Pennymac Mortgage Investment Trust · NYSE:PMT
Pennymac Mortgage Investment Trust — Q4 2012 Earnings Presentation
24 slides from Pennymac Mortgage Investment Trust's earnings presentation, Feb 7, 2013
Slide 1: Fourth Quarter 2012 Earnings Report
PennyMac Mortgage Investment Trust February 7, 2013 Fourth Quarter 2012 Earnings Report
Slide 2: Forward-looking statements
4Q12 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: Fourth Quarter 2012 Highlights
4Q12 Earnings Report 3 Fourth Quarter 2012 Highlights Net Income Net Investment Income Correspondent Acquisitions Distressed Acquisitions As of or for the three months ended December 2012 Diluted EPS $49.2 million $124.9 million $0.83 per share $290 million in UPB $10.0 billion ROAE % Change Q/Q 22%
Slide 4: Full Year 2012 Highlights
4Q12 Earnings Report 4 Full Year 2012 Highlights Net Income Net Investment Income Correspondent Acquisitions Distressed Acquisitions Diluted EPS $138.2 million $335.2 million $3.14 per share $1.0 billion in UPB $21.5 billion ROAE % Change Y/Y 115% 161% 1,587% 2% 30% 16% 4% As of or for the twelve mo
Slide 5: PMT is an Externally Managed REIT with a Broad Array of Residential Mortgage Investments
PMT is an Externally Managed REIT, with a Broad Array of Residential Mortgage Investments 4Q12 Earnings Report 5 to invest in residential mortgage assets PMT utilizes its equity and modest leverage... driving quality investor returns through dividends and capital appreciation PMT’s 3 year total retu
Slide 6: Investment management capabilities of PCM and mortgage banking services of PLS
4Q12 Earnings Report 6 PMT’s investment returns are achieved through the investment management capabilities of PCM and the mortgage banking services provided by PLS. These services include: Specialized investment management for PMT, including sourcing, capital markets analytics and valuation, due di
Slide 7: Outlook for Key Mortgage Market Drivers and Implications for PMT
Outlook for Key Mortgage Market Drivers and Implications for PMT 4Q12 Earnings Report 7 Regulatory / Government Economy Capital flow into residential mortgage investments is expected to remain strong Margins to continue moving towards normalization as new competitors emerge Ability to pursue organic
Slide 8: Mortgage Investment Activities
Mortgage Investment Activities
Slide 9: Correspondent Lending Continues Solid Performance in 4Q12
4Q12 Earnings Report 9 Correspondent Lending Continues Solid Performance in 4Q12 Correspondent Acquisitions Volume and Mix Correspondent loan acquisitions totaled $10.0 billion in 4Q12, up 59% vs. 3Q12 Conventional and jumbo loan purchases reached $6.5 billion and locks totaled $7.0 billion Margins
Slide 10: Distressed whole loan purchases totaled $290 million in UPB during 4Q12
4Q12 Earnings Report 10 Distressed whole loan purchases totaled $290 million in UPB during 4Q12 Purchases in the quarter were largely comprised of nonperforming loans Flow of distressed loan pools available for review remains robust Fair value of acquisitions during the quarter was $130 million Acqu
Slide 11: Distressed Whole Loan Investments Benefit from Housing Market Stabilization
4Q12 Earnings Report 11 Gains on mortgage loans rose 44% from 3Q12 as a result of improving loan performance, home prices and higher refinance activity Loan performance improved due to lower delinquencies and solid progress toward resolution Actual home prices reported during the fourth quarter posi
Slide 12: Prospective Investments Provide Opportunities For Future Growth
4Q12 Earnings Report 12 Prospective Investments Provide Opportunities For Future Growth Prospective Future Investment Commentary Participation in the structuring, sale and servicing of new non-agency mortgage backed securities Collateral would be newly originated prime jumbo loans sourced through co
Slide 13: Financial Results
Financial Results (ennyMac’
Slide 14: Growth in Mortgage Assets and Earnings Continued in 4Q12
4Q12 Earnings Report 14 Mortgage related assets continued to grow, increasing 14% Q/Q to $2.4 billion Growth primarily resulted from distressed whole loan acquisition and a growing pipeline of correspondent loans acquired for sale MSRs grew 95% on continued strong volume growth by Correspondent Lend
Slide 15: Investment Activities Deliver Solid Fourth Quarter Performance
4Q12 Earnings Report 15 Investment Activities Deliver Solid Fourth Quarter Performance Pretax income increased 13% Q/Q, resulting from higher investment balances and improved home price performance Revenues increased 12% Q/Q from a solid 46% increase in net gain on investments Loss in other income o
Slide 16: Correspondent Lending Pretax Income Grows as Loan Purchase Volumes Rise
4Q12 Earnings Report 16 Correspondent Lending Pretax Income Grows as Loan Purchase Volumes Rise Correspondent segment pretax income rose 9% Q/Q to $41 million as a result of strong growth in correspondent loan purchase volumes Net gain on mortgage loans acquired for sale increased 33% Q/Q Other inco
Slide 17: Net Gain On Mortgage Loans Acquired for Sale Up On Strong Correspondent Performance
Net Gain On Mortgage Loans Acquired for Sale Up On Strong Correspondent Performance 4Q12 Earnings Report 17 Net gain on mortgage loans acquired for sale reached $66 million in 4Q12, a 33% quarter-over-quarter increase Growth in net gain on mortgage loans acquired for sale resulted from strong growth
Slide 18: Servicing Portfolio Growth Continues with Addition of Low Coupon MSRs
4Q12 Earnings Report 18 Servicing Portfolio Growth Continues with Addition of Low Coupon MSRs PMT’s MSR investment grew 95% from 3Q12, reflecting the strong correspondent activity The total UPB of PMT’s MSR portfolio reached $12.2 billion at year end Servicing multiple on conventional MSRs capitaliz
Slide 19: Key Takeaways
Key Takeaways (ennyMac’
Slide 20: Key Takeaways: residential mortgage market opportunities remain significant
4Q12 Earnings Report 20 Residential mortgage market opportunities remain significant Stabilization in housing benefits both correspondent acquisitions and distressed whole loan values Correspondent acquisition volumes expected to grow Targeting $4 billion of total correspondent acquisitions per mont
Slide 21: Appendix
Appendix (ennyMac’
Slide 22: PMT's REIT Income and Asset Test Results
4Q12 Earnings Report 22 PMT’s REIT Income and Asset Test Results Income Test Requirements YTD Status As of 12/31/12 Notes At least 75% of income must be derived from interest on obligations secured by mortgages or interests in real property, gain from the disposition of non-dealer real propertyand q
Slide 23: Portfolio Acquisitions Are Progressing in Line With Expectations
Portfolio Acquisitions Are Progressing in Line With Expectations 4Q12 Earnings Report 23 (1) Ratio of unpaid principal balance remaining to unpaid principal balance at acquisition Purchase 4Q12 Purchase 4Q12 Purchase 4Q12 Purchase 4Q12 Balance ($mm) 182.7 $ 78.6 Balance ($mm) 195.5 $ 70.4 Balance ($
Slide 24: Pre-tax Financial Impact of Revised Management and Services Agreements
4Q12 Earnings Report 24 Pre-tax Financial Impact of Revised Management and Services Agreements PMT Expense for FY 2012 Current Agreements Pro Forma for Revised Agreement(1) Loan Fulfillment Fees Loan Servicing Refinance Recapture Benefit Management Fees Incentive Fee to PCM Total Pre-Tax Items Impac
PennyMac Mortgage Investment Trust — Q4 2012 Earnings Presentation on 6ix