Management Touts PennyMac’s Diversification Strategy

PennyMac Mortgage Investment Trust had net income of $54.5 million for 2Q13, up from $29.6 million one year prior.

“The second-quarter results demonstrate the strength of PMT’s strategy pursuing multiple investment opportunities across the residential mortgage market,” said chairman and CEO Stanford Kurland. “PMT achieved new investments in distressed whole loans, grew its correspondent lending activities, and acquired a bulk portfolio of jumbo loans as we prepare for PMT’s first securitization targeted for the third quarter.

“The ability to pursue diverse and changing opportunities across the mortgage landscape differentiates PMT from other mortgage REITs and we continue to pursue new opportunities for growth as we head into the second half of 2013.”

The company’s correspondent lending segment had revenue of $59 million in 2Q13 and pretax income of $28 million. It added a combination of higher interest rate lock commitments and a stabilization of margins resulted in a net gain on loans acquired for sale of $44 million.

It reported $10 billion of IRLCs in 2Q13, up 23% from 1Q13. The correspondent channel purchased $8.6 billion during the period. It also made distressed loan purchases of $397 million in the quarter.

Meanwhile its spin-off, PennyMac Financial Services Inc. had net income of $48 million during the second quarter. PFSI did its initial public offering on May 9.

The company’s mortgage banking segment does retail lending and correspondent lending for itself and provides fulfillment services for PMT. It reported revenue of $92 billion for 2Q13.

Loan production totaled $8.9 billion, of which $4.3 billion came from fee-based fulfillment services for PMT.

Net servicing fees for PFSI totaled $22 million, up 38% from 1Q13. Its servicing portfolio is $44 billion, up 23% from March 31. There is also another $26 billion of subservicing.

“Our servicing portfolio continues to grow rapidly through organic production, and we have significant opportunities to continue profitable market share gains in our correspondent and retail lending businesses. PMT, the REIT that we manage, has been very active putting capital to work in multiple opportunities including distressed whole loans, jumbo loans, and its correspondent lending activities, which helps grow our servicing portfolio and increase investment management revenues over time,” Kurland, who is also chairman and CEO of PFSI, said.