Mortgage | PennyMac Mortgage Investment Trust Reports Fourth Quarter And Full-Year 2011 Results

February 9, 2012 – 5:15 am

MOORPARK, Calif.–(BUSINESS WIRE)–

PennyMac Mortgage Investment Trust (NYSE: PMT – News ) today reported net income for the fourth quarter of 2011 of $19.6 million, or $0.70 per diluted share, on total net investment income of $39.1 million. This brings the full-year net income earned by PMT to $64.4 million, or $2.41 per diluted share, on total net investment income for the year of $128.6 million. In addition, the Board of Trustees of PMT has declared a cash dividend of $0.55 per common share of beneficial interest. This dividend will be paid on February 29, 2012 to common shareholders of record on February 17, 2012.

During the quarter, fundings in the correspondent lending segment were $991 million and rate locks amounted to $1.3 billion. Of total correspondent fundings, conventional loans amounted to $566 million, FHA loans were $410 million, and jumbo loans were $15 million. Pre-tax income attributable to the correspondent lending segment was $7.4 million for the quarter, primarily resulting from a $7.4 million net gain on mortgage loans acquired for sale and $1.6 million from interest income. This gain is largely attributed to PMT’s conventional and jumbo loans, with FHA volume generating a sourcing fee of 0.03% of loans funded.

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In the fourth quarter, PMT entered into a forward purchase agreement pursuant to which it committed to purchase a pool of mortgage loans and REO with aggregate unpaid principal amount of approximately $49 million. At December 31, 2011, the Company’s portfolios of distressed residential mortgage whole loans, REO and mortgage-backed securities were valued at $826 million, $96 million, and $73 million, respectively. Pre-tax income attributable to the Company’s investment activity segment, consisting of investments in distressed mortgage assets, was $13.9 million for the fourth quarter.

During the quarter ended December 31, 2011, PMT recorded investment income on financial instruments totaling $38.7 million, as summarized below.

PMT’s distressed mortgage loan portfolio, included in the investment activity segment, generated realized and unrealized gains totaling $19.9 million in the fourth quarter. Of these gains, $5.5 million was realized through payoffs, the result of collections on the loan balances at levels higher than recorded fair values. During the quarter ended December 31, 2011, the Company recognized valuation gains totaling $14.3 million. The following is detail of the realized and unrealized gains on mortgage loans for the fourth quarter:

Expenses for the fourth quarter of 2011 totaled $17.8 million, compared to $17.1 million in the third quarter of 2011. The increase is primarily attributable to an increase in interest expense of $1.2 million, and an increase in fulfillment fees associated with correspondent lending, partially offset by a decrease in loan servicing fees, management fees, and professional services. The increase in interest expense was associated with an increase in the amount of mortgage assets financed, including the inventory of correspondent mortgage loans. The weighted average interest rate on borrowings for the fourth quarter was 3.69%.

Stanford L. Kurland, Chairman and Chief Executive Officer of PMT, stated, “The fourth quarter was a busy and productive quarter for PMT. In particular, the correspondent lending segment increased funding volumes to almost $1 billion and locked $1.3 billion in loans. We anticipate first quarter locks increasing to approximately $1.8 billion, of which approximately $1.1 billion will be from conventional and jumbo loans.

“Our distressed whole loan portfolio continues to perform well,” continued Mr. Kurland. “We have continued to selectively make investments in this asset category, and entered into a forward purchase agreement to acquire $49 million in UPB of distressed whole loans during the fourth quarter. Utilizing this unique arrangement allowed us to acquire the distressed loan portfolio while allocating capital to correspondent activities.

“This was a transformative quarter for PMT,” Kurland concluded. “The Company’s correspondent lending segment had a measurable positive impact on earnings. We continue pursuing opportunities to acquire additional

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