PennyMac earnings up as mortgage boom continues
PennyMac Financial Services reported a higher net income and revenue in the first quarter, as well as a cash dividend, when it announced its latest earnings on May 6.
The Westlake Village-based mortgage lender and loan servicer recorded net income of $376.9 million, or $5.15 per share, on revenue of $944.7 million. For the first quarter of 2020, the company saw net income of $306.2 million, or $3.73 per share, on revenue of $721.8 million.
PennyMac reported $506 million in pretax income for the first quarter, up 22% year-over-year. The company has also repurchased about 4.7 million shares of common stock in the past year, at a cost of $288.4 million, and bought another 270,000 shares in April for about $15.8 million.
“PennyMac Financial has built an extremely valuable mortgage banking enterprise well positioned for long-term success. We believe deeply in that value, which is why we continue to repurchase shares,” David Spector, PennyMac Financial Services’ chairman and CEO, said in a news release. “Since the beginning of 2020, we have now repurchased approximately 18% of PFSI’s common shares.”
The company also issued $650 million of 8-year senior unsecured notes since the first quarter of 2020, and direct lending interest rate lock commitments hit a record $19.1 billion in unpaid principal balance, up 92% year-over year.
PennyMac Financial Services’ board of directors declared a first quarter cash dividend of 20 cents per share, payable on May 27 to common stockholders of record as of May 17.
PennyMac Mortgage Trust, a real estate investment trust managed by PennyMac Financial Services, also released its first-quarter earnings on May 6.
The investment trust reported a net income of $65.4 million, or 67 cents per common share, on net investment income of $201.4 million. That was a major improvement from the first quarter of 2020, when the investment trust saw a net loss of $600.9 million, or $5.99 per common share, on net investment losses of $506.5 million.
Conventional correspondent loan production volumes reached $33.8 billion in unpaid principal balance, up 109% from the same quarter of 2020. PennyMac Mortgage Trust also added $408 million in new mortgage servicing rights and issued $1.4 billion in term debt, including $659 million of 3-year term notes, $350 million of 5-year Fannie Mae mortgage servicing rights and raising $345 million of new 5-year senior exchangeable notes.
“As we look at the evolving mortgage landscape, we believe PMT remains uniquely positioned to capitalize on the current environment characterized by elevated production volumes,” Spector said.
PennyMac Financial Services closed at $57.61 on May 6 and shares were trading about $2.40 lower in after-hours trading, after the earnings release. The company’s stock trades at around double its price from one year ago. PennyMac Mortgage Investment Trust closed on May 6 at $19.68, also around double its price from May 2020.