PennyMac Mortgage Investment Trust Reports First Quarter 2021 Results
PennyMac Mortgage Investment Trust (NYSE: PMT) reported a net income of $65.4 million or $0.67 per share for Q1 2021, down from $76.6 million in Q4 2020. The firm announced a cash dividend of $0.47 declared on March 24, 2021. Investment income demonstrated strength, with $201.4 million reported. However, conventional loan production fell by 11% from the previous quarter. The book value per share increased to $20.90. PMT issued $1.4 billion in term debt, enhancing its capital structure.
- Net income of $65.4 million despite a decline from the previous quarter.
- Cash dividend of $0.47 declared, showing commitment to shareholder returns.
- Book value per share increased from $20.30 to $20.90.
- Strong correspondent loan production at $33.8 billion, indicating robust market presence.
- Issued $1.4 billion in term debt, strengthening balance sheet.
- Net income decreased from $76.6 million in the prior quarter.
- Conventional loan production volumes decreased by 11% from the previous quarter.
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Analyzing...
PennyMac Mortgage Investment Trust (NYSE: PMT) today reported net income attributable to common shareholders of
First Quarter 2021 Highlights
Financial results:
-
Net income attributable to common shareholders of
$65.4 million , down from$76.6 million in the prior quarter- Strong correspondent segment results and continued improvement in the fair value of government-sponsored enterprise (GSE) credit risk transfer (CRT) investments due to credit spread tightening
- Mortgage servicing rights (MSR) fair value gains more than offset by fair value declines on Agency mortgage-backed securities (MBS) and interest rate hedges due to significant prepayment activity and elevated hedge costs driven by market volatility
-
Book value per common share of
$20.90 at March 31, 2021, up from$20.30 at December 31, 2020
Other investment and financing highlights:
-
Investment activity driven by strong correspondent production volumes
-
Conventional correspondent loan production volumes of
$33.8 billion in unpaid principal balance (UPB), down 11 percent from the prior quarter and up 109 percent from the first quarter of 2020 -
Added
$408 million in new MSRs - Sold remaining excess servicing spread (ESS) investment to PennyMac Financial Services, Inc. (NYSE: PFSI) at fair value
-
Conventional correspondent loan production volumes of
-
Issued
$1.4 billion in term debt, further strengthening PMT’s capital structure-
$659 million of 3-year term notes issued to replace short-term securities repurchase agreements associated with PMT’s sixth CRT transaction -
$350 million of 5-year Fannie Mae MSR term notes issued to replace short-term financing -
Raised
$345 million of new 5-year senior exchangeable notes
-
"PMT delivered another strong quarter of investment performance with earnings in excess of the dividend level,” said Chairman and CEO David Spector. “We saw strong correspondent production segment results and continued improvement in the fair value of our credit risk transfer investments. The CRT performance also reflects the successful implementation of loss mitigation activities by our manager and services provider, PennyMac Financial. PMT also issued
Mr. Spector continued, “As we look at the evolving mortgage landscape, we believe PMT remains uniquely positioned to capitalize on the current environment characterized by elevated production volumes. Additionally, we expect changes to the GSE preferred stock purchase agreements limiting cash window deliveries to make the role of well-capitalized correspondent aggregators like PMT increasingly important to a healthy mortgage market. Finally, we look forward to further discussing our outlook for the business at our upcoming investor day for PennyMac Mortgage Investment Trust and PennyMac Financial.”
The following table presents the contributions of PMT’s segments, consisting of Credit Sensitive Strategies, Interest Rate Sensitive Strategies, Correspondent Production, and Corporate:
| Quarter ended March 31, 2021 | |||||||||||||||||||
| Credit sensitive strategies | Interest rate sensitive strategies | Correspondent production | Corporate | Consolidated | |||||||||||||||
| (in thousands) | |||||||||||||||||||
| Net investment income (loss): | |||||||||||||||||||
| Net gain on loans acquired for sale | $ |
(1 |
) |
$ |
- |
|
$ |
53,013 |
$ |
- |
|
$ |
53,012 |
|
|||||
| Net (loss) gain on investments: | |||||||||||||||||||
| CRT investments |
|
154,031 |
|
|
- |
|
|
- |
|
- |
|
|
154,031 |
|
|||||
| Loans at fair value |
|
95 |
|
|
- |
|
|
- |
|
- |
|
|
95 |
|
|||||
| Loans held by variable interest entity net of asset-backed secured financing |
|
- |
|
|
(1,445 |
) |
|
- |
|
- |
|
|
(1,445 |
) |
|||||
| Mortgage-backed securities |
|
- |
|
|
(71,117 |
) |
|
- |
|
- |
|
|
(71,117 |
) |
|||||
| Hedging derivatives |
|
145 |
|
|
(169 |
) |
|
- |
|
- |
|
|
(24 |
) |
|||||
| Excess servicing spread investments |
|
- |
|
|
1,651 |
|
|
- |
|
- |
|
|
1,651 |
|
|||||
|
154,271 |
|
|
(71,080 |
) |
|
- |
|
- |
|
|
83,191 |
|
||||||
| Net loan servicing fees |
|
- |
|
|
50,045 |
|
|
- |
|
- |
|
|
50,045 |
|
|||||
| Net interest (expense) income: | |||||||||||||||||||
| Interest income |
|
650 |
|
|
13,516 |
|
|
22,797 |
|
626 |
|
|
37,589 |
|
|||||
| Interest expense |
|
17,261 |
|
|
37,316 |
|
|
21,731 |
|
- |
|
|
76,308 |
|
|||||
|
(16,611 |
) |
|
(23,800 |
) |
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FAQWhat was PennyMac Mortgage Investment Trust's net income for Q1 2021?
PennyMac reported a net income of $65.4 million for Q1 2021.
What was the cash dividend declared by PMT for Q1 2021?
PMT declared a cash dividend of $0.47 per common share for Q1 2021.
How much term debt did PMT issue in Q1 2021?
PMT issued $1.4 billion in term debt during Q1 2021.
What was the book value per share for PMT at the end of Q1 2021?
The book value per share for PMT increased to $20.90 as of March 31, 2021.
How did PMT's conventional loan production compare to the previous quarter?
Conventional correspondent loan production decreased by 11% from the prior quarter.
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