March 21, 2023
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PennyMac reports decline in net income


Westlake Village-based PennyMac Mortgage Investment Trust and PennyMac Financial Services reported a drop in earnings on Aug. 3 for the quarter ended June 30.

Investment income was up 30 percent compared to the prior quarter, but net income for the mortgage investment trust was $26.4 million, a 6 percent decline from the same period in 2016, and earnings per share fell to 38 cents.

PennyMac Financial had a much steeper decline, from net income of $74.3 million in the second quarter of 2016 to $50.7 million in the most recent quarter, down 31.7 percent. Revenues fell 2.9 percent to $201.7 million, and expenses rose more than 16 percent.

“PMT continues to make solid progress in growing its credit risk transfer and mortgage servicing rights investments and in liquidating its distressed loan investments,” President and CEO David Spector said in an earnings release, adding that credit risk transfer investments and correspondent production saw strong growth in volumes.

Interest rate volatility was a challenge for the company during the quarter, he added.

“Our second quarter performance reflects our position as a large player in a highly competitive market,” Spector said of PennyMac Financial. “While the interest rate environment was volatile, with mortgage rates declining overall for the quarter, our operations performed well, and our strong capital position allowed us to grow despite the smaller origination market this year.

PennyMac Mortgage had $6 billion in total assets and $69.9 million in cash on hand, with $4.56 billion in liabilities. PennyMac Financial had nearly $76 million in cash as of June 30, and $6.4 billion in total assets. Liabilities rose to $4.9 billion.

Shares for the two companies remained relatively flat for the day at $17.68 and $17.60, respectively.

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