Pennymac Mortgage Investment Trust · NYSE:PMT
Pennymac Mortgage Investment Trust — Q1 2013 Earnings Presentation
20 slides from Pennymac Mortgage Investment Trust's earnings presentation, Apr 23, 2013
Slide 1: First Quarter 2013 Earnings Report
PennyMac Mortgage Investment Trust April 23, 2013 First Quarter 2013 Earnings Report
Slide 2: Forward-looking statements
1Q13 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 2013 Highlights & Recent Developments
1Q13 Earnings Report 3 First Quarter 2013 Highlights & Recent Developments • Net Income of $53.3 million on net investment income of $119.1 million • Diluted EPS of $0.90 per share and dividend of $0.57 per share • Business segment pre-tax earnings reflect the diversity and strength of PMT’s busines
Slide 4: Market Factors Impacting 1Q13 Results
Market Factors Impacting 1Q13 Results 4 Correspondent competitive landscape Distressed whole loan demand Ongoing improvement in home prices • Home prices continue to improve in most regions of the country and housing appears to be on a steady path to recovery • Shortage of home inventory and strong
Slide 5: Opportunities in Residential Mortgage Finance
1Q13 Earnings Report 5 Opportunities in Residential Mortgage Finance Distressed Mortgage Whole Loans Illustrative Gross Levered Return(1) Correspondent Lending 16% - 29% 25% - 50% Bulk Mortgage Servicing Rights / IO Investments 16% - 25% PMT Strategy • Flow of loans available for sale remains robust
Slide 6: Mortgage Investment Activities
Mortgage Investment Activities
Slide 7: Correspondent Acquisitions Drive Continued Growth In MSR Investment
$1.5 $2.9 $6.1 $12.2 $16.6 $19 $33 $65 $127 $180 $0 $50 $100 $150 $200 $250 1Q12 2Q12 3Q12 4Q12 1Q13 $0 $4 $8 $12 $16 $20 MSR Portfolio MSR Asset $1.0 $1.8 $3.7 $6.5 $4.8 $0.8 $1.6 $2.6 $3.5 $3.7 $2.4 $4.6 $8.5 $10.4 $8.1 $0 $2 $4 $6 $8 $10 $12 1Q12 2Q12 3Q12 4Q12 1Q13 Government Jumbo Conventional
Slide 8: Prime Non-Agency Jumbo Securitizations
$3 $4 2003 - 2007 Avg. 2008-2012 Avg. 1Q13 Prime Non-Agency Jumbo Securitizations(2) ($ in billions) • Prime jumbo acquisitions reached $8 million in 1Q13, up from $2.1 million in 4Q12 – Lock volume in quarter reached $100 million • Targeting 3Q13 for first securitization transaction – Deal size of
Slide 9: Distressed Whole Loan Acquisitions Grow in 1Q13
$- $402 $357 $290 $366 $481 $- $100 $200 $300 $400 $500 $600 1Q12 2Q12 3Q12 4Q12 1Q13 QTD 2Q13 9 • Distressed whole loan purchases in 1Q13 reached $366 million in UPB – Comprised largely of nonperforming loans – Acquisition price to UPB averaged 55% in 1Q13 • Flow of distressed whole loans available
Slide 10: Rising Home Values Drive Solid Valuation Gains On Distressed Whole Loans
1Q13 Earnings Report 10 • Valuation gains on PMT’s $2.4 billion(1) distressed loan portfolio totaled $56 million in 1Q13 – Performing - $674 million(1) performing loan portfolio had valuation gains of $23 million – Nonperforming - $1,680 million(1) nonperforming loan portfolio had valuation gains of
Slide 11: Financial Results
Financial Results annymac’
Slide 12: Growth in Mortgage Assets and Earnings Continued in 1Q13
1Q13 Earnings Report 12 • Mortgage related assets continued to grow, increasing 16% Q/Q to $2.8 billion • Growth primarily resulted from distressed whole loan acquisitions and a growing inventory of correspondent loans acquired for sale • MSRs continued their strong organic growth through correspond
Slide 13: Investment Activities Deliver Strong Results
Quarter Ended ($ in thousands) March 31, 2013 December 31, 2012 Revenues: Net gain on investments 63,980 $ 38,108 $ Interest income 10,592 12,680 Other income 3,445 (5,605) Total revenues 78,017 45,183 Expenses: Interest 5,630 4,692 Servicing 7,940 4,932 Other 14,108 11,237 Total expenses 27,678 20,
Slide 14: Correspondent Lending Pretax Earnings Declined On Lower Volumes
Quarter Ended ($ in thousands) March 31, 2013 December 31, 2012 Revenues: Interest income 6,324 $ 7,604 $ Net gain on mortgage loans acquired for sale 29,279 66,465 Other income 5,473 5,665 Total revenues 41,076 79,734 Expenses: Interest 5,647 5,291 Servicing 150 68 Loan fulfillment fees 25,938 31,8
Slide 15: Net Gain On Mortgage Loans Acquired for Sale
Net Gain On Mortgage Loans Acquired for Sale 1Q13 Earnings Report 15 • Net gain on mortgage loans acquired for sale reached $29.3 million in 1Q13 • Margins fell 26 bps Q/Q as a result of the following factors: – Higher mortgage rates during the quarter – Competitive pricing from large players Net ga
Slide 16: Net Servicing Fees Rise With Servicing Portfolio Growth
• Net loan servicing fees reached $6.6 million in 1Q13, up from $605 thousand in 4Q12 - Impairment reversal of $2.5 million reflects the impact of higher mortgage rates, which rose 23bps (1) during the first quarter • As the servicing portfolio grows, its bottom line impact will become more meaningf
Slide 17: Key Takeaways
Key Takeaways énnymac’
Slide 18: Key Takeaways
Key Takeaways 1Q13 Earnings Report 18 • Today’s residential mortgage market holds many opportunities for PMT’s multi-investment strategy – Broad capabilities, through our affiliated manager and loan fulfillment and servicing provider, to pursue a wide range of opportunities – Expect to continue rais
Slide 19: Appendix
Appendix (&nnyMac’
Slide 20: Portfolio Acquisitions Are Progressing in Line With Expectations
Portfolio Acquisitions Are Progressing in Line With Expectations 1Q13 Earnings Report 20 (1) Ratio of unpaid principal balance remaining to unpaid principal balance at acquisition Purchase 1Q13 Purchase 1Q13 Purchase 1Q13 Purchase 1Q13 Balance ($mm) 182.7 $ 73.0 Balance ($mm) 195.5 $ 67.1 Balance ($
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