PennyMac Mortgage Investment Trust Reports Fourth Quarter and Full-Year 2021 Results

WESTLAKE VILLAGE, Calif.–(BUSINESS WIRE)–PennyMac Mortgage Investment Trust (NYSE: PMT) today reported a net loss attributable to common shareholders of $27.3 million, or $(0.28) per common share on a diluted basis for the fourth quarter of 2021, on net investment income of $49.5 million. PMT previously announced a cash dividend for the fourth quarter of 2021 of $0.47 per common share of beneficial interest, which was declared on December 7, 2021 and paid on January 31, 2022 to common shareholders of record as of December 31, 2021.

Fourth Quarter 2021 Highlights

Financial results:

  • Net loss attributable to common shareholders of $27.3 million, compared to a net loss of $43.9 million in the prior quarter

    • Interest rate sensitive strategies impacted by fair value declines resulting from the significant flattening of the yield curve, increased short-term prepayment speed expectations, and elevated hedge costs
    • Strong performance of government-sponsored enterprise (GSE) credit risk transfer (CRT) investments and non-Agency subordinate bonds
  • Repurchased 2.2 million PMT common shares at a cost of $39 million
  • Book value per common share decreased to $19.05 at December 31, 2021 from $19.79 at September 30, 20211

Other investment highlights:

  • Investment activity driven by correspondent production volumes

    • Conventional correspondent loan production volumes of $17.2 billion in unpaid principal balance (UPB), down 40% from 3Q21 and 55% from 4Q20 as a result of significant levels of competition for conventional loans, including from the GSEs

      • Resulted in $239 million in new MSRs
    • Retained mortgage securities from two PMT securitizations of agency-eligible investor loans totaling $713 million in UPB; in aggregate, at December 31, 2021, the fair value of PMT’s investments in investor loans was approximately $87 million

Full-Year 2021 Highlights

Financial Results:

  • Net income of $56.9 million, up from $52.4 million in 2020
  • Net income attributable to common shareholders of $26.0 million, down from $27.4 million in 2020; diluted earnings per common share of $0.26, down from $0.27 in 2020
  • Dividends of $1.88 per common share
  • Net investment income of $420.3 million, down from $469.4 million in 2020
  • Return on average common equity of 1.3%2

_________________

1 As described in Note 2 of PMT’s Quarterly Report on form 10Q for the quarter ended September 30, 2021, a recent accounting change requires that beginning in 2022, the portion of PMT’s senior notes that are exchangeable for PMT common shares of beneficial interest originally allocated to additional paid-in capital will be reclassified to the carrying value of the exchangeable notes. Giving effect to this change on a pro forma basis, PMT’s book value as of December 31, 2021 would have been $18.60.

2 Return on average common equity is calculated based on net income attributable to common shareholders as a percentage of monthly average common equity during the year.

PMT’s net loss in the fourth quarter was primarily driven by fair value changes in our Interest Rate Sensitive Strategies due to significant interest rate volatility and flattening of the yield curve,” said Chairman and CEO David Spector. “Additionally, elevated competition in the conventional correspondent channel, including from the GSEs, put pressure on acquisition volumes and margins during the quarter. As the market transitions to a higher rate environment, we believe the return volatility of our investments will stabilize and the competitive climate will improve as correspondent aggregators adjust capacity to the new market. Until that takes place, we expect headwinds for the return potential of PMT’s strategies. However, there are significant investment opportunities we are pursuing in the form of private-label securitization and the potential to resume new CRT investments and we are encouraged by our continued active discussions with the GSEs and FHFA on that front.”

Mr. Spector continued, “As a public company in our 13th year of operations with a very seasoned management team, we have been disciplined through numerous mortgage cycles and have a strong track record of performance throughout our history. While we acknowledge the headwinds in this currently transitioning mortgage market, we are optimistic about PMT’s ability to execute on opportunities and deliver attractive risk-adjusted returns to shareholders over the long-term.”

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 December 31, 2021
Credit sensitive strategies Interest rate sensitive strategies Correspondent production Corporate Consolidated
 
 
(in thousands)
Net investment income (loss):
Net gains (losses) on investments and financings:
CRT investments

$

43,065

 

$

 

$

 

$

 

$

43,065

 

Loans held by variable interest entity net of asset-backed secured financing (investments in non-agency subordinate bonds)

 

6,276

 

 

 

 

 

 

 

 

6,276

 

Loans at fair value

 

(266

)

 

 

 

 

 

 

 

(266

)

Mortgage-backed securities

 

(798

)

 

(13,100

)

 

 

 

 

 

(13,898

)

 

48,277

 

 

(13,100

)

 

 

 

 

 

35,177

 

Net (loss) gains on loans acquired for sale

 

(2

)

 

 

 

(9,659

)

 

 

 

(9,661

)

Net loan servicing fees

 

 

 

12,188

 

 

 

 

 

 

12,188

 

Net interest (expense) income:
Interest income

 

1,071

 

 

22,693

 

 

30,766

 

 

1,150

 

 

55,680

 

Interest expense

 

12,250

 

 

42,586

 

 

18,902

 

 

 

 

73,738

 

 

(11,179

)

 

(19,893

)

 

11,864

 

 

1,150

 

 

(18,058

)

Other income

 

1,737

 

 

 

 

28,097

 

 

 

 

29,834

 

 

38,833

 

 

(20,805

)

 

30,302

 

 

1,150

 

 

49,480

 

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

 

56

 

 

20,791

 

 

20,150

 

 

 

 

40,997

 

Management fees payable to PennyMac Financial Services, Inc.

 

 

 

 

 

 

 

8,919

 

 

8,919

 

Other

 

5,596

 

 

1,605

 

 

5,601

 

 

6,271

 

 

19,073

 

$

5,652

 

$

22,396

 

$

25,751

 

$

15,190

 

$

68,989

 

Pretax income (loss)

$

33,181

 

$

(43,201

)

$

4,551

 

$

(14,040

)

$

(19,509

)

Credit Sensitive Strategies Segment

The Credit Sensitive Strategies segment primarily includes results from CRT, investments in non-agency subordinated bonds from the private-label securitizations of PMT’s production, and also includes distressed loans. Pretax income for the segment was $33.2 million on revenues of $38.8 million, compared to pretax income of $60.7 million on revenues of $63.1 million in the prior quarter.

Net gain on investments in the segment was $48.3 million, down from $75.8 million in the prior quarter and included $43.1 million in net gains on CRT investments, $6.3 million in net gains from investments in non-agency subordinate bonds, $0.8 million in net losses on mortgage-backed securities (MBS) and $0.3 million in net losses on loans at fair value.

Net gain on CRT investments for the quarter was $43.1 million, down from $73.9 million in the prior quarter, and included $1.6 million in valuation-related gains. The prior quarter included $26.4 million in such gains which reflected the impact of credit spread tightening and elevated prepayment speeds. Net gain on CRT investments also included $26.9 million in realized gains and carry, compared to $33.1 million of such gains in the prior quarter. Recoveries net of realized losses during the quarter were $14.5 million, primarily related to L Street Securities 2017-PM1, as losses were reversed for loans that had been in forbearance and reperformed.

During the quarter, PMT retained mortgage securities from two of its own securitizations of agency-eligible investor loans with an aggregate UPB of $713 million. This resulted in approximately $42 million in fair value of new investments, net of associated asset-backed financing, and at the end of the year, the fair value of PMT’s investments in investor loans was approximately $87 million.

Net interest expense for the segment totaled $11.2 million, compared to $13.2 million in the prior quarter. Interest income totaled $1.1 million, up from $0.6 million in the prior quarter. Interest expense totaled $12.3 million, down from $13.9 million in the prior quarter due to decreased financing expenses as a result of smaller CRT balances due to prepayments.

Segment expenses were $5.7 million, up from $2.4 million in the prior quarter as a result of additional expenses incurred resulting from the agency-eligible investor loan securitizations completed.

Interest Rate Sensitive Strategies Segment

The Interest Rate Sensitive Strategies segment includes results from investments in MSRs, Agency MBS, non-Agency senior MBS and interest rate hedges. Pretax loss for the segment was $43.2 million on investment losses of $20.8 million, compared to a pretax loss of $116.8 million on net investment losses of $95.0 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 increasing interest rates, MSRs typically increase in fair value whereas Agency MBS typically decrease in fair 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 was $13.1 million and consisted of losses on MBS.

Net loan servicing fees were $12.2 million, compared to a net loss of $53.3 million in the prior quarter. Net loan servicing fees included servicing fees of $148.1 million, up from the prior quarter primarily driven by seasonal collection trends, and $14.0 million in other fees, reduced by $87.7 million in realization of MSR cash flows, which was up 8 percent from the prior quarter. Net loan servicing fees also included $84.0 million in fair value declines of MSRs, $9.1 million in related gains in hedging results, and $12.7 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 and MBS.

The following schedule details net loan servicing fees:

Quarter ended
December 31, 2021 September 30, 2021 December 31, 2020
(in thousands)
From non-affiliates:
Contractually specified(1)

$

148,135

 

$

137,804

 

$

111,741

 

Other fees

 

13,994

 

 

13,960

 

 

18,719

 

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

 

(87,734

)

 

(81,398

)

 

(56,258

)

Due to changes in valuation inputs used in valuation model

 

(83,995

)

 

(62,843

)

 

(18,157

)

 

(171,729

)

 

(144,241

)

 

(74,415

)

Gains (losses) on hedging derivatives

 

9,087

 

 

(73,841

)

 

(115,755

)

 

(162,642

)

 

(218,082

)

 

(190,170

)

 

(513

)

 

(66,318

)

 

(59,710

)

From PFSI—MSR recapture income

 

12,701

 

 

12,975

 

 

11,067

 

Net loan servicing fees

$

12,188

 

$

(53,343

)

$

(48,643

)

(1) Includes contractually specified servicing fees, net of guarantee fees.

MSR fair value declined by $84.0 million in the quarter, and consisted of $49.4 million in fair value decreases due to changes in interest rates, primarily due to a significant flattening of the yield curve, and $34.6 million in other valuation losses, primarily due to increases to short-term prepayment projections. Additional fair value losses in the segment resulted from elevated hedge costs. PMT also benefited from recapture income from PFSI for elevated prepayment activity during the quarter. PMT generally benefits from recapture income when the prepayment of a loan underlying PMT’s MSR results from refinancing by PFSI.

Net interest expense for the segment was $19.9 million, versus net interest expense of $23.2 million in the prior quarter. Interest income totaled $22.7 million, up from $18.3 million in the prior quarter and interest expense totaled $42.6 million, up from $41.5 million in the prior quarter. The additional interest income and interest expense were primarily due to the growth in investor loan securitizations consolidated on the balance sheet.

Segment expenses were $22.4 million, up slightly from $21.8 million in the prior quarter.

Correspondent Production Segment

PMT acquires newly originated loans from correspondent sellers and typically sells or securitizes the loans, resulting in current-period income and additions to its investments in MSRs related to a portion of its production. PMT’s Correspondent Production segment generated pretax income of $4.6 million, down from $27.8 million in the prior quarter due to lower volumes and margins.

Through its correspondent production activities, PMT acquired $32.8 billion in UPB of loans, down 25 percent from the prior quarter and down 42 percent from the fourth quarter of 2020. Of total correspondent acquisitions, conventional conforming acquisitions totaled $17.2 billion, and government-insured or guaranteed acquisitions totaled $15.7 billion, down from $28.6 billion and up from $15.4 billion, respectively, in the prior quarter. Interest rate lock commitments on conventional loans totaled $14.7 billion, down from $29.4 billion in the prior quarter, due to elevated levels of competition for conventional loans, including from the GSEs.

Segment revenues were $30.3 million, a 62 percent decrease from the prior quarter and included net losses on loans acquired for sale of $9.7 million, other income of $28.1 million, which primarily consists of volume-based origination fees, and net interest income of $11.9 million. Net gain on loans acquired for sale in the quarter decreased by $25.9 million from the prior quarter as a result of lower volumes and margins. Interest income was $30.8 million, down from $39.0 million in the prior quarter, and interest expense was $18.9 million, down from $20.2 million in the prior quarter.

Segment expenses were $25.8 million, down from $51.6 million in the prior quarter driven by decreases in acquisition volumes and the weighted average fulfillment fee rate. The weighted average fulfillment fee rate in the fourth quarter was 12 basis points, down from 15 basis points in the prior quarter reflecting discretionary reductions by PMT’s manager, PFSI, to facilitate successful loan acquisitions for PMT.

Corporate Segment

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

Segment revenues were $1.2 million, up from $0.4 million in the prior quarter. Management fees were $8.9 million, up from $8.5 million in the prior quarter. Other segment expenses were $6.3 million, up from $4.2 million in the prior quarter.

Taxes

PMT recorded a tax benefit of $2.6 million driven by fair value declines in MSRs held in PMT’s taxable subsidiary.

Management’s slide presentation will be available in the Investor Relations section of the Company’s website at www.pennymac-REIT.com beginning after the market closes on Thursday, February 3, 2022.

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: our exposure to risks of loss and disruptions in operations resulting from adverse weather conditions, man-made or natural disasters, climate change and pandemics such as COVID-19; the impact to our CRT agreements of increased borrower requests for forbearance under the CARES Act; changes in interest rates; 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; volatility in the Company’s industry, the debt or equity markets, the general economy or the real estate finance and real estate markets; 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 manmade 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; our substantial amount of indebtedness; 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 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; 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; 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; 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)

 
December 31, 2021 September 30, 2021 December 31, 2020
(in thousands except share amounts)
ASSETS
Cash

$

58,983

 

$

131,741

 

$

57,704

 

Short-term investments at fair value

 

167,999

 

 

116,130

 

 

127,295

 

Mortgage-backed securities at fair value

 

2,666,768

 

 

2,471,033

 

 

2,213,922

 

Loans acquired for sale at fair value

 

4,171,025

 

 

4,979,256

 

 

3,551,890

 

Loans at fair value

 

1,568,726

 

 

895,880

 

 

151,734

 

Excess servicing spread received from PennyMac Financial Services, Inc. at fair value

 

 

 

 

 

131,750

 

Derivative assets

 

34,238

 

 

97,688

 

 

164,318

 

Deposits securing credit risk transfer arrangements

 

1,704,911

 

 

1,962,800

 

 

2,799,263

 

Mortgage servicing rights at fair value

 

2,892,855

 

 

2,825,501

 

 

1,755,236

 

Servicing advances

 

204,951

 

 

115,961

 

 

121,820

 

Real estate acquired in settlement of loans

 

14,382

 

 

10,473

 

 

28,709

 

Due from PennyMac Financial Services, Inc.

 

15,953

 

 

19,162

 

 

8,152

 

Other

 

271,917

 

 

242,975

 

 

380,218

 

Total assets

$

13,772,708

 

$

13,868,600

 

$

11,492,011

 

LIABILITIES
Assets sold under agreements to repurchase

$

6,671,890

 

$

7,025,147

 

$

6,309,418

 

Mortgage loan participation and sale agreements

 

49,988

 

 

45,044

 

 

16,851

 

Notes payable secured by credit risk transfer and mortgage servicing assets

 

2,471,961

 

 

2,633,228

 

 

1,924,999

 

Exchangeable senior notes

 

502,459

 

 

499,612

 

 

196,796

 

Asset-backed financing at fair value

 

1,469,999

 

 

843,163

 

 

134,726

 

Interest-only security payable at fair value

 

10,593

 

 

12,000

 

 

10,757

 

Assets sold to PennyMac Financial Services, Inc. under agreement to repurchase

 

 

 

 

 

80,862

 

Derivative and credit risk transfer strip liabilities at fair value

 

42,206

 

 

68,185

 

 

263,473

 

Accounts payable and accrued liabilities

 

96,156

 

 

160,112

 

 

124,809

 

Due to PennyMac Financial Services, Inc.

 

40,091

 

 

49,993

 

 

87,005

 

Income taxes payable

 

9,598

 

 

11,880

 

 

23,563

 

Liability for losses under representations and warranties

 

40,249

 

 

40,909

 

 

21,893

 

Total liabilities

 

11,405,190

 

 

11,389,273

 

 

9,195,152

 

SHAREHOLDERS’ EQUITY
Preferred shares of beneficial interest

 

541,482

 

 

541,482

 

 

299,707

 

Common shares of beneficial interest—authorized, 500,000,000 common shares of $0.01 par value; issued and outstanding 94,897,255, 97,006,694 and 97,862,625 common shares, respectively

 

949

 

 

970

 

 

979

 

Additional paid-in capital

 

2,081,757

 

 

2,120,457

 

 

2,096,907

 

Accumulated deficit

 

(256,670

)

 

(183,582

)

 

(100,734

)

Total shareholders’ equity

 

2,367,518

 

 

2,479,327

 

 

2,296,859

 

Total liabilities and shareholders’ equity

$

13,772,708

 

$

13,868,600

 

$

11,492,011

 

PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 
For the Quarterly Periods Ended
December 31, 2021 September 30, 2021 December 31, 2020
(in thousands, except per share amounts)
Investment Income
Net gains on investments and financings

$

35,177

 

$

57,306

 

$

135,715

 

Net (losses) gains on loans acquired for sale

 

(9,661

)

 

16,196

 

 

70,511

 

Loan origination fees

 

27,867

 

 

44,189

 

 

59,589

 

Net loan servicing fees:
From nonaffiliates
Servicing fees

 

162,129

 

 

151,764

 

 

130,460

 

Change in fair value of mortgage servicing rights

 

(171,729

)

 

(144,241

)

 

(74,415

)

Hedging results

 

9,087

 

 

(73,841

)

 

(115,755

)

 

(513

)

 

(66,318

)

 

(59,710

)

From PennyMac Financial Services, Inc.

 

12,701

 

 

12,975

 

 

11,067

 

 

12,188

 

 

(53,343

)

 

(48,643

)

Interest income

 

55,680

 

 

58,284

 

 

48,577

 

Interest expense

 

73,738

 

 

75,489

 

 

69,637

 

Net interest expense

 

(18,058

)

 

(17,205

)

 

(21,060

)

Other

 

1,967

 

 

711

 

 

422

 

Net investment income

 

49,480

 

 

47,854

 

 

196,534

 

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

 

20,150

 

 

43,922

 

 

72,606

 

Loan servicing fees

 

20,847

 

 

20,703

 

 

18,375

 

Management fees

 

8,919

 

 

8,520

 

 

8,687

 

Loan origination

 

4,904

 

 

6,594

 

 

10,486

 

Loan collection and liquidation

 

1,321

 

 

2,126

 

 

7,667

 

Professional services

 

6,078

 

 

949

 

 

1,863

 

Safekeeping

 

2,248

 

 

2,306

 

 

2,452

 

Compensation

 

870

 

 

(383

)

 

1,132

 

Other

 

3,652

 

 

3,773

 

 

(629

)

Total expenses

 

68,989

 

 

88,510

 

 

122,639

 

(Loss) income before benefit from income taxes

 

(19,509

)

 

(40,656

)

 

73,895

 

Benefit from income taxes

 

(2,622

)

 

(4,701

)

 

(8,984

)

Net (loss) income

 

(16,887

)

 

(35,955

)

 

82,879

 

Dividends on preferred shares

 

10,454

 

 

7,969

 

 

6,235

 

Net (loss) income attributable to common shareholders

$

(27,341

)

$

(43,924

)

$

76,644

 

(Loss) earnings per share
Basic

$

(0.28

)

$

(0.45

)

$

0.78

 

Diluted

$

(0.28

)

$

(0.45

)

$

0.78

 

Weighted average shares outstanding
Basic

 

96,306

 

 

97,927

 

 

98,498

 

Diluted

 

96,306

 

 

98,034

 

 

98,686

 

PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Year ended December 31,

 

2021

 

 

2020

 

 

2019

 

(in thousands, except per share amounts)
Net investment income
Net gains (losses) on investments and financings

$

304,079

 

$

(170,885

)

$

263,318

 

Net gain on loans acquired for sale

 

87,273

 

 

379,922

 

 

170,164

 

Net loan servicing fees:
From nonaffiliates
Servicing fees

 

595,346

 

 

462,517

 

 

319,489

 

Change in fair value of mortgage servicing rights

 

(337,186

)

 

(938,937

)

 

(464,353

)

Hedging results

 

(345,041

)

 

601,743

 

 

80,622

 

 

(86,881

)

 

125,323

 

 

(64,242

)

From PennyMac Financial Services, Inc.

 

50,859

 

 

28,373

 

 

5,324

 

 

(36,022

)

 

153,696

 

 

(58,918

)

Loan origination fees

 

170,672

 

 

147,272

 

 

87,997

 

Interest income

 

195,239

 

 

222,135

 

 

317,885

 

Interest expense

 

304,737

 

 

270,770

 

 

297,446

 

Net interest (expense) income

 

(109,498

)

 

(48,635

)

 

20,439

 

Other

 

3,793

 

 

7,981

 

 

5,815

 

Net investment income

$

420,297

 

$

469,351

 

$

488,815

 

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

 

178,927

 

 

222,200

 

 

160,610

 

Loan servicing fees

 

80,658

 

 

67,181

 

 

48,797

 

Management fees

 

37,801

 

 

34,538

 

 

36,492

 

Loan origination

 

28,792

 

 

26,437

 

 

15,105

 

Loan collection and liquidation

 

11,279

 

 

10,363

 

 

4,600

 

Professional services

 

11,148

 

 

6,405

 

 

5,556

 

Safekeeping

 

9,087

 

 

7,090

 

 

5,097

 

Compensation

 

4,000

 

 

3,890

 

 

6,897

 

Other

 

13,944

 

 

11,517

 

 

15,020

 

Total expenses

 

375,636

 

 

389,621

 

 

298,174

 

Income before (benefit from) provision for income taxes

 

44,661

 

 

79,730

 

 

190,641

 

(Benefit from) provision for income taxes

 

(12,193

)

 

27,357

 

 

(35,716

)

Net income

 

56,854

 

 

52,373

 

 

226,357

 

Dividends on preferred shares

 

30,891

 

 

24,938

 

 

24,938

 

Net income attributable to common shareholders

$

25,963

 

$

27,435

 

$

201,419

 

Earnings per common share
Basic

$

0.26

 

$

0.27

 

$

2.54

 

Diluted

$

0.26

 

$

0.27

 

$

2.42

 

Weighted average common shares outstanding
Basic

 

97,402

 

 

99,373

 

 

78,990

 

Diluted

 

97,519

 

 

99,373

 

 

87,711

 

 

Source

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