PennyMac Mortgage reports Q2 EPS 17c, consensus 35c

Reports Q2 NII $71.2M vs. $90.5M last year. “PMT‘s second quarter financial results reflect higher levels of income excluding market-driven value changes and income contributions from all three strategies,” said CEO David Spector. “This income was partially offset by net fair value declines, predominantly in the interest rate sensitive strategies due to continued interest rate volatility during the quarter. I am pleased to note that we successfully issued $217 million of exchangeable senior notes and $355 million of term notes secured by Fannie Mae MSRs at attractive levels as we saw improvement in the credit markets during the second quarter. Given the new capital, we expect to deploy more capital to conventional correspondent production in the third quarter, driving organic growth of our MSR investments. Additionally, we will continue to monitor the markets for opportunities to deploy capital into bulk MSR packages and other investments at appropriate returns. With a diversified portfolio of mortgage-related investments with strong underlying fundamentals – and a leading correspondent production business – I remain confident in PMT’s ability to continue delivering attractive risk-adjusted returns to its shareholders.”