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PennyMac Financial Services, Inc. (PFSI) CEO David Spector on Q2 2018 Results - Earnings Call Transcript

Aug. 05, 2018 9:28 PM ETPennyMac Financial Services, Inc. (PFSI)
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PennyMac Financial Services, Inc. (NYSE:PFSI) Q2 2018 Earnings Conference Call August 2, 2018 8:00 AM ET


Chris Oltmann - Senior Vice President of IR

Stan Kurland - Executive Chairman

David Spector - President and Chief Executive Officer

Andy Chang - Chief Financial Officer


Chris Oltmann

Good afternoon, and welcome to the Second Quarter 2018 Earnings Discussion for PennyMac Financial Services, Inc. The slides that accompany this discussion are available from PennyMac Financial's Web site at www.ir.pennymacfinancial.com.

Before we begin, please take a few moments to read the disclaimer on Slide 2 of the presentation. Thank you.

Now I'd like to turn the discussion over to Stan Kurland, PennyMac Financial's Executive Chairman.

Stan Kurland

Thank you, Chris.

Let's begin with Slide 3. PennyMac Financial's second quarter results demonstrate the earnings power of our comprehensive mortgage banking platform against the backdrop of a rising interest rate environment and heightened competition among industry participants adjusting capacity to a smaller origination market. While the origination market environment continued to adjust to higher rates, the earnings contribution from our production segment increased from the prior quarter, driven by higher production volumes, while the servicing segment continued to deliver strong results this quarter. PennyMac Financial earned pretax income of $74.7 million and diluted earnings per share of $0.70.

During the quarter, we repurchased approximately 236,000 shares of PFSI Class A common stock at a cost of $4.8 million at an average price of $20.41 per share. Book value per share increased to $21.19, from $20.74 per share at March 31 and $16.40 a year ago.

Our production segment, pretax income was $19 million, up 11% from the prior quarter and down 71% from the second quarter of 2017. Acquisition and origination volume totaled $15.9 billion in UPB, up 11% from the prior quarter and down 9% from the second quarter of 2017.

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