Core Insights - The company reported strong earnings momentum and growth in private label securitizations, completing 19 securitizations totaling $6.7 billion in unpaid principal balance (UPB) in 2025, significantly up from two securitizations in 2024 [1][4][7] - Net income to common shareholders for the fourth quarter was $42 million, representing a 13% annualized return on common equity, with diluted earnings per share at $0.48, surpassing the quarterly dividend of $0.40 [3][6] - The company anticipates completing approximately 30 securitizations in 2026, targeting returns on equity for retained investments in the low- to mid-teens [8][19] Financial Performance - The company generated $21 million of net income across its strategies, excluding market-driven value changes, a decline from the previous quarter due to lower contributions from the correspondent segment and increased runoff from mortgage servicing rights (MSRs) [2][6] - The book value per share increased to $15.25 at year-end from $15.16 as of September 30 [3] - The MSR asset was valued at $3.6 billion at year-end, slightly down from the prior quarter, with stable delinquency rates in the conventional MSR portfolio [13] Operational Highlights - The correspondent production segment faced challenges, posting a pre-tax loss of $1 million due to spread widening on jumbo loans and increased competition [5][14] - The company raised $150 million of unsecured financing and plans to retire $345 million of 2026 notes, with total debt-to-equity increasing to approximately 10:1 [17][18] - The company rotated capital to optimize returns, purchasing $876 million of Agency floating-rate MBS and selling $195 million of GSE-issued credit risk transfer investments [9][10] Market Positioning - PMT established itself as a top-three issuer of prime non-Agency MBS in 2025, with retained investments from securitizations growing to $528 million compared to $54 million in 2024 [1][7] - The company expects to maintain a significant portion of its equity in seasoned investments, with 60% allocated to MSRs and GSE credit risk transfer investments [10][11] - Credit-sensitive strategies contributed $24 million to pre-tax income in the quarter, generating a 27% annualized return on equity [11][12]