | (4,842) |
Mortgage loans held for sale | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 372,139 | 264,312 | 49,559 |
Mortgage loans held for sale | Net gains on mortgage loans held for sale at fair value | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | 372,139 | 264,312 | 49,559 |
Mortgage servicing rights at fair value | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | (65,973) | (54,205) | (4,842) |
Mortgage servicing rights at fair value | Net loan servicing fees | |||
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value | |||
Total gains (losses) from changes in estimated fair values included in earnings | $ (65,973) | $ (54,205) | $ (4,842) |
Fair Value - Fair Value Option
Fair Value - Fair Value Option Maturities, Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
Fair value | ||||||||
Total fair value | $ 1,101,204 | $ 1,696,980 | $ 1,594,262 | $ 1,353,944 | $ 1,147,884 | $ 1,259,991 | $ 1,000,415 | $ 717,476 |
Recurring basis | ||||||||
Fair value | ||||||||
Total fair value | 1,101,204 | 1,147,884 | ||||||
Mortgage loans held for sale | ||||||||
Fair value | ||||||||
Current through 89 days delinquent | 1,068,548 | 950,697 | ||||||
Not in foreclosure | 26,399 | 126,171 | ||||||
In foreclosure | 6,257 | 71,016 | ||||||
Total fair value | 1,101,204 | 1,147,884 | ||||||
Principal amount due upon maturity | ||||||||
Current through 89 days delinquent | 1,016,314 | 894,924 | ||||||
Not in foreclosure | 26,999 | 128,533 | ||||||
In foreclosure | 6,598 | 72,039 | ||||||
Total principal amount due upon maturity | 1,049,911 | 1,095,496 | ||||||
Difference | ||||||||
Current through 89 days delinquent | 52,234 | 55,773 | ||||||
Not in foreclosure | (600) | (2,362) | ||||||
In foreclosure | (341) | (1,023) | ||||||
Total difference | $ 51,293 | $ 52,388 |
Fair Value - Measurement Basis,
Fair Value - Measurement Basis, Nonrecurring (Details) - Nonrecurring basis - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Financial statement items measured at fair value on a nonrecurring basis | |||
Mortgage servicing rights at lower of amortized cost or fair value | $ 202,991 | $ 139,505 | |
Total assets | 202,991 | 139,505 | |
Total gains (losses) on assets measured at estimated fair values on a nonrecurring basis | |||
Mortgage servicing rights at lower of amortized cost or fair value | (37,437) | (5,178) | $ (1,644) |
Total gains on assets measured at estimated fair values on a nonrecurring basis | (37,437) | (5,178) | $ (1,644) |
Level 3 | |||
Financial statement items measured at fair value on a nonrecurring basis | |||
Mortgage servicing rights at lower of amortized cost or fair value | 202,991 | 139,505 | |
Total assets | $ 202,991 | $ 139,505 |
Fair Value - Level 3 Unobservab
Fair Value - Level 3 Unobservable Inputs, Mortgage Loans and IRLC (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Mortgage loans held for sale | Minimum | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Discount rate (as a percent) | 2.30% | |
Twelve-month projected housing price index change (as a percent) | 4.20% | |
Prepayment / resale speed (1) | 1.30% | |
Total prepayment speed (as a percent) | 2.10% | |
Mortgage loans held for sale | Maximum | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Discount rate (as a percent) | 9.60% | |
Twelve-month projected housing price index change (as a percent) | 5.40% | |
Prepayment / resale speed (1) | 15.50% | |
Total prepayment speed (as a percent) | 38.10% | |
Mortgage loans held for sale | Weighted average | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Discount rate (as a percent) | 2.40% | |
Twelve-month projected housing price index change (as a percent) | 4.50% | |
Prepayment / resale speed (1) | 15.10% | |
Total prepayment speed (as a percent) | 35.70% | |
Mortgage loans held for sale | Level 3 | Minimum | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Discount rate (as a percent) | 2.50% | |
Twelve-month projected housing price index change (as a percent) | 1.80% | |
Prepayment / resale speed (1) | 0.60% | |
Total prepayment speed (as a percent) | 0.70% | |
Mortgage loans held for sale | Level 3 | Maximum | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Discount rate (as a percent) | 9.10% | |
Twelve-month projected housing price index change (as a percent) | 5.00% | |
Prepayment / resale speed (1) | 20.10% | |
Total prepayment speed (as a percent) | 37.60% | |
Mortgage loans held for sale | Level 3 | Weighted average | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Discount rate (as a percent) | 2.80% | |
Twelve-month projected housing price index change (as a percent) | 3.70% | |
Prepayment / resale speed (1) | 16.60% | |
Total prepayment speed (as a percent) | 30.90% | |
Interest rate lock commitments | Level 3 | Minimum | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Pull-through rate (as a percent) | 54.10% | 55.40% |
Mortgage servicing rights value expressed as: Servicing fee multiple | 1 | 2 |
Mortgage servicing rights value expressed as: Percentage of unpaid principal balance | 0.20% | 0.40% |
Interest rate lock commitments | Level 3 | Maximum | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Pull-through rate (as a percent) | 100.00% | 99.90% |
Mortgage servicing rights value expressed as: Servicing fee multiple | 5.8 | 5 |
Mortgage servicing rights value expressed as: Percentage of unpaid principal balance | 3.80% | 3.10% |
Interest rate lock commitments | Level 3 | Weighted average | ||
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items | ||
Pull-through rate (as a percent) | 90.10% | 85.50% |
Mortgage servicing rights value expressed as: Servicing fee multiple | 4.4 | 3.7 |
Mortgage servicing rights value expressed as: Percentage of unpaid principal balance | 1.50% | 1.20% |
Fair Value - Level 3 Unobserv95
Fair Value - Level 3 Unobservable Inputs, Mortgage Servicing Rights - Initial Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
MSR and pool characteristics | |||
Amount recognized | $ 14,636 | ||
Mortgage servicing rights | |||
MSR and pool characteristics | |||
Amount recognized | $ 18,013 | 14,636 | |
Mortgage servicing rights | Initial recognition | Fair values | Level 3 | |||
MSR and pool characteristics | |||
Amount recognized | 18,013 | $ 24,698 | 14,636 |
Unpaid principal balance of underlying mortgage loans | $ 1,463,150 | $ 1,982,505 | $ 1,055,797 |
Weighted-average servicing fee rate (as a percent) | 33.00% | 33.00% | 33.00% |
Mortgage servicing rights | Initial recognition | Fair values | Level 3 | Minimum | |||
Inputs: | |||
Pricing spread (as a percent) | 7.00% | 7.80% | 7.40% |
Annual total prepayment speed (as a percent) | 1.90% | 7.60% | 7.80% |
Life (in years) | 1 year 1 month 6 days | 1 year 6 months | 2 years 6 months |
Annual per-loan cost of servicing | $ 59 | $ 53 | $ 68 |
Mortgage servicing rights | Initial recognition | Fair values | Level 3 | Maximum | |||
Inputs: | |||
Pricing spread (as a percent) | 14.40% | 16.20% | 14.40% |
Annual total prepayment speed (as a percent) | 62.40% | 46.10% | 25.50% |
Life (in years) | 12 years 3 months 18 days | 7 years 6 months | 7 years 3 months 18 days |
Annual per-loan cost of servicing | $ 101 | $ 100 | $ 120 |
Mortgage servicing rights | Initial recognition | Fair values | Level 3 | Weighted average | |||
Inputs: | |||
Pricing spread (as a percent) | 9.30% | 11.40% | 10.20% |
Annual total prepayment speed (as a percent) | 11.80% | 9.30% | 9.20% |
Life (in years) | 6 years 6 months | 6 years 10 months 24 days | 6 years 10 months 24 days |
Annual per-loan cost of servicing | $ 77 | $ 86 | $ 98 |
Mortgage servicing rights | Initial recognition | Amortized cost | Level 3 | |||
MSR and pool characteristics | |||
Amount recognized | 454,840 | 185,152 | 190,469 |
Unpaid principal balance of underlying mortgage loans | $ 32,849,718 | $ 15,362,240 | $ 15,316,315 |
Weighted-average servicing fee rate (as a percent) | 34.00% | 31.00% | 29.00% |
Mortgage servicing rights | Initial recognition | Amortized cost | Level 3 | Minimum | |||
Inputs: | |||
Pricing spread (as a percent) | 6.80% | 6.80% | 5.40% |
Annual total prepayment speed (as a percent) | 2.50% | 7.60% | 7.60% |
Life (in years) | 1 year 3 months 18 days | 1 year 4 months 24 days | 1 year 6 months |
Annual per-loan cost of servicing | $ 59 | $ 53 | $ 68 |
Mortgage servicing rights | Initial recognition | Amortized cost | Level 3 | Maximum | |||
Inputs: | |||
Pricing spread (as a percent) | 16.20% | 15.70% | 15.90% |
Annual total prepayment speed (as a percent) | 50.00% | 47.80% | 42.50% |
Life (in years) | 12 years | 7 years 6 months | 7 years 6 months |
Annual per-loan cost of servicing | $ 95 | $ 100 | $ 120 |
Mortgage servicing rights | Initial recognition | Amortized cost | Level 3 | Weighted average | |||
Inputs: | |||
Pricing spread (as a percent) | 9.20% | 10.80% | 8.50% |
Annual total prepayment speed (as a percent) | 8.90% | 8.30% | 8.80% |
Life (in years) | 7 years 2 months 12 days | 7 years | 6 years 8 months 12 days |
Annual per-loan cost of servicing | $ 78 | $ 84 | $ 102 |
Fair Value - Level 3 Unobserv96
Fair Value - Level 3 Unobservable Inputs, Mortgage Services Rights, Effect of Change In Inputs on Fair Value (Details) - Mortgage servicing rights - Year end - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair values | ||
MSR and pool characteristics | ||
Carrying value | $ 660,247 | $ 325,383 |
Unpaid principal balance of underlying mortgage loans | $ 54,182,477 | $ 30,945,000 |
Weighted-average note interest rate (as a percent) | 4.13% | 4.24% |
Weighted-average servicing fee rate (as a percent) | 32.00% | 31.00% |
Pricing spread | ||
Effect on fair value of 5% adverse change | $ (11,115) | $ (5,550) |
Effect on fair value of 10% adverse change | (21,857) | (10,908) |
Effect on fair value of 20% adverse change | (42,283) | (21,084) |
Prepayment speed | ||
Effect on fair value of 5% adverse change | (12,475) | (7,052) |
Effect on fair value of 10% adverse change | (24,499) | (13,835) |
Effect on fair value of 20% adverse change | (47,286) | (26,654) |
Annual per-loan cost of servicing | ||
Effect on fair value of 5% adverse change | (6,812) | (2,910) |
Effect on fair value of 10% adverse change | (13,624) | (5,819) |
Effect on fair value of 20% adverse change | $ (27,247) | $ (11,638) |
Fair values | Minimum | ||
Inputs | ||
Pricing spread (as a percent) | 7.20% | 2.90% |
Pricing spread | ||
Average life of MSRs (in years) | 1 year 10 months 24 days | 4 months 24 days |
Prepayment speed of MSRs (as a percent) | 5.30% | 7.60% |
Prepayment speed | ||
Annual per-loan cost of servicing | $ 68 | $ 59 |
Fair values | Maximum | ||
Inputs | ||
Pricing spread (as a percent) | 14.10% | 21.30% |
Pricing spread | ||
Average life of MSRs (in years) | 9 years | 8 years 2 months 12 days |
Prepayment speed of MSRs (as a percent) | 43.80% | 60.50% |
Prepayment speed | ||
Annual per-loan cost of servicing | $ 97 | $ 109 |
Fair values | Weighted average | ||
Inputs | ||
Pricing spread (as a percent) | 8.90% | 9.20% |
Pricing spread | ||
Average life of MSRs (in years) | 6 years 10 months 24 days | 5 years 9 months 18 days |
Prepayment speed of MSRs (as a percent) | 9.70% | 11.20% |
Prepayment speed | ||
Annual per-loan cost of servicing | $ 86 | $ 76 |
Amortized cost | ||
MSR and pool characteristics | ||
Carrying value | 405,445 | |
Unpaid principal balance of underlying mortgage loans | $ 33,745,613 | |
Weighted-average note interest rate (as a percent) | 3.82% | |
Weighted-average servicing fee rate (as a percent) | 30.00% | |
Pricing spread | ||
Effect on fair value of 5% adverse change | $ (8,710) | |
Effect on fair value of 10% adverse change | (17,083) | |
Effect on fair value of 20% adverse change | (32,890) | |
Prepayment speed | ||
Effect on fair value of 5% adverse change | (7,359) | |
Effect on fair value of 10% adverse change | (14,494) | |
Effect on fair value of 20% adverse change | (28,132) | |
Annual per-loan cost of servicing | ||
Effect on fair value of 5% adverse change | (2,992) | |
Effect on fair value of 10% adverse change | (5,983) | |
Effect on fair value of 20% adverse change | $ (11,967) | |
Amortized cost | Minimum | ||
Inputs | ||
Pricing spread (as a percent) | 7.20% | 6.30% |
Pricing spread | ||
Average life of MSRs (in years) | 1 year 9 months 18 days | 1 year 7 months 6 days |
Prepayment speed of MSRs (as a percent) | 5.70% | 7.60% |
Prepayment speed | ||
Annual per-loan cost of servicing | $ 68 | $ 59 |
Amortized cost | Maximum | ||
MSR and pool characteristics | ||
Carrying value | 751,688 | |
Unpaid principal balance of underlying mortgage loans | $ 56,420,227 | |
Weighted-average note interest rate (as a percent) | 3.83% | |
Weighted-average servicing fee rate (as a percent) | 32.00% | |
Inputs | ||
Pricing spread (as a percent) | 12.80% | 15.30% |
Pricing spread | ||
Effect on fair value of 5% adverse change | $ (13,467) | |
Effect on fair value of 10% adverse change | (26,472) | |
Effect on fair value of 20% adverse change | $ (51,183) | |
Average life of MSRs (in years) | 9 years 1 month 6 days | 7 years 3 months 18 days |
Prepayment speed of MSRs (as a percent) | 46.70% | 42.80% |
Prepayment speed | ||
Effect on fair value of 5% adverse change | $ (14,360) | |
Effect on fair value of 10% adverse change | (28,197) | |
Effect on fair value of 20% adverse change | (54,406) | |
Annual per-loan cost of servicing | 95 | $ 81 |
Annual per-loan cost of servicing | ||
Effect on fair value of 5% adverse change | (5,725) | |
Effect on fair value of 10% adverse change | (11,451) | |
Effect on fair value of 20% adverse change | $ (22,901) | |
Amortized cost | Weighted average | ||
Inputs | ||
Pricing spread (as a percent) | 8.90% | 9.70% |
Pricing spread | ||
Average life of MSRs (in years) | 7 years 4 months 24 days | 6 years 9 months 18 days |
Prepayment speed of MSRs (as a percent) | 9.50% | 8.50% |
Prepayment speed | ||
Annual per-loan cost of servicing | $ 84 | $ 75 |
Fair Value - Level 3 Unobserv97
Fair Value - Level 3 Unobservable Inputs, ESS (Details) - Excess servicing spread financing - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Quantitative summary of key inputs used in the valuation and the effect on estimated fair value from adverse changes in those assumptions | ||
Carrying value | $ 412,425 | $ 191,166 |
Unpaid principal balance of underlying mortgage loans | $ 51,966,405 | $ 28,227,340 |
Average servicing fee rate (as a percent) | 32.00% | 31.00% |
Average excess servicing spread (as a percent) | 17.00% | 16.00% |
Minimum | ||
Quantitative summary of key inputs used in the valuation and the effect on estimated fair value from adverse changes in those assumptions | ||
Pricing spread (as a percent) | 4.80% | 1.70% |
Average life of ESS (in years) | 1 year 4 months 24 days | 4 months 24 days |
Annualized prepayment speed of ESS (as a percent) | 5.20% | 7.60% |
Maximum | ||
Quantitative summary of key inputs used in the valuation and the effect on estimated fair value from adverse changes in those assumptions | ||
Pricing spread (as a percent) | 6.50% | 12.00% |
Average life of ESS (in years) | 9 years | 7 years 3 months 18 days |
Annualized prepayment speed of ESS (as a percent) | 52.40% | 74.60% |
Weighted average | ||
Quantitative summary of key inputs used in the valuation and the effect on estimated fair value from adverse changes in those assumptions | ||
Pricing spread (as a percent) | 5.70% | 5.30% |
Average life of ESS (in years) | 6 years 10 months 24 days | 5 years 9 months 18 days |
Annualized prepayment speed of ESS (as a percent) | 9.60% | 11.20% |
Mortgage Loans Held for Sale 98
Mortgage Loans Held for Sale at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
Mortgage Loans Held for Sale at Fair Value | ||||||||
Mortgage loans held for sale at fair value | $ 1,101,204 | $ 1,696,980 | $ 1,594,262 | $ 1,353,944 | $ 1,147,884 | $ 1,259,991 | $ 1,000,415 | $ 717,476 |
Fair value of mortgage loans pledged to secure mortgage loans sold under agreements to repurchase | 833,748 | 976,772 | ||||||
Fair value of mortgage loans pledged to secure mortgage loan participation and sale agreement | 245,741 | 148,133 | ||||||
Pledged Assets Separately Reported, Loans Pledged as Collateral, at Fair Value, Total | 1,079,489 | 1,124,905 | ||||||
Government-insured or guaranteed | ||||||||
Mortgage Loans Held for Sale at Fair Value | ||||||||
Mortgage loans held for sale at fair value | 992,805 | 866,148 | ||||||
Conventional mortgage loans | ||||||||
Mortgage Loans Held for Sale at Fair Value | ||||||||
Mortgage loans held for sale at fair value | 59,868 | 66,229 | ||||||
Jumbo Loan | ||||||||
Mortgage Loans Held for Sale at Fair Value | ||||||||
Mortgage loans held for sale at fair value | 5,599 | |||||||
Mortgage loans purchased from Ginnie Mae pools serviced by the entity | ||||||||
Mortgage Loans Held for Sale at Fair Value | ||||||||
Mortgage loans held for sale at fair value | 42,600 | 206,331 | ||||||
Mortgage loans repurchased pursuant to representations and warranties | ||||||||
Mortgage Loans Held for Sale at Fair Value | ||||||||
Mortgage loans held for sale at fair value | $ 5,931 | $ 3,577 |
Derivative Financial Instrume99
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative assets: | |||||
Derivative asset, before netting | $ 58,822 | $ 46,264 | |||
Netting | (8,542) | (7,807) | |||
Total derivative assets | 50,280 | 38,457 | |||
Derivative liabilities: | |||||
Derivative liability, before netting | 18,863 | 17,211 | |||
Netting | (9,780) | (10,698) | |||
Total derivative liabilities | 9,083 | 6,513 | |||
Net gains on mortgage loans held for sale at fair value | Interest rate lock commitments and mortgage loans held for sale | |||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Gains (losses) recognized on derivative financial instruments | $ (48,960) | $ (109,771) | $ 110,267 | ||
Net loan servicing fees | Mortgage servicing rights | |||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Gains (losses) recognized on derivative financial instruments | (7,717) | 26,840 | (1,300) | ||
Margin Deposits | |||||
Derivative assets: | |||||
Derivative asset, before netting | 1,238 | 2,891 | |||
Not designated as hedging instrument | Interest rate lock commitments | |||||
Derivative Instruments | |||||
Notional amount | 1,765,597 | 1,765,597 | 3,487,366 | 1,765,597 | |
Derivative assets: | |||||
Derivative asset, before netting | 45,885 | 33,353 | |||
Derivative liabilities: | |||||
Derivative liability, before netting | 2,112 | 952 | |||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 1,765,597 | ||||
Balance end of period | 3,487,366 | 1,765,597 | |||
Not designated as hedging instrument | Forward contracts | Purchases | |||||
Derivative Instruments | |||||
Notional amount | 2,634,218 | 1,418,527 | 1,021,981 | 5,254,293 | 2,634,218 |
Derivative assets: | |||||
Derivative asset, before netting | 4,181 | 9,060 | |||
Derivative liabilities: | |||||
Derivative liability, before netting | 9,004 | 141 | |||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 2,634,218 | 1,418,527 | 1,021,981 | ||
Additions | 103,571,212 | 45,827,559 | 43,449,699 | ||
Dispositions/expirations | (100,951,137) | (44,611,868) | (43,053,153) | ||
Balance end of period | 5,254,293 | 2,634,218 | 1,418,527 | ||
Not designated as hedging instrument | Forward contracts | Sales | |||||
Derivative Instruments | |||||
Notional amount | 3,901,851 | 2,659,000 | 2,621,948 | 6,230,811 | 3,901,851 |
Derivative assets: | |||||
Derivative asset, before netting | 4,965 | 320 | |||
Derivative liabilities: | |||||
Derivative liability, before netting | 7,497 | 16,110 | |||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 3,901,851 | 2,659,000 | 2,621,948 | ||
Additions | 137,061,118 | 63,117,808 | 63,655,600 | ||
Dispositions/expirations | (134,732,158) | (61,874,957) | (63,618,548) | ||
Balance end of period | 6,230,811 | 3,901,851 | 2,659,000 | ||
Not designated as hedging instrument | MBS put options | |||||
Derivative Instruments | |||||
Notional amount | 340,000 | 185,000 | 500,000 | 1,275,000 | 340,000 |
Derivative assets: | |||||
Derivative asset, before netting | 404 | 476 | |||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 340,000 | 185,000 | 500,000 | ||
Additions | 3,902,500 | 1,730,000 | 2,520,000 | ||
Dispositions/expirations | (2,967,500) | (1,575,000) | (2,835,000) | ||
Balance end of period | 1,275,000 | 340,000 | 185,000 | ||
Not designated as hedging instrument | MBS call options | |||||
Derivative Instruments | |||||
Notional amount | 105,000 | 105,000 | |||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 105,000 | ||||
Additions | 160,000 | 590,000 | 2,205,000 | ||
Dispositions/expirations | (160,000) | (695,000) | (2,100,000) | ||
Balance end of period | $ 105,000 | ||||
Not designated as hedging instrument | Put options on interest rate futures | Purchases | |||||
Derivative Instruments | |||||
Notional amount | 755,000 | 755,000 | 1,650,000 | 755,000 | |
Derivative assets: | |||||
Derivative asset, before netting | 1,832 | 862 | |||
Derivative liabilities: | |||||
Derivative liability, before netting | 203 | ||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 755,000 | ||||
Additions | 8,790,000 | 2,997,500 | |||
Dispositions/expirations | (7,895,000) | (2,242,500) | |||
Balance end of period | 1,650,000 | 755,000 | |||
Not designated as hedging instrument | Put options on interest rate futures | Sales | |||||
Derivative Instruments | |||||
Notional amount | 50,000 | 50,000 | 50,000 | ||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 50,000 | ||||
Additions | 50,000 | 425,000 | |||
Dispositions/expirations | (100,000) | (375,000) | |||
Balance end of period | 50,000 | ||||
Not designated as hedging instrument | Call options on interest rate futures | Purchases | |||||
Derivative Instruments | |||||
Notional amount | 630,000 | 630,000 | 600,000 | 630,000 | |
Derivative assets: | |||||
Derivative asset, before netting | 1,555 | 2,193 | |||
Derivative liabilities: | |||||
Derivative liability, before netting | $ 47 | ||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 630,000 | ||||
Additions | 6,055,000 | 2,385,000 | |||
Dispositions/expirations | (6,085,000) | (1,755,000) | |||
Balance end of period | 600,000 | 630,000 | |||
Not designated as hedging instrument | Call options on interest rate futures | Sales | |||||
Derivative Instruments | |||||
Notional amount | 50,000 | 50,000 | 50,000 | ||
Derivative liabilities: | |||||
Derivative liability, before netting | $ 8 | ||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Balance at beginning of period | 50,000 | ||||
Additions | 35,100 | 1,025,000 | |||
Dispositions/expirations | $ (35,100) | (1,025,000) | |||
Balance end of period | 50,000 | ||||
Not designated as hedging instrument | Treasury future | Purchases | |||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Additions | 148,900 | ||||
Dispositions/expirations | (148,900) | ||||
Not designated as hedging instrument | Treasury future | Sales | |||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Additions | 170,600 | ||||
Dispositions/expirations | (170,600) | ||||
Not designated as hedging instrument | Eurodollar futures | Purchases | |||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Additions | 26,000 | ||||
Dispositions/expirations | (26,000) | ||||
Not designated as hedging instrument | Eurodollar futures | Sales | |||||
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value | |||||
Additions | 26,000 | ||||
Dispositions/expirations | $ (26,000) |
Mortgage Servicing Rights (Acti
Mortgage Servicing Rights (Activity in MSRs at fair value) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Activity in MSRs carried at fair value | |||
Balance at beginning of year | $ 325,383 | ||
Additions - Purchases | $ 195,871 | ||
Additions - Mortgage servicing rights resulting from mortgage loan sales | 14,636 | ||
Sales | (550) | ||
Change in fair value: | |||
Balance at end of year | 660,247 | $ 325,383 | |
Mortgage servicing rights | |||
Activity in MSRs carried at fair value | |||
Balance at beginning of year | 325,383 | 224,913 | 19,798 |
Additions - Purchases | 382,824 | 135,480 | 195,871 |
Additions - Mortgage servicing rights resulting from mortgage loan sales | 18,013 | 24,698 | 14,636 |
Additions | 400,837 | 160,178 | 210,507 |
Sales | (10,881) | (550) | |
Change in fair value: | |||
Changes in valuation inputs used in valuation model | 7,352 | (9,447) | 659 |
Other changes in fair value | (73,325) | (39,380) | (5,501) |
Total change in fair value | (65,973) | (48,827) | (4,842) |
Balance at end of year | $ 660,247 | $ 325,383 | $ 224,913 |
Mortgage Servicing Rights (A101
Mortgage Servicing Rights (Activity in MSRs carried at lower of Amortize Cost or FV) (Details) - Mortgage servicing rights - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Amortized cost: | ||||
Amortized cost at beginning of year | $ 415,245 | $ 263,373 | $ 92,155 | |
Mortgage servicing rights resulting from mortgage loan sales | 454,840 | 185,152 | 190,469 | |
Amortization | (71,160) | (33,280) | (19,251) | |
Amortized cost at end of year | 798,925 | 415,245 | 263,373 | |
Valuation allowance: | ||||
Balance at beginning of year | (9,800) | (4,622) | (2,978) | |
(Additions) reversals | (37,437) | (5,178) | (1,644) | |
Balance at end of year | (47,237) | (9,800) | (4,622) | |
Additional disclosures | ||||
Mortgage servicing rights, net | 751,688 | 405,445 | 258,751 | |
Fair value of mortgage servicing rights at end of year | 766,345 | 416,802 | 269,422 | $ 91,028 |
Fair value of mortgage servicing rights at beginning of year | 766,345 | $ 416,802 | $ 269,422 | $ 91,028 |
Estimated amortization | ||||
2,016 | 96,931 | |||
2,017 | 86,482 | |||
2,018 | 76,473 | |||
2,019 | 68,128 | |||
2,020 | 60,594 | |||
Thereafter | 410,317 | |||
Total | $ 798,925 |
Mortgage Servicing Rights (Esti
Mortgage Servicing Rights (Estimate of future amortization) (Details) - Mortgage servicing rights $ in Thousands | Dec. 31, 2015USD ($) |
Estimated amortization | |
2,016 | $ 96,931 |
2,017 | 86,482 |
2,018 | 76,473 |
2,019 | 68,128 |
2,020 | 60,594 |
Thereafter | 410,317 |
Total | $ 798,925 |
Mortgage Servicing Rights (Serv
Mortgage Servicing Rights (Servicing, late, ancillary and other fees relating to MSRs) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net servicing income | |||
Contractual servicing fees | $ 290,474 | $ 173,005 | $ 61,523 |
Ancillary and other fees | |||
Other | 43,139 | 26,469 | 11,426 |
Net mortgage loan servicing fees | 229,543 | 216,919 | 90,010 |
Mortgage servicing rights pledged to creditors | 803,560 | 583,420 | |
Mortgage servicing rights | |||
Net servicing income | |||
Contractual servicing fees | 290,474 | 173,005 | 61,523 |
Ancillary and other fees | |||
Late charges | 5,835 | 4,320 | 1,998 |
Other | 2,266 | 1,257 | 549 |
Net mortgage loan servicing fees | 298,575 | 178,582 | 64,070 |
Mortgage servicing rights pledged to creditors | $ 803,560 | $ 392,254 | $ 258,241 |
Mortgage Servicing Rights (Mort
Mortgage Servicing Rights (Mortgage servicing liabilities carried at FV) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Amortized cost: | ||
Accrual of mortgage servicing liabilities resulting from mortgage loan sales | $ 20,442 | $ 1,965 |
Mortgage servicing liabilities | ||
Amortized cost: | ||
Balance at beginning of year | 6,306 | |
Accrual of mortgage servicing liabilities resulting from mortgage loan sales | 20,442 | 1,965 |
Change in fair value | (25,349) | 4,341 |
Balance at end of year | $ 1,399 | $ 6,306 |
Carried Interest Due from In105
Carried Interest Due from Investment Funds (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Activity in the carried interest | |||
Balance at beginning of year | $ 67,298 | ||
Carried Interest recognized during the year | 2,628 | $ 6,156 | $ 13,419 |
Balance at end of year | 69,926 | 67,298 | |
Investment Funds | |||
Activity in the carried interest | |||
Balance at beginning of year | 67,298 | 61,142 | 47,723 |
Carried Interest recognized during the year | 2,628 | 6,156 | 13,419 |
Balance at end of year | $ 69,926 | $ 67,298 | $ 61,142 |
Additional disclosures | |||
Number of times when agreement will be extended | item | 3 | ||
Agreement extensions term | 1 year |
Investment in PennyMac Mortg106
Investment in PennyMac Mortgage Investment Trust at Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investment in PennyMac Mortgage Investment Trust at Fair Value | |||
Fair value of PennyMac Mortgage Investment Trust shares at year end | $ 1,145 | $ 1,582 | |
PMT | |||
Investment in PennyMac Mortgage Investment Trust at Fair Value | |||
Dividends received from PennyMac Mortgage Investment Trust | 207 | 134 | $ 216 |
Change in fair value of investment in PennyMac Mortgage Investment Trust | (437) | (140) | (175) |
Change in fair value and dividends received | (230) | (6) | 41 |
Fair value of PennyMac Mortgage Investment Trust shares at year end | $ 1,145 | $ 1,582 | $ 1,722 |
Furniture, Fixtures, Equipme107
Furniture, Fixtures, Equipment and Building Improvements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Furniture, fixtures, equipment and building improvements | |||
Property, Plant and Equipment, Net, Total | $ 16,311 | $ 11,339 | |
Furniture, fixtures, equipment and building improvements pledged to creditors | 14,034 | 0 | |
Depreciation and amortization expense | 2,423 | 1,365 | $ 824 |
Furniture, Fixtures, Equipment and Building Improvements [Member] | |||
Furniture, fixtures, equipment and building improvements | |||
Furniture, fixtures, equipment and building improvements | 26,862 | 17,740 | |
Less: accumulated depreciation and amortization | (10,551) | (6,401) | |
Property, Plant and Equipment, Net, Total | 16,311 | 11,339 | |
Depreciation and amortization expense | 4,100 | 3,100 | 1,800 |
Furniture, Fixtures, Equipment and Building Improvements [Member] | PMT | Management Fees | |||
Furniture, fixtures, equipment and building improvements | |||
Depreciation and amortization expense | $ 2,100 | $ 2,100 | $ 1,400 |
Capitalized Software (Detail)
Capitalized Software (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Capitalized Software. | |||
Cost | $ 4,920,000 | $ 2,138,000 | |
Less: Accumulated amortization | (1,895,000) | (1,571,000) | |
Capitalized Computer Software, Net, Total | 3,025,000 | 567,000 | |
Capitalized software pledged to creditors | 783,000 | 0 | |
Software amortization expense | $ 324,000 | $ 320,000 | $ 374,000 |
Borrowings (Details)
Borrowings (Details) | 12 Months Ended |
Dec. 31, 2015item | |
Short-term Debt [Line Items] | |
Number of borrowing facilities that provide for sales of mortgage loans under agreements to repurchase | 6 |
Number of facilities that provide for sale of mortgage loan participants certificates | 2 |
Number of secured note payable borrowing facilities | 1 |
Number of revolving credit agreements classified as a note payable borrowing facility | 1 |
Number of borrowing facilities classified as obligations under capital lease | 1 |
Assets sold under agreements to repurchase | Overnight cost-of funds rate | |
Short-term Debt [Line Items] | |
Number of borrowing facilities that provide for sales of mortgage loans under agreements to repurchase | 1 |
Assets sold under agreements to repurchase | LIBOR | |
Short-term Debt [Line Items] | |
Number of borrowing facilities that provide for sales of mortgage loans under agreements to repurchase | 3 |
Borrowings - Assets Sold Under
Borrowings - Assets Sold Under Agreement to Repurchase (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Year end: | |||||||||
Unpaid principal balance | $ 1,167,405 | ||||||||
Unamortized issuance costs | (674) | ||||||||
Total loans sold under agreements to repurchase | 1,166,731 | $ 822,252 | $ 1,286,411 | $ 1,263,248 | $ 992,187 | $ 929,747 | $ 825,267 | $ 567,737 | |
Fair value of assets securing repurchase agreements: mortgage loans | 833,748 | 976,772 | |||||||
During the year: | |||||||||
Debt issuance costs | 674 | ||||||||
Amortization of commitment fees excluded from calculation of Weighted average interest rate | 7,775 | 5,989 | $ 5,014 | ||||||
Assets sold under agreements to repurchase | |||||||||
Year end: | |||||||||
Unpaid principal balance | 1,167,405 | 822,621 | 471,592 | ||||||
Unamortized issuance costs | (674) | (369) | (88) | ||||||
Total loans sold under agreements to repurchase | 1,166,731 | 822,252 | 471,504 | ||||||
Unused amount | $ 40,178 | $ 277,379 | $ 528,408 | ||||||
Weighted average interest rate (as a percent) | 2.50% | 1.80% | 1.79% | ||||||
Fair value of assets securing repurchase agreements: mortgage loans | $ 833,748 | $ 976,772 | $ 512,350 | ||||||
Fair value of assets securing repurchase agreements: mortgage servicing rights | 782,679 | ||||||||
Margin deposits placed with counterparties | 2,500 | 1,500 | 1,500 | ||||||
During the year: | |||||||||
Average balance of mortgage loans sold under agreements to repurchase | $ 823,490 | $ 529,832 | $ 344,625 | ||||||
Weighted-average interest rate (as a percent) | 1.78% | 1.78% | 1.96% | ||||||
Total interest expense | $ 21,377 | $ 14,285 | $ 10,863 | ||||||
Debt issuance costs | 674 | 369 | 88 | ||||||
Maximum daily amount outstanding | 1,976,744 | 1,073,073 | 623,523 | ||||||
Amortization of commitment fees excluded from calculation of Weighted average interest rate | $ 7,400 | $ 4,700 | $ 4,000 |
Borrowings - Maturities of Outs
Borrowings - Maturities of Outstanding Advances Under Repurchase Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Mortgage loans sold under agreement to repurchase | ||||||||
Unpaid principal balance | $ 1,167,405 | |||||||
Debt issuance costs | (674) | |||||||
Total loans sold under agreements to repurchase | $ 1,166,731 | $ 1,286,411 | $ 1,263,248 | $ 992,187 | $ 822,252 | $ 929,747 | $ 825,267 | $ 567,737 |
Weighted-average maturity (in months) | 1 month 18 days | |||||||
Within 30 days | ||||||||
Mortgage loans sold under agreement to repurchase | ||||||||
Unpaid principal balance | $ 413,919 | |||||||
Over 30 to 90 days | ||||||||
Mortgage loans sold under agreement to repurchase | ||||||||
Unpaid principal balance | $ 753,486 |
Borrowings - Mortgage Loans Sol
Borrowings - Mortgage Loans Sold Under Agreement to Repurchase by Counterparty (Details) - Assets sold under agreements to repurchase $ in Thousands | Dec. 31, 2015USD ($) |
Credit Suisse First Boston Mortgage Capital LLC Tranche One | |
Mortgage loans sold under agreement to repurchase | |
Amount at risk | $ 375,678 |
Credit Suisse First Boston Mortgage Capital LLC Tranche Two | |
Mortgage loans sold under agreement to repurchase | |
Amount at risk | 38,848 |
Bank of America, N.A. | |
Mortgage loans sold under agreement to repurchase | |
Amount at risk | 26,812 |
Morgan Stanley Bank | |
Mortgage loans sold under agreement to repurchase | |
Amount at risk | 3,942 |
Citibank, N.A. | |
Mortgage loans sold under agreement to repurchase | |
Amount at risk | $ 4,239 |
Borrowings - Mortgage Loan Part
Borrowings - Mortgage Loan Particpation and Sale Agreement (Details) | 12 Months Ended | |||||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | |
Short-term Debt [Line Items] | ||||||
Number of facilities that provide for sale of mortgage loan participants certificates | item | 2 | |||||
Year end: | ||||||
Mortgage loan participation and sale agreement secured by mortgage loan participation certificates | $ 234,872,000 | $ 143,568,000 | $ 247,410,000 | $ 195,959,000 | $ 190,762,000 | |
During the year: | ||||||
Total interest expense | 2,670,000 | 427,000 | ||||
Amortization of debt issuance costs and commitment fees relating to financing facilities | 7,775,000 | 5,989,000 | $ 5,014,000 | |||
Mortgage Loan Participation and Sale Agreement member | ||||||
Year end: | ||||||
Unpaid principal balance of mortgage loan participation and sale agreement secured by mortgage loan participation certificates | 234,898,000 | 143,638,000 | ||||
Unamortized issuance costs | (26,000) | (70,000) | ||||
Mortgage loan participation and sale agreement secured by mortgage loan participation certificates | 234,872,000 | 143,568,000 | ||||
Mortgage loans pledged to secure mortgage loan participation and sale agreement | 245,741,000 | 148,133,000 | ||||
During the year: | ||||||
Average balance | $ 157,918,000 | $ 22,756,000 | ||||
Weighted-average interest rate (as a percent) | 1.45% | 1.43% | ||||
Total interest expense | $ 2,670,000 | $ 427,000 | ||||
Amortization of debt issuance costs and commitment fees relating to financing facilities | $ 355,000 | $ 355,000 |
Borrowings - Note Payable (Deta
Borrowings - Note Payable (Details) - USD ($) | Dec. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
Year end: | ||||||||||
Note Payable | $ 61,136,000 | $ 146,855,000 | $ 406,990,000 | $ 246,456,000 | $ 134,665,000 | $ 154,948,000 | $ 115,314,000 | $ 48,819,000 | ||
During the year: | ||||||||||
Total interest expense | 9,336,000 | 4,382,000 | $ 2,931,000 | |||||||
Note Payable | ||||||||||
Year end: | ||||||||||
Note Payable | 61,136,000 | 146,855,000 | 52,154,000 | |||||||
Unamortized issuance costs | (1,541,000) | |||||||||
During the year: | ||||||||||
Average balance | $ 214,235,000 | $ 102,546,000 | $ 53,894,000 | |||||||
Weighted-average interest rate (as a percent) | 2.60% | 2.93% | 3.19% | |||||||
Total interest expense | $ 9,336,000 | $ 4,382,000 | $ 2,931,000 | |||||||
Note Payable | Revolving credit agreement | ||||||||||
During the year: | ||||||||||
Maximum loan amount | $ 100,000,000 | |||||||||
Term of loan | 364 days | |||||||||
Note Payable | Minimum | ||||||||||
During the year: | ||||||||||
Advance rate to secure note payable (as a percent) | 50.00% | |||||||||
Note Payable | Maximum | ||||||||||
During the year: | ||||||||||
Advance rate to secure note payable (as a percent) | 85.00% | |||||||||
Note Payable | Mortgage servicing rights | ||||||||||
Year end: | ||||||||||
Note Payable | $ 62,677,000 | 146,855,000 | 52,154,000 | |||||||
Assets pledged to secure note payable | 20,881,000 | $ 392,254,000 | 258,241,000 | |||||||
Note Payable | Servicing advances | ||||||||||
Year end: | ||||||||||
Assets pledged to secure note payable | $ 5,564,000 | |||||||||
Note Payable | Cash. | ||||||||||
Year end: | ||||||||||
Assets pledged to secure note payable | 93,757,000 | |||||||||
Note Payable | Carried interest | ||||||||||
Year end: | ||||||||||
Assets pledged to secure note payable | $ 69,926,000 |
Borrowings - Obligations Under
Borrowings - Obligations Under Capital Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Borrowings | ||
Furniture, fixtures, equipment and building improvements pledged to creditors | $ 14,034 | $ 0 |
Capitalized software pledged to creditors | $ 783 | $ 0 |
Borrowings - ESS (Details)
Borrowings - ESS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | $ 197,472 | $ 138,723 | |
Issuances of excess servicing spread to PennyMac Mortgage Investment Trust: | |||
Pursuant to a recapture agreement | 7,342 | ||
Accrual of interest expense | 13,292 | ||
Repayments | (39,256) | ||
Change in fair value | (24,322) | ||
Balance at the end of the year | 197,472 | $ 138,723 | |
Recurring basis | |||
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 197,472 | ||
Issuances of excess servicing spread to PennyMac Mortgage Investment Trust: | |||
Pursuant to a recapture agreement | 6,728 | ||
Accrual of interest expense | 25,365 | ||
Repayments | (78,578) | ||
Change in fair value | (29,159) | ||
Balance at the end of the year | 413,824 | 197,472 | |
Excess servicing spread financing | |||
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 191,166 | 138,723 | |
Issuances of excess servicing spread to PennyMac Mortgage Investment Trust: | |||
Pursuant to a recapture agreement | 7,342 | ||
Accrual of interest expense | 13,292 | 1,348 | |
Repayments | (39,256) | (4,076) | |
Change in fair value | (28,663) | 2,423 | |
Balance at the end of the year | 191,166 | 138,723 | |
Excess servicing spread financing | Recurring basis | |||
Roll forward of liabilities measured using Level 3 inputs on a recurring basis | |||
Balance at the beginning of the year | 191,166 | 138,723 | |
Issuances of excess servicing spread to PennyMac Mortgage Investment Trust: | |||
For cash | 271,554 | 99,728 | 139,028 |
Pursuant to a recapture agreement | 6,728 | 7,342 | |
Accrual of interest expense | 25,365 | 13,292 | 1,348 |
Repayments | (78,578) | (39,256) | (4,076) |
Change in fair value | (3,810) | (28,663) | 2,423 |
Balance at the end of the year | $ 412,425 | $ 191,166 | $ 138,723 |
Liability for Losses Under R117
Liability for Losses Under Representations and Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
During the year: | |||
Balance at beginning of year | $ 13,259 | $ 8,123 | $ 3,504 |
Provision for losses on loans sold | 7,512 | 5,291 | 4,675 |
Incurred losses | (160) | (155) | (56) |
Balance at end of year | 20,611 | 13,259 | 8,123 |
Unpaid principal balance of mortgage loans subject to representations and warranties at year end | $ 60,687,246 | $ 37,014,687 | $ 23,637,202 |
Income Taxes - Returns Currentl
Income Taxes - Returns Currently Under Examination (Details) item in Millions | 12 Months Ended |
Dec. 31, 2015item | |
Income Taxes | |
Returns currently under examination | 0 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense Details (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||||||||||
Federal | $ 2,234 | ||||||||||
State | 559 | ||||||||||
Total current expense | 2,793 | ||||||||||
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||||||||||
Federal | $ 24,819 | 19,126 | $ 7,815 | ||||||||
State | 6,816 | 4,803 | 2,146 | ||||||||
Total deferred expense | 31,635 | 23,929 | 9,961 | ||||||||
Income Tax Expense (Benefit), Total | $ 8,327 | $ 8,575 | $ 8,619 | $ 6,114 | $ 7,337 | $ 7,232 | $ 6,630 | $ 5,523 | $ 31,635 | $ 26,722 | $ 9,961 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of the entity's provision for income taxes at statutory rates to the provision for income taxes at the entity's effective tax rate | |||
Federal income tax statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
Less: Rate attributable to non-controlling interest members (as a percent) | (25.10%) | (25.00%) | (30.30%) |
State income taxes, net of federal benefit (as a percent) | 1.60% | 1.50% | 0.80% |
Other (as a percent) | (0.20%) | 0.50% | 0.00% |
Valuation allowance (as a percent) | 0.00% | 0.00% | 0.00% |
Effective tax rate (as a percent) | 11.30% | 12.00% | 5.50% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred expense: | |||
Investment in PennyMac | $ 22,998 | $ 20,981 | $ 12,909 |
Net operating loss carryforward | 8,637 | 2,948 | (2,948) |
Total deferred expense | 31,635 | 23,929 | $ 9,961 |
Components of Deferred tax asset: | |||
Taxes currently receivable | 3,883 | 2,014 | |
Deferred income tax asset, net | 14,495 | 44,024 | |
Deferred tax asset | 18,378 | 46,038 | |
Deferred income tax assets: | |||
Investment in PennyMac | 5,858 | 44,024 | |
Net operating loss carryforward | 8,637 | ||
Gross deferred tax assets | 14,495 | 44,024 | |
Deferred income tax liabilities: | |||
Net deferred income tax asset | 14,495 | 44,024 | |
Net operating loss carryforward, generally expires in 2035 | 21,300 | ||
Unrecognized tax benefits | 0 | 0 | |
Accrual of interest or penalties related to unrecognized tax benefits | $ 0 | $ 0 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) - USD ($) $ in Thousands | May. 14, 2013 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Noncontrolling Interest [Line Items] | ||||||||||||
Noncontrolling interest in Private National Mortgage Acceptance Company, LLC (as a percent) | 71.10% | 71.60% | 71.10% | 71.60% | 72.60% | |||||||
Net income and the effects of changes in noncontrolling interest | ||||||||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ 12,771 | $ 12,680 | $ 12,749 | $ 9,028 | $ 8,763 | $ 10,489 | $ 9,618 | $ 7,972 | $ 47,228 | $ 36,842 | $ 14,400 | |
Class A Common Stock | ||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A stock of PennyMac Financial Services, Inc. (in shares) | 319,518 | 718,039 | 12,778,000 | |||||||||
Stock Issued During Period, Shares, New Issues | 12,800,000 | |||||||||||
Net income and the effects of changes in noncontrolling interest | ||||||||||||
Noncontrolling Interest Initial Recognition | $ (127,160) | |||||||||||
Stock Issued During Period, Shares, Conversion of Units | 319,518 | 718,039 | 12,778,000 | |||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 4,982 | $ 7,107 | $ 60,556 | |||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 319,000 | 516,000 | 8,035,000 |
Net Gains on Mortgage Loans 123
Net Gains on Mortgage Loans Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash (loss) gain: | |||||||||||
Mortgage Loans | $ (82,709) | $ 43,665 | $ (150,589) | ||||||||
Hedging activities | (47,150) | (90,507) | 98,707 | ||||||||
Cash gain (loss), net of effects of cash hedging, on sale of mortgage loans held for sale | (129,859) | (46,842) | (51,882) | ||||||||
Non-cash gain: | |||||||||||
Mortgage servicing rights resulting from mortgage loan sales | 472,853 | 209,850 | 205,105 | ||||||||
Accrual of mortgage servicing liabilities resulting from mortgage loan sales | (20,442) | (1,965) | |||||||||
MSR and ESS recapture payable to PennyMac Mortgage Investment Trust | (7,836) | (7,837) | (709) | ||||||||
Provision for losses relating to representations and warranties on loans sold | (7,512) | (5,291) | (4,675) | ||||||||
Change in fair value relating to loans and hedging derivatives held at period end: | |||||||||||
Interest rate lock commitments | 11,372 | 25,640 | (17,179) | ||||||||
Mortgage loans | 3,949 | 12,733 | (4,207) | ||||||||
Hedging derivatives | (1,810) | (19,264) | 11,560 | ||||||||
Net gains on mortgage loans held for sale at fair value | $ 78,736 | $ 82,646 | $ 83,955 | $ 75,378 | $ 44,649 | $ 48,133 | $ 39,704 | $ 34,538 | $ 320,715 | $ 167,024 | $ 138,013 |
Net Interest Expense (Details)
Net Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest income: | |||
Short-term investments | $ 3,804 | $ 1,591 | $ 893 |
Mortgage loans held for sale at fair value | 42,008 | 26,180 | 14,739 |
Interest income, excluding related parties | 45,812 | 27,771 | 15,632 |
Interest income | 49,155 | 27,771 | 15,632 |
Interest expense: | |||
Mortgage loan participation and sale agreement | 2,670 | 427 | |
Note payable | 9,336 | 4,382 | 2,931 |
Interest shortfall on repayments of mortgage loans serviced for Agency securitizations | 6,883 | 2,460 | 1,317 |
Interest on mortgage loan impound deposits | 2,888 | 2,409 | 469 |
Other | 18 | 2 | 2 |
Interest expense, non-affiliates | 43,172 | 23,965 | 15,582 |
Interest expense | 68,537 | 37,257 | 16,673 |
Net interest expense: | (19,382) | (9,486) | (1,041) |
PMT | |||
Interest income: | |||
From PennyMac Mortgage Investment Trust | 3,343 | ||
Interest expense: | |||
To PennyMac Mortgage Investment Trust Excess servicing spread financing at fair value | 25,365 | 13,292 | 1,091 |
Parent Company [Member] | |||
Interest income: | |||
Interest income | 121 | ||
Interest expense: | |||
Interest expense | 6 | ||
Assets sold under agreements to repurchase | |||
Interest expense: | |||
Interest expense | $ 21,377 | $ 14,285 | $ 10,863 |
Stock-based Compensation - Comp
Stock-based Compensation - Compensation Expense by Award (Details) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-Based Compensation | |||
Units available for future awards under 2013 Equity Incentive Plan (in units) | 2.6 | ||
Stock-based compensation expense | $ 17,521 | $ 10,331 | $ 3,699 |
Stock Options | |||
Stock-Based Compensation | |||
Stock-based compensation expense | 5,713 | 5,101 | 1,387 |
Performance-based RSUs | |||
Stock-Based Compensation | |||
Stock-based compensation expense | 9,293 | 3,075 | 1,273 |
Time-based RSUs | |||
Stock-Based Compensation | |||
Stock-based compensation expense | 2,294 | 1,824 | 672 |
Exchangable PNMAC Units | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ 221 | $ 331 | $ 367 |
Stock-based Compensation - Acti
Stock-based Compensation - Activity of Equity Awards (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | |
Stock-Based Compensation | |||
Stock-based compensation expense | $ | $ 17,521 | $ 10,331 | $ 3,699 |
Expected volatility (as a percent) | 41.00% | ||
Expected dividends (as a percent) | 0.00% | ||
Stock Options | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ | $ 5,713 | $ 5,101 | $ 1,387 |
Percentage of the award vesting at each of the three anniversaries | 33.00% | ||
Contractual term of the stock options | 10 years | ||
Expected volatility (as a percent) | 42.00% | 45.00% | |
Expected dividends (as a percent) | 0.00% | 0.00% | |
Risk-free rate, Minimum (as a percent) | 0.10% | 0.10% | 0.30% |
Risk-free rate, Maximum (as a percent) | 2.30% | 2.90% | 2.30% |
Summary of equity awards, options | |||
Balance at beginning of period (in units) | 1,167,181 | 418,785 | |
Granted (in units) | 715,480 | 769,035 | 425,796 |
Exercised (in units) | (61) | ||
Forfeited (in units) | (37,229) | (20,639) | (7,011) |
Balance at end of period (in units) | 1,845,371 | 1,167,181 | 418,785 |
Number of options exercisable at end of year | 533,199 | 137,816 | |
Number of shares exercisable at end of year | 1,280,437 | 1,032,309 | 340,061 |
Weighted-average exercise price per share: | |||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 18.23 | $ 21.03 | |
Granted (in dollars per share) | $ / shares | 17.52 | 17.22 | $ 21.03 |
Exercised (in dollars per share) | $ / shares | 17.26 | ||
Forfeited | $ / shares | 17.88 | 18.71 | 21.03 |
Outstanding at end of year (in dollars per share) | $ / shares | $ 18.17 | $ 18.23 | $ 21.03 |
Weighted-average remaining contractual term: | |||
Outstanding at end of year | 8 years 7 months 6 days | 8 years 10 months 24 days | 9 years 4 months 24 days |
Exercisable at end of year | 8 years | 8 years 4 months 24 days | |
Aggregate intrinsic value | |||
Outstanding at end of year | $ | $ 59,270 | ||
Stock Options | Minimum | |||
Stock-Based Compensation | |||
Expected grantee forfeiture rate (as a percent) | 0 | 4.3 | 6.2 |
Stock Options | Maximum | |||
Stock-Based Compensation | |||
Expected grantee forfeiture rate (as a percent) | 18.7 | 20.2 | 19.2 |
Stock Options | Weighted average | |||
Summary of equity awards, options | |||
Weighted-average vesting period (in months) | 17 months | 24 months | 21 months |
Performance-based RSUs | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ | $ 9,293 | $ 3,075 | $ 1,273 |
Expected volatility (as a percent) | 42.00% | 45.00% | |
Expected dividends (as a percent) | 0.00% | 0.00% | |
Summary of equity award grants, RSUs | |||
Balance at beginning of period (in units) | 1,257,466 | 490,998 | |
Granted (in units) | 1,143,223 | 789,312 | 500,373 |
Forfeited (in units) | (50,054) | (22,844) | (9,375) |
Balance at end of period (in units) | 2,350,635 | 1,257,466 | 490,998 |
Number of shares expected to vest (in units) | 2,141,089 | 866,181 | 448,639 |
Weighted-average grant date fair value per unit: | |||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 15.48 | $ 11.30 | |
Granted (in dollars per share) | $ / shares | 17.21 | 14.35 | $ 11.29 |
Forfeited (in dollars per share) | $ / shares | 16.46 | 15.94 | 10.85 |
Outstanding at end of year (in dollars per share) | $ / shares | $ 16.30 | $ 15.48 | $ 11.30 |
Unamortized compensation cost | $ | $ 16,620 | $ 8,019 | $ 4,364 |
Performance-based RSUs | Minimum | |||
Stock-Based Compensation | |||
Risk-free rate, Minimum (as a percent) | 0.10% | 0.30% | |
Expected grantee forfeiture rate (as a percent) | 4.3 | 6.2 | |
Performance-based RSUs | Maximum | |||
Stock-Based Compensation | |||
Risk-free rate, Maximum (as a percent) | 0.70% | 2.30% | |
Expected grantee forfeiture rate (as a percent) | 20.2 | 19.2 | |
Performance-based RSUs | Weighted average | |||
Summary of equity awards, options | |||
Weighted-average vesting period (in months) | 17 months | 24 months | 18 months |
Time-based RSUs | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ | $ 2,294 | $ 1,824 | $ 672 |
Percentage of the award vesting at each of the three anniversaries | 33.00% | ||
Summary of equity award grants, RSUs | |||
Balance at beginning of period (in units) | 202,371 | 100,318 | |
Granted (in units) | 149,863 | 146,937 | 101,459 |
Vested (in units) | (75,366) | (32,619) | |
Forfeited (in units) | (6,215) | (12,265) | (1,141) |
Balance at end of period (in units) | 270,653 | 202,371 | 100,318 |
Number of shares expected to vest (in units) | 232,287 | 183,521 | 58,398 |
Weighted-average grant date fair value per unit: | |||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 17.92 | $ 18.04 | |
Granted (in dollars per share) | $ / shares | 17.87 | 16.73 | $ 18.03 |
Forfeited (in dollars per share) | $ / shares | 26.07 | 10.72 | 17.14 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares | 18.25 | 20.46 | |
Outstanding at end of year (in dollars per share) | $ / shares | $ 17.81 | $ 17.92 | $ 18.04 |
Unamortized compensation cost | $ | $ 2,270 | $ 1,441 | $ 1,099 |
Time-based RSUs | Minimum | |||
Weighted-average remaining contractual term: | |||
Turnover rates (as a percent) | 4.3 | ||
Time-based RSUs | Maximum | |||
Weighted-average remaining contractual term: | |||
Turnover rates (as a percent) | 20.2 | ||
Time-based RSUs | Weighted average | |||
Summary of equity awards, options | |||
Weighted-average vesting period (in months) | 20 months | 24 months | 18 months |
Time-based RSUs | Class A Common Stock | |||
Stock-Based Compensation | |||
Number of share awarded for each RSU (in shares) | 1 |
Supplemental Cash Flow Infor127
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash paid for interest | $ 69,317 | $ 36,320 | $ 16,527 |
Cash paid for income taxes | 1,909 | 4,800 | 7 |
Non-cash investing activity: | |||
Mortgage servicing rights resulting from mortgage loan sales | 472,853 | 209,850 | 205,105 |
Mortgage servicing liabilities resulting from mortgage loan sales | 20,442 | 1,965 | |
Mortgage servicing rights recapture incurred | 787 | 9 | $ 709 |
Non-cash financing activity: | |||
Transfer of excess servicing spread pursuant to recapture agreement with PennyMac Mortgage Investment Trust | 6,728 | 7,342 | |
Issuance of common stock in settlement of director fees | 297 | $ 222 | |
Note Payable | |||
Non-cash financing activity: | |||
Conversion of note payable to assets sold under agreements to repurchase | $ 406,852 |
Capital and Liquidity Requireme
Capital and Liquidity Requirements (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Federal Housing Finance Agency | ||
Regulatory Net Worth and Agency Capital Requirements | ||
Net worth | $ 2,500,000 | |
FHFA liquidity spread of UPB serviced | 0.035% | |
FHFA additional liquidity spread of UPB in excess of 6% | $ 2 | |
Federal Housing Finance Agency | 1-4 unit servicing portfolio | ||
Regulatory Net Worth and Agency Capital Requirements | ||
FHFA net worth requirement spread | 0.25% | |
Fannie Mae-PLS | ||
Regulatory Net Worth and Agency Capital Requirements | ||
Net worth | $ 835,157,000 | $ 583,686,000 |
Capital Requirement | 283,655,000 | 35,507,000 |
Freddie Mac-PLS | ||
Regulatory Net Worth and Agency Capital Requirements | ||
Net worth | 835,157,000 | 583,819,000 |
Capital Requirement | 283,655,000 | 3,721,000 |
Ginnie Mae - Issuer - PLS | ||
Regulatory Net Worth and Agency Capital Requirements | ||
Net worth | 633,222,000 | 536,009,000 |
Capital Requirement | 386,732,000 | 111,457,000 |
Liquidity | 145,431,000 | |
Liquidity requirement | 95,868,000 | |
Ginnie Mae - Issuer's parent - PennyMac | ||
Regulatory Net Worth and Agency Capital Requirements | ||
Net worth | 894,731,000 | 763,907,000 |
Capital Requirement | 425,405,000 | 133,748,000 |
HUD - PLS | ||
Regulatory Net Worth and Agency Capital Requirements | ||
Net worth | 633,222,000 | 539,844,000 |
Capital Requirement | 2,500,000 | $ 2,500,000 |
Fannie Mae / Freddie Mac | ||
Regulatory Net Worth and Agency Capital Requirements | ||
Liquidity | 145,431,000 | |
Liquidity requirement | $ 38,936,000 |
Commitments and Contingencie129
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Commitment and Contingencies. | |
Commitments to purchase mortgage loans from PennyMac Mortgage Investment Trust | $ 2,107,245 |
Commitments to fund mortgage loans | 1,380,121 |
Total commitments to purchase and fund mortgage loans | 3,487,366 |
Commitments to sell mortgage loans | $ 6,230,811 |
Segments and Related Informa130
Segments and Related Information - Effect of Change in Allocations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segments and Related Information | |||||||||||
Operating Expenses | $ 110,007 | $ 115,282 | $ 121,552 | $ 87,076 | $ 88,492 | $ 77,933 | $ 72,388 | $ 56,431 | $ 433,917 | $ 295,244 | $ 204,433 |
Segments and Related Informa131
Segments and Related Information - Financial Hilights by Segment (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segments and Related Information | |||||||||||
Number of segments | item | 3 | ||||||||||
Revenues: | |||||||||||
Net gains (losses) on mortgage loans held for sale at fair value | $ 78,736 | $ 82,646 | $ 83,955 | $ 75,378 | $ 44,649 | $ 48,133 | $ 39,704 | $ 34,538 | $ 320,715 | $ 167,024 | $ 138,013 |
Loan origination fees | 91,520 | 41,576 | 23,575 | ||||||||
Fulfillment fees from PennyMac Mortgage Investment Trust | 58,607 | 48,719 | 79,712 | ||||||||
Net servicing fees | 229,543 | 216,919 | 90,010 | ||||||||
Management fees | 28,237 | 42,508 | 40,330 | ||||||||
Carried Interest from Investment Funds | 2,628 | 6,156 | 13,419 | ||||||||
Net interest (expense) income: | |||||||||||
Interest income | 49,155 | 27,771 | 15,632 | ||||||||
Interest expense | 68,537 | 37,257 | 16,673 | ||||||||
Net interest expense: | (19,382) | (9,486) | (1,041) | ||||||||
Other | 2,937 | 3,483 | 2,541 | ||||||||
Total net revenues, before non-segment activities | 714,805 | 516,899 | 386,559 | ||||||||
Expenses | 110,007 | 115,282 | 121,552 | 87,076 | 88,492 | 77,933 | 72,388 | 56,431 | 433,917 | 295,244 | 204,433 |
Income (loss) before provision for income taxes and non-segement activites | 280,888 | 221,655 | |||||||||
Non-segment activities | (1,695) | 1,378 | |||||||||
Income before provision for income taxes | 77,233 | 73,923 | 74,799 | 53,238 | 53,233 | 62,692 | 58,047 | 49,061 | 279,193 | 223,033 | 182,126 |
Assets: | |||||||||||
Segment assets at year end | 3,505,294 | 3,815,322 | 3,430,605 | 2,858,001 | 2,506,686 | 2,538,627 | 2,182,194 | 1,760,545 | 3,505,294 | 2,506,686 | |
Deferred tax asset | 14,495 | 44,024 | 14,495 | 44,024 | |||||||
PMT | |||||||||||
Revenues: | |||||||||||
Fulfillment fees from PennyMac Mortgage Investment Trust | 12,855 | $ 17,553 | $ 15,333 | $ 12,866 | 11,887 | $ 15,497 | $ 12,433 | $ 8,902 | 58,607 | 48,719 | 79,712 |
Management fees | 24,194 | 35,035 | 32,410 | ||||||||
Investment Funds | |||||||||||
Revenues: | |||||||||||
Management fees | 4,043 | 7,473 | 7,920 | ||||||||
Carried Interest from Investment Funds | $ 2,628 | 6,156 | 13,419 | ||||||||
Mortgage banking | |||||||||||
Segments and Related Information | |||||||||||
Number of segments | item | 2 | ||||||||||
Operating segment | |||||||||||
Assets: | |||||||||||
Segment assets at year end | 3,486,075 | 2,453,331 | $ 3,486,075 | 2,453,331 | 1,520,650 | ||||||
Operating segment | Investment management | |||||||||||
Revenues: | |||||||||||
Management fees | 28,237 | 42,508 | 40,330 | ||||||||
Carried Interest from Investment Funds | 13,419 | ||||||||||
Net interest (expense) income: | |||||||||||
Interest income | 5 | 22 | |||||||||
Net interest expense: | 5 | 22 | |||||||||
Other | (18) | 318 | 1,385 | ||||||||
Total net revenues, before non-segment activities | 30,847 | 48,987 | 55,156 | ||||||||
Expenses | 23,125 | 28,876 | 19,098 | ||||||||
Income (loss) before provision for income taxes and non-segement activites | 7,722 | 20,111 | |||||||||
Income before provision for income taxes | 7,722 | 20,111 | 36,058 | ||||||||
Assets: | |||||||||||
Segment assets at year end | 92,893 | 92,881 | 92,893 | 92,881 | 117,341 | ||||||
Operating segment | Investment management | Investment Funds | |||||||||||
Revenues: | |||||||||||
Carried Interest from Investment Funds | 2,628 | 6,156 | |||||||||
Operating segment | Mortgage banking | |||||||||||
Revenues: | |||||||||||
Net gains (losses) on mortgage loans held for sale at fair value | 320,715 | 167,024 | 138,013 | ||||||||
Loan origination fees | 91,520 | 41,576 | 23,575 | ||||||||
Net servicing fees | 229,543 | 216,919 | 90,010 | ||||||||
Net interest (expense) income: | |||||||||||
Interest income | 49,155 | 27,766 | 15,610 | ||||||||
Interest expense | 68,537 | 37,257 | 16,673 | ||||||||
Net interest expense: | (19,382) | (9,491) | (1,063) | ||||||||
Other | 2,955 | 3,165 | 1,156 | ||||||||
Total net revenues, before non-segment activities | 683,958 | 467,912 | 331,403 | ||||||||
Expenses | 410,792 | 266,368 | 185,335 | ||||||||
Income (loss) before provision for income taxes and non-segement activites | 273,166 | 201,544 | |||||||||
Income before provision for income taxes | 273,166 | 201,544 | 146,068 | ||||||||
Assets: | |||||||||||
Segment assets at year end | 3,393,183 | 2,360,450 | 3,393,183 | 2,360,450 | 1,403,309 | ||||||
Operating segment | Mortgage banking | PMT | |||||||||||
Revenues: | |||||||||||
Fulfillment fees from PennyMac Mortgage Investment Trust | 58,607 | 48,719 | 79,712 | ||||||||
Operating segment | Mortgage banking Production | |||||||||||
Revenues: | |||||||||||
Net gains (losses) on mortgage loans held for sale at fair value | 310,254 | 158,758 | 138,013 | ||||||||
Loan origination fees | 91,520 | 41,576 | 23,575 | ||||||||
Net interest (expense) income: | |||||||||||
Interest income | 39,238 | 21,873 | 15,610 | ||||||||
Interest expense | 19,851 | 12,143 | 11,103 | ||||||||
Net interest expense: | 19,387 | 9,730 | 4,507 | ||||||||
Other | 1,868 | 1,890 | 912 | ||||||||
Total net revenues, before non-segment activities | 481,636 | 260,673 | 246,719 | ||||||||
Expenses | 209,767 | 125,054 | 120,699 | ||||||||
Income (loss) before provision for income taxes and non-segement activites | 271,869 | 135,619 | |||||||||
Income before provision for income taxes | 271,869 | 135,619 | 126,020 | ||||||||
Assets: | |||||||||||
Segment assets at year end | 1,122,242 | 1,040,358 | 1,122,242 | 1,040,358 | 607,989 | ||||||
Operating segment | Mortgage banking Production | PMT | |||||||||||
Revenues: | |||||||||||
Fulfillment fees from PennyMac Mortgage Investment Trust | 58,607 | 48,719 | 79,712 | ||||||||
Operating segment | Mortgage banking Servicing | |||||||||||
Revenues: | |||||||||||
Net gains (losses) on mortgage loans held for sale at fair value | 10,461 | 8,266 | |||||||||
Net servicing fees | 229,543 | 216,919 | 90,010 | ||||||||
Net interest (expense) income: | |||||||||||
Interest income | 9,917 | 5,893 | |||||||||
Interest expense | 48,686 | 25,114 | 5,570 | ||||||||
Net interest expense: | (38,769) | (19,221) | (5,570) | ||||||||
Other | 1,087 | 1,275 | 244 | ||||||||
Total net revenues, before non-segment activities | 202,322 | 207,239 | 84,684 | ||||||||
Expenses | 201,025 | 141,314 | 64,636 | ||||||||
Income (loss) before provision for income taxes and non-segement activites | 1,297 | 65,925 | |||||||||
Income before provision for income taxes | 1,297 | 65,925 | 20,048 | ||||||||
Assets: | |||||||||||
Segment assets at year end | $ 2,270,940 | $ 1,320,092 | $ 2,270,940 | $ 1,320,092 | $ 795,320 |
Selected Quarterly Results (132
Selected Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 8 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 14, 2013 | |
Revenue | |||||||||||||
Net gains (losses) on mortgage loans held for sale at fair value | $ 78,736 | $ 82,646 | $ 83,955 | $ 75,378 | $ 44,649 | $ 48,133 | $ 39,704 | $ 34,538 | $ 320,715 | $ 167,024 | $ 138,013 | ||
Fulfillment fees from affiliate | 58,607 | 48,719 | 79,712 | ||||||||||
Net servicing fees | 76,959 | 57,258 | 68,549 | 26,776 | 62,278 | 53,908 | 56,969 | 43,764 | 382,672 | 258,421 | 119,461 | ||
Management fees and Carried Interest | 6,059 | 7,939 | 7,145 | 9,722 | 10,285 | 13,281 | 12,832 | 12,266 | |||||
Other income | 12,631 | 23,809 | 21,369 | 15,572 | 12,626 | 9,806 | 8,497 | 6,022 | 1,472 | 4,867 | 2,500 | ||
Total net revenue | 187,240 | 189,205 | 196,351 | 140,314 | 141,725 | 140,625 | 130,435 | 105,492 | 713,110 | 518,277 | 386,559 | ||
Expenses | 110,007 | 115,282 | 121,552 | 87,076 | 88,492 | 77,933 | 72,388 | 56,431 | 433,917 | 295,244 | 204,433 | ||
Income before provision for income taxes | 77,233 | 73,923 | 74,799 | 53,238 | 53,233 | 62,692 | 58,047 | 49,061 | 279,193 | 223,033 | 182,126 | ||
Provision for income taxes | 8,327 | 8,575 | 8,619 | 6,114 | 7,337 | 7,232 | 6,630 | 5,523 | 31,635 | 26,722 | 9,961 | ||
Net income | 68,906 | 65,348 | 66,180 | 47,124 | 45,896 | 55,460 | 51,417 | 43,538 | $ 95,331 | 247,558 | 196,311 | 172,165 | |
Less: Net income attributable to noncontrolling interest | 56,135 | 52,668 | 53,431 | 38,096 | 37,133 | 44,971 | 41,799 | 35,566 | 200,330 | 159,469 | 157,765 | ||
Net income attributable to PennyMac Financial Services, Inc. common stockholders | $ 12,771 | $ 12,680 | $ 12,749 | $ 9,028 | $ 8,763 | $ 10,489 | $ 9,618 | $ 7,972 | $ 47,228 | $ 36,842 | $ 14,400 | ||
Earnings per share of Common Stock: | |||||||||||||
Basic (in dollars per share) | $ 0.58 | $ 0.58 | $ 0.59 | $ 0.42 | $ 0.41 | $ 0.49 | $ 0.45 | $ 0.38 | $ 2.17 | $ 1.73 | $ 0.83 | ||
Diluted (in dollars per share) | $ 0.58 | $ 0.58 | $ 0.59 | $ 0.42 | $ 0.41 | $ 0.49 | $ 0.45 | $ 0.38 | $ 2.17 | $ 1.73 | $ 0.82 | ||
Assets: | |||||||||||||
Mortgage loans held for sale at fair value | $ 1,101,204 | $ 1,696,980 | $ 1,594,262 | $ 1,353,944 | $ 1,147,884 | $ 1,259,991 | $ 1,000,415 | $ 717,476 | $ 1,101,204 | $ 1,147,884 | |||
Mortgage servicing rights | 1,411,935 | 1,307,392 | 1,135,510 | 790,411 | 730,828 | 677,413 | 621,681 | 529,128 | 1,411,935 | 730,828 | |||
Carried Interest from Investment Funds | 69,926 | 70,196 | 68,713 | 68,531 | 67,298 | 67,035 | 65,133 | 63,299 | 69,926 | 67,298 | |||
Servicing advances | 299,354 | 252,172 | 244,806 | 242,397 | 228,630 | 195,246 | 179,169 | 171,395 | 299,354 | 228,630 | |||
Other assets | 622,875 | 488,582 | 387,314 | 402,718 | 332,046 | 338,942 | 315,796 | 279,247 | 622,875 | 332,046 | |||
Total assets | 3,505,294 | 3,815,322 | 3,430,605 | 2,858,001 | 2,506,686 | 2,538,627 | 2,182,194 | 1,760,545 | 3,505,294 | 2,506,686 | |||
Liabilities: | |||||||||||||
Assets sold under agreements to repurchase | 1,166,731 | 1,286,411 | 1,263,248 | 992,187 | 822,252 | 929,747 | 825,267 | 567,737 | 1,166,731 | 822,252 | |||
Mortgage loans participation and sale agreement | 234,872 | 247,410 | 195,959 | 190,762 | 143,568 | 234,872 | 143,568 | ||||||
Note payable | 61,136 | 406,990 | 246,456 | 134,665 | 146,855 | 154,948 | 115,314 | 48,819 | 61,136 | 146,855 | |||
Excess servicing spread financing at fair value payable to affiliate | 412,425 | 191,166 | 412,425 | 191,166 | |||||||||
Other liabilities | 567,780 | 466,631 | 446,367 | 465,242 | 395,579 | 500,115 | 329,676 | 317,892 | 567,780 | 395,579 | |||
Total liabilities | 2,442,944 | 2,826,015 | 2,511,132 | 2,005,165 | 1,699,420 | 1,772,178 | 1,460,501 | 1,085,467 | 2,442,944 | 1,699,420 | |||
Total equity | 1,062,350 | 989,307 | 919,473 | 852,836 | 807,266 | 766,449 | 721,693 | 675,078 | $ 629,204 | 1,062,350 | 807,266 | $ 629,204 | $ 315,454 |
Total liabilities and stockholders' equity | 3,505,294 | 3,815,322 | 3,430,605 | 2,858,001 | 2,506,686 | 2,538,627 | 2,182,194 | 1,760,545 | 3,505,294 | 2,506,686 | |||
PMT | |||||||||||||
Revenue | |||||||||||||
Fulfillment fees from affiliate | 12,855 | 17,553 | 15,333 | 12,866 | 11,887 | 15,497 | 12,433 | 8,902 | 58,607 | 48,719 | $ 79,712 | ||
Liabilities: | |||||||||||||
Excess servicing spread financing at fair value payable to affiliate | $ 412,425 | $ 418,573 | $ 359,102 | $ 222,309 | $ 191,166 | $ 187,368 | $ 190,244 | $ 151,019 | $ 412,425 | $ 191,166 |
Parent Company Information - Mi
Parent Company Information - Minimum Tangible Net Worth (Details) $ in Millions | Dec. 31, 2015USD ($) |
PLS | |
Parent Company Information | |
Minimum tangible net worth | $ 90 |
Parent Company Information - Co
Parent Company Information - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
ASSETS | ||||||||||
Cash | $ 105,472 | $ 76,256 | $ 30,639 | $ 12,323 | ||||||
Investment in PennyMac Mortgage Investment Trust at fair value | 1,145 | 1,582 | ||||||||
Deferred tax asset | 18,378 | 46,038 | ||||||||
Total assets | 3,505,294 | $ 3,815,322 | $ 3,430,605 | $ 2,858,001 | 2,506,686 | $ 2,538,627 | $ 2,182,194 | $ 1,760,545 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Total liabilities | 2,442,944 | 2,826,015 | 2,511,132 | 2,005,165 | 1,699,420 | 1,772,178 | 1,460,501 | 1,085,467 | ||
Stockholders' equity | 270,826 | 213,964 | ||||||||
Total liabilities and stockholders' equity | 3,505,294 | $ 3,815,322 | $ 3,430,605 | $ 2,858,001 | 2,506,686 | $ 2,538,627 | $ 2,182,194 | $ 1,760,545 | ||
Parent Company [Member] | ||||||||||
ASSETS | ||||||||||
Cash | 841 | 7,757 | $ 707 | |||||||
Investment in PennyMac Mortgage Investment Trust at fair value | 344,007 | 244,814 | ||||||||
Deferred tax asset | 18,378 | 46,038 | ||||||||
Due from subsidiaries | 3,818 | |||||||||
Total assets | 367,044 | 298,609 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Accrued expenses and other liabilities | 74,315 | 75,024 | ||||||||
Payables to subsidiaries | 1 | |||||||||
Total liabilities | 74,315 | 75,025 | ||||||||
Stockholders' equity | 292,729 | 223,584 | ||||||||
Total liabilities and stockholders' equity | $ 367,044 | $ 298,609 |
Parent Company Information -135
Parent Company Information - Condensed Statement of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | ||||||||||||
Interest | $ 49,155 | $ 27,771 | $ 15,632 | |||||||||
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | (1,695) | 1,378 | ||||||||||
Revaluation Of Payable | (1,695) | 1,378 | ||||||||||
Total net revenue | $ 187,240 | $ 189,205 | $ 196,351 | $ 140,314 | $ 141,725 | $ 140,625 | $ 130,435 | $ 105,492 | 713,110 | 518,277 | 386,559 | |
Expenses | ||||||||||||
Interest | 68,537 | 37,257 | 16,673 | |||||||||
Total expenses | 110,007 | 115,282 | 121,552 | 87,076 | 88,492 | 77,933 | 72,388 | 56,431 | 433,917 | 295,244 | 204,433 | |
Income before provision for income taxes | 77,233 | 73,923 | 74,799 | 53,238 | 53,233 | 62,692 | 58,047 | 49,061 | 279,193 | 223,033 | 182,126 | |
Provision for income taxes | 8,327 | 8,575 | 8,619 | 6,114 | 7,337 | 7,232 | 6,630 | 5,523 | 31,635 | 26,722 | 9,961 | |
Net income | $ 68,906 | $ 65,348 | $ 66,180 | $ 47,124 | $ 45,896 | $ 55,460 | $ 51,417 | $ 43,538 | $ 95,331 | 247,558 | 196,311 | 172,165 |
Parent Company [Member] | ||||||||||||
Revenue | ||||||||||||
Dividends from subsidiaries | 3,825 | 11,900 | 664 | |||||||||
Interest | 121 | |||||||||||
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | (1,695) | 1,378 | ||||||||||
Revaluation Of Payable | (1,695) | 1,378 | ||||||||||
Total net revenue | 2,251 | 13,278 | 664 | |||||||||
Expenses | ||||||||||||
Interest | 6 | |||||||||||
Total expenses | 6 | |||||||||||
Income before provision for income taxes | 2,245 | 13,278 | 664 | |||||||||
Provision for income taxes | 31,635 | 26,722 | 9,961 | |||||||||
Income before equity in undistributed earnings of subsidiaries | (29,390) | (13,444) | (9,297) | |||||||||
Equity in undistributed earnings of subsidiaries | 76,618 | 50,286 | 23,697 | |||||||||
Net income | 47,228 | 36,842 | $ 14,400 | |||||||||
Private National Mortgage Acceptance Company, LLC | Parent Company [Member] | ||||||||||||
Revenue | ||||||||||||
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | (1,695) | 1,378 | ||||||||||
Revaluation Of Payable | $ (1,695) | $ 1,378 |
Parent Company Information -136
Parent Company Information - Condensed Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flow from operating activities | ||||||||||||
Net income | $ 68,906 | $ 65,348 | $ 66,180 | $ 47,124 | $ 45,896 | $ 55,460 | $ 51,417 | $ 43,538 | $ 95,331 | $ 247,558 | $ 196,311 | $ 172,165 |
Decrease in deferred tax asset | 29,726 | 21,922 | 9,954 | |||||||||
Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | (5,132) | |||||||||||
Increase in intercompany receivable | (3,819) | |||||||||||
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | 1,695 | (1,378) | ||||||||||
Net cash provided by (used in) operating activities | 53,144 | (578,954) | (98,390) | |||||||||
Cash flow from investing activities | ||||||||||||
Net cash provided by (used in) investing activities | (563,142) | 6,752 | (284,781) | |||||||||
Cash flow from financing activities | ||||||||||||
Issuance of common shares | 230,000 | |||||||||||
Payment of common share underwriting and offering costs | (13,486) | |||||||||||
Net cash provided by financing activities | 539,214 | 617,819 | 401,487 | |||||||||
Net change in cash | 29,216 | 45,617 | 18,316 | |||||||||
Cash at beginning of year | 76,256 | 30,639 | 76,256 | 30,639 | 12,323 | |||||||
Cash at end of year | 105,472 | 76,256 | 30,639 | 105,472 | 76,256 | 30,639 | ||||||
Parent Company [Member] | ||||||||||||
Cash flow from operating activities | ||||||||||||
Net income | 47,228 | 36,842 | 14,400 | |||||||||
Equity in undistributed earnings of subsidiaries | (76,618) | (50,286) | (23,697) | |||||||||
(Decrease) increase in payables to subsidiaries | (50) | 50 | ||||||||||
Decrease in deferred tax asset | 29,730 | 21,922 | 9,954 | |||||||||
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement | 1,695 | (1,378) | ||||||||||
Net cash provided by (used in) operating activities | (6,916) | 7,050 | 707 | |||||||||
Cash flow from investing activities | ||||||||||||
Increase in investments in subsidiaries | (216,775) | |||||||||||
Net cash provided by (used in) investing activities | (216,775) | |||||||||||
Cash flow from financing activities | ||||||||||||
Issuance of common shares | 230,000 | |||||||||||
Payment of common share underwriting and offering costs | (13,225) | |||||||||||
Net cash provided by financing activities | 216,775 | |||||||||||
Net change in cash | (6,916) | 7,050 | 707 | |||||||||
Cash at beginning of year | $ 7,757 | $ 707 | 7,757 | 707 | ||||||||
Cash at end of year | $ 841 | $ 7,757 | $ 707 | $ 841 | $ 7,757 | $ 707 |
Recently Issued Accounting P137
Recently Issued Accounting Pronouncements (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Amount reclassified from Other assets | $ 45,594,000 | $ 37,419,000 |
Recently Issued Accounting Pronouncements | Other Assets. | Accounting Standards Update 2015-03: Simplifying the Presentation of Debt Issuance Costs | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Amount reclassified from Other assets | (716,000) | |
Recently Issued Accounting Pronouncements | Assets sold under agreements to repurchase | Accounting Standards Update 2015-03: Simplifying the Presentation of Debt Issuance Costs | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Amount reclassified from Other assets | 715,000 | |
Recently Issued Accounting Pronouncements | Mortgage Loan Participation and Sale Agreement member | Accounting Standards Update 2015-03: Simplifying the Presentation of Debt Issuance Costs | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Amount reclassified from Other assets | 1,000 | |
Recently Issued Accounting Pronouncements | Note Payable | Accounting Standards Update 2015-03: Simplifying the Presentation of Debt Issuance Costs | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Amount reclassified from Other assets | $ 10,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) $ in Millions | Feb. 29, 2016 | Feb. 26, 2016 | Feb. 25, 2016 |
Barclays | |||
Subsequent Event [Line Items] | |||
Maximum loan amount | $ 100 | $ 20 | |
PLS | PMH | Fannie Mae | |||
Subsequent Event [Line Items] | |||
Reaquisition of ESS | $ 52 | ||
PLS | PMH | Freddie Mac | |||
Subsequent Event [Line Items] | |||
Reaquisition of ESS | $ 7 |
Uncategorized Items - pfsi-2015
Label | Element | Value |
Adjustments To Additional Paid In Capital Share based Compensation Stock Options And Restricted Stock Units Requisite Service Period Recognition Value | pfsi_AdjustmentsToAdditionalPaidInCapitalShareBasedCompensationStockOptionsAndRestrictedStockUnitsRequisiteServicePeriodRecognitionValue | $ 3,699,000 |
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts | 13,486,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 230,000,000 |
Adjustments to Additional Paid in Capital under Tax Agreement | pfsi_AdjustmentsToAdditionalPaidInCapitalUnderTaxAgreement | 2,015,000 |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders | 3,809,000 |
Predecessor [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_ProfitLoss | 76,834,000 |
Limited Partners' Capital Account, Distribution Amount | us-gaap_LimitedPartnersCapitalAccountDistributionAmount | 19,623,000 |
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | us-gaap_StockGrantedDuringPeriodValueSharebasedCompensation | 238,000 |
Partner Capital Issuance Cost | pfsi_PartnerCapitalIssuanceCost | 3,745,000 |
Additional Paid In Capital [Member] | ||
Adjustments To Additional Paid In Capital Share based Compensation Stock Options And Restricted Stock Units Requisite Service Period Recognition Value | pfsi_AdjustmentsToAdditionalPaidInCapitalShareBasedCompensationStockOptionsAndRestrictedStockUnitsRequisiteServicePeriodRecognitionValue | 881,000 |
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts | 13,290,000 |
Noncontrolling Interest Initial Recognition | pfsi_NoncontrollingInterestInitialRecognition | 127,160,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 229,999,000 |
Adjustments to Additional Paid in Capital under Tax Agreement | pfsi_AdjustmentsToAdditionalPaidInCapitalUnderTaxAgreement | 2,015,000 |
Stock Issued During Period, Value, Conversion of Units | us-gaap_StockIssuedDuringPeriodValueConversionOfUnits | $ 60,555,000 |
Common Class A [Member] | ||
Stock Issued During Period, Shares, Conversion of Units | us-gaap_StockIssuedDuringPeriodSharesConversionOfUnits | 8,035,000 |
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 12,778,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 1,000 |
Stock Issued During Period, Value, Conversion of Units | us-gaap_StockIssuedDuringPeriodValueConversionOfUnits | 1,000 |
Noncontrolling Interest [Member] | ||
Adjustments To Additional Paid In Capital Share based Compensation Stock Options And Restricted Stock Units Requisite Service Period Recognition Value | pfsi_AdjustmentsToAdditionalPaidInCapitalShareBasedCompensationStockOptionsAndRestrictedStockUnitsRequisiteServicePeriodRecognitionValue | 2,818,000 |
Net Income (Loss) Attributable to Parent | us-gaap_ProfitLoss | 80,931,000 |
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts | 196,000 |
Noncontrolling Interest Initial Recognition | pfsi_NoncontrollingInterestInitialRecognition | (127,160,000) |
Stock Issued During Period, Value, Conversion of Units | us-gaap_StockIssuedDuringPeriodValueConversionOfUnits | (60,556,000) |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders | 3,809,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 315,454,000 |
Retained Earnings [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_ProfitLoss | 14,400,000 |
Members Equity Component [Member] | Predecessor [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_ProfitLoss | 76,834,000 |
Limited Partners' Capital Account, Distribution Amount | us-gaap_LimitedPartnersCapitalAccountDistributionAmount | 19,623,000 |
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | us-gaap_StockGrantedDuringPeriodValueSharebasedCompensation | 238,000 |
Partner Capital Issuance Cost | pfsi_PartnerCapitalIssuanceCost | $ 3,745,000 |