Pennymac Mortgage Investment Trust · NYSE:PMT
Pennymac Mortgage Investment Trust — Q1 2012 Earnings Presentation
26 slides from Pennymac Mortgage Investment Trust's earnings presentation, May 4, 2012
Slide 1: First Quarter 2012 Earnings Report
PennyMac Mortgage Investment Trust May 3, 2012 First Quarter 2012 Earnings Report
Slide 2: Forward-looking statements
1Q12 Earnings Report 2 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 resul
Slide 3: First Quarter 2012 Highlights
1Q12 Earnings Report 3 First Quarter 2012 Highlights Net Income of $19.1 million on revenue of $46.6 million Diluted EPS of $0.65 per share, and dividend of $0.55 per share Correspondent funding volume increased to $1.8 billion (Conventional fundings of $992 million, 55% of total), up 81% from the f
Slide 4: PMT's unique hybrid structure
1Q12 Earnings Report 4 PMT’s unique hybrid structure allows the Company to focus its specialized operations on legacy loans and the emergence of the post crisis mortgage market PMT wholly owns REIT subsidiaries that enjoy favorable tax treatment and taxable REIT subsidiaries that are taxable as a C-
Slide 5: Approach to Raising Additional Equity
Approach to Raising Additional Equity PMT’s approach to raise additional equity is driven by the growth of the business and the availability of accretive investment opportunities Raised $47 million in 1Q12 through PMT’s Controlled Equity Offering™ program to support continued growth, primarily for C
Slide 6: Strategy and Outlook for PMT
6 Illustrative Leveraged Gross Return(1) 20% - 26% 15% - 20% 27% - 39% (avg. holding period 20 days) 25% - 32% Strategy and Outlook Strategy and Outlook for PMT Continuing to acquire ABS and MBS on an opportunistic basis Correspondent business provides additional insight into MBS opportunities PCM e
Slide 7: PMT capturing the HARP 2.0 opportunity
PMT has unique capabilities to capture the opportunity in two ways Correspondent Lending – partnering with our correspondent sellers to deliver best-in-class fulfillment & servicing capabilities, GSE relationships, underwriting and capital markets expertise for HARP loans Bulk Servicing acquisitions
Slide 8: Financial Results
Financial Results (&nnyMac’
Slide 9: Income Statement Overview
1Q12 Earnings Report 9 Income Statement Overview Drivers Pretax earnings increased 15% quarter-over-quarter Net gain on investments down quarter-over-quarter, primarily due to home price performance Interest income up as a result of higher correspondent originations and increased levels of performin
Slide 10: Balance Sheet Highlights
1Q12 Earnings Report 10 Balance Sheet Highlights (1)Return on equity calculated using average monthly equity values. Mortgage assets were down slightly quarter-over-quarter, as declines in loans acquired for sale and mortgages held for investment were largely offset by a rise in MBS Acquired for sal
Slide 11: PMT's Business Segments Pretax Income
1Q12 Earnings Report 11 PMT’s Business Segments Pretax Income Distressed Mortgage Investments pretax income increased 2.5% from the fourth quarter Correspondent Lending up 41% from fourth quarter driven by increased gain on sale of mortgage loans acquired for sale and interest income (Unaudited) Qua
Slide 12: Net Gain On Mortgage Loans Acquired for Sale Breakdown
Net Gain On Mortgage Loans Acquired for Sale Breakdown 1Q12 Earnings Report 12 Net gain on mortgage loans acquired for sale rose 80% quarter-over-quarter due to an increase in Correspondent Lending lock volume Net gain on mortgage loans acquired for sale includes both cash and the value of the origi
Slide 13: Growing Investment in Mortgage Servicing Rights
1Q12 Earnings Report 13 Growing Investment in Mortgage Servicing Rights (MSRs) MSR growth has been driven by the growth in Correspondent Lending MSRs retained on loans with initial note rates equal to or less than 4.5% are accounted for under the lower of cost or market (LOCOM) method Currently, the
Slide 14: Distressed Mortgage Investments: Valuation and REO Proceeds
1Q12 Earnings Report 14 Distressed Mortgage Investments: Valuation and REO Proceeds Valuation changes declined 22% from the fourth quarter 2011 Predominantly due to home values underlying PMT’s loan portfolio decreasing more than projected during the first quarter Home values declined less than proj
Slide 15: Correspondent Lending
Correspondent Lending (&nnyMac’
Slide 16: Correspondent Lending Achieves Strong Growth in 1Q12
Fundings total $1.8 billion in 1Q12, up 81% vs. 4Q11 Conventional volume increased 75% from 4Q11 Operational results for the month of April 2012 Locks: $1.3 billion Fundings: $800 million Prudently growing relationships with our correspondent sellers: Focusing on quality long-term relationships Buil
Slide 17: Correspondent Lending: Relationship-Based Client Selection
Client portfolio is comprised of: Large-to-medium-sized independent mortgage companies Financial institutions National home builders Clients share our focus on maintaining a quality relationship Manufacturing quality and efficiency Mutual profitability Financial capacity and management integrity Res
Slide 18: Distressed Mortgage Investment
Distressed Mortgage Investment
Slide 19: Whole Loan Portfolio Acquisitions
1Q12 Earnings Report 19 Whole Loan Portfolio Acquisitions Volume of whole loan pools available for purchase remained steady throughout the first quarter PCM reviewed nearly $5.0 billion in UPB of whole loans PMT entered into an agreement to acquire approximately $90 million UPB of distressed whole l
Slide 20: Acquisitions Are Progressing Through the Resolution Process
1Q12 Earnings Report 20 Acquisitions Are Progressing Through the Resolution Process (1) Ratio of unpaid principal balance remaining to unpaid principal balance at acquisition Purchase 1Q12 Purchase 1Q12 Purchase 1Q12 Purchase 1Q12 Balance ($mm) 182.7 $ 90.0 Balance ($mm) 195.5 $ 94.9 Balance ($mm) 1
Slide 21: Modification and Payoff Activity Accelerated
1Q12 Earnings Report 21 Modification and Payoff Activity Accelerated in the First Quarter Modification activity has increased steadily for last three quarters More than 90% of modifications were facilitated under the Home Affordable Modification Program (HAMP) Payoffs rose 78% quarter-over-quarter d
Slide 22: Resolution Activity
1Q12 Earnings Report 22 Resolution Activity Deeds-in-lieu resolutions have risen significantly as our efforts continue to gain traction Working with borrowers in imminent risk of foreclosure to opt for a deed-in-lieu vs. foreclosure Short sales declined in the 1Q12, but remained the second largest l
Slide 23: Continue to Progress REO Inventory Through to Liquidation
1Q12 Earnings Report 23 Continue to Progress REO Inventory Through to Liquidation $26.7 million in carrying value of REO was liquidated in the first quarter, compared to $14.4 million last quarter 68% of REO inventory was aged > 90 days at March 31, 2012, compared to 54% at the end of 4Q11 Rehabilit
Slide 24: Cash Flow from Distressed Investments
1Q12 Earnings Report 24 Cash Flow from Distressed Investments Cash proceeds from the liquidation of distressed mortgage loans and REO totaled $68.4 million for the first quarter of 2012 Repayments of mortgage loans at fair value -- $26.2 million Repayments of mortgage loans under forward purchase ag
Slide 25: Contact Us
1Q12 Earnings Report 25 For questions or comments please contact us at: PennyMac Mortgage Investment Trust 6101 Condor Drive Moorpark, CA 93021 IR Contacts: Kevin Chamberlain Managing Director, Corporate Communications Christopher Oltmann Director, Investor Relations chris.oltmann@pnmac.com or Inves
Slide 26: First Quarter 2012 Earnings Report
PennyMac Mortgage Investment Trust May 3, 2012 First Quarter 2012 Earnings Report
PennyMac Mortgage Investment Trust — Q1 2012 Earnings Presentation on 6ix