PennyMac Financial Services: Conference Meeting Highlights - Rising Rates Continue to Weigh on 2026 Outlook

研报英文原文证据摘录

PennyMac Financial Services: Conference Meeting Highlights - Rising Rates Continue to Weigh on 2026 Outlook

28 May 2026

PennyMac Financial Services

Hedging Strategy

• The company is moving towards a more balanced hedge approach with less delta-

hedging.

• An expensive hedging strategy early in the year, combined with an improving

consumer direct recapture rate in 1Q26, was used to manage negative convexity.

Servicing Operations & Technology

• Management believes the trigger lead bill has protected the servicing book,

though the exact impact with rising rates is difficult to quantify. Conventional

recapture rates increased to 30% (from 22% prior quarter), partially due to this

bill.

• Vesta, fully online since mid-Q1, has significantly improved efficiency in

processing from lock to close. Early feedback from the consumer direct channel

has been positive, indicating meaningful front-end savings.

• A significant portion of tech spend is directed towards servicing, particularly for

default servicing models, and to integrate Cenlar. Default servicing currently

requires substantial human intervention, which cannot be entirely replaced by

technology. While servicing performing loans is already fairly efficient, the cost to

service a delinquent loan is 10-15x that of a current loan.

• Average servicing fees are 25-26 bps for conventional loans and closer to 44 bps

for Ginnie Mae. This larger Ginnie Mae strip benefits the company when rates rise

and DQs increase but exacerbates the increase in amortization expense when

prepayments accelerate.

Cenlar Acquisition

• The Cenlar deal process began roughly a year before its announcement and is

estimated to be 3-4% dilutive to tangible book value and dilutive to EPS in the first

two years, but $2.00/shr accretive to EPS in 2028.