PennyMac Financial Services, Inc. (PFSI) Q1 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

Good afternoon and welcome to PennyMac Financial Services, Inc.' 's first quarter 2026 earnings call. Additional earnings materials, including presentation slides that will be referred to in this call, as well as an Excel file with supplemental information are available on PennyMac Financial's website at pfsi.pennymac.com. Before we begin, let me remind you that this call may contain forward-looking statements that are subject to certain risks identified on slide two of the earnings presentation. that could cause the company's actual results to differ materially, as well as non-GAAP measures that have been reconciled to their GAAP equivalent in the earnings materials. Now I'd like to introduce David Spector, PennyMac Financial's Chairman and Chief Executive Officer, and Dan Perotti, PennyMac Financial's Chief Financial Officer. Thank you, Operator. Good afternoon, and thank you to everyone for participating in our first quarter 2026 earnings call. As shown on slide three, PennyMac Financial generated net income of $82 million in the first quarter for $1.53 in earnings per diluted share for an 8% annualized return on equity. Excluding the impact of valuation-related changes and transaction expenses related to our acquisition of similar subservicing business, Adjusted EPS was $2.19 per diluted share, or an 11% annualized adjusted return on equity. As Dan will expand upon, we continue to optimize our hedging strategies to converge GAAP and adjusted ROEs. While our adjusted return on equity this quarter remained below our longer-term expectations, we remain intensely focused on maximizing returns on invested capital over the near and long term. I'm also optimistic regarding the underlying trends in our business, particularly higher recapture rates in consumer direct chan...