Good afternoon, and welcome to the First Quarter 2014 Earnings Discussion for PennyMac Mortgage Investment Trust. The slides that accompany this discussion are available from the PennyMac Mortgage Investment Trust website at www.pennymac-reit.com. Before we begin, please take a few moments to read the disclaimer on Slide 2 of the presentation. Thank you. Now, I'd like to turn the discussion over to Stan Kurland, PMT's Chairman and Chief Executive Officer.

Thank you, Chris. I would like to begin with the highlights of PMT's first quarter performance on Slide 3. PMT earned $37.9 million in net income, or $0.50 per diluted share, which represents an annualized return on equity of 10%. The reduction in earnings versus the last quarter was driven by reduced income from Correspondent Lending and lower gains in the distressed loan portfolio. The Investment Activities segment earned $33.1 million in pretax income, which comprised 91% of PMT's pretax income for the quarter. The Correspondent Lending segment earned $3.1 million in pretax income. Correspondent loan acquisitions totaled $4.8 billion in the first quarter, down 16% from the fourth quarter. Lock volumes totaled $5.5 billion, down 8%. During the first quarter, PMT completed selective new investments in distressed whole loans and excess servicing spread. We completed the previously announced acquisition of nonperforming loans totaling $316 million in UPB and acquired an additional pool of nonperforming loans and REO totaling $120 million in UPB. As part of our ongoing co-investment strategy, PennyMac Financial acquired $2.4 billion in UPB of MSRs during the quarter, and produced $21 million in excess servicing spread investments for PMT. MSR and ESS investments reached $452 million, an increase of 5% from last quarter. Also, PMT raised $80 million of equity to support the company's growth through at-the-market issuances of common shares. After quarter-end, PMT entered into transactions to acquire $41 million in UPB of nonperforming whole loans, which are expected to settle in May, and approximately $26 million in excess servicing spread on MSRs that PennyMac Financial is expected to acquire in mini-bulk and flow transactions in the second quarter. Now, let's turn to Slide 4. PMT's overarching objective is to deliver superior long-term returns to shareholders by managing an investment portfolio consisting of multiple residential…

Thank you, Stan. I'd like to begin my comments on Slide 9, and review our investments in distressed whole loans during the quarter. In addition to completing the previously announced acquisition of the $360 million in unpaid principal balance of nonperforming loans, we acquired an additional pool of $120 million in unpaired principal balance. Additionally, after quarter-end, we agreed to acquire $41 million in unpaid principal balance of nonperforming loans, which we expect to settle in May. We are seeing some notable changes in the market for distressed whole loans. While we see and expect to see a continued supply of distressed whole loans for sale, in general, we find the pricing for these transactions to be unattractive. We have seen new capital enter the market, and we believe that some of these investors are willing to invest in loans at unlevered yields that are below PMT's targeted returns and may be making more aggressive assumptions, for example, about expectations for future home price appreciation. We remain patient and selective in making new investments in distressed whole loans, and we continue to monitor the market to assess best execution opportunities for our existing distressed portfolio investments. Let's move to Slide 10 and turn to Correspondent Lending. PMT's correspondent acquisitions totaled $4.8 billion in unpaid principal balance in the first quarter, down 16% from the fourth quarter. Conventional and jumbo loan acquisitions were $1.9 billion in unpaid principal balance, a decline of 21% from the prior quarter. Correspondent lock volume for the quarter was $5.5 billion in unpaid principal balance, an 8% decline from the fourth quarter. Conventional and jumbo locks totaled $2.2 billion dollars in unpaid principal balance, a decline of 13% from the prior quarter. Volumes in correspondent acquisitions were affected by the 23% quarter-over-quarter decline in the U.S.…

Thank you, David. On Slide 14, we show the pretax earnings contribution from each of PMT's segments over the last 5 quarters. In the first quarter, pretax earnings totaled $36.3 million, $33.1 million from Investment Activities and $3.1 million from Correspondent Lending. Now, let's turn to Slide 15, and look at the results of the Investment Activities segment. This segment's income is derived from the performance of our investment portfolio, including distressed mortgage loans, mortgage servicing rights, excess servicing spread, mortgage-backed securities and retained interests from private-label securitizations. In the first quarter, the Investment Activities' segment revenues totaled $64.3 million, down 18% from the fourth quarter. Net gain on investments, which includes valuation gains on our investment portfolio, declined 11% from the fourth quarter. The decline resulted from lower distressed loan valuation gains and a fair-value loss on excess servicing spread investments due to lower interest rates at quarter-end, partially offset by recapture income of $1.9 million from PFSI. Segment net interest income declined 13%, due in part to a $1.3 million quarter-over-quarter decline in capitalized interest income from loan modifications due to lower modification activity. Net servicing fee revenue declined 39%, largely due to fair-value adjustments and impairment on MSRs for the quarter, driven by expectations for higher prepayment speeds as a result of lower interest rates at quarter-end. Segment expenses rose 5%, quarter-over-quarter, primarily due to higher servicing expense from a growing servicing portfolio of both nonperforming loan investments and MSRs. Also, PMT incurred a $2.9 million liquidation fee on the sale of performing loans, which closed in January. Now, I'd like to turn Slide 16, and dive a little deeper into the performance of the distressed loan portfolio in the first quarter. PMT's distressed mortgage loan portfolio generated realized and unrealized gains on mortgage loans totaling $39.9…

Thank you. Anne. We believe that PMT is well-positioned to continue delivering on its investment objective, and our outlook remains positive. The existing investment portfolio should continue to generate strong returns, and we expect to grow PMT's investments in a patient and prudent manner. We see a flow of opportunities in excess servicing spread and distressed loan pools, where we are being selective. At present, we believe that the taxable earnings generated by PMT's assets and future investment opportunities are consistent with the current dividend level. We remain vigilant in pursuing investment opportunities, and working to deliver superior long-term returns for our shareholders. Finally, we encourage investors with any questions to reach out to our Investor Relations team by e-mail or phone. Thank you.

This concludes the PennyMac Mortgage Investment Trust first quarter earnings discussion. For any questions, please visit our website at www.pennymac-reit.com or call our Investor Relations Department at 812-224-7028. Thank you.