Good afternoon, and welcome to the Third quarter Earnings Discussion for PennyMac Mortgage Investment Trust. The slides that accompany this discussion are available from 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 Executive Chairman.

Thank you, Isaac. Let's begin with Slide 3. PMT reported net income attributable to common shareholders of $63.8 million or $0.71 per share, representing an annualized return on average common equity of 14%. Book value per common share increased to $21.14 at quarter end from $20.79 at June 30. And PMT paid a dividend of $0.47 per share for the quarter. PMT reports results through four segments, Credit Sensitive Strategies, which contributed $51.9 million in pretax income; Interest Rate Sensitive Strategies, with a pretax loss of $10.1 million, Correspondent Production, which contributed $21.8 million in pretax income; and Corporate, with a pretax loss of $15.4 million. Lastly, we recorded a $21.9 million income tax benefit, driven by fair value losses on MSRs held in PMT's taxable REIT subsidiary. Our results this quarter reflect continued strong performance from our GSE credit risk transfer investments. The performance of our agency mortgage-backed securities and interest rate hedges were to substantially offset fair value losses on mortgage servicing rights and excess servicing spread investments during the quarter, resulting from declining interest rates and market volatility. Results in our Interest Rate Sensitive Strategy were more than offset by strong Correspondent Production results. PMT continued its strong pace of capital investment, driven by record, quarterly conventional acquisition volumes of $18.5 billion in UPB. For the quarter, we delivered to Fannie Mae CRT-eligible loans of $14.2 billion in UPB, which resulted in a firm commitment to purchase $523 million of CRT securities. New MSR investments for the quarter totaled $250 million. Let's turn to Slide 4 and continue our discussion of third quarter results. During the quarter, we completed the previously announced sale of loans from the distressed portfolio, totaling $94 million in UPB. PMT's strong investment opportunities and excellent performance drove successful capital raising activities in…

Thank you, Stan. Let's begin with slide 10 for a look at our Correspondent Production highlights. Correspondent acquisitions by PMT from nonaffiliated sellers in the third quarter totaled $31.5 billion in UPB, up 45% from the prior quarter and 90% year-over-year. The mix of our acquisition activity was 54% conventional loans and 46% government loans. Conventional correspondent acquisitions totaled $16.6 billion in UPB, up 55% from the prior quarter and 122% from the third quarter of 2018. Government loan acquisitions in the quarter for which PMT earns a sourcing fee from PennyMac Financial totaled $14.3 billion in UPB, up 36% from the prior quarter and 60% from the third quarter of 2018. As part of its correspondent loan acquisitions, PMT also acquired conventional loans originated by PFSI totaling $1.4 billion in UPB, up from $1.1 billion in the prior quarter. These loans were originated through PFSI's consumer- and broker-direct channels and with their growth, PennyMac Financial remains PMT's largest single correspondent client. Combined conventional lock volume totaled $19.5 billion in UPB, up 54% from the prior quarter and 132% for the third quarter of 2018. Given our growth in acquisition volumes, I am proud to mention that according to Inside Mortgage Finance, PennyMac was the largest correspondent aggregator in the United States in the third quarter. We believe our commitment to consistently high service levels and fast turn times is a key to the success of our correspondent seller network. And we expect this to continue to drive further growth in our market share over time. As a whole, the conventional correspondent market remains highly competitive and margins were stable in comparison to the prior quarter. The weighted average fulfillment fee paid to PFSI to facilitate correspondent loan production was 27 basis points, down slightly from 28 basis points in…

Thank you, David. Let's turn to slide 15 and discuss the third quarter's income and return contributions by strategy. PMT's activities in the third quarter generated an annualized return on common equity of 14%, net of all expenses. In total, Credit Sensitive Strategies contributed $51.9 million to pretax income or a 31% annualized return on equity for the quarter. Within this segment, CRT investments contributed pretax income of $55.2 million, which I will expand upon later. Distressed loan and REO investments contributed a $3.6 million pretax loss, primarily driven by expenses related to the bulk sale completed in the quarter, and holding cost on the remaining loans and REO. Interest Rate Sensitive Strategies, which include the performance of our MSRs, ESS and Agency and Non-Agency Senior MBS positions, and related interest rate hedges, together contributed a pretax loss of $10.1 million or a negative 5% annualized return on equity for the quarter. These results were primarily driven by fair value losses on our MSR investments, which resulted from the continued decline in mortgage rates and market volatility, offset by gains in the fair value of our interest rate hedges and Agency MBS. While we show the income contribution for each of these Interest Rate Sensitive strategies separately, they are managed together as the interest rate sensitivity of MSRs and ESS is inversely correlated to that of MBS and our other interest rate hedges. I will discuss this in more detail on the following slide. Correspondent Production contributed $21.8 million to pretax income or a 15% annualized return on equity for the quarter driven by the increase in production volumes. The Corporate segment contributed a pretax loss of $15.4 million. And lastly, we recorded a $21.9 million income tax benefit driven by the fair value losses on our MSR investments, which…

Thank you, Andy. Our results reflect continued strong performance from PMT's unique investment strategies. The third quarter also represents the third consecutive quarter we have prudently raised capital in the equity markets. As we continue to source attractive organic investment opportunities in CRT and interest rate sensitive investments from our leadership position in the conventional correspondent market. We continue to see compelling opportunities for new investments in CRT and MSRs, and expect to benefit from greater economies of scale as we leverage our larger capital base. As a result, we remain optimistic about our ability to continue to provide strong shareholder returns. Lastly, we encourage investors with any questions to reach out to our Investor Relations team by email or phone. Thank you. End of Q&A: This concludes PennyMac Mortgage Investment Trust's 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.