PennyMac Financial Services (PFSI) posted net income of $47.1 million for the first quarter of 2015, on revenue of $140.3 million. Net income attributable to common stockholders was $9 million, or $0.42 per diluted share.

Total net revenue dropped 1% from the previous quarter, falling to $140.3 million, while production revenue increased 53% from the previous quarter, jumping to $110.8 million.

Total loan production activity reached $8.9 billion in unpaid principal balance, up 12% from the prior quarter.

In addition, the lender’s servicing portfolio reached $115.2 billion in UPB, up 9% from Dec. 31, 2014.

“PennyMac Financial delivered strong earnings in the first quarter, driven by higher volumes and revenue from our loan production business,” said Chairman and CEO Stanford Kurland.

“The opportunity in mortgage production is substantial, driven by continued low mortgage rates, the FHA's reduction of its mortgage insurance premium and limited origination capacity in the market. While this opportunity also results in higher prepayment activity, which negatively impacted our loan servicing segment during this quarter, we believe that PennyMac Financial is well positioned for continued success in this vibrant market,” Kurland added.

Notable activity from the company in the quarter includes:

  • Completed the previously announced acquisition of $15 billion in UPB of agency Mortgage Servicing Rights with associated excess servicing spread (ESS) sold to PennyMac Mortgage Investment Trust (PMT).
  • Entered into a letter of intent to acquire approximately $9 billion in UPB of Ginnie Mae MSRs.
  • Amended PennyMac Financial’s Ginnie Mae MSR financing facility to allow the financing of related ESS by PMT to facilitate continued co-investment by PMT in Ginnie Mae MSR acquisitions