PennyMac sees net income slump over full year

However, it expects a robust offering going forward

PennyMac sees net income slump over full year

PennyMac Mortgage Investment Trust (PMT) has delivered its financial results – showing a mixed bag between the fourth quarter of 2024 and the full year.

For the full year it saw its net income slump significantly. It posted net income of $161.0 million, down from $199.7 million in 2023. Net income attributable to common shareholders reached $119.2 million, translating to diluted earnings per share of $1.37, compared to $1.63 in the previous year.

Net investment income declined to $334.2 million from $429.0 million in 2023. The company’s book value per share dipped slightly from $16.13 to $15.87, while return on average common equity was recorded at 8%.

Pennymac Q4 performance

In the fourth quarter, it reported net income of $36.1 million, or $0.41 per diluted common share.

Despite market fluctuations, the mortgage real estate investment trust (REIT) said it saw continued investment activity and expects a robust securitization pipeline heading into 2025.

PennyMac’s net investment income for Q4 totaled $107.9 million, contributing to an annualized return on average common equity of 10%. The company announced a $0.40 per-share dividend for the fourth quarter, which was paid on Jan. 24, 2025, to shareholders of record as of Dec. 27, 2024. The book value per common share rose slightly to $15.87 from $15.85 at the end of the prior quarter.

The quarter’s investment activity was largely fueled by correspondent loan production, which reached $3.5 billion in unpaid principal balance (UPB). While this was down 41% from the previous quarter – due to the sale of conventional loans to PennyMac Financial Services (PFSI) – it reflected a 41% year-over-year increase.

PennyMac renewed its management and services agreement with PFSI for another five years. After the quarter ended, the company closed an additional securitization of agency-eligible investor loans worth $341 million in UPB and added $21 million in net new investments in non-agency subordinate bonds.

Additionally, PennyMac completed two securitizations of agency-eligible investor loans, totaling $822 million in UPB, and generated $52 million in net new investments in non-agency subordinate bonds.

Read next: Flagstar Financial reports Q4 2024 net loss

“PMT produced strong results in the fourth quarter with a 10% annualized return on equity primarily driven by strong levels of income excluding market-driven value changes and excellent performance across all three investment strategies,” chairman and CEO David Spector said in the financial report.

“Importantly, the fourth quarter marked a return to organic creation of credit investments... With a growing pipeline of loans available for private label securitization and strong investor demand, we expect similar levels of activity well into 2025, with the potential for increased activity and securitizations of other loan products as the origination market grows.”

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