PennyMac Mortgage Investment Trust (PMT) Q3 2025 Earnings Call Transcript

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.