PennyMac Mortgage Investment Trust(PMT) - 2024 Q2 - Quarterly Results

Financial Performance - Net income attributable to common shareholders was $15.0 million, with an annualized return on average common equity of 4%[1] - Net income attributable to common shareholders for Q2 2024 was $15.0 million, or $0.17 per diluted share, on net investment income of $71.2 million[29] - For the quarter ended June 30, 2024, net income attributable to common shareholders was $14.98 million, a decrease of 59.7% from $37.15 million in the prior quarter[42] - Net investment income for the quarter was $71.20 million, compared to $74.21 million in the prior quarter, reflecting a decrease of 4.1%[42] Debt Issuance and Management - Issued $217 million of 5-year exchangeable senior notes due June 2029, reflecting improved credit market conditions[2] - The company issued $355 million of new, 3.5-year MSR term notes at attractive rates, expecting to deploy more capital to conventional correspondent production in Q3[31] - The company issued $247 million of new, 3-year CRT term notes, refinancing $213 million of notes due to mature in 2025[45] - The company redeemed $305 million of MSR term notes due in 2027, indicating active management of its liabilities[45] Loan Servicing and Production - Net loan servicing fees amounted to $96.5 million, up from $45.7 million in the prior quarter, driven by contractually specified servicing fees of $162.1 million[16] - The company created $41 million in new mortgage servicing rights (MSRs) during the quarter[12] - Total correspondent acquisitions reached $22.5 billion in UPB of loans, up 24% from the prior quarter and 6% from Q2 2023[36] - Conventional correspondent loan production volumes for PMT's account totaled $2.2 billion in unpaid principal balance (UPB), up 26% from the prior quarter but down 26% from the second quarter of 2023[44] - Interest rate lock commitments on conventional and jumbo loans for PMT's account totaled $2.7 billion, up 8% from the prior quarter[49] Segment Performance - The Credit Sensitive Strategies segment reported pretax income of $15.7 million on net investment income of $15.8 million, a decrease from $60.8 million in the prior quarter[14] - Interest income for the credit-sensitive strategies segment totaled $22.9 million, down from $24.2 million in the prior quarter[33] - Net losses on investments for the credit-sensitive strategies segment were $37.2 million, primarily due to losses on MBS from higher interest rates[34] - Segment revenues were $14.6 million, including net gains on loans acquired for sale of $12.2 million[37] - Management fees for the segment were $7.1 million, with other segment expenses totaling $8.1 million[24] - Interest expense for the credit-sensitive strategies segment totaled $24.3 million, up from $23.0 million in the prior quarter[33] - The Interest Rate Sensitive Strategies segment reported pretax income of $16.9 million on net investment income of $39.1 million, a significant recovery from a pretax loss of $27.2 million in the prior quarter[47] Expenses and Financial Metrics - Total expenses for the quarter were $42.59 million, slightly up from $41.82 million in the prior quarter[42] - Segment expenses were $22.2 million, essentially unchanged from the prior quarter[17] - The weighted average fulfillment fee rate decreased to 20 basis points from 23 basis points in the prior quarter[19] - The company recorded a provision for tax expense of $3.2 million, primarily due to earnings on assets held in its taxable subsidiary[20] - Book value per common share decreased to $15.89 at June 30, 2024, down from $16.11 at March 31, 2024[30] Investment Gains and Losses - Net gains on organically-created CRT investments were $16.6 million, down from $51.7 million in the previous quarter[4] - The net (losses) gains on investments and financings were $(19.74) million, a significant decline from $39.75 million in the prior quarter[42] - Interest income for the quarter was $151.84 million, an increase of 5.4% from $143.56 million in the prior quarter[42] Dividends - The company declared a cash dividend of $0.40 per common share for Q2 2024, payable on July 26, 2024[29]