Good afternoon, and welcome to the second quarter 2017 earnings discussion for PennyMac Mortgage Investment Trust. The slides that accompany this discussion are available from PennyMac Mortgage Investment Trust's 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 Executive Chairman.

Thank you, Chris. Let's begin with Slide 3. PMT’s second quarter results were driven by strong contributions from our uniquely generated GSE credit risk transfer investments and results from the Correspondent Production segment activities. During the quarter, we also continued to make steady progress liquidating our distressed loan portfolio. PMT reported net income attributable to common shareholders of $26.4 million on investment income of $84 million or $0.38 per diluted share, representing an annualized return on common equity of 8%. PMT paid a dividend of $0.47 per share for the quarter, and book value per share decreased to $20.04 at quarter end from $20.14 at March 31. PMT reports results through 4 segments: Credit Sensitive Strategies, which generated $30.4 million in pretax income; Interest Rate Sensitive Strategies, which earned $5.4 million in pretax income; Correspondent Production, which earned $8.1 million in pretax income; and Corporate with a pretax loss of $12.1 million. During the second quarter, we made significant progress growing our investment activities in CRT and mortgage servicing rights resulting from PMT’s Correspondent Production activities. CRT eligible deliveries totaled $3.8 billion in UPB, which will result in approximately $132 million of new CRT investments once the aggregation period is complete. We also added $66 million in new MSRs resulting from our correspondent activities. Conventional Correspondent Production totaled $5.9 billion in unpaid principal balance, up 28% from the prior quarter. Turning to Slide 4, let's continue our review of the highlights. We also continued to successfully reduce equity allocated to distressed mortgage loans to 31% of total equity, down from 50% a year ago. Cash proceeds from the liquidation and paydown of distressed mortgage loans and REO totaled $71 million, down from $89 million in the second quarter, and we entered into an agreement to sell $149 million in UPB…

Thank you, Stan. Let's turn to Slide 11 and discuss the resolution activity on PMT’s distressed whole loan investments. Here we show the 5-quarter trend for distressed loan resolutions, including liquidation and modification activities, which totaled $209 million in UPB during the second quarter. As a percentage of the average nonperforming loan and REO balances, quarterly resolution activity represented 18% in the second quarter, up from 14% in the second quarter of 2016. Modifications totaled $105 million in UPB and comprised 50% of total resolution activity compared with 42% in the prior quarter and 36% in the second quarter of 2016. Streamlined modifications totaled $88 million in UPB, up from $76 million in the prior quarter. With streamlined modifications, once a homeowner makes its first modified payment, the homeowner is moved directly into a trial modification. This quarter, 59% of total streamlined modifications were done through PennyMac's own proprietary program. Liquidation activities totaled $98 million in UPB, down from $120 million in the prior quarter. Liquidation activities include payoffs, foreclosure sales to third parties, short sales and sales of REO properties to third parties. REO sales were $64 million, down from $96 million in the prior quarter. The decrease in REO property sales reflects a lower volume of high value properties sold in the second quarter versus the previous quarter. However, we continue to make progress in resolving the foreclosure pipeline, with REO inventory declining to $207 million at June 30 from $225 million at March 31. New REO rentals were $7 million for the quarter, down from $10 million in the first quarter. Now let's turn to Slide 12 for a look at Correspondent Production highlights. Correspondent acquisitions by PMT in the second quarter totaled $16.3 billion in UPB, up 17% from the first quarter and up 12% year-over-year.…

Thank you, David. On Slide 16, we show the pretax income contributions from each of PMT’s operating segments over the last 5 quarters. As Stan noted earlier, we report results in 4 segments, which reflect the evolution of PMT’s activities and the strategies that drive its financial results. PMT’s pretax income in the second quarter totaled $31.8 million, comprised of $30.4 million from Credit Sensitive Strategies, $5.4 million from Interest Rate Sensitive Strategies, $8.1 million from Correspondent Production and a pretax loss of $12.1 million from Corporate. Now let's turn to Slide 17 and review the results of the Credit Sensitive Strategies segment. The Credit Sensitive Strategies segment includes results from PMT’s distressed mortgage loans, CRT, Non-Agency subordinate bonds and commercial real estate investments. Segment revenues totaled $40.2 million, an increase of 56% from the prior quarter. The increase in revenues was driven by a significant increase in net gain on investments and a reduction in other losses. Net gain on investments in the second quarter was $34.1 million, up 55% from $22 million in the prior quarter. The increase in net gain on investments was primarily due to strong gains on CRT, which totaled $32.9 million. Net interest income for Credit Sensitive Strategies was $6.9 million, up 15% from the prior quarter. Interest income was $20.7 million, a 2% increase from the prior quarter and included $10.8 million of capitalized interest from loan modifications, up from $9.9 million in the prior quarter. Capitalized interest increases interest income and reduces loan valuation gains. Interest expense decreased 3% from the prior quarter to $13.8 million due to a smaller distressed mortgage loan portfolio. Other investment losses were $1.1 million compared with losses of $2.3 million in the prior quarter. Segment expenses were $9.7 million in the second quarter, a 52% increase…

Thank you, Andy. PMT continues to focus on CRT and MSR investments that result from our Correspondent Production business. As mentioned earlier, Fannie Mae and Freddie Mac recently announced structural improvements to their credit risk transfer programs, which we expect will benefit PMT’s future CRT investments. We are pleased with our capital progress, highlighted by our successful raise of new preferred equity after quarter end. The ability to finance mortgage servicing rights has also improved markedly with attractive transactions recently in the market. These are exciting developments that we believe will enhance the attractiveness of PMT’s core strategies and earnings potential going forward. Lastly, we encourage investors with any questions to reach out to our Investor Relations team by email or phone. Thank you.

This concludes PennyMac Mortgage Investment Trust's second 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.