Pennymac Mortgage Investment Trust · NYSE:PMT
Pennymac Mortgage Investment Trust — Q3 2010 Earnings Presentation
20 slides from Pennymac Mortgage Investment Trust's earnings presentation, Nov 5, 2010
Slide 1: Third Quarter 2010 Earnings Report
PennyMac Mortgage Investment Trust Third Quarter 2010 Earnings Report November 3, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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 r
Slide 3: Third Quarter Highlights
Third Quarter Highlights 2 Consolidated quarterly net income of $7.7 million or $0.45 per share Net Investment Income: $12.6 million Cash flow generated from investments: $45 million Declared quarterly dividend of $0.42 per share Represents an annualized yield of 9.7% based on closing stock price on
Slide 4: PMT's Investment Activity & Strategy
PMT’s Investment Activity & Strategy
Slide 5: Investment Activity During the Quarter
Collateral Type Subprime: $68mm Alt-A: $21mm Prime jumbo: $14mm Total Holdings $103mm Investment Activity During the Quarter 4 Q2 Holdings Q3 Activity From Investments Q3 Purchases (settlement dates) Q3 Holdings Whole Loans MBS Nonperforming loans $148mm in fair value Performing loans $49mm in fair
Slide 6: PMT's Asset Strategy Will Continually Evolve
PMT’s Asset Strategy Will Continually Evolve 5 Short-term Strategy Medium-term Strategy Long-term Strategy Distressed Mortgage Purchases Conventional Conforming Conduit Purchases Predominant activity Deployed all of capital initially raised in IPO PCM has built the capabilities for PMT Slowly buildi
Slide 7: PMT's Liability Structure Will Also Continue to Evolve Over Time
PMT’s Liability Structure Will Also Continue to Evolve Over Time 6 Securitization Repurchase Facilities Warehouse Facilities NPL Credit Facility Available Leverage Current Utilization Planned Additions in Q4 Potential Leverage by Q2 2011 $0 $0 $75 $150 $116 $116 $0 $146 $0 $0 $0 $55 $0 $0 $200(2) $2
Slide 8: U.S. Foreclosure Update
U.S. Foreclosure Update 7 (4) Source: RealtyTrac. Bank repossessions as of October 14, 2010 release. There have been more than 800,000 home foreclosures in the U.S. through the first three quarters of 2010 – a record level (4) Some large lenders have halted foreclosures in recent weeks due to concer
Slide 9: Distressed Whole Loan Opportunity
Distressed Whole Loan Opportunity
Slide 10: Whole Loan Activity Overview
Whole Loan Activity Overview 9 Non-performing whole loan market continues to remain active Over $6 billion in whole loans shown to PCM in Q3 Pricing levels have remained stable over the past couple of months, and only slightly off of the highs experienced approximately 6 months ago We continue to fo
Slide 11: Why U.S. Banks Are Selling NPLs
Why U.S. Banks Are Selling NPLs 10 Banks can free up capital tied to NPLs and generate higher returns by investing in other assets NPLs carry a 100% “risk weight” in regulatory capital calculations, whereas less risky performing assets can carry a 20% risk weight Regulators (as well as investors and
Slide 12: Non-Performing Loans Are Purchased At a Substantial Discount
Non-Performing Loans Are Purchased At a Substantial Discount 11 34% property value decline based on broker quick-sale value (QSV) (2) 41% purchase price discount to current QSV 61% purchase price discount to original property value (2) Determined based on broker price opinions (BPOs) for each proper
Slide 13: PMT's Partnership With PCM and PLS Provide It Operational Excellence
Valued over $100 billion in residential whole loans since 2008 Best in class valuation methodology and analytics Deep relationships with sellers of distressed residential whole loans PMT’s Partnership With PCM and PLS Provide It Operational Excellence 12 By utilizing the extensive operational capabi
Slide 14: Financials
Financials (&nnymac’
Slide 15: Non-Performing Loan Credit Facility
Non-Performing Loan Credit Facility 14 Unique revolving facility to provide $100 million in financing for NPL and REO assets New source of capital to fund additional investments Introduces prudent leverage on NPL investments Our objective is to utilize the line as an “aggregation” facility to fund N
Slide 16: Income Statement
Income Statement 15 PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share data) (Unaudited) Quarter ended September 30, 2010 Period from August 4, 2009 (commencement of operations) to September 30, 2009 Nine months ended September 30, 2
Slide 17: Valuation Changes For The Third Quarter
Valuation Changes For The Third Quarter 16 For the three months ended September 30, 2010 Changes reflected in loans’ carrying values: Valuation Changes $4,012 Payoffs 2,728 Sales 821 $7,561
Slide 18: Cash Flows for the Third Quarter
Cash Flows for the Third Quarter 17 For the three months ended September 30, 2010 Mortgage-backed securities – principal payments $19,788 Mortgage loans held for investment: Scheduled payments 448 Liquidations 11,952 Payoff 4,540 Sales 1,960 18,900 Real estate acquired in settlement of loans – proce
Slide 19: Balance Sheet
Balance Sheet 18 PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) September 30, 2010 December 31, 2009 ASSETS Cash $25,061 $54 Short-term investment — 213,628 Mortgage-backed securities at fair value 137,049 83,771 Mortgage
Slide 20: Third Quarter 2010 Earnings Report
PennyMac Mortgage Investment Trust Third Quarter 2010 Earnings Report November 3, 2010
PennyMac Mortgage Investment Trust — Q3 2010 Earnings Presentation on 6ix