[Executive Summary / Q3 2025 Results Overview](index=1&type=section&id=Executive%20Summary%20%2F%20Q3%202025%20Results%20Overview) PennyMac Mortgage Investment Trust delivered strong Q3 2025 financial results, marked by significant net income, increased book value, and strategic investment activities [Third Quarter 2025 Highlights](index=1&type=section&id=Third%20Quarter%202025%20Highlights) PennyMac Mortgage Investment Trust reported strong financial results for Q3 2025, with significant net income and an increase in book value per common share Q3 2025 Key Financial Highlights | Metric | Q3 2025 Value | | :---------------------------------- | :------------ | | Net income attributable to common shareholders | $47.8 million | | Net income per common share | $0.55 | | Annualized return on average common shareholders' equity | 14% | | Book value per common share (Sep 30, 2025) | $15.16 | | Book value per common share (Jun 30, 2025) | $15.00 | | Total loans acquired (UPB) | $4.6 billion | | Loans from PFSI fulfillment (UPB) | $3.3 billion | | Loans from PFSI production (UPB) | $1.3 billion | - Book value per common share increased to **$15.16** at September 30, 2025, from **$15.00** at June 30, 2025[4](index=4&type=chunk) - Loans acquired totaled **$4.6 billion** in unpaid principal balance (UPB), up **13 percent** from the prior quarter[4](index=4&type=chunk) - Acquired **$3.3 billion** in UPB of conventional conforming and jumbo loan volume from PFSI through their fulfillment agreement, up **8 percent** from the prior quarter[4](index=4&type=chunk) - Acquired **$1.3 billion** in UPB of loans from PennyMac Financial Services, Inc.'s (PFSI) production, up **28 percent** from the prior quarter[4](index=4&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) Chairman and CEO David Spector highlighted outstanding Q3 results, driven by strong income excluding market-driven value changes and effective interest rate risk hedging - Q3 results were primarily driven by strong income excluding market-driven value changes combined with strong interest rate risk hedging results[7](index=7&type=chunk) - Sold **$195 million** of opportunistic investments in GSE-issued CRT, realizing significant gains and freeing up capital for newly created assets with higher projected returns from private label securitization efforts[7](index=7&type=chunk) - Successfully completed four non-Agency securitizations totaling **$1.5 billion** in UPB and retained **$140 million** of newly created securities[7](index=7&type=chunk) - Anticipates earnings per share over the next year to average above the current dividend level, with continued strong performance and modest growth in book value per share[10](index=10&type=chunk) [Notable Activity After Quarter End](index=2&type=section&id=Notable%20Activity%20After%20Quarter%20End) After the quarter end, PMT engaged in significant activities including the creation of new mortgage servicing rights, closing multiple securitizations, and generating new investments - Resulted in the creation of **$46 million** in new mortgage servicing rights (MSRs)[9](index=9&type=chunk) - Closed three Agency-eligible investor loan securitizations and one Jumbo loan securitization with a combined UPB of **$1.5 billion**[9](index=9&type=chunk) - Generated **$84 million** of net new investments in non-Agency subordinate bonds and **$50 million** in non-Agency senior bonds[9](index=9&type=chunk) - Purchased **$876.4 million** of Agency floating rate mortgage-backed securities (MBS)[9](index=9&type=chunk) - Sold the remainder of opportunistic investments in government sponsored enterprise (GSE)-issued credit risk transfer (CRT) for **$195 million**, realizing significant gains[9](index=9&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) An analysis of PMT's Credit Sensitive, Interest Rate Sensitive, Correspondent Production, and Corporate segments reveals varied financial performance and strategic activities in Q3 2025 [Credit Sensitive Strategies Segment](index=4&type=section&id=Credit%20Sensitive%20Strategies%20Segment) The Credit Sensitive Strategies segment reported a decrease in pretax income and net investment income quarter-over-quarter, with declining net gains on investments Credit Sensitive Strategies Segment Performance (in thousands) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) | | :-------------------------- | :--------------------- | :--------------------- | :------------- | | Pretax income | $18,754 | $21,800 | -14.0% | | Net investment income | $18,849 | $21,900 | -14.0% | | Net gains on investments | $17,580 | $19,800 | -11.2% | | Net interest income | $1,297 | $2,100 | -38.2% | - Net gains on investments included **$13.7 million** from organically-created GSE CRT investments and **$4.7 million** from non-Agency subordinate bonds, offset by **$0.8 million** losses from other GSE CRT investments[12](index=12&type=chunk) - Net gains on organically-created CRT investments were **$13.7 million**, down from **$20.3 million** in the prior quarter, with valuation-related gains of **$1.5 million** reflecting relatively flat credit spreads[13](index=13&type=chunk) [Interest Rate Sensitive Strategies Segment](index=4&type=section&id=Interest%20Rate%20Sensitive%20Strategies%20Segment) The Interest Rate Sensitive Strategies segment saw a significant turnaround to pretax income in Q3 2025, driven by higher net investment income and substantial net gains on MBS Interest Rate Sensitive Strategies Segment Performance (in thousands) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) | | :-------------------------- | :--------------------- | :--------------------- | :------------- | | Pretax income (loss) | $32,346 | $(4,900) | N/A (swing to profit) | | Net investment income | $56,540 | $20,700 | +173.1% | | Net loan servicing fees | $15,429 | $23,947 | -35.6% | | Net gains on investments | $46,507 | N/A (not explicitly stated for Q2) | N/A | | Net interest expense | $5,396 | $17,100 | -68.4% | | Segment expenses | $24,194 | $25,600 | -5.5% | - Net loan servicing fees included **$27.0 million** in fair value losses on MSRs and **$27.4 million** in hedging losses, partially offset by **$3.3 million** of MSR recapture income[17](index=17&type=chunk) - Interest income increased to **$173.8 million** from **$137.5 million** in the prior quarter, primarily due to higher retained investments from Agency-eligible investor loan securitizations and the addition of **$876.4 million** of Agency floating rate MBS[19](index=19&type=chunk) [Correspondent Production Segment](index=6&type=section&id=Correspondent%20Production%20Segment) The Correspondent Production segment experienced a decrease in pretax income in Q3 2025, despite increased acquisition of conventional conforming and jumbo loans Correspondent Production Segment Performance (in thousands) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) | | :----------------------------------- | :--------------------- | :--------------------- | :------------- | | Pretax income | $9,244 | $13,700 | -32.6% | | Loans purchased (UPB) from PFSI fulfillment | $3.3 billion | $3.1 billion | +6.5% | | Loans acquired from PFSI production (UPB) | $1.3 billion | $1.0 billion | +30.0% | | Segment revenues | $22,907 | N/A (not explicitly stated for Q2) | N/A | | Net gains on loans acquired for sale | $14,857 | $17,806 | -16.6% | | Net interest income | $4,857 | N/A (not explicitly stated for Q2) | N/A | | Segment expenses | $13,663 | $13,100 | +4.3% | | Weighted average fulfillment fee rate | 18 basis points | 19 basis points | -1 bp | - PMT purchased **$3.3 billion** in UPB of conventional conforming and jumbo loans through its fulfillment agreement, up **8 percent** compared to the prior quarter[23](index=23&type=chunk) - Acquired **$1.3 billion** in UPB of loans from PFSI's production for inclusion in private label securitizations, up from **$1.0 billion** in the prior quarter[23](index=23&type=chunk) - Net gains on loans acquired for sale decreased **$2.9 million** from the prior quarter, but included gains from increased demand for private label securitization and whole loan execution[24](index=24&type=chunk) [Corporate Segment](index=7&type=section&id=Corporate%20Segment) The Corporate segment reported a pretax loss of $13.3 million, with a slight increase in corporate revenues and relatively stable corporate expenses Corporate Segment Performance (in thousands) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) | | :---------------- | :--------------------- | :--------------------- | :------------- | | Pretax loss | $(13,346) | N/A (not explicitly stated for Q2) | N/A | | Corporate revenues | $936 | $700 | +33.7% | | Corporate expenses | $14,282 | $14,400 | -0.8% | | Management fees | $6,912 | N/A (not explicitly stated for Q2) | N/A | - Corporate expenses consisted of management fees of **$6.9 million** and **$7.4 million** of remaining expenses[27](index=27&type=chunk) [Financial Statements](index=10&type=section&id=Financial%20Statements) The financial statements provide a detailed overview of the company's balance sheet and operational performance, highlighting significant changes in assets, liabilities, and net income [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows a significant increase in total assets and liabilities quarter-over-quarter and year-over-year, primarily driven by growth in mortgage-backed securities and loans held for investment Consolidated Balance Sheet Highlights (in thousands) | Metric (in thousands) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change | YoY Change | | :-------------------------- | :----------- | :----------- | :----------- | :--------- | :--------- | | Total assets | $18,525,671 | $16,801,119 | $13,055,654 | +10.38% | +41.90% | | Total liabilities | $16,646,362 | $14,935,474 | $11,118,867 | +11.46% | +49.72% | | Total shareholders' equity | $1,879,309 | $1,865,645 | $1,936,787 | +0.73% | -3.00% | | Mortgage-backed securities at fair value | $4,609,164 | $3,967,045 | $4,182,382 | +16.19% | +10.20% | | Loans held for investment at fair value | $5,983,197 | $4,566,532 | $1,429,525 | +31.04% | +318.55% | | Mortgage servicing rights at fair value | $3,668,755 | $3,739,106 | $3,809,047 | -1.88% | -3.68% | | Assets sold under agreements to repurchase | $7,708,183 | $6,826,855 | $5,748,461 | +12.91% | +34.10% | | Asset-backed financing of variable interest entities at fair value | $5,439,582 | $4,176,128 | $1,334,797 | +30.25% | +307.54% | [Consolidated Statements of Operations](index=11&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a significant improvement in net income attributable to common shareholders, swinging from a loss to a profit in Q3 2025 Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric (in thousands, except per share) | Q3 2025 | Q2 2025 | Q3 2024 | QoQ Change | YoY Change | | :-------------------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Net investment income | $99,232 | $70,201 | $80,864 | +41.35% | +22.71% | | Total expenses | $52,234 | $53,195 | $54,330 | -1.81% | -3.86% | | Income before (benefit from) provision for income taxes | $46,998 | $17,006 | $26,534 | +176.37% | +77.19% | | (Benefit from) provision for income taxes | $(11,298) | $9,472 | $(14,873) | N/A (swing to benefit) | N/A (swing to benefit) | | Net income | $58,296 | $7,534 | $41,407 | +673.79% | +40.07% | | Net income (loss) attributable to common shareholders | $47,841 | $(2,921) | $30,952 | N/A (swing to profit) | +54.57% | | Basic earnings (loss) per common share | $0.55 | $(0.04) | $0.36 | N/A (swing to profit) | +52.78% | - Net gains on investments and financings increased significantly to **$64.1 million** in Q3 2025 from **$33.7 million** in Q2 2025 and **$146.7 million** in Q3 2024[38](index=38&type=chunk) - Net interest income turned positive at **$1.7 million** in Q3 2025, compared to a net interest expense of **$(8.7) million** in Q2 2025 and **$(7.4) million** in Q3 2024[38](index=38&type=chunk) [Additional Information](index=7&type=section&id=Additional%20Information) This section provides supplementary details on the company's tax position, its corporate profile, and important disclaimers regarding forward-looking statements [Taxes](index=7&type=section&id=Taxes) PMT recorded a tax benefit of $11.3 million for the quarter, primarily due to fair value declines on MSRs and interest rate hedges held in its taxable REIT subsidiary - Recorded a tax benefit of **$11.3 million**[28](index=28&type=chunk) - The tax benefit was driven primarily by fair value declines on MSRs and interest rate hedges held in PMT's taxable REIT subsidiary[28](index=28&type=chunk) [About PennyMac Mortgage Investment Trust](index=7&type=section&id=About%20PennyMac%20Mortgage%20Investment%20Trust) PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) that primarily invests in residential mortgage loans and mortgage-related assets - PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT)[31](index=31&type=chunk) - Invests primarily in residential mortgage loans and mortgage-related assets[31](index=31&type=chunk) - Externally managed by PNMAC Capital Management, LLC, a wholly-owned subsidiary of PennyMac Financial Services, Inc. (PFSI)[31](index=31&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This section serves as a disclaimer, indicating that the press release contains forward-looking statements subject to change due to various risk factors - The press release contains forward-looking statements regarding financial results, future operations, business plans, and investment strategies, which are subject to change[33](index=33&type=chunk) - Factors that could cause actual results to differ materially include changes in interest rates, housing prices, macroeconomic conditions, compliance with laws and regulations, competition, availability of capital, cybersecurity risks, and the development of artificial intelligence[33](index=33&type=chunk) - The Company undertakes no obligation to publicly update or revise any forward-looking statements[34](index=34&type=chunk)

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Core Viewpoint - The mREIT sector's baby bonds are perceived as slightly undervalued compared to preferred stocks, presenting potential investment opportunities [1]. Group 1: Investment Strategy - The focus is on seeking alpha in the high-yield space, particularly through mispriced preferred stocks and baby bonds [1]. - The service offers frequent picks, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [1]. Group 2: Analyst's Position - The analyst holds a beneficial long position in PMTW shares, indicating confidence in the stock's performance [1].

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Company Ratings and Analyst Insights - PennyMac Mortgage Investment Trust (NYSE:PMT) has a dividend yield of 13.50%. Analyst Bose George from Keefe, Bruyette & Woods downgraded the stock from Outperform to Market Perform, reducing the price target from $14.5 to $13.5 [7] - KKR Real Estate Finance Trust Inc (NYSE:KREF) has a dividend yield of 11.64%. JP Morgan analyst Richard Shane maintained an Overweight rating but decreased the price target from $11.5 to $9.5 [7] - Western Union Co (NYSE:WU) has a dividend yield of 11.55%. Keefe, Bruyette & Woods analyst Sanjay Sakhrani maintained a Market Perform rating and cut the price target from $10 to $9 [7] Group 2: Recent Company News - PennyMac Mortgage Investment Trust announced that Kevin Ryan will join as senior managing director and chief strategy officer [7] - KKR Real Estate Finance Trust is set to release its financial results for the third quarter on October 21 [7] - Western Union will announce its third quarter results on October 23 [7]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: PennyMac Mortgage Investment Trust (PMT) - PMT has a dividend yield of 13.50% [7] - Analyst Bose George from Keefe, Bruyette & Woods downgraded PMT from Outperform to Market Perform, reducing the price target from $14.5 to $13.5 [7] - Analyst Mike Kaye from Wells Fargo maintained an Equal-Weight rating and cut the price target from $14 to $13 [7] - Recent news includes the appointment of Kevin Ryan as senior managing director and chief strategy officer [7] Group 2: KKR Real Estate Finance Trust Inc (KREF) - KREF has a dividend yield of 11.64% [7] - Analyst Richard Shane from JP Morgan maintained an Overweight rating and decreased the price target from $11.5 to $9.5 [7] - Analyst Jade Rahmani from Keefe, Bruyette & Woods maintained an Outperform rating and cut the price target from $13 to $12.25 [7] - KREF is set to release its financial results for Q3 on October 21 [7] Group 3: Western Union Co (WU) - WU has a dividend yield of 11.55% [7] - Analyst Sanjay Sakhrani from Keefe, Bruyette & Woods maintained a Market Perform rating and cut the price target from $10 to $9 [7] - Analyst Ramsey El-Assal from Barclays maintained an Underweight rating and slashed the price target from $10 to $8 [7] - WU will release its third-quarter results on October 23 [7]

Core Insights - PennyMac Financial Services, Inc. and PennyMac Mortgage Investment Trust announced key executive leadership appointments [1] Group 1: Executive Appointments - Kevin Ryan will join the company as Senior Managing Director, Chief Strategy Officer on October 13, 2025 [1] - Marshall Sebring has been promoted to Senior Managing Director, Chief Investment Officer [1] - Shiva Iyer will be assuming a new position, although the specific title is not mentioned [1]

Group 1 - The focus is on income-producing asset classes such as REITs, ETFs, Preferreds, and 'Dividend Champions' that target premium dividend yields up to 10% [1] - iREIT®+HOYA Capital is highlighted as a premier income-focused investing service that emphasizes sustainable portfolio income, diversification, and inflation hedging [2] - The service offers a Free Two-Week Trial to explore top ideas across exclusive income-focused portfolios [2] Group 2 - The Retired Investor has a background in data analysis and pension fund management, focusing on helping others prepare for retirement through investments in CEFs, ETFs, BDCs, and REITs [3] - The investment strategy includes long-only positions and trading options with an emphasis on cash-secured puts [3]

Group 1 - The individual began investing in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - Recently, the investment strategy has evolved to combine long stock positions with covered calls and cash secured puts, reflecting a more sophisticated approach to investing [1] - The investment philosophy is fundamentally long-term, with a primary focus on REITs and financials, while occasionally exploring ETFs and other stocks based on macro trade ideas [1]

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Core Insights - Zealand Pharma is exploring a direct-to-patient sales model for its experimental weight-loss drug, in addition to traditional sales through insurers [1] - The CEO highlighted a shift in the market dynamics that may support this new sales approach [1] Company Strategy - The company is considering a dual-channel strategy that includes both direct-to-patient sales and traditional insurer channels [1] - This strategy aims to enhance accessibility and potentially increase the market reach of the weight-loss drug [1] Market Dynamics - The CEO's comments reflect a broader trend in the pharmaceutical industry towards more direct engagement with patients [1] - The shift in market dynamics may be influenced by changing consumer preferences and the increasing importance of patient-centric models [1]