PennyMac Mortgage Investment Trust (NYSE: PMT)

PennyMac Mortgage Investment Trust is a specialty finance company that invests primarily in mortgage related assets. The company conducts substantially all of its operations and makes substantially all of its investments through its subsidiary PennyMac Operating Partnership L. P. and its subsidiaries. PennyMac Mortgage Investment Trust is externally managed by Pennymac Capital Management LLC a wholly owned subsidiary of PennyMac Financial Services Inc. which specializes in U. S. mortgage assets. The company's objective is to provide attractive risk adjusted returns to investors over the long term primarily through dividends and secondarily through capital appreciation.

PennyMac Mortgage Investment Trust generates revenue from interest income on its mortgage related investments gains on the sale of loans and fees from mortgage servicing activities. The company earns income from its holdings of mortgage backed securities mortgage servicing rights credit risk transfer arrangements and structured products such as interest only and principal only stripped securities. Revenue also arises from correspondent production activities where the company purchases loans from originators and sells them to agencies or investors while retaining servicing rights or other interests.

The company operates through the following segments: credit sensitive strategies interest rate sensitive strategies and correspondent production.

• Credit sensitive strategies represents the company's investments in credit risk transfer arrangements referencing loans from its own correspondent production and subordinate and credit linked mortgage backed securities.

• Interest rate sensitive strategies represents the company's investments in mortgage servicing rights Agency mortgage backed securities and structured products including interest only and principal only stripped mortgage backed securities and floating rate collateralized mortgage obligations senior non Agency mortgage backed securities and related interest rate hedging activities.

• Correspondent production represents the company's operations aimed at serving as an intermediary between lenders and the capital markets by purchasing pooling and reselling newly originated prime credit quality loans either directly or in the form of mortgage backed securities using the services of Pennymac Capital Management LLC and PennyMac Loan Services LLC. The company primarily sells the loans it acquires through correspondent production to the Agencies. It also securitizes certain of its loans directly and may retain interests such as senior and subordinate mortgage backed securities from these securitizations.

PennyMac Mortgage Investment Trust operates in a competitive landscape that includes specialty finance companies private funds thrifts banks mortgage bankers insurance companies mutual funds institutional investors investment banking firms governmental bodies and other mortgage REITs such as Chimera Investment Corporation Invesco Mortgage Capital Inc Rithm Capital Corp Ellington Financial Inc MFA Financial Inc Adamas Trust Inc Redwood Trust Inc Two Harbors Investment Corp AGNC Investment Corp and Annaly Capital Management Inc. In its correspondent production activities the company competes with large financial institutions the GSE cash windows and other independent residential loan producers and servicers such as Rocket Mortgage Rithm Capital Corp Freedom Mortgage Truist Financial Corporation Western Alliance Bank and Onity Group Inc. The company's competitive advantages stem from its access to Pennymac Capital Management LLC's professionals and their industry expertise which helps assess investment risks and determine appropriate pricing and from its access to PennyMac Loan Services LLC's servicing expertise which provides a competitive edge over peers with a similar focus.

PennyMac Mortgage Investment Trust serves a diverse customer base that includes government sponsored enterprises such as Fannie Mae and Freddie Mac various banks and other institutional investors. The company also sells loans to PennyMac Loan Services LLC and to nonaffiliated investors. Its correspondent production activities involve purchasing loans from approved mortgage originators and selling them to these customers while retaining servicing rights or other interests.