Good afternoon, and welcome to the third 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 third quarter performance on Slide 3. PMT's strong financial performance continued in the third quarter, where it earned $54.9 million in net income or $0.69 per diluted share, which represents an annualized return on equity of 14%. PMT paid a dividend of $0.61 in the third quarter, a $0.02 per share increase from the previous quarter, and book value rose to $21.42 per share, up from $21.27 per share at the end of the second quarter. This quarter's results continued our track record of regular dividend distributions and growing book value. PMT operates 2 segments: Investment Activities and Correspondent Production. The Investment Activities segment earned $55.1 million in pretax income, driven by gains on distressed mortgage loans resulting from an improvement in the progression of loans towards their ultimate resolution, strong investor demand for performing distressed loans and improved current and future home price expectations. While we didn't acquire any new distressed loan pools during the quarter, we are active bidders in the distressed market and remain disciplined in pursuing new investments for PMT. The Correspondent Production segment earned $2.8 million in pretax income, which reflects the highly competitive correspondent market for newly originated conventional conforming loans. The correspondent aggregation activities result in new mortgage servicing rights, which we see as attractive investments, particularly in the current low interest-rate environment. Correspondent loan acquisitions increased 15% from the second quarter, which included a 109% increase in prime jumbo acquisition. MSRs and excess servicing spread, or ESS, investments grew to $533 million during the third quarter, which relate to $60 billion in UPB of servicing at September 30. For the quarter, PMT made $40 million of direct investments in MSRs from conventional Correspondent Production activities, representing $3.7 billion in…

Thank you, Stan. During the third quarter, we continued to evaluate investment opportunities in distressed whole loans. As Stan mentioned, PMT did not make an investment in these assets during the third quarter even though the supply of distressed loans available in the market continues to remain strong. To achieve targeted return levels, it appears that investors have recently relied more heavily on assumptions about future home price appreciation over the liquidation time frame and on leverage in determining bid prices, which can result in greater downside risk. We remain an active bidder in the distressed market and continue to be patient and disciplined in making investments. We continue to manage existing investments to their optimal resolution, which resulted in the sale of an additional $80 million in UPB of performing loans from PMT's portfolio of distressed loans during the third quarter. Investor demand for these assets continued to improve during the quarter, and we continuously evaluate a variety of options for optimizing the execution for the distressed loan portfolio going forward. At September 30, the UPB of performing loans in our distressed portfolio was $847 million, down from $910 million at June 30. And the loans in this portfolio are at varying stages of reperformance. As these loans continue to perform, we expect to see continued gains in fair value as the loans migrate to their resolution. Let's now turn to Slide 10 and review the operational results of our Correspondent Production business. PMT's correspondent acquisitions totaled $8.1 billion in UPB in the third quarter, up 15% from the second quarter. Conventional conforming and jumbo loan acquisitions were $3.7 billion in UPB, an increase of 23% from the prior quarter. Correspondent lock volume for the quarter was $8.4 billion in UPB, a 3% increase from the second quarter. Conventional…

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 third quarter, pretax earnings totaled $57.9 million: $55.1 million from Investment Activities and $2.8 million from Correspondent Production. Now let's turn to Slide 15 and look at the results of the Investment Activities segment. The Investment Activities segment income is derived from the performance of PMT's investment portfolio. In the third quarter, segment revenues totaled $86.4 million, down 18% from a record second quarter. The quarter-over-quarter decline in revenues was driven by declines in net interest income and net gains on investments, partially offset by an increase in net loan servicing fees. Net gain on investments, which includes realized and unrealized gains and losses on our distressed loan investments, agency and non-agency MBS and excess servicing spread, decreased by 4% from the second quarter. Valuation gains on distressed loans were $81.3 million, which were partially offset by a $3.5 million loss on MBS and retained interest positions as a result of wider MBS spreads and valuation losses on ESS of $7.4 million largely resulting from increased expectations of future prepayment speeds on government loans underlying the investment. In future periods, when those prepayments occur, PMT will benefit from recapture income. Also contributing to lower Investment Activities segment revenue was a $7.6 million quarter-over-quarter decline in net interest income due to a decrease in capitalized interest resulting from lower loan modification activity during the quarter. Capitalized interest on loan modifications is recorded as interest income and is generally offset by a negative adjustment to the fair value of the loan. As a result, the decline in capitalized interest during the quarter was generally offset by gains in the fair value of the distressed loan portfolio. Net loan…

Thank you, Anne. We continually evaluate opportunities for new investments for PMT across a variety of mortgage-related assets. We are making attractive investments in MSRs resulting from our Correspondent Production activities and new ESS acquisitions in partnership with PennyMac Financial. We are focused on additional mortgage opportunities, such as prime jumbo, a market that is improving as evidenced by our increasing jumbo acquisitions through Correspondent Production and our opportunistic investments in MBS backed by jumbo loans. Finally, we encourage investors with any questions to reach out to our Investor Relations team by email or phone. Thank you.

This concludes the PennyMac Mortgage Investment Trust third quarter earnings discussion. For any questions, please visit our website at www.pennymac-reit.com or call our Investor Relations department at (818) 224-7028. Thank you.