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PennyMac Financial reports profit while investment trust records loss in Q3

By   /   Friday, November 5th, 2021  /   Comments Off on PennyMac Financial reports profit while investment trust records loss in Q3

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Westlake Village-based PennyMac Financial Services saw its net income drop in the third quarter compared to the year before, but officials reported “exceptional financial performance” in other areas in earnings released Nov. 4.

The mortgage lender and loan servicer reported net income of $249.3 million in the third quarter, or $3.80 per share on a diluted basis, on revenue of $786.6 million. For the same quarter in 2020, PennyMac reported net income of $535.2 million, or $7.03 per share on a diluted basis, on revenue of $1.1 billion.

The company saw its pretax income at $339.5 million in the third quarter, down 53% from the same quarter last year.

Shares of PennyMac were up 3.7% on Nov. 5 to close at $66.95.

PennyMac’s third quarter report said the company repurchased about 4.2 million shares of common stock at a cost of $257.3 million, and also repurchased an additional 1.4 million shares in October at a cost of $89.7 million.

“PennyMac Financial delivered exceptional financial performance in the third quarter with a 29% annualized return on equity,” David Spector, PennyMac Financial Services’ chairman and CEO, said in a news release. “The increase in earnings from last quarter was driven by strong execution in our consumer direct lending channel in particular, which locked and funded record volumes.”

PennyMac also issued $500 million of 10-year unsecured senior notes in the third quarter, “solidifying its position as an industry leader and joining a small handful of non-bank mortgage companies able to raise long-term unsecured debt,” the company said. 

Consumer direct interest rate lock commitments were $16.3 billion in unpaid principal balance, up 50% from the third quarter of 2020.

PennyMac’s board also declared a third quarter cash dividend of 20 cents per share, payable on Nov. 24 to common stockholders of record as of Nov. 15.

PennyMac Mortgage Investment Trust, a real estate investment trust managed by PennyMac Financial Services, also announced its quarterly earnings on Nov. 4. The company lost $43.9 million in the third quarter, or 45 cents per share, down from positive net income of $31.9 million in the same quarter of 2020.

Net assets under management were $2.5 billion, an increase of 9% from the third quarter in 2020.

Shares of PennyMac Mortgage Investment Trust dropped 4.2% on Nov. 5 to close at $19.26.

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