PennyMac Mortgage Investment Trust (PMT) Q3 2025 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 21 2025
0mins
Should l Buy PMT?
Source: SeekingAlpha
Net income to common shareholders $48 million, with strong performance across all investment strategies.
Earnings per share $0.55, reflecting strong performance across all investment strategies.
Book value per share $15.16 as of September 30, up from $15 at June 30, indicating growth in book value.
Third quarter common dividend $0.40 per share, reflecting consistent dividend distribution.
Securitizations of agency-eligible investor loans $1.2 billion in UPB, retaining $93 million of new investments, showcasing successful securitization efforts.
Jumbo loan securitization $300 million in UPB, retaining $45 million of new investments, indicating continued securitization activity.
Private label securitizations since Q4 2024 16 securitizations totaling $5.7 billion in UPB with retained investments of more than $460 million, highlighting consistent securitization efforts.
MSR investments Account for approximately 46% of deployed equity, down from 56% in late 2022, benefiting from higher interest rates and stable cash flows.
Credit risk transfer investments Represent 14% of shareholders' equity, backed by seasoned loans with low delinquencies and strong fundamentals, expected to perform well.
Sale of opportunistic investments in GSE-issued CRT $195 million sold, freeing up capital for higher-return investments.
Purchase of Agency floating rate MBS $877 million, targeting ROEs in the 13% to 15% range, reflecting strategic redeployment of capital.
Run rate return potential Quarterly average of $0.42 per share, up from $0.38 in the prior quarter, indicating improved return potential.
Pretax income from credit-sensitive strategies $19 million, driven by gains from CRT investments and opportunistic investments.
Pretax income from interest-rate-sensitive strategies $32 million, primarily driven by higher income from MSR investments and gains on Agency MBS.
Income tax benefit $11 million, driven by fair value declines on MSRs and interest rate hedges.
Fair value of MSR asset $3.7 billion as of the end of the quarter, down slightly from June 30 due to runoff and fair value declines.
Servicing advances outstanding $62 million, down from $70 million at June 30, indicating reduced servicing advances.
Loans acquired from PFSI's correspondent production $3 billion, consistent with the prior quarter, reflecting stable acquisition activity.
Debt-to-equity ratio excluding nonrecourse debt 5.8x as of September 30, within expected and historical levels, reflecting leverage management.
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Analyst Views on PMT
Wall Street analysts forecast PMT stock price to rise
7 Analyst Rating
1 Buy
6 Hold
0 Sell
Hold
Current: 12.490
Low
13.00
Averages
13.85
High
14.50
Current: 12.490
Low
13.00
Averages
13.85
High
14.50
About PMT
PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) that invests primarily in residential mortgage loans and mortgage-related assets. The Company's segments include credit sensitive strategies, interest rate sensitive strategies and correspondent production. The credit sensitive strategies segment represents its investments in CRT arrangements referencing loans from its own correspondent production and subordinate MBS. The interest rate sensitive strategies segment represents its investments in MSRs, Agency and senior non-Agency MBS and the related interest rate hedging activities. The correspondent production segment represents its operations aimed at serving as an intermediary between lenders and the capital markets by purchasing, pooling and reselling newly originated prime credit quality loans either directly or in the form of MBS, using the services of PCM and PLS. The Company is externally managed by PNMAC Capital Management, LLC.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Accelerated Securitization Activity: The company successfully completed 19 securitizations totaling $6.7 billion in UPB in 2025, a substantial increase from just 2 in 2024, highlighting its strengthened position in the non-Agency MBS market.
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PennyMac Mortgage Trust to Announce Q4 Earnings on January 29
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- Expectation Revision Dynamics: In the last three months, EPS estimates have seen two upward revisions and one downward revision, while revenue estimates have experienced one upward and one downward revision, indicating mixed market sentiment regarding the company's future performance.
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See More
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- Loan Pool Characteristics: The trust comprises 1,032 mortgages, with 72.6% being investment properties and 27.4% second homes, reflecting a diversified asset base that helps mitigate risk.
- Borrower Credit Quality: The pool's weighted average original loan-to-value (LTV) ratio stands at 74.6%, while the weighted average credit score is 779, both within the prime mortgage range, demonstrating strong borrower repayment capacity.
- Rating Methodology: KBRA utilized its Residential Asset Loss Model (REALM) for loan-level analysis of the mortgage pool, supplemented by third-party due diligence results and cash flow modeling analysis, ensuring the accuracy and reliability of the ratings.
See More
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- Increased Competitive Pressure: With Biohaven's drug trial failure, market attention shifts to other competitors, particularly in the depression treatment space, potentially leading investors to reassess the market outlook and investment value of related companies.
- Wider Industry Implications: Biohaven's failure could have a ripple effect across the biopharmaceutical industry, particularly in terms of R&D investments and clinical trial designs, prompting other companies to more cautiously evaluate their drug development strategies.
See More
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- Interest Payment Arrangement: The Notes will pay interest semiannually on June 1 and December 1, ensuring a stable cash flow for investors and increasing market attractiveness.
- Use of Proceeds: The net proceeds from this offering are expected to be approximately $75.6 million, which will be used to repay a portion of borrowings under mortgage servicing rights and to repurchase 2026 due Exchangeable Senior Notes, optimizing financial leverage.
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