PennyMac Mortgage Investment Trust (PMT) Q2 2024 earnings summary

Executive summary

• Net income attributable to common shareholders was $15 million for Q2 2024, or $0.17 per diluted share, with an annualized return on common equity of 4%.

• Book value per share was $15.89 at June 30, 2024, down slightly from the prior quarter.

• Dividend of $0.40 per common share was declared for Q2 2024.

• All three investment strategies contributed to income, though fair value changes in interest rate-sensitive strategies offset some gains.

• Total assets decreased to $12.1 billion at June 30, 2024, mainly due to lower mortgage-backed securities holdings.

Financial highlights

• Net income to common shareholders was $15 million, or $0.17 per diluted share, for Q2 2024.

• Pretax income for credit sensitive strategies was $15.7 million; interest rate sensitive strategies generated $16.9 million pretax income.

• Correspondent production pretax income was $9.6 million, with $2.2 billion in conventional correspondent production volume.

• MSR asset fair value at quarter end was $3.9 billion, unchanged from March 31.

• Net loan servicing fees were $96.5 million in Q2 2024.

Outlook and guidance

• Third-party estimates for total mortgage originations are $1.7 trillion in 2024 and $2.1 trillion in 2025, with rates expected to decline and refinance volumes to rise.

• PMT expects to retain a higher percentage of conventional correspondent loan production in Q3 2024 (30%-50% vs. 18% in Q2).

• Run rate potential for investment strategies is $0.33 per share quarterly, down from $0.35 last quarter, mainly due to lower expected yields in interest rate-sensitive strategies.

• Dividend expected to remain stable at $0.40 per share, with potential for EPS to rise above $0.40 next year as short-term rates decline.

• Management remains focused on liquidity, risk management, and capital deployment in correspondent production and MSR investments.