Key Takeaways Mortgage rates fell to 6.01%, the lowest since September 2022, lifting refinancing and purchase activity.Refinance applications jumped 7% weekly and 132% y/y, per MBA data.NLY, MITT and RWT stand to gain as lower rates lift origination and refinancing volumes.Mortgage rates continue to ease, with the average 30-year fixed rate sliding to 6.01% in the week ended Feb. 19, 2026, according to the data from FreddieMac's report. This is the lowest rate since September 2022. A year ago at this time, ...

Core Viewpoint - The Federal Reserve is proposing regulatory changes aimed at encouraging large banks to re-enter the mortgage origination and servicing business, which may reshape the competitive landscape between banks and non-bank lenders [2][3]. Group 1: Regulatory Changes - The proposed changes by the Federal Reserve focus on mortgage servicing assets (MSRs) and aim to reduce the capital burden on banks, making it more economically appealing for them to maintain servicing portfolios in-house [6][7]. - The Fed plans to eliminate the current deduction requirement for MSRs from core regulatory capital, which has made retaining these assets costly for banks [7]. - Additionally, the Fed is reassessing the 250% risk weight applied to MSRs, intending to create a more proportionate and risk-sensitive capital framework [8]. Group 2: Impact on Banks - If implemented, the regulatory changes could significantly improve returns on equity for banks like Wells Fargo, Bank of America, and JPMorgan in their mortgage businesses [11]. - Mortgage banking is expected to provide stable fee income that is less sensitive to interest rate cycles, enhancing long-term customer relationships and cross-selling opportunities [12]. - A regulatory reset could help banks diversify revenues and regain competitive positions in housing finance [12]. Group 3: Impact on Non-Bank Lenders - Non-bank lenders such as Rocket Companies Inc. and PennyMac Financial Services may face increased competition as banks re-enter the mortgage market [3][13]. - The easing of capital constraints for banks could narrow the structural advantages that non-bank lenders have enjoyed, leading to intensified competition [13][14]. - Greater bank participation in the mortgage market could compress pricing and thin margins for non-bank lenders, resulting in a more balanced and competitive mortgage market overall [14].

Disclaimer This presentation includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995,. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as "goal," "expect," "target," "assume," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "woul ...

Financial Data and Key Metrics Changes - PennyMac Mortgage Investment Trust (PMT) reported a net income of $42 million for Q4 2025, translating to a 13% annualized return on common equity, with diluted earnings per share at $0.48, exceeding the quarterly dividend of $0.40 per share [2][10] - Book value per share increased to $15.25 at year-end from $15.16 on September 30 [2] - The total debt-to-equity ratio rose to approximately 10-to-1 from 9-to-1 at the end of Q3 2025, reflecting growth in non-recourse debt associated with securitizations [14] Business Line Data and Key Metrics Changes - PMT completed 19 securitizations in 2025, totaling $6.7 billion in UPB, a significant increase from 2 securitizations in 2024 [3] - Retained investments from these securitizations grew to $528 million, up nearly tenfold from $54 million in 2024 [3] - In Q4 2025, PMT completed 8 securitizations totaling $2.8 billion in UPB and retained $184 million of new investments [7] Market Data and Key Metrics Changes - Approximately 60% of PMT's shareholders' equity is deployed to seasoned investments in mortgage servicing rights (MSRs) and GSE credit risk transfer investments [6] - The weighted average coupon of the loans underlying the MSR investment is 3.9%, providing stable cash flows [6] - The UPB of loans acquired from PFSI's correspondent production totaled $3.7 billion in Q4 2025, with PMT purchasing 17% of total conventional conforming correspondent production [12] Company Strategy and Development Direction - PMT aims to optimize returns by recycling capital into higher-yielding assets, targeting returns on equity in the 13%-15% range [8] - The company leverages its relationship with PFSI to access a consistent and high-quality pipeline of loans for investment [4] - PMT expects to complete approximately 30 securitizations in 2026, with targeted returns on equity for retained investments in the low to mid-teens [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in PMT's ability to generate earnings that support dividends and drive long-term shareholder value [9] - The company noted that while prepayment speeds have increased, they expect to offset declines in profitability through additional recapture from PFSI [16][17] - Management highlighted a robust demand for securitizations in January 2026, indicating a supportive market environment [40] Other Important Information - PMT raised $150 million of new unsecured financing through opportunistic reopenings of its Exchangeable Senior Notes due in 2029 [13] - The company is considering the sale of MSRs for risk management purposes if higher returning assets become available [35] Q&A Session Summary Question: Return expectations for the interest rate strategy - Management indicated that prepayments are expected to remain elevated, but they anticipate growth in recapture through PFSI [16][17] Question: Competition in the non-agency space - Management noted healthy competition from companies like Rocket Mortgage and UWM, but stated that they have been outperforming these competitors [21] Question: Financing costs for securitization - Management described a competitive market for financing, benefiting from robust demand for securitizations [28][40] Question: Capacity of the correspondent channel - Management expressed confidence in the capacity to handle potential increases in demand from GSE programs, noting excess capacity in the sector [30][31] Question: Selling MSRs for risk management - Management stated they would consider selling MSRs if higher returning assets are available, highlighting their agility in managing the portfolio [35] Question: Spread behavior in the non-agency market - Management reported stable to tightening spreads in the non-agency space, supporting continued securitization activity [40][41]

Financial Data and Key Metrics Changes - PennyMac Mortgage Investment Trust (PMT) reported a net income of $42 million for Q4 2025, translating to a 13% annualized return on common equity and diluted earnings per share of $0.48, exceeding the quarterly dividend of $0.40 per share [2][10] - Book value per share increased to $15.25 at year-end from $15.16 on September 30 [2] - The total debt-to-equity ratio rose to approximately 10-to-1 from 9-to-1 at the end of Q3 2025, reflecting growth in non-recourse debt associated with securitizations [14] Business Line Data and Key Metrics Changes - PMT completed 19 securitizations in 2025, totaling $6.7 billion in UPB, a significant increase from 2 securitizations in 2024 [3] - Retained investments from these securitizations grew to $528 million, up nearly tenfold from $54 million in 2024 [3] - In Q4 2025, PMT completed 8 securitizations totaling $2.8 billion in UPB and retained $184 million of new investments [7] Market Data and Key Metrics Changes - Approximately 60% of PMT's shareholders' equity is deployed to seasoned investments in mortgage servicing rights (MSRs) and GSE credit risk transfer investments [6] - The weighted average coupon of the loans underlying the MSR investment is 3.9%, providing stable cash flows [6] - The UPB of loans acquired from PFSI's correspondent production totaled $3.7 billion in Q4 2025, with $2.9 billion being conventional conforming volume [12] Company Strategy and Development Direction - PMT aims to optimize returns by recycling capital into higher-yielding assets, targeting returns on equity in the 13%-15% range [8] - The company is focused on leveraging its relationship with PFSI to enhance its origination capabilities and maintain a consistent pipeline of high-quality loans [4][5] - PMT expects to complete approximately 30 securitizations in 2026, with targeted returns on equity for retained investments in the low to mid-teens [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in PMT's ability to generate earnings that support dividends and drive long-term shareholder value [9] - The company noted that while prepayment speeds are expected to remain elevated, they anticipate a dilution effect on profitability as the portfolio grows at a slower pace [17][18] - Management highlighted the competitive landscape in the non-Agency space, noting healthy activity from competitors but also PMT's strong performance in originations [21] Other Important Information - PMT raised $150 million of new unsecured financing during the quarter [13] - The company plans to retire $345 million in Exchangeable Senior Notes due in 2026 using existing financing capacity [14] Q&A Session Summary Question: Return expectations for the interest rate strategy - Management discussed the limited responsiveness of MSRs to interest rate changes and the expectation of increased recapture through PFSI [16] Question: Competition in the non-Agency space - Management noted healthy competition from companies like Rocket Mortgage and UWM but emphasized PMT's strong origination performance [21] Question: Financing costs for securitizations - Management indicated a competitive market for financing and discussed the implementation of a facility without a mark-to-market feature for risk management [28] Question: Origination capacity under affordability-driven initiatives - Management expressed confidence in the system's capacity to handle increased demand from potential GSE programs [30] Question: Selling MSRs for risk management - Management stated they would consider selling MSRs if higher returning assets become available, highlighting their agility in managing the portfolio [35] Question: Spread behavior in the non-Agency market - Management reported stable to tightening spreads in the non-Agency space, supporting continued securitization activity [40]

Core Viewpoint - PennyMac Mortgage Investment Trust (PMT) reported strong financial results for the fourth quarter of 2025, with net income attributable to common shareholders of $41.9 million, or $0.48 per share, driven by solid contributions from credit-sensitive and interest rate-sensitive strategies [1][4][5]. Financial Results - Net investment income for the fourth quarter of 2025 was $93.6 million [1]. - The annualized return on average common equity was 13% [3][4]. - Book value per common share increased to $15.25 at December 31, 2025, up from $15.16 at September 30, 2025 [4]. - PMT raised $150 million through opportunistic reopenings of exchangeable senior notes due June 2029 [2]. Investment Activity - Loans acquired totaled $5.5 billion in unpaid principal balance (UPB), an increase of 18% from the prior quarter [4]. - PMT acquired $3.7 billion in UPB of conventional conforming and non-Agency loan volume from PennyMac Financial Services, Inc. (PFSI), up 10% from the prior quarter [4]. - The company closed three Agency-eligible investor loan securitizations, three jumbo loan securitizations, and two Agency-eligible owner-occupied loan securitizations with a combined UPB of $2.8 billion [4]. Segment Performance - The Credit Sensitive Strategies segment generated pretax income of $23.5 million on net investment income of $23.6 million, compared to $18.8 million in the prior quarter [7]. - The Interest Rate Sensitive Strategies segment reported pretax income of $28.5 million on net investment income of $52.7 million, down from $32.3 million in the prior quarter [12]. - The Correspondent Production segment experienced a pretax loss of $1.0 million, compared to a pretax income of $9.2 million in the prior quarter [16]. Tax and Corporate Information - PMT recorded a tax benefit of $16.2 million, primarily due to net fair value declines on mortgage servicing rights (MSR) and interest rate hedges [21]. - Corporate revenues were $0.9 million, unchanged from the prior quarter, while corporate expenses increased to $15.7 million from $14.3 million [20].

Industry Overview - The Zacks Mortgage & Related Services industry is experiencing growth due to declining mortgage rates, influenced by the Federal Reserve's interest rate cuts in 2025 and expectations for further easing this year [1][4] - The industry consists of providers of mortgage-related loans, refinancing, and loan-servicing facilities, with non-banks gaining market share as banks retreat from the mortgage business due to higher compliance and capital requirements [3] Current Trends - The 30-year fixed mortgage rate has stabilized around a low-6% range since mid-September 2025, providing relief for homebuyers and improving purchase demand [4][5] - Refinancing activity is recovering as homeowners seek to refinance into lower-rate loans, which is expected to drive higher loan origination volumes and improve fee income for industry players [6] - The competitive landscape is intensifying, with mortgage servicers facing pressure to cut prices, leading to reduced sales margins [2][7] Performance Metrics - The Zacks Mortgage & Related Services industry has outperformed the broader Zacks Finance sector and the S&P 500, gaining 54.7% over the past year compared to 23.2% and 23.4% for the sector and S&P 500, respectively [11] - The industry currently trades at a price-to-book (P/B) ratio of 6.27X, lower than the S&P 500's 8.67X, indicating a premium compared to the broader finance sector's P/B of 4.36X [14][17] Company Highlights - **PennyMac Financial Services, Inc. (PFSI)**: A specialty financial services firm benefiting from a strong servicing business and a strategic transaction with Annaly Capital Management. The Zacks Consensus Estimate for PFSI's 2025 earnings is $11.71 per share, a 1.7% increase from the previous year [20][21] - **Federal Agricultural Mortgage (AGM)**: Known as Farmer Mac, it focuses on creating a secondary market for loans to rural borrowers. AGM's 2025 earnings estimate is $17.53 per share, reflecting a 12.1% rise from the prior year [24][25] - **LendingTree, Inc. (TREE)**: An online marketplace enhancing its product offerings and focusing on improving purchase conversion rates. The Zacks Consensus Estimate for TREE's 2025 earnings is $4.79 per share, indicating a 50.2% increase from the previous year [27][30]

Q3 2025 | INVESTOR PRESENTATION November 6, 2025 Disclaimer This presentation includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including as related to the expected impact (including related to Chimera's future earnings) of Chimera's acquisition of HomeXpress. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking stat ...

Core Insights - Cherry Hill Mortgage Investment Corp. (CHMI) is positioned to benefit from anticipated Federal Reserve rate cuts through 2026, making it a noteworthy investment opportunity [1][5] Company Overview - Cherry Hill operates as a dual-sleeve strategy REIT, with a portfolio that includes 77% agency residential mortgage-backed securities (RMBS) and 23% mortgage servicing rights (MSRs) as of Q2 2025 [2] - The business model is sensitive to market interest rate changes, which can impact asset valuation positively in favorable conditions [3] Risk Management - Cherry Hill actively manages interest rate risks by utilizing a natural hedging relationship between MSRs and RMBS to mitigate volatility [3] Financial Performance - The company has fully internalized its operating structure, aiming for better alignment between management incentives and shareholder interests, which is expected to lead to annualized cost savings [4] - Cherry Hill anticipates core earnings growth from $12.1 million in 2024 to $20.2 million in 2026, supported by a strong dividend yield of 16.2% [4] Market Opportunities - With the Fed's first rate cut initiated for 2025, further cuts are expected, which will lower borrowing costs, improve refinancing costs, and enhance asset valuations for Cherry Hill [5] - Currently, Cherry Hill trades at a discount across several key valuation metrics, presenting an opportunity for investors before broader market recognition [5]

Financial Performance - Onity Group Inc delivered strong second quarter results in 2025, with sustained robust net income driving book value growth[9, 10] - Diluted EPS increased by 35% year-over-year to $2.40, and book value per share increased by $2.94 year-over-year to $60[12] - The company reaffirmed its annual Adjusted ROE guidance of 16-18%, demonstrating a commitment to strong shareholder returns[10] - Adjusted Pre-Tax Income was $16 million in Q2'25[12] Servicing Portfolio - Total Servicing Average UPB grew to $307 billion[12, 21] - Owned Servicing Average UPB increased from $147 billion in Q1'25 to $153 billion in Q2'25[21] - MSR originations increased by 35% year-over-year, exceeding industry growth of 23%[23] Originations - Originations volume reached $9.4 billion in Q2'25[12, 24] - Consumer Direct funded volume increased by 2.4x year-over-year[26] - The company achieved a top-tier refinance recapture rate, 1.5x the industry average in Q2'25[26] Technology and Efficiency - The company is expanding its AI-powered platform to grow revenue, reduce costs, and drive service excellence[32] - Robotic Process Automation (RPA) is performing over 190 processes, completing the work of approximately 400 FTE[35]