• PennyMac Mortgage Investment Trust
email this
  • PennyMac Mortgage Investment Trust Reports Second Quarter 2019 Results
    Company Release - 08/01/2019 16:30

    WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)-- PennyMac Mortgage Investment Trust (NYSE: PMT) today reported net income attributable to common shareholders of $38.0 million, or $0.50 per common share on a diluted basis for the second quarter of 2019, on net investment income of $96.4 million. PMT previously announced a cash dividend for the second quarter of 2019 of $0.47 per common share of beneficial interest, which was declared on June 26, 2019 and paid on July 30, 2019 to common shareholders of record as of July 15, 2019.

    Second Quarter 2019 Highlights

    Financial results:

    • Net income attributable to common shareholders of $38.0 million, down from $47.3 million in the prior quarter
      • Results reflect solid performance from government-sponsored enterprise (GSE) credit risk transfer (CRT) investments and strong correspondent production
      • Agency mortgage-backed securities (MBS) and interest rate hedges substantially offset the market-driven valuation impact on mortgage servicing rights (MSR) and excess servicing spread (ESS) investments
    • Annualized return on average common equity of 10 percent1
    • Book value per common share of $20.79 at June 30, 2019, up from $20.72 at March 31, 2019

    Other investment and financing highlights:

    • Increased investment in CRT securities and MSRs resulting from PMT’s record level of loan acquisition volumes
      • Conventional loan production totaled $12.2 billion in unpaid principal balance (UPB), up 35 percent from the prior quarter2
      • CRT deliveries totaled $9.3 billion in UPB, resulting in a firm commitment to purchase $324 million of CRT securities
      • New MSR investments totaled $153 million
    • Settled PMT’s fifth CRT transaction totaling $933 million in face amount; currently delivering loans to Fannie Mae under a commitment for our sixth CRT transaction
    • Issued $638 million of 4-year term notes to finance PMT’s fourth settled CRT transaction, further adding duration and improving its capital efficiency
    • Raised approximately $214 million in net proceeds from the issuance of common shares during the quarter
    • Completed the sale of nonperforming loans totaling $42 million in UPB from the distressed portfolio

    Notable activity after quarter end:

    • Entered into an agreement after the quarter end to sell approximately $115 million in UPB of nonperforming and reperforming loans from the distressed portfolio3
      • Remaining distressed loans after the sale are expected to total $18 million in UPB

    1

    Annualized return on average common equity is calculated based on annualized quarterly net income attributable to common shareholders as a percentage of monthly average common equity during the period.

    2

    Consists of delegated and non-delegated conventional conforming and non-Agency loans and includes conventional loans acquired from PennyMac Financial Services, Inc. (NYSE: PFSI).

    3

    These transactions are subject to continuing due diligence and customary closing conditions. There can be no assurance regarding the size of these transactions or that these transactions will be completed at all.

    “PMT’s investments delivered solid returns in the second quarter, driven by strong fundamental performance of our credit sensitive strategies and improved correspondent production earnings,” said President and CEO David Spector. “Record production volumes this quarter accelerated the pace of capital deployment into CRT and MSRs. Lower interest rates drove fair value losses on MSR and ESS investments, which were substantially offset by gains from MBS and interest rate hedges. We are optimistic regarding our ability to continue to deploy capital into PMT’s organically created investments with accretive returns as we consider our outlook for future growth.”

    The following table presents the contributions of PMT’s segments, consisting of Correspondent Production, Credit Sensitive Strategies, Interest Rate Sensitive Strategies, and Corporate:

    Quarter ended June 30, 2019

    Correspondent

    production

     

    Credit sensitive

    strategies

     

    Interest rate

    sensitive strategies

     

    Corporate

     

    Consolidated

    (in thousands)

    Net gain (loss) on investments:
    Loans at fair value

    $

    -

     

    $

    (5,451

    )

    $

    -

     

    $

    -

     

    $

    (5,451

    )

    Loans held by variable interest entity net of asset-backed secured financing

     

    -

     

     

    64

     

     

    954

     

     

    -

     

     

    1,018

     

    Mortgage-backed securities

     

    -

     

     

    -

     

     

    27,448

     

     

    -

     

     

    27,448

     

    CRT investments

     

    -

     

     

    30,769

     

     

    -

     

     

    -

     

     

    30,769

     

    Hedging derivatives

     

    -

     

     

    -

     

     

    37,181

     

     

    -

     

     

    37,181

     

    Excess servicing spread investments

     

    -

     

     

    -

     

     

    (3,211

    )

     

    -

     

     

    (3,211

    )

     

    -

     

     

    25,382

     

     

    62,372

     

     

    -

     

     

    87,754

     

    Net gain on loans acquired for sale

     

    22,797

     

     

    11,447

     

     

    -

     

     

    -

     

     

    34,244

     

    Net loan servicing fees

     

    -

     

     

    -

     

     

    (53,589

    )

     

    -

     

     

    (53,589

    )

    Net interest income (expense)
    Interest income

     

    25,838

     

     

    9,644

     

     

    35,864

     

     

    447

     

     

    71,793

     

    Interest expense

     

    (16,893

    )

     

    (13,989

    )

     

    (35,014

    )

     

    -

     

     

    (65,896

    )

     

    8,945

     

     

    (4,345

    )

     

    850

     

     

    447

     

     

    5,897

     

    Other income

     

    17,652

     

     

    3,307

     

     

    -

     

     

    1,136

     

     

    22,095

     

     

    49,394

     

     

    35,791

     

     

    9,633

     

     

    1,583

     

     

    96,401

     

    Expenses:
    Loan fulfillment and servicing fees payable to PennyMac Financial Services, Inc.

     

    29,590

     

     

    617

     

     

    10,951

     

     

    -

     

     

    41,158

     

    Management fees payable to PennyMac Financial Services, Inc.

     

    -

     

     

    -

     

     

    -

     

     

    8,832

     

     

    8,832

     

    Other

     

    3,638

     

     

    2,159

     

     

    582

     

     

    6,662

     

     

    13,041

     

    $

    33,228

     

    $

    2,776

     

    $

    11,533

     

    $

    15,494

     

    $

    63,031

     

    Pretax income (loss)

    $

    16,166

     

    $

    33,015

     

    $

    (1,900

    )

    $

    (13,911

    )

    $

    33,370

     

    Credit Sensitive Strategies Segment

    The Credit Sensitive Strategies segment primarily includes results from CRT, distressed mortgage loans and non-Agency subordinated bonds. Pretax income for the segment was $33.0 million on revenues of $35.8 million, compared to pretax income of $58.4 million on revenues of $61.1 million in the prior quarter.

    The Credit Sensitive Strategies segment recorded a net gain on loans acquired for sale of $11.4 million, up modestly from $11.1 million in the prior quarter. These amounts represent the recognition of the fair value of firm commitments to acquire CRT securities for deliveries during the second quarter; an additional $9.4 million was attributed to the Correspondent Production segment, up from $8.6 million in the prior quarter.

    Net gain on investments in the segment was $25.4 million, down from $53.8 million in the prior quarter.

    Net gain on CRT investments for the quarter was $30.8 million, compared to $53.1 million in the prior quarter, and included $3.6 million in valuation-related losses driven by credit spread widening on seasoned CRT investments. The prior quarter included $20.4 million in valuation-related gains related to credit spread tightening. Net gain on CRT investments also included $35.3 million in realized gains and carry, up from $33.6 million in the prior quarter. Recognized losses of $0.9 million were flat from the prior quarter, reflecting portfolio seasoning and in line with expectations.

    PMT’s distressed mortgage loan portfolio generated realized and unrealized losses totaling $5.5 million, compared to gains of $0.5 million in the prior quarter. Fair value losses on performing loans in the distressed portfolio were $1.8 million, while fair value losses on nonperforming loans were $4.3 million, driven by forecasts for slower home price appreciation and higher expected resolution costs. The distressed mortgage loan portfolio also generated realized gains related to payoffs and loan sales of $0.7 million.

    Net interest expense for the segment totaled $4.3 million, compared to $3.8 million in the prior quarter. Interest income totaled $9.6 million, up from $8.3 million in the prior quarter, driven by a larger CRT investment. Interest expense totaled $14.0 million, up from $12.0 million in the prior quarter, driven by increased financing costs related to the larger CRT investment.

    Other investment income in the segment was $3.3 million, compared to a loss of $30,000 in the prior quarter, driven by the continued liquidation of the real estate acquired in the settlement of loans (REO) portfolio and seasonal factors. At quarter end, PMT’s inventory of REO properties totaled $97.8 million, up from $72.2 million at March 31, 2019. The increase was driven by a reclassification of certain properties previously held for investment to the REO portfolio.

    Segment expenses were $2.8 million, essentially unchanged from the prior quarter.

    Interest Rate Sensitive Strategies Segment

    The Interest Rate Sensitive Strategies segment includes results from investments in MSRs, ESS, Agency MBS, non-Agency senior MBS and interest rate hedges. Pretax loss for the segment was $1.9 million on revenues of $9.6 million, compared to pretax income of $0.8 million on revenues of $11.2 million in the prior quarter. The segment includes investments that typically have offsetting fair value exposures to changes in interest rates. For example, in a period with decreasing interest rates, MSRs and ESS typically decrease in fair value whereas Agency MBS typically increase in value.

    The results in the Interest Rate Sensitive Strategies segment consist of net gains and losses on investments, net interest income and net loan servicing fees, as well as associated expenses.

    Net gain on investments for the segment totaled $62.4 million, and primarily consisted of $37.2 million of gains in the value of hedging derivatives and $27.5 million of gains on MBS, partially offset by a $3.2 million loss in the value of ESS investments.

    Net loan servicing fees resulted in a loss of $53.6 million, compared to a loss of $31.1 million in the prior quarter. Net loan servicing fees included $66.9 million in servicing fees and $6.4 million in other fees, reduced by $46.6 million in realization of MSR cash flows. Net loan servicing fees also included a $136.9 million decrease in the fair value of MSRs, $55.5 million of related hedging gains and $1.0 million of MSR recapture income. PMT’s hedging activities are intended to manage the Company’s net exposure across all interest rate sensitive strategies, which include MSRs, ESS and MBS.

    The following schedule details net mortgage loan servicing fees:

    Quarter Ended

    June 30, 2019

    March 31, 2019

    June 30, 2018

     

    (in thousands)

    From non-affiliates:
    Servicing fees1

    $

    66,919

     

    $

    61,272

     

    $

    48,667

     

    Other fees

     

    6,408

     

     

    3,208

     

     

    1,859

     

    Effect of MSRs:
    Carried at fair value—change in fair value
    Realization of cashflows

     

    (46,580

    )

     

    (40,821

    )

     

    (27,998

    )

    Other

     

    (136,887

    )

     

    (96,508

    )

     

    16,084

     

     

    (183,467

    )

     

    (137,329

    )

     

    (11,914

    )

    Gains (losses) on hedging derivatives

     

    55,536

     

     

    41,135

     

     

    (11,438

    )

     

    (127,931

    )

     

    (96,194

    )

     

    (23,352

    )

     

    (54,604

    )

     

    (31,714

    )

     

    27,174

     

    From PFSI—MSR recapture income

     

    1,015

     

     

    634

     

     

    412

     

    Net mortgage loan servicing fees

    $

    (53,589

    )

    $

    (31,080

    )

    $

    27,586

     

    1 Includes contractually specified servicing fees

    MSR valuation losses were primarily driven by a decrease in mortgage rates during the quarter, resulting in expectations for elevated prepayment activity in the future. ESS investments also declined in value from a decrease in mortgage rates and the ongoing paydown of the underlying loans, partially offset by increased recapture income from PFSI for prepayment activity during the quarter. PMT generally benefits from recapture income when the prepayment of a loan underlying PMT’s ESS results from refinancing by PFSI.

    Net interest income for the segment was $0.9 million, down from $1.0 million in the prior quarter. Interest income totaled $35.9 million, up from $34.1 million in the prior quarter, primarily driven by higher interest income on custodial deposits. Interest expense totaled $35.0 million, up from $33.1 million in the prior quarter, driven by higher interest shortfall expense from elevated prepayment activity.

    Segment expenses were $11.5 million, an increase of 11 percent from the prior quarter, primarily driven by higher servicing fee expenses on a growing MSR portfolio.

    Correspondent Production Segment

    PMT acquires newly originated loans from correspondent sellers and typically sells or securitizes the loans, resulting in current-period income and ongoing investments in MSRs and CRT related to a portion of its production. PMT’s Correspondent Production segment generated pretax income of $16.2 million, up from $3.6 million in the prior quarter.

    Through its correspondent production activities, PMT acquired $21.7 billion in UPB of loans from nonaffiliates compared to $15.1 billion in the prior quarter. Of total correspondent acquisitions, conventional conforming and jumbo acquisitions from nonaffiliates totaled $10.7 billion, and government-insured or guaranteed and non-delegated acquisitions totaled $11.0 billion, compared to $8.1 billion and $6.9 billion, respectively, in the prior quarter. PMT also acquired $1.1 billion of conventional loans from PennyMac Financial, compared to $0.7 billion in the prior quarter. PMT issued interest rate lock commitments on conventional loans totaling $12.6 billion, compared to $9.0 billion in the prior quarter.

    Segment revenues were $49.4 million, a 46 percent increase from the prior quarter and included net gain on loans acquired for sale of $22.8 million, other income of $17.7 million, which primarily consists of volume-based origination fees, and net interest income of $8.9 million. Net gain on loans acquired for sale in the quarter increased by $12.6 million from the prior quarter, driven by improved production margins and higher CRT-related gains, as discussed earlier. Net interest income decreased $1.7 million from the prior quarter, primarily driven by a decrease in the recognition of incentives the Company is entitled to receive under one of its master repurchase agreements, under which it finances mortgage loans that satisfy certain consumer relief characteristics. These incentives totaled $2.3 million in the second quarter, down from $7.5 million in the first quarter. As the Company expected, the lender substantially curtailed the incentives provided under the master repurchase agreement through an orderly wind down of the incentive program during the quarter ended June 30, 2019.

    Segment expenses were $33.2 million, up from $30.2 million in the prior quarter driven by the increase in production activity, partially offset by a decrease in the weighted average fulfillment fee during the quarter. The weighted average fulfillment fee rate in the second quarter was 28 basis points, down from 34 basis points in the prior quarter.

    Corporate Segment

    The Corporate segment includes interest income from cash and short-term investments, management fees, and corporate expenses.

    Segment revenues were $1.6 million, up from $0.4 million in the prior quarter.

    Management fees were $8.8 million, up 22 percent from the prior quarter driven by increased incentive fees paid to PFSI based on PMT’s profitability and an increase in base management fees as a result of PMT’s increased shareholders’ equity.

    Other segment expenses were $6.7 million, up from $6.1 million in the prior quarter.

    Taxes

    PMT recorded a $10.9 million benefit for income tax expense compared to $3.7 million in the prior quarter, driven by increased fair value losses on investments held in PMT’s taxable subsidiary.

    “This week marks the 10th anniversary of PennyMac Mortgage Investment Trust, and we are proud of our track record in pursuing unique mortgage-related investment strategies and delivering attractive risk-adjusted returns while preserving shareholder value,” commented Executive Chairman Stanford L. Kurland. “Our recent successful capital raises have been driven by PMT's performance and compelling investment outlook. We expect the new investments in CRT and MSRs to be accretive to PMT’s overall return profile with further benefit from increased scale economies, and we remain optimistic about our ability to drive strong returns and shareholder value over the current investment horizon.”

    Management’s slide presentation will be available in the Investor Relations section of the Company’s website at www.pennymac-REIT.com beginning at 1:30 p.m. (Pacific Time) on Thursday, August 1, 2019.

    About PennyMac Mortgage Investment Trust

    PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) that invests primarily in residential mortgage loans and mortgage-related assets. PMT is externally managed by PNMAC Capital Management, LLC, a wholly-owned subsidiary of PennyMac Financial Services, Inc. (NYSE: PFSI). Additional information about PennyMac Mortgage Investment Trust is available at www.PennyMac-REIT.com.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections and assumptions with respect to, among other things, the Company’s financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like “believe,” “expect,” “anticipate,” “promise,” “plan,” and other expressions or words of similar meanings, as well as future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: changes in the Company’s investment objectives or investment or operational strategies, including any new lines of business or new products and services that may subject it to additional risks; the occurrence of natural disasters or other events or circumstances that could impact the Company’s operations; volatility in the Company’s industry, the debt or equity markets, the general economy or the real estate finance and real estate markets specifically, whether the result of market events or otherwise; events or circumstances which undermine confidence in the financial and housing markets or otherwise have a broad impact on financial and housing markets, such as the sudden instability or collapse of large depository institutions or other significant corporations, terrorist attacks, natural or man-made disasters, or threatened or actual armed conflicts; changes in general business, economic, market, employment and domestic and international political conditions, or in consumer confidence and spending habits from those expected; declines in real estate or significant changes in U.S. housing prices or activity in the U.S. housing market; the availability of, and level of competition for, attractive risk-adjusted investment opportunities in mortgage loans and mortgage-related assets that satisfy the Company’s investment objectives; the inherent difficulty in winning bids to acquire mortgage loans, and the Company’s success in doing so; the concentration of credit risks to which the Company is exposed; the degree and nature of the Company’s competition; the Company’s dependence on its manager and servicer, potential conflicts of interest with such entities and their affiliates, and the performance of such entities; changes in personnel and lack of availability of qualified personnel at its manager, servicer or their affiliates; the availability, terms and deployment of short-term and long-term capital; the adequacy of the Company’s cash reserves and working capital; the Company’s ability to maintain the desired relationship between its financing and the interest rates and maturities of its assets; the timing and amount of cash flows, if any, from the Company’s investments; unanticipated increases or volatility in financing and other costs, including a rise in interest rates; the performance, financial condition and liquidity of borrowers; the ability of the Company’s servicer, which also provides the Company with fulfillment services, to approve and monitor correspondent sellers and underwrite loans to investor standards; incomplete or inaccurate information or documentation provided by customers or counterparties, or adverse changes in the financial condition of the Company’s customers and counterparties; the Company’s indemnification and repurchase obligations in connection with mortgage loans it purchases and later sells or securitizes; the quality and enforceability of the collateral documentation evidencing the Company’s ownership and rights in the assets in which it invests; increased rates of delinquency, default and/or decreased recovery rates on the Company’s investments; the performance of mortgage loans underlying mortgage-backed securities in which the Company retains credit risk; the Company’s ability to foreclose on its investments in a timely manner or at all; increased prepayments of the mortgages and other loans underlying the Company’s mortgage-backed securities or relating to the Company’s mortgage servicing rights, excess servicing spread and other investments; the degree to which the Company’s hedging strategies may or may not protect it from interest rate volatility; the effect of the accuracy of or changes in the estimates the Company makes about uncertainties, contingencies and asset and liability valuations when measuring and reporting upon the Company’s financial condition and results of operations; the Company’s ability to maintain appropriate internal control over financial reporting; the Company’s exposure to risks of loss and disruptions in operations resulting from adverse weather conditions and man-made or natural disasters; technologies for loans and the Company’s ability to mitigate security risks and cyber intrusions; the Company’s ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct its business; the Company’s ability to detect misconduct and fraud; the Company’s ability to comply with various federal, state and local laws and regulations that govern its business; developments in the secondary markets for the Company’s mortgage loan products; legislative and regulatory changes that impact the mortgage loan industry or housing market; changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies such as the Government National Mortgage Association, the Federal Housing Administration or the Veterans Administration, the U.S. Department of Agriculture, or government-sponsored entities such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, or such changes that increase the cost of doing business with such entities; the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implementing regulations and regulatory agencies, and any other legislative and regulatory changes that impact the business, operations or governance of mortgage lenders and/or publicly-traded companies; the Consumer Financial Protection Bureau and its issued and future rules and the enforcement thereof; changes in government support of homeownership; changes in government or government-sponsored home affordability programs; limitations imposed on the Company’s business and its ability to satisfy complex rules for it to qualify as a REIT for U.S. federal income tax purposes and qualify for an exclusion from the Investment Company Act of 1940 and the ability of certain of the Company’s subsidiaries to qualify as REITs or as taxable REIT subsidiaries for U.S. federal income tax purposes, as applicable, and the Company’s ability and the ability of its subsidiaries to operate effectively within the limitations imposed by these rules; changes in governmental regulations, accounting treatment, tax rates and similar matters (including changes to laws governing the taxation of REITs, or the exclusions from registration as an investment company); the Company’s ability to make distributions to its shareholders in the future; the Company’s failure to deal appropriately with issues that may give rise to reputational risk; and the Company’s organizational structure and certain requirements in its charter documents. You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this press release are current as of the date of this release only.

    PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEETS (UNAUDITED)

     

    June 30, 2019

    March 31, 2019

    June 30, 2018

    (in thousands except share amounts)

    ASSETS
    Cash

    $

    77,676

     

    $

    68,538

     

    $

    63,035

     

    Short-term investments

     

    76,731

     

     

    29,751

     

     

    39,484

     

    Mortgage-backed securities at fair value

     

    2,600,357

     

     

    2,589,106

     

     

    1,698,322

     

    Loans acquired for sale at fair value

     

    2,477,267

     

     

    1,435,071

     

     

    1,790,518

     

    Loans at fair value

     

    358,570

     

     

    398,664

     

     

    749,445

     

    Excess servicing spread purchased from PennyMac Financial Services, Inc.

     

    194,156

     

     

    205,081

     

     

    229,470

     

    Derivative and credit risk transfer strip assets

     

    258,782

     

     

    188,710

     

     

    133,239

     

    Firm commitment to purchase credit risk transfer securities at fair value

     

    15,581

     

     

    79,784

     

     

    4,426

     

    Real estate acquired in settlement of loans

     

    97,808

     

     

    72,175

     

     

    109,271

     

    Real estate held for investment

     

    -

     

     

    42,346

     

     

    46,431

     

    Deposits securing credit risk transfer arrangements

     

    2,060,612

     

     

    1,137,283

     

     

    651,204

     

    Mortgage servicing rights

     

    1,126,427

     

     

    1,156,908

     

     

    1,010,507

     

    Servicing advances

     

    35,143

     

     

    37,392

     

     

    53,340

     

    Due from PennyMac Financial Services, Inc.

     

    1,485

     

     

    3,345

     

     

    4,010

     

    Other assets

     

    85,194

     

     

    111,833

     

     

    94,147

     

    Total assets

    $

    9,465,789

     

    $

    7,555,987

     

    $

    6,676,849

     

    LIABILITIES
    Assets sold under agreements to repurchase

    $

    5,364,551

     

    $

    4,179,829

     

    $

    3,780,204

     

    Mortgage loan participation and sale agreements

     

    -

     

     

    73,142

     

     

    87,751

     

    Exchangeable senior notes

     

    248,958

     

     

    248,652

     

     

    247,759

     

    Notes payable

     

    1,370,074

     

     

    739,224

     

     

    445,062

     

    Asset-backed financing of a variable interest entity at fair value

     

    270,077

     

     

    275,509

     

     

    287,719

     

    Interest-only security payable at fair value

     

    26,356

     

     

    32,564

     

     

    7,652

     

    Assets sold to PennyMac Financial Services, Inc.

     

    118,716

     

     

    125,929

     

     

    138,582

     

    Derivative liabilities

     

    22,454

     

     

    8,750

     

     

    3,446

     

    Accounts payable and accrued liabilities

     

    36,373

     

     

    74,294

     

     

    58,612

     

    Due to PennyMac Financial Services, Inc.

     

    34,695

     

     

    29,951

     

     

    19,661

     

    Income taxes payable

     

    21,873

     

     

    32,866

     

     

    47,289

     

    Liability for losses under representations and warranties

     

    7,728

     

     

    7,688

     

     

    7,625

     

    Total liabilities

     

    7,521,855

     

     

    5,828,398

     

     

    5,131,362

     

    SHAREHOLDERS' EQUITY
    Preferred shares of beneficial interest

     

    299,707

     

     

    299,707

     

     

    299,707

     

    Common shares of beneficial interest—authorized, 500,000,000 common shares of $0.01 par value; issued and outstanding 78,607,436, 68,412,435, and 60,950,754 common shares, respectively

     

    786

     

     

    684

     

     

    610

     

    Additional paid-in capital

     

    1,647,186

     

     

    1,431,887

     

     

    1,282,971

     

    Accumulated deficit

     

    (3,745

    )

     

    (4,689

    )

     

    (37,801

    )

    Total shareholders' equity

     

    1,943,934

     

     

    1,727,589

     

     

    1,545,487

     

    Total liabilities and shareholders' equity

    $

    9,465,789

     

    $

    7,555,987

     

    $

    6,676,849

     

    PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

     

    For the Quarterly Periods ended

    June 30, 2019

    March 31, 2018

    June 30, 2018

    (in thousands, expect per share amounts)

    Investment Income
    Net gain (loss) on investments:
    From nonaffiliates

    $

    90,965

     

    $

    98,655

     

    $

    23,989

     

    From PennyMac Financial Services, Inc.

     

    (3,211

    )

     

    (3,562

    )

     

    1,520

     

     

    87,754

     

     

    95,093

     

     

    25,509

     

    Net gain on loans acquired for sale:
    From nonaffiliates

     

    31,089

     

     

    19,329

     

     

    6,251

     

    From PennyMac Financial Services, Inc.

     

    3,155

     

     

    1,994

     

     

    2,891

     

     

    34,244

     

     

    21,323

     

     

    9,142

     

    Loan origination fees

     

    17,630

     

     

    12,938

     

     

    8,850

     

    Net loan servicing fees:
    From nonaffiliates

     

    (54,604

    )

     

    (31,714

    )

     

    27,174

     

    From PennyMac Financial Services, Inc.

     

    1,015

     

     

    634

     

     

    412

     

     

    (53,589

    )

     

    (31,080

    )

     

    27,586

     

    Interest income:
    From nonaffiliates

     

    69,026

     

     

    60,015

     

     

    48,434

     

    From PennyMac Financial Services, Inc.

     

    2,767

     

     

    3,066

     

     

    3,910

     

     

    71,793

     

     

    63,081

     

     

    52,344

     

    Interest expense:
    To nonaffiliates

     

    64,204

     

     

    52,943

     

     

    38,167

     

    To PennyMac Financial Services, Inc.

     

    1,692

     

     

    1,796

     

     

    1,898

     

     

    65,896

     

     

    54,739

     

     

    40,065

     

    Net interest income

     

    5,897

     

     

    8,342

     

     

    12,279

     

    Results of real estate acquired in settlement of loans

     

    2,075

     

     

    (1,480

    )

     

    (2,297

    )

    Other

     

    2,390

     

     

    1,482

     

     

    1,922

     

    Net investment income

     

    96,401

     

     

    106,618

     

     

    82,991

     

    Expenses
    Earned by PennyMac Financial Services, Inc.:
    Loan fulfillment fees

     

    29,590

     

     

    27,574

     

     

    14,559

     

    Loan servicing fees1

     

    11,568

     

     

    10,570

     

     

    9,431

     

    Management fees

     

    8,832

     

     

    7,248

     

     

    5,728

     

    Loan origination

     

    3,118

     

     

    2,277

     

     

    1,572

     

    Compensation

     

    1,771

     

     

    1,969

     

     

    2,220

     

    Professional services

     

    1,733

     

     

    1,327

     

     

    1,757

     

    Loan collection and liquidation

     

    1,247

     

     

    1,584

     

     

    1,923

     

    Real estate held for investment

     

    865

     

     

    1,054

     

     

    1,301

     

    Other

     

    4,307

     

     

    3,148

     

     

    2,214

     

    Total expenses

     

    63,031

     

     

    56,751

     

     

    40,705

     

    Income before (benefit from) provision for income taxes

     

    33,370

     

     

    49,867

     

     

    42,286

     

    (Benefit from) provision for income taxes

     

    (10,863

    )

     

    (3,660

    )

     

    5,861

     

    Net income

     

    44,233

     

     

    53,527

     

     

    36,425

     

    Dividends on preferred shares

     

    6,234

     

     

    6,234

     

     

    6,234

     

    Net income attributable to common shareholders

     

    37,999

     

     

    47,293

     

     

    30,191

     

    Earnings per share
    Basic

    $

    0.52

     

    $

    0.73

     

    $

    0.49

     

    Diluted

    $

    0.50

     

    $

    0.68

     

    $

    0.47

     

    Weighted average shares outstanding
    Basic

     

    73,425

     

     

    64,629

     

     

    60,903

     

    Diluted

     

    81,892

     

     

    73,371

     

     

    69,370

     

    Dividends declared per common share

    $

    0.47

     

    $

    0.47

     

    $

    0.47

     

     

    1 Loan servicing fees expense includes both special servicing for PMT’s distressed portfolio and subservicing for its mortgage servicing rights

     

    Media
    Janis Allen
    (805) 330-4899

    Investors
    Christopher Oltmann
    (818) 224-7028

    Source: PennyMac Mortgage Investment Trust