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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 ...

[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]