STOCK TITAN
  1. Home
  2. News
  3. PMT
  4. PennyMac Mortgage Investment Trust Reports First Quarter 2021 Results

PennyMac Mortgage Investment Trust Reports First Quarter 2021 Results

Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Positive)
Tags

PennyMac Mortgage Investment Trust (NYSE: PMT) today reported net income attributable to common shareholders of $65.4 million, or $0.67 per common share on a diluted basis for the first quarter of 2021, on net investment income of $201.4 million. PMT previously announced a cash dividend for the first quarter of 2021 of $0.47 per common share of beneficial interest, which was declared on March 24, 2021 and paid on April 29, 2021 to common shareholders of record as of April 15, 2021.

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
  • 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 $1.4 billion in term debt during the quarter, further strengthening its balance sheet. As the largest correspondent aggregator in the U.S., combined with its synergistic partnership with PennyMac Financial, PMT enjoys a unique, competitive advantage allowing it to organically create high-quality MSR investments and we continue to redeploy capital into these new investments as our CRT portfolio seasons."

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

)

Stock PMT logo
Pennymac Mortg

NYSE:PMT

PMT Rankings

#1580 Ranked by Market Cap
#89 Ranked by Dividends

PMT Latest News

PMT Stock Data

1.13B
85.93M
1.21%
69.77%
4.68%
REIT - Mortgage
Real Estate Investment Trusts
Link
United States
WESTLAKE VILLAGE