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PennyMac Mortgage Investment Trust Reports Third Quarter 2012 Results

PennyMac Mortgage Investment Trust (NYSE: PMT) today reported net income of $40.4 million, or $0.81 per diluted share, for the third quarter of 2012, on net investment income of $99.2 million. In addition, PMT’s Board of Trustees has declared a cash dividend of $0.57 per common share of beneficial interest. This dividend will be paid on November 30, 2012 to common shareholders of record on November 16, 2012.

Quarterly Highlights

Financial results:

  • Diluted earnings per common share of $0.81, up 3 percent from the prior quarter with a 33 percent increase in weighted shares outstanding
  • Net investment income of $99.2 million, up 54 percent from the prior quarter
  • Net income of $40.4 million, up 37 percent from the prior quarter
  • Return on average equity of 16 percent 1, down from 17 percent in the prior quarter
  • Issued over $359 million in new equity capital, bringing total shareholders’ equity to $1.2 billion
  • Increased dividend to $0.57 per diluted common share, up 3 percent from the prior quarter

Mortgage Investment Results:

  • Correspondent purchases of $6.3 billion in unpaid principal balance (UPB) 2, up 87 percent from the prior quarter
    • Conventional purchases of $3.7 billion in UPB, up 111 percent from the prior quarter
  • Correspondent interest rate lock commitments (IRLCs) of $8.5 billion, up 84 percent from the prior quarter
    • Conventional IRLCs of $5.5 billion, up 105 percent from the prior quarter
  • Distressed mortgage loan purchases of $357 million in UPB

______________________________________

1

 

Return on equity calculated based on average shareholders’ equity for each month.

2

FHA purchases were $2.6 billion in UPB, for which PMT earns a sourcing fee of 3bps and interest income for its holding period.

 

PMT earned $59.0 million in pretax income for the quarter ended September 30, 2012, a 55 percent increase from the second quarter. The following table presents the contribution of PMT’s Investment Activities and Correspondent Lending segments to pretax income:

                                 
Quarter ended September 30, 2012
Investment Correspondent Intersegment
Unaudited Activities Lending elimination Total
(in thousands)
Revenues:
External
Net gain on investments $ 26,061 $ - $ - $ 26,061
Interest income 13,586 6,159 (15 ) 19,730
Net gain on mortgage loans acquired for sale - 49,793 - 49,793
Other income   775   2,837   -     3,612
  40,422   58,789   (15 )   99,196
Expenses:
Interest 4,931 3,366 (15 ) 8,282
Servicing expense 5,148 60 - 5,208
Loan fulfillment fees payable to affiliate - 17,258 - 17,258
Other   8,801   678   -     9,479
  18,880   21,362   (15 )   40,227
Pretax income $ 21,542 $ 37,427 $ -   $ 58,969
 

“During the third quarter, PMT efficiently deployed capital from its equity raise to grow earnings and achieve strong investment results,” said Chairman and Chief Executive Officer Stanford L. Kurland. “We increased earnings to $0.81 per share, grew mortgage investments by over $350 million, increased conventional correspondent loan purchase volume by 111% and realized solid returns in our distressed whole loan portfolio.”

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