PennyMac Reports Higher ProfitsTuesday, April 23, 2013
Boosted by an improving housing market, mortgage lender PennyMac Mortgage Investment Trust reported increased profits for the first quarter that beat analysts’ estimates.
The Moorpark real estate investment trust reported net income of $53.3 million (90 cents a share) in the quarter ended March 31, compared with $19 million (65 cents) in the same period a year earlier. Revenue was up 155 percent to $119 million.
The earnings beat the consensus estimate of 82 cents from analysts polled by Thomson Reuters.
A subsidiary of PennyMac Financial Services Inc., the REIT primarily deals in distressed residential mortgages and other mortgage-related assets.
Chief Executive Stanford Kurland attributed the increased profit to the recovering housing market.
“Investment returns were solid for the quarter, particularly in distressed whole loans where we saw increased gains from valuation and strong liquidation activity,” he said in a statement. “Home prices have continued to stabilize, with many of the previously hardest hit areas showing appreciating home prices.”
The company reported a 56 percent quarter-to -quarter decrease in revenue from its correspondent lending division, which sells loans originated by the firm to other banks, but said it was offset by $64 million in gains on its distressed mortgage portfolio.
PennyMac’s parent company, PennyMac Financial Service Inc., disclosed in February in a filing with the Securities and Exchange Commission plans for an initial public offering. It wants to raise up to $288 million, which the company said will be used to increase its loan operations.
Shares of PennyMac gained 9 cents, or less than 1 percent, to close at $24.22 on the New York Stock Exchange.