PennyMac Mortgage Investment Trust Reports Third Quarter 2018 Results
PennyMac Mortgage Investment Trust (NYSE: PMT) today reported net income attributable to common shareholders of $40.3 million,
or $0.62 per common share on a diluted basis for the third quarter of 2018, on net investment income of $108.5 million. PMT
previously announced a cash dividend for the third quarter of 2018 of $0.47 per common share of beneficial interest, which was
declared on September 25, 2018, and paid on October 30, 2018.
Third Quarter 2018 Highlights
Financial results:
- Net income attributable to common shareholders of $40.3 million, up from $30.2 million in the
prior quarter
- Diluted earnings per common share of $0.62, up 31 percent from the prior quarter
- Book value per common share of $20.48 at September 30, 2018, up from $20.27 at June 30, 2018
- Annualized return on average common equity of 13 percent, up from 10 percent for the prior
quarter1
Investment and operating highlights:
- Continued investment in GSE credit risk transfer (CRT) and mortgage servicing rights (MSRs) resulting
from PMT’s mortgage acquisitions
- Correspondent production from nonaffiliates related to conventional conforming loans totaled
$7.5 billion in unpaid principal balance (UPB), up 39 percent from the prior quarter
- Loan acquisitions from PennyMac Financial Services, Inc. (NYSE: PFSI) totaled $0.9 billion in
UPB, up 41 percent from the prior quarter
- Loans eligible for CRT investments totaled $6.8 billion, resulting in a firm commitment to
purchase $237 million of CRT securities
- New MSR investments totaled $96 million
Notable activity after quarter end:
- Entered into four agreements to sell approximately $300 million in UPB of performing and
nonperforming loans from the distressed portfolio 2
“Our results this quarter reflect strong performance in our Credit Sensitive and Interest Rate Sensitive Strategies, and
improved results from Correspondent Production,” said President and CEO David Spector. “The seasonal purchase market and our unique
execution capabilities drove quarter-over-quarter volume increases in our Correspondent Production channel, with purchase mortgages
representing 87 percent of our production, and accelerated growth in our organic investment strategies of CRT and MSRs. Those
factors, combined with a continued strong credit environment, provided solid returns across each of our business segments. While
third quarter results were adversely impacted by losses on the distressed loan portfolio, after quarter end we agreed to sell over
$300 million in UPB of distressed loans, which should diminish their impact on earnings going forward. Overall, we are very pleased
with this quarter’s results and the ability of PMT’s unique investment strategies to deliver attractive returns in the future.”
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 September 30, 2018 |
|
|
Correspondent
production
|
|
Credit
sensitive
strategies
|
|
Interest rate
sensitive
strategies
|
|
Corporate |
|
Total |
|
|
(in thousands) |
Net investment income: |
|
|
Net gain (loss) on investments |
|
|
Mortgage loans at fair value |
|
$ |
- |
|
|
$ |
(3,051 |
) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(3,051 |
) |
Mortgage loans held by variable interest entity net of asset-backed secured financing
|
|
|
- |
|
|
|
- |
|
|
|
(114 |
) |
|
|
- |
|
|
|
(114
|
)
|
Mortgage-backed securities |
|
|
- |
|
|
|
(137 |
) |
|
|
(18,893 |
) |
|
|
- |
|
|
|
(19,030 |
) |
CRT Agreements |
|
|
- |
|
|
|
29,481 |
|
|
|
- |
|
|
|
- |
|
|
|
29,481 |
|
Hedging derivatives |
|
|
- |
|
|
|
- |
|
|
|
691 |
|
|
|
- |
|
|
|
691 |
|
Excess servicing spread investments |
|
|
- |
|
|
|
- |
|
|
|
1,706 |
|
|
|
- |
|
|
|
1,706 |
|
|
|
|
- |
|
|
|
26,293 |
|
|
|
(16,610 |
) |
|
|
- |
|
|
|
9,683 |
|
Net gain on mortgage loans acquired for sale |
|
|
12,496 |
|
|
|
12,314 |
|
|
|
- |
|
|
|
- |
|
|
|
24,810 |
|
Net mortgage loan servicing fees |
|
|
- |
|
|
|
5 |
|
|
|
44,389 |
|
|
|
- |
|
|
|
44,394 |
|
Net interest income (expense) |
|
|
Interest income |
|
|
22,465 |
|
|
|
8,675 |
|
|
|
30,573 |
|
|
|
611 |
|
|
|
62,324 |
|
Interest expense |
|
|
(12,708 |
) |
|
|
(8,792 |
) |
|
|
(25,109 |
) |
|
|
- |
|
|
|
(46,609 |
) |
|
|
|
9,757 |
|
|
|
(117 |
) |
|
|
5,464 |
|
|
|
611 |
|
|
|
15,715 |
|
Other income |
|
|
12,442 |
|
|
|
1,457 |
|
|
|
- |
|
|
|
- |
|
|
|
13,899 |
|
|
|
|
34,695 |
|
|
|
39,952 |
|
|
|
33,243 |
|
|
|
611 |
|
|
|
108,501 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
Mortgage loan fulfillment and servicing fees payable to PennyMac Financial Services, Inc.
|
|
|
26,256 |
|
|
|
1,271 |
|
|
|
8,800 |
|
|
|
- |
|
|
|
36,327 |
|
Management fees payable to PennyMac Financial Services, Inc.
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,482 |
|
|
|
6,482 |
|
Other |
|
|
2,485 |
|
|
|
5,619 |
|
|
|
344 |
|
|
|
5,582 |
|
|
|
14,030 |
|
|
|
|
28,741 |
|
|
|
6,890 |
|
|
|
9,144 |
|
|
|
12,064 |
|
|
|
56,839 |
|
Pretax income (loss) |
|
$ |
5,954 |
|
|
$ |
33,062 |
|
|
$ |
24,099 |
|
|
$ |
(11,453 |
) |
|
$ |
51,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $33.1 million on revenues of $40.0 million, compared to pretax
income of $32.7 million on revenues of $37.4 million in the prior quarter.
Net gain on investments was $26.3 million, a decrease of 23 percent from the prior quarter.
Net gain on CRT investments was $29.5 million, compared to $38.5 million in the prior quarter driven by a reduced earnings
contribution from market-driven value changes, partially offset by the growth in CRT investments.
PMT’s distressed mortgage loan portfolio generated realized and unrealized losses totaling $3.1 million, compared to
$4.7 million of losses in the prior quarter.
The schedule below summarizes the (losses) gains on distressed mortgage loans:
|
|
Quarter ended |
|
|
September 30, 2018 |
|
June 30, 2018 |
|
September 30, 2017 |
|
|
(in thousands) |
Valuation changes: |
|
|
|
|
|
|
Performing loans |
|
$ |
885 |
|
|
$ |
(4,437 |
) |
|
$ |
8,638 |
|
Nonperforming loans |
|
|
(2,026 |
) |
|
|
(409 |
) |
|
|
(5,841 |
) |
|
|
|
(1,141 |
) |
|
|
(4,846 |
) |
|
|
2,797 |
|
Gain on payoffs |
|
|
107 |
|
|
|
561 |
|
|
|
224 |
|
(Loss) gain on sale |
|
|
(2,017 |
) |
|
|
(416 |
) |
|
|
256 |
|
|
|
$ |
(3,051 |
) |
|
$ |
(4,701 |
) |
|
$ |
3,277 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value gains on performing loans in the distressed portfolio were $0.9 million while fair value losses on nonperforming
loans were $2.0 million. Performing loans benefitted from improved reperformance during the quarter. Nonperforming loan losses
resulted from the adverse valuation impact of higher projected costs of liquidation and protecting PMT’s lien interest (e.g.,
taxes, insurance, maintenance and legal fees). The nonperforming loan portfolio also incurred losses on sales of deeply delinquent
loans.
The Credit Sensitive Strategies segment includes net gain on mortgage loans acquired for sale of $12.3 million, up from $4.4
million in the prior quarter, which represents the recognition of the fair value of firm commitments to acquire CRT securities
under the new REMIC structure. The quarter-over-quarter increase was driven by three months of loan deliveries into the new
structure this quarter, compared to one month in the prior quarter.
Net interest expense for the segment totaled $0.1 million, compared to $0.7 million in the prior quarter. Interest income
totaled $8.7 million, a 1 percent decrease from the prior quarter, driven by a decrease in interest income from deposits
securing CRT agreements, partially offset by an increase in capitalized interest from higher loan modification activity. Interest
expense totaled $8.8 million, down 7 percent from the prior quarter, driven by lower financing costs related to the
ongoing reduction of the distressed loan portfolio and real estate acquired upon settlement of loans (REO).
Other investment income was $1.5 million, compared to a loss of $0.4 million in the prior quarter driven by improved
results from REO due to the ongoing distressed portfolio reductions. At quarter end, PMT’s inventory of REO properties totaled
$95.6 million, down from $109.3 million at June 30, 2018.
Segment expenses were $6.9 million, a 46 percent increase from the prior quarter driven by higher professional services
expense and activity fees paid to PFSI related to the settlement of a bulk distressed loan sale.
Interest Rate Sensitive Strategies Segment
The Interest Rate Sensitive Strategies segment includes results from investments in MSRs, excess servicing spread (ESS), Agency
mortgage-backed securities (MBS), and non-Agency senior MBS and interest rate hedges. Pretax income for the segment was
$24.1 million on revenues of $33.2 million, compared to pretax income of $16.4 million on revenues of
$24.4 million in the prior quarter. The segment includes investments that typically have offsetting exposures to changes in
interest rates. For example, in a period with increasing interest rates, MSRs and ESS typically gain in value whereas Agency MBS
typically decline 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 loss on investments for the segment totaled $16.6 million, primarily consisting of $18.9 million of losses on MBS,
partially offset by $1.7 million in gains on ESS and $0.7 million in gains on hedging derivatives.
Net interest income for the segment was $5.5 million compared to $5.3 million in the prior quarter. Interest income totaled
$30.6 million, a 20 percent increase from the prior quarter, primarily driven by growth in the MBS portfolio and
placement fees on custodial deposits. Interest expense totaled $25.1 million, a 25 percent increase from the prior
quarter primarily driven by higher interest rates and increased financing costs driven by the growth in investments.
Net mortgage loan servicing fees were $44.4 million, up from $27.6 million in the prior quarter. Net mortgage loan
servicing fees included $49.9 million in servicing fees and $3.1 million in ancillary and other fees, reduced by $30.1 million
in realization of MSR cashflows. Net mortgage loan servicing fees also included a $33.1 million increase in the value of MSRs,
$12.1 million of related hedging losses and $0.6 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 |
|
|
September 30, 2018 |
|
June 30, 2018 |
|
September 30, 2017 |
|
|
(in thousands) |
From non-affiliates: |
|
|
|
|
|
|
Servicing fees(1) |
|
$ |
49,864 |
|
|
$ |
48,667 |
|
|
$ |
42,237 |
|
Ancillary and other fees |
|
|
3,111 |
|
|
|
1,859 |
|
|
|
2,043 |
|
Effect of MSRs: |
|
|
|
|
|
|
Carried at fair value—change in fair value |
|
|
|
|
|
|
Realization of cashflows |
|
|
(30,053 |
) |
|
|
(27,997 |
) |
|
|
(2,628 |
) |
Other |
|
|
33,127 |
|
|
|
16,083 |
|
|
|
(1,349 |
) |
|
|
|
3,074 |
|
|
|
(11,914 |
) |
|
|
(3,977 |
) |
Loss on sale |
|
|
(123 |
) |
|
|
- |
|
|
|
- |
|
Carried at lower of amortized cost or fair value: |
|
|
|
|
|
|
Amortization |
|
|
- |
|
|
|
- |
|
|
|
(21,634 |
) |
Additions to impairment valuation allowance |
|
|
- |
|
|
|
- |
|
|
|
(1,702 |
) |
Gains (losses) on hedging derivatives |
|
|
(12,093 |
) |
|
|
(11,438 |
) |
|
|
4,576 |
|
|
|
|
(9,142 |
) |
|
|
(23,352 |
) |
|
|
(22,737 |
) |
|
|
|
43,833 |
|
|
|
27,174 |
|
|
|
21,543 |
|
From PFSI-MSR recapture income
|
|
|
561 |
|
|
|
412 |
|
|
|
333 |
|
Net mortgage loan servicing fees |
|
$ |
44,394 |
|
|
$ |
27,586 |
|
|
$ |
21,876 |
|
|
|
|
|
|
|
|
(1)Includes contractually specified servicing fees, net of
Agency guarantee fees. |
|
|
|
|
|
|
|
|
|
Before January 1, 2018, PMT carried the majority of its MSRs at the lower of amortized cost or fair value. Beginning January 1,
2018 and prospectively, the Company accounts for all MSRs at fair value.
MSR valuation gains were primarily driven by higher mortgage rates, resulting in expectations for lower prepayment activity in
the future. ESS valuation gains also benefitted from higher mortgage rates and include recapture income of $0.5 million from
PFSI for prepayment activity during the quarter. When prepayment of a loan underlying PMT’s ESS results from refinancing by PFSI,
PMT generally benefits from recapture income.
Segment expenses were $9.1 million, a 15 percent increase from the prior quarter, primarily driven by higher servicing
expenses on a growing MSR portfolio.
Correspondent Production Segment
PMT acquires newly originated mortgage 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 $6.0 million, up from $4.5 million in the prior quarter.
Through its correspondent production activities, PMT acquired $16.5 billion in UPB of loans and issued interest rate lock
commitments totaling $17.7 billion in the third quarter, compared to $15.0 billion and $16.2 billion, respectively,
in the prior quarter. Of the correspondent acquisitions, conventional conforming acquisitions from nonaffiliates totaled
$7.5 billion and government-insured or guaranteed acquisitions totaled $9.0 billion, compared to $5.4 billion and
$9.5 billion, respectively, in the prior quarter.
Segment revenues were $34.7 million, a 66 percent increase from the prior quarter. Segment revenues included a net
gain on mortgage loans of $12.5 million, other income of $12.4 million, which primarily consists of volume-based origination fees,
and net interest income of $9.8 million. Net gain on mortgage loans acquired for sale in the quarter increased 165 percent
from the prior quarter, driven by PMT’s unique execution capabilities and improved market conditions during the quarter. Net
interest income increased 34 percent from the prior quarter, primarily driven by volume growth and the recognition of incentives,
which the Company is currently entitled to receive under one of its master repurchase agreements to finance mortgage loans that
satisfy certain consumer relief characteristics. These incentives totaled $5.0 million, a 43 percent increase form the prior
quarter. The master repurchase agreement is subject to a rolling six-month term through August 2019, unless terminated earlier at
the option of the lender.
Segment expenses were $28.7 million, up 75 percent from the prior quarter, resulting from an $11.7 million increase in
fulfillment fee expenses driven by the increase in conventional correspondent production volume and a higher weighted average
fulfillment fee rate. The weighted average fulfillment fee rate in the third quarter was 35 basis points, up from 27 basis
points in the prior quarter, reflecting lower discretionary reductions by PFSI to facilitate successful loan acquisitions by
PMT.
Corporate Segment
The Corporate segment includes interest income from cash and short-term investments, management fees, and corporate
expenses.
Segment revenues were $611,000, up from $349,000 in the prior quarter.
Management fees were $6.5 million, up 13 percent from the prior quarter primarily driven by $683,000 of incentive fees
in the third quarter based on PMT’s performance.
Other segment expenses were $5.6 million, down from $5.9 million in the prior quarter.
Taxes
PMT recorded income tax expense of $5.1 million compared to $5.9 million of expense in the prior quarter.
***
“PMT’s unique investment strategies and capabilities to organically create attractive investments sourced from its loan
production business are delivering strong returns,” said Executive Chairman Stanford L. Kurland. “Our correspondent business has
delivered profitable volume growth this year, driving increased capital deployment into attractive CRT and MSR investments. Our new
REMIC structure for CRT investments allows a greater percentage of loans to be eligible for CRT, further accelerating growth of
this opportunity. Looking forward, we see tremendous opportunity in the mortgage market as we focus on product expansion in the
prime non-Agency and HELOC markets to continue driving investment opportunities beyond CRT and MSRs while leveraging our mortgage
market expertise and risk management capabilities.”
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 Daylight Time) on Thursday, November 1, 2018.
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 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.
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 controlled subsidiary of
PennyMac Financial Services, Inc. (NYSE: PFSI). Additional information about PennyMac Mortgage Investment Trust is available at
www.PennyMac-REIT.com.
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 our investment objectives or
investment or operational strategies, including any new lines of business or new products and services that may subject us to
additional risks; volatility in our industry, the debt or equity markets, the general economy or the real estate finance and real
estate markets specifically; events or circumstances which undermine confidence in the financial markets or otherwise have a broad
impact on financial markets; changes in general business, economic, market, employment and 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 our investment objectives; the inherent difficulty in
winning bids to acquire mortgage loans, and our success in doing so; the concentration of credit risks to which we are exposed; the
degree and nature of our competition; the availability, terms and deployment of short-term and long-term capital; the adequacy of
our cash reserves and working capital; our ability to maintain the desired relationship between our financing and the interest
rates and maturities of our assets; the timing and amount of cash flows, if any, from our investments; unanticipated increases or
volatility in financing and other costs, including a rise in interest rates; the performance, financial condition and liquidity of
borrowers; incomplete or inaccurate information or documentation provided by customers or counterparties, or adverse changes in the
financial condition of our customers and counterparties; changes in the number of investor repurchases or indemnifications and our
ability to obtain indemnification or demand repurchase from our correspondent sellers; increased rates of delinquency, default
and/or decreased recovery rates on our investments; increased prepayments of the mortgages and other loans underlying our
mortgage-backed securities or relating to our mortgage servicing rights, excess servicing spread and other investments; our
exposure to market risk and declines in credit quality and credit spreads; the degree to which our hedging strategies may or may
not protect us from interest rate volatility; the effect of the accuracy of or changes in the estimates we make about
uncertainties, contingencies and asset and liability valuations when measuring and reporting upon our financial condition and
results of operations; changes in regulations or the occurrence of other events that impact the business, operation or prospects of
government sponsored enterprises; changes in government support of homeownership; changes in governmental regulations, accounting
treatment, tax rates and similar matters; our ability to mitigate cybersecurity risks and cyber incidents; our exposure to risks of
loss with real estate investments resulting from adverse weather conditions and man-made or natural disasters; our ability to
satisfy complex rules in order to qualify as a REIT for U.S. federal income tax purposes; our ability to make distributions to our
shareholders in the future; and our organizational structure and certain requirements in our 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)
|
|
|
|
|
|
|
|
|
|
September 30, 2018 |
|
June 30, 2018 |
|
September 30, 2017 |
|
|
(in thousands except share information) |
ASSETS |
|
|
|
|
|
|
|
|
Cash |
|
$ |
88,929 |
|
|
|
$ |
63,035 |
|
|
|
$ |
99,515 |
|
Short-term investments |
|
|
26,736 |
|
|
|
|
39,484 |
|
|
|
|
5,646 |
|
Mortgage-backed securities at fair value |
|
|
2,126,507 |
|
|
|
|
1,698,322 |
|
|
|
|
1,036,669 |
|
Mortgage loans acquired for sale at fair value |
|
|
1,949,432 |
|
|
|
|
1,790,518 |
|
|
|
|
1,270,340 |
|
Mortgage loans at fair value |
|
|
633,168 |
|
|
|
|
749,445 |
|
|
|
|
1,347,943 |
|
Excess servicing spread purchased from PennyMac Financial Services, Inc. |
|
|
223,275 |
|
|
|
|
229,470 |
|
|
|
|
248,763 |
|
Firm commitment to purchase credit risk transfer security at fair value |
|
|
18,749 |
|
|
|
|
4,426 |
|
|
|
|
- |
|
Derivative assets |
|
|
143,577 |
|
|
|
|
133,239 |
|
|
|
|
67,288 |
|
Real estate acquired in settlement of loans |
|
|
95,605 |
|
|
|
|
109,271 |
|
|
|
|
185,034 |
|
Real estate held for investment |
|
|
45,971 |
|
|
|
|
46,431 |
|
|
|
|
42,546 |
|
Mortgage servicing rights |
|
|
1,109,741 |
|
|
|
|
1,010,507 |
|
|
|
|
790,335 |
|
Servicing advances |
|
|
48,056 |
|
|
|
|
53,340 |
|
|
|
|
61,826 |
|
Deposits securing credit risk transfer agreements |
|
|
662,624 |
|
|
|
|
651,204 |
|
|
|
|
545,694 |
|
Due from PennyMac Financial Services, Inc. |
|
|
2,351 |
|
|
|
|
4,010 |
|
|
|
|
4,725 |
|
Other assets |
|
|
92,857 |
|
|
|
|
94,147 |
|
|
|
|
78,719 |
|
Total assets |
|
$ |
7,267,578 |
|
|
|
$ |
6,676,849 |
|
|
|
$ |
5,785,043 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
Assets sold under agreements to repurchase |
|
$ |
4,394,500 |
|
|
|
$ |
3,780,204 |
|
|
|
$ |
3,203,386 |
|
Mortgage loan participation and sale agreements |
|
|
31,578 |
|
|
|
|
87,751 |
|
|
|
|
43,988 |
|
Notes payable |
|
|
445,318 |
|
|
|
|
445,062 |
|
|
|
|
80,106 |
|
Asset-backed financing of a variable interest entity at fair value |
|
|
278,113 |
|
|
|
|
287,719 |
|
|
|
|
318,404 |
|
Exchangeable senior notes |
|
|
248,053 |
|
|
|
|
247,759 |
|
|
|
|
246,906 |
|
Assets sold to PennyMac Financial Services, Inc. under agreement to repurchase |
|
|
133,128 |
|
|
|
|
138,582 |
|
|
|
|
148,072 |
|
Interest-only security payable at fair value |
|
|
8,821 |
|
|
|
|
7,652 |
|
|
|
|
6,386 |
|
Derivative liabilities |
|
|
11,880 |
|
|
|
|
3,446 |
|
|
|
|
4,900 |
|
Accounts payable and accrued liabilities |
|
|
70,362 |
|
|
|
|
58,612 |
|
|
|
|
76,127 |
|
Due to PennyMac Financial Services, Inc. |
|
|
27,467 |
|
|
|
|
19,661 |
|
|
|
|
16,008 |
|
Income taxes payable |
|
|
52,382 |
|
|
|
|
47,289 |
|
|
|
|
20,148 |
|
Liability for losses under representations and warranties |
|
|
7,413 |
|
|
|
|
7,625 |
|
|
|
|
10,047 |
|
Total liabilities |
|
|
5,709,015 |
|
|
|
|
5,131,362 |
|
|
|
|
4,174,478 |
|
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 60,951,444, 60,950,754, and 65,875,618 common shares, respectively
|
|
|
610 |
|
|
|
|
610 |
|
|
|
|
659 |
|
Additional paid-in capital |
|
|
1,284,537 |
|
|
|
|
1,282,971 |
|
|
|
|
1,362,319 |
|
Accumulated deficit |
|
|
(26,291 |
) |
|
|
|
(37,801 |
) |
|
|
|
(52,120 |
) |
Total shareholders' equity |
|
|
1,558,563 |
|
|
|
|
1,545,487 |
|
|
|
|
1,610,565 |
|
Total liabilities and shareholders' equity |
|
$ |
7,267,578 |
|
|
|
$ |
6,676,849 |
|
|
|
$ |
5,785,043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
|
September 30, 2018 |
|
June 30, 2018 |
|
September 30, 2017 |
|
|
(in thousands, except per share amounts) |
Net investment income |
|
|
|
|
|
|
|
Net mortgage loan servicing fees |
|
|
|
|
|
|
|
From nonaffiliates |
|
$ |
43,833 |
|
|
|
$ |
27,174 |
|
|
$ |
21,543 |
|
From PennyMac Financial Services, Inc. |
|
|
561 |
|
|
|
|
412 |
|
|
|
333 |
|
|
|
|
44,394 |
|
|
|
|
27,586 |
|
|
|
21,876 |
|
Net gain on mortgage loans acquired for sale |
|
|
|
|
|
|
|
From nonaffiliates |
|
|
22,121 |
|
|
|
|
6,251 |
|
|
|
14,692 |
|
From PennyMac Financial Services, Inc. |
|
|
2,689 |
|
|
|
|
2,891 |
|
|
|
3,275 |
|
|
|
|
24,810 |
|
|
|
|
9,142 |
|
|
|
17,967 |
|
Mortgage loan origination fees |
|
|
12,424 |
|
|
|
|
8,850 |
|
|
|
11,744 |
|
Net gain (loss) on investments: |
|
|
|
|
|
|
|
From nonaffiliates |
|
|
7,977 |
|
|
|
|
23,989 |
|
|
|
17,499 |
|
From PennyMac Financial Services, Inc. |
|
|
1,706 |
|
|
|
|
1,520 |
|
|
|
(3,665 |
) |
|
|
|
9,683 |
|
|
|
|
25,509 |
|
|
|
13,834 |
|
Interest income: |
|
|
|
|
|
|
|
From nonaffiliates |
|
|
58,584 |
|
|
|
|
48,434 |
|
|
|
47,579 |
|
From PennyMac Financial Services, Inc. |
|
|
3,740 |
|
|
|
|
3,910 |
|
|
|
3,998 |
|
|
|
|
62,324 |
|
|
|
|
52,344 |
|
|
|
51,577 |
|
Interest expense: |
|
|
|
|
|
|
|
To nonaffiliates |
|
|
44,797 |
|
|
|
|
38,167 |
|
|
|
38,161 |
|
To PennyMac Financial Services, Inc. |
|
|
1,812 |
|
|
|
|
1,898 |
|
|
|
2,116 |
|
|
|
|
46,609 |
|
|
|
|
40,065 |
|
|
|
40,277 |
|
Net interest income |
|
|
15,715 |
|
|
|
|
12,279 |
|
|
|
11,300 |
|
Results of real estate acquired in settlement of loans |
|
|
(310 |
) |
|
|
|
(2,297 |
) |
|
|
(3,143 |
) |
Other |
|
|
1,785 |
|
|
|
|
1,922 |
|
|
|
2,226 |
|
Net investment income |
|
|
108,501 |
|
|
|
|
82,991 |
|
|
|
75,804 |
|
Expenses |
|
|
|
|
|
|
|
Earned by PennyMac Financial Services, Inc.: |
|
|
|
|
|
|
|
Mortgage loan fulfillment fees |
|
|
26,256 |
|
|
|
|
14,559 |
|
|
|
23,507 |
|
Mortgage loan servicing fees (1) |
|
|
10,071 |
|
|
|
|
9,431 |
|
|
|
11,402 |
|
Management fees |
|
|
6,482 |
|
|
|
|
5,728 |
|
|
|
6,038 |
|
Mortgage loan collection and liquidation |
|
|
2,747 |
|
|
|
|
1,923 |
|
|
|
864 |
|
Professional services |
|
|
2,616 |
|
|
|
|
1,757 |
|
|
|
1,331 |
|
Compensation |
|
|
1,924 |
|
|
|
|
2,220 |
|
|
|
1,067 |
|
Real estate held for investment |
|
|
1,713 |
|
|
|
|
1,301 |
|
|
|
1,898 |
|
Mortgage loan origination |
|
|
2,136 |
|
|
|
|
1,572 |
|
|
|
2,230 |
|
Other |
|
|
2,894 |
|
|
|
|
2,214 |
|
|
|
3,301 |
|
Total expenses |
|
|
56,839 |
|
|
|
|
40,705 |
|
|
|
51,638 |
|
Income before provision for income taxes |
|
|
51,662 |
|
|
|
|
42,286 |
|
|
|
24,166 |
|
Provision for income taxes |
|
|
5,100 |
|
|
|
|
5,861 |
|
|
|
4,771 |
|
Net income |
|
|
46,562 |
|
|
|
|
36,425 |
|
|
|
19,395 |
|
Dividends on preferred shares |
|
|
6,235 |
|
|
|
|
6,234 |
|
|
|
6,125 |
|
Net income attributable to common shareholders |
|
$ |
40,327 |
|
|
|
$ |
30,191 |
|
|
$ |
13,270 |
|
Earnings per common share |
|
|
|
|
|
|
|
Basic |
|
$ |
0.66 |
|
|
|
$ |
0.49 |
|
|
$ |
0.20 |
|
Diluted |
|
$ |
0.62 |
|
|
|
$ |
0.47 |
|
|
$ |
0.20 |
|
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
60,950 |
|
|
|
|
60,903 |
|
|
|
66,636 |
|
Diluted |
|
|
69,417 |
|
|
|
|
69,370 |
|
|
|
66,636 |
|
Dividends declared per common share |
|
$ |
0.47 |
|
|
|
$ |
0.47 |
|
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Mortgage loan servicing fees expense includes both special servicing for PMT’s distressed portfolio and
subservicing for its mortgage servicing rights
PennyMac Mortgage Investment Trust
Media
Stephen Hagey
(805) 530-5817
or
Investors
Christopher Oltmann
(818) 224-7028
View source version on businesswire.com: https://www.businesswire.com/news/home/20181101006124/en/