Core Insights - The focus is on closed-end funds and the opportunities for directional and arbitrage trading created by market price deviations [1][2] - The yield curve has begun to normalize, with long-term yields surpassing short-term yields, indicating potential investment strategies [2] Group 1: Trading Strategies - The company emphasizes the importance of timing in trading closed-end funds and offers early access to discussions for members [1] - Denislav Iliev, an experienced trader, leads a team that identifies mispriced investments in fixed-income and closed-end funds using straightforward financial logic [2] Group 2: Service Features - The service provided includes frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [2] - An actively managed portfolio and a chat feature for discussions are also part of the service offerings [2]

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WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--PennyMac Mortgage Investment Trust (NYSE: PMT) ("PMT†or the "Company†) today announced that its indirect wholly-owned subsidiary, PennyMac Corp. ("PMC†), has priced an offering of $75 million aggregate principal amount of its 8.500% Exchangeable Senior Notes due 2029 (the "Notes†) to certain investors in a direct placement registered under the Securities Act of 1933, as amended. The Notes will be issued as a reopening of, and will be part of the same. ...

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Core Viewpoint - PennyMac Mortgage (PMT) is positioned as a strong investment opportunity due to its improving earnings outlook and analysts raising their earnings estimates [1][2]. Estimate Revisions - The upward trend in earnings estimate revisions indicates growing analyst optimism regarding PennyMac Mortgage's earnings prospects, which is expected to positively impact its stock price [2]. - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that stocks with a Zacks Rank 1 have generated an average annual return of +25% since 2008, highlighting the potential for PennyMac Mortgage [3]. - For the current quarter, the earnings estimate of $0.41 per share reflects no change from the previous year, but the Zacks Consensus Estimate has increased by 11.45% over the last 30 days with two estimates raised and no negative revisions [5]. - The full-year earnings estimate of $0.82 per share shows a decrease of -40.2% from the previous year, yet the consensus estimate has risen by 21.67% due to two upward revisions [6][7]. Zacks Rank - The favorable estimate revisions have led to PennyMac Mortgage earning a Zacks Rank 2 (Buy), indicating strong potential for outperformance compared to the S&P 500 [8]. Stock Performance - The stock has gained 6.5% over the past four weeks, reflecting investor confidence in its earnings growth prospects, suggesting it may be a good addition to investment portfolios [9].

Investment and Financial Performance - As of September 30, 2025, the company held net CRT-related investments totaling approximately $1.0 billion[280]. - During the nine months ended September 30, 2025, the company invested approximately $235.9 million in non-Agency subordinate bonds and held $372.8 million at fair value[282]. - The company purchased newly originated prime credit quality residential loans with fair values totaling $64.7 billion for the nine months ended September 30, 2025, compared to $67.9 billion for the same period in 2024[286]. - The company sold $25.0 billion in UPB of conventional loans to PennyMac Loan Services, Inc. during the nine months ended September 30, 2025[287]. - The company held approximately $3.7 billion of MSRs at fair value at September 30, 2025[285]. - The company reported net investment income of $99.2 million for the quarter ended September 30, 2025, compared to $80.9 million for the same period in 2024[292]. - Non-cash items accounted for 58% of net investment income for the quarter ended September 30, 2025[292]. - The company sold loans held for sale totaling $7.97 billion in the quarter ended September 30, 2025[283]. - The company received sourcing fees totaling $5.2 million for the nine months ended September 30, 2025, compared to $5.6 million for the same period in 2024[286]. - Net income for the quarter ended September 30, 2025, increased by $16.9 million compared to the same quarter in 2024, driven by reduced mortgage servicing rights and hedging losses, partially offset by decreased gains on investments[300]. - Total assets as of September 30, 2025, reached $18,525,671, an increase from $14,408,706 as of December 31, 2024[299]. - Net gains on investments and financings for the quarter ended September 30, 2025, were $64,087, a decrease from $146,695 in the same quarter of 2024[304]. - The company expects to acquire a portion of conventional loans and all jumbo loans produced in the correspondent channel from PFSI in Q4 2025[296]. - The credit sensitive strategies segment experienced a $56.9 million decrease in net gains on CRT arrangements for the nine months ended September 30, 2025, compared to the same period in 2024[306]. - Net loan servicing fees for the quarter ended September 30, 2025, were $15,429, a significant recovery from a loss of $85,080 in the same quarter of 2024[299]. - The annualized return on average common shareholders' equity for the quarter ended September 30, 2025, was 14.3%, up from 8.8% in the same quarter of 2024[299]. - The company recognized net valuation gains of $37.6 million on mortgage-backed securities for the quarter ended September 30, 2025, compared to $123.4 million in the same quarter of 2024[305]. - The net investment income for the nine months ended September 30, 2025, was $213,898, a decrease from $226,267 in the same period of 2024[303]. Loan and Servicing Activities - The company plans to continue investing in subordinate MBS generated from private label securitization of Agency eligible loans, which is expected to increase asset-backed financing of variable interest entities[297]. - For the quarter ended September 30, 2025, net gains on investments and financings from credit risk transfer derivatives totaled $2,947,000, a decrease from $8,735,000 in the same quarter of 2024[308]. - The realized gains from credit risk transfer strips were $10,800,000 for the quarter ended September 30, 2025, compared to $14,489,000 in the same quarter of 2024, reflecting a decline of approximately 25%[308]. - Interest income from deposits securing credit risk transfer arrangements was $11,125,000 for the quarter ended September 30, 2025, down from $15,042,000 in the same quarter of 2024, representing a decrease of about 26%[308]. - The carrying value of credit risk transfer arrangements as of September 30, 2025, was $1,018,552,000, a decrease from $1,101,803,000 at December 31, 2024[310]. - The unpaid principal balance of loans underlying credit risk transfer arrangements was $19,937,381,000 as of September 30, 2025, down from $21,249,304,000 at December 31, 2024[310]. - The total net gains on loans held for sale for the nine months ended September 30, 2025, were $45,007,000, compared to $46,737,000 for the same period in 2024, indicating a slight decline[313]. - The company recorded a provision for losses relating to representations and warranties of $222,000 for the quarter ended September 30, 2025, compared to $459,000 for the same quarter in 2024[320]. - Loans indemnified at the end of the period for September 30, 2025, were $16,207,000, compared to $14,981,000 for the same period in 2024, reflecting an increase of approximately 8%[320]. - The liability for representations and warranties at the end of the period was $5,152,000 as of September 30, 2025, down from $8,315,000 in the same period of 2024[320]. - The net loans repurchased (resolved) with losses chargeable to liability for representations and warranties was $(3,938,000) for the quarter ended September 30, 2025, compared to $(1,819,000) for the same quarter in 2024[320]. - The company recorded a reduction in liability for representations and warranties of $39,000 for the quarter and $2.1 million for the nine months ended September 30, 2025, compared to $5.2 million and $18.6 million for the same periods in 2024[325]. - Loan origination fees decreased during the quarter and nine months ended September 30, 2025, due to fewer loans purchased for sale to nonaffiliates compared to the same periods in 2024[326]. - Net loan servicing fees for the quarter ended September 30, 2025, were $15,429,000, a decrease from $85,080,000 in the same quarter of 2024, while for the nine months ended September 30, 2025, they were $12,166,000 compared to $57,119,000 in 2024[327]. - The average unpaid principal balance (UPB) of loans outstanding as of September 30, 2025, was $218,799,013, down from $226,237,613 as of December 31, 2024[333]. - The company reported a 30-89 days delinquency of $2,743,880,000 as of September 30, 2025, compared to $2,645,952,000 as of December 31, 2024[333]. - The average balance of mortgage servicing rights (MSRs) was $3,717,551,000 for the quarter ended September 30, 2025, compared to $3,876,497,000 for the same quarter in 2024[331]. - The change in fair value of MSRs for the nine months ended September 30, 2025, was $(182,007,000), compared to $(140,829,000) for the same period in 2024[331]. - The company experienced an increase in loan recapture income from PFSI, reflecting higher refinancing activity in the MSR portfolio during the quarter and nine months ended September 30, 2025, compared to the same period in 2024[332]. - The average loan-to-value (LTV) ratio for the MSR servicing portfolio as of September 30, 2025, was 75%[334]. - The company’s contractually specified servicing fees for the quarter ended September 30, 2025, were $151,395,000, down from $162,605,000 in the same quarter of 2024[328]. Interest Income and Expenses - Net interest income for the quarter ended September 30, 2025, was $230,088 thousand, an increase from $176,734 thousand in the same quarter of 2024, reflecting a growth of 30.2%[336]. - Average yield on interest-earning assets for the quarter ended September 30, 2025, was 7.02%, compared to 8.55% for the same quarter in 2024, indicating a decrease of 1.53 percentage points[336]. - Loans held for investment generated interest income of $67,160 thousand with an average yield of 5.10% for the quarter ended September 30, 2025, compared to $16,044 thousand and 4.60% in the same quarter of 2024, showing significant growth in both income and yield[336]. - The total interest expense for the quarter ended September 30, 2025, was $228,394 thousand, up from $184,171 thousand in the same quarter of 2024, representing an increase of 24%[336]. - For the nine months ended September 30, 2025, net interest income was $602,660 thousand, compared to $472,128 thousand for the same period in 2024, marking a year-over-year increase of 27.6%[337]. - The average yield on loans held for sale was 6.57% for the nine months ended September 30, 2025, compared to 6.77% for the same period in 2024, reflecting a slight decrease of 0.20 percentage points[337]. - Interest income from mortgage-backed securities for the nine months ended September 30, 2025, was $182,903 thousand, with an average yield of 6.01%, compared to $184,762 thousand and 6.04% in the same period of 2024[337]. - The company experienced a decrease in interest expense due to reduced costs of repurchase agreement financing, contributing to improved net interest income[337]. - The total interest expense for the nine months ended September 30, 2025, was $615,680 thousand, compared to $527,539 thousand for the same period in 2024, indicating an increase of 16.7%[337]. - The company reported a net interest expense decrease of $4,394 thousand for the quarter ended September 30, 2025, compared to an increase of $17,888 thousand in the same quarter of 2024, highlighting improved financial management[337]. Expenses and Financial Management - Total expenses decreased by $2.1 million, or 4%, for the quarter ended September 30, 2025, but increased by $17.5 million, or 13%, for the nine months ended September 30, 2025, compared to the same periods in 2024[338]. - Loan servicing fees decreased by $1.2 million for the quarter but increased by $1.6 million for the nine months ended September 30, 2025, compared to the same periods in 2024[339]. - Management fees decreased by $241,000 for the quarter and $681,000 for the nine months ended September 30, 2025, due to lower average shareholders' equity[341]. - Loan fulfillment fees decreased by $5.3 million for the quarter and $2.7 million for the nine months ended September 30, 2025, due to a decrease in the volume of loans purchased for sale[342]. - Professional services expense increased by $6.0 million for the quarter and $17.2 million for the nine months ended September 30, 2025, due to increased legal and consulting fees[343]. Asset and Debt Management - Total assets increased by approximately $4.1 billion, or 29%, from December 31, 2024, to September 30, 2025, primarily due to an increase in loans held for investment[352]. - Loans held for investment increased by $3.8 billion at fair value, while loans held for sale increased by $304.7 million at fair value[352]. - The Company's effective tax rate was (24.0)% for the quarter ended September 30, 2025, with consolidated pretax income of $47.0 million[348]. - The TRS recognized a tax benefit of $11.2 million on a pretax loss of $43.8 million for the quarter ended September 30, 2025[348]. - Common overhead allocation from PFSI decreased by $885,000 for the quarter and $2.9 million for the nine months ended September 30, 2025, due to changes in the allocation method[346]. - Correspondent loan purchases for the quarter ended September 30, 2025, totaled $9.3 billion, a decrease from $26.5 billion in the same period of 2024[355]. - The total correspondent loan purchases for the nine months ended September 30, 2025, were $64.7 billion, compared to $67.9 billion in 2024[355]. - The company reported a net acquisition of subordinate credit-linked securities of $(194,513) thousand for the quarter ended September 30, 2025, compared to $(111,044) thousand in 2024[356]. - Interest rate sensitive assets included $876,394 thousand in floating rate collateralized mortgage obligations for the quarter ended September 30, 2025[356]. - The carrying value of credit risk transfer (CRT) arrangements as of September 30, 2025, was $1,018,552 thousand, down from $1,101,803 thousand at December 31, 2024[359]. - The UPB of loans subject to credit guarantee obligations was $19,937,381 thousand as of September 30, 2025, compared to $21,249,304 thousand at December 31, 2024[360]. - The weighted average original debt-to-income ratio for loans in CRT arrangements was 35.8% as of September 30, 2025[360]. - The average origination FICO credit score for loans in CRT arrangements was 752 as of September 30, 2025[360]. - The company expects that its ability to grow its investment portfolio will depend on raising additional equity capital over time[357]. - The total mortgage-backed securities at fair value as of September 30, 2025, amounted to $4,609,164 thousand[358]. Cash Flow and Liquidity - Total cash used in operating activities was $3.9 billion for the nine months ended September 30, 2025, compared to $1.1 billion for the same period in 2024[365]. - Net cash used in investing activities was $123.1 million for the nine months ended September 30, 2025, down from $1.1 billion provided in the same period in 2024[366]. - Net cash provided by financing activities was $4.0 billion for the nine months ended September 30, 2025, compared to a net cash used of $67.3 million in 2024[367]. - The company experienced a net decrease in cash of $74.2 million during the nine months ended September 30, 2025[364]. - Operating cash flows from loans held for sale were $(4.4) billion for the nine months ended September 30, 2025, compared to $(1.0) billion in 2024[365]. - The total delinquency status showed $4.1 billion current (0-89 days) for 2020, down from $9.2 billion in 2019[363]. - The total collection status indicated $4.1 billion in total for 2020, compared to $9.3 billion in 2019[363]. - The company plans to continue investing in subordinate MBS generated from private label securitization to increase asset-backed financing[372]. - The company redeemed $350 million of secured term notes on August 20, 2025[372]. - The liquidity strategy includes cash flows from the investment portfolio and proceeds from borrowings or additional equity offerings[371]. - Total assets as of September 30, 2025, amounted to $18,525,671,000, with secured financing of $13,040,201,000[374]. - The company reported total debt of $16,309,442,000, resulting in a debt-to-equity ratio of 8.7:1[374]. - Average balance outstanding for assets sold under agreements to repurchase was $6,670,245,000 for the quarter ended September 30, 2025, compared to $5,513,519,000 in the same quarter of 2024[376]. - The maximum daily balance outstanding for repurchase agreements reached $8,082,484,000 in Q3 2025, up from $6,474,799,000 in Q3 2024[376]. - The company issued $105 million in unsecured 9.00% senior notes due June 15, 2030, and $172.5 million in unsecured 9.00% senior notes due February 15, 2030[378]. - As of September 30, 2025, the company had net income of $230,996,000, with pre-tax income reported at $310,479,000[384]. - The total facility size for assets sold under agreements to repurchase was approximately $12.8 billion as of September 30, 2025[376]. - The company expects to renew or replace short-term borrowings to maintain liquidity and access to capital[377]. - The amount at risk related to assets sold under agreements to repurchase totaled $996,858,000 as of September 30, 2025[377]. - The company is compliant with financial covenants, including maintaining positive net income for at least one of the previous two consecutive quarters[386]. - The company maintains a minimum of $75 million in unrestricted cash and cash equivalents across its subsidiaries, with a minimum tangible net worth of $1.25 billion for both the company and its Operating Partnership[387]. - As of September 30, 2025, the company has not entered into any off-balance sheet arrangements, and its management and servicing agreements are detailed in the financial statements[391]. - The company is subject to liquidity and net worth requirements established by the Federal Housing Finance Agency (FHFA) and Ginnie Mae, and believes it is in compliance with these requirements as of September 30, 2025[389]. - The company explores various financing means, including debt financing through bank warehouse lines of

Financial Data and Key Metrics Changes - In Q3 2025, the company reported net income to common shareholders of $48 million, with earnings per share of $0.55, reflecting strong performance across all investment strategies [2][18] - The book value per share increased to $15.16 as of September 30, up from $15.00 at June 30, representing a growth in book value per share [2][6] - The annualized return on common equity was 14% for the quarter [2][6] Business Line Data and Key Metrics Changes - The credit sensitive strategies contributed $19 million to pretax income, with gains from organically created CRT investments totaling $10 million [18] - Interest rate sensitive strategies had strong results with pretax income of $32 million, primarily driven by higher income from MSR investments [18] - The fair value of PMT's MSR asset at the end of the quarter was $3.7 billion, slightly down from June 30 [18][20] Market Data and Key Metrics Changes - The company completed three securitizations of agency eligible investor loans totaling $1.2 billion in UPB, retaining $93 million of new investments [9] - PMT also completed a jumbo loan securitization totaling $300 million in UPB, retaining investments of $45 million [9] - The delinquency rates for borrowers underlying PMT's MSR portfolio remain low, with servicing advances outstanding decreasing to $62 million from $70 million at June 30 [20] Company Strategy and Development Direction - PMT leverages its relationship with PFSI to gain competitive advantages, including access to a consistent and high-quality pipeline of loans for investment [3][7] - The company aims to recycle capital into higher yielding assets, transitioning from lower yielding assets into high-quality investments [14] - PMT is focused on increasing its allocation to credit sensitive strategies while maintaining a balance with interest rate sensitive investments [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow earnings potential and deliver superior risk-adjusted returns to shareholders [17] - The company anticipates continued opportunities for organic growth as PFSI increases its share of loan production [8] - Management highlighted the importance of maintaining agility in operations to navigate potential disruptions in the mortgage market [53] Other Important Information - Approximately 60% of PMT's shareholders' equity is invested in a seasoned portfolio of MSRs, which are expected to produce stable cash flows [12] - The company has identified agency floating rate MBS as an attractive investment, purchasing $877 million of these investments [15] - PMT's current run rate reflects a quarterly average of $0.42 per share, up from $0.38 in the prior quarter [16] Q&A Session Summary Question: Discussion on conventional loan securitization opportunities - Management indicated that they have familiarity and success with lender CRT investments and are exploring opportunities in owner-occupied securitizations, which have become more viable due to market conditions [26][28] Question: Impact of GSE pricing on correspondent business - Management noted that the level of correspondent activity is influenced by PMT's investment needs, and they can source loans from PFSI as needed [31][32] Question: Prepayment speeds on jumbo loan securitizations - Management stated that it is early to assess prepayment speeds on jumbo securitizations, but generally, prepayments are beneficial to their investments [43][44] Question: Best opportunities for risk-adjusted returns - Management highlighted that credit sensitive strategies currently present the best opportunities, with a focus on balancing investments between credit and interest rate sensitive assets [48][49] Question: Thoughts on potential changes to GSEs - Management emphasized the importance of maintaining strong relationships with GSEs and the need for agility in operations to adapt to any market disruptions [52][53]

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3Q25 EARNINGS REPORT PennyMac Mortgage Investment Trust October 2025 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management's beliefs, estimates, projections and assumptions with respect to, among other things, the Company's financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to cha ...