PennyMac Mortgage Investment Trust (PMT) investor relations material

Market and financial trends

• Mortgage rates have risen by about 50 basis points, leading to lower production and reduced revenue forecasts across all channels.

• Margins are holding in consumer direct and correspondent channels, but broker direct faces some margin pressure.

• Servicing portfolio remains strong with low delinquencies and generates about $530 million in quarterly servicing fees.

• Operating ROE is expected to be in the mid to high single digits for Q3, reflecting a post-COVID trough.

Technology and efficiency initiatives

• Deployment of new, legacy-free technology and AI agents has reduced processing costs by 50% per loan and increased loan officer efficiency by 20%.

• Reduction of excess capacity led to a $60 million cut in production expenses, stabilizing earnings.

• Technology investments are expected to peak in Q3 and then decline, with automation targeted at 80% by year-end 2027.

• AI tools and virtual assistants are driving down servicing costs and improving borrower self-service options.

Channel strategies and market share

• Broker direct channel is set to benefit from new technology and a broker portal, aiming for significant share growth over the next 2–3 years.

• Correspondent channel remains a strategic focus, with selective capital allocation and growth in non-QM and jumbo business.

• Recapture rates are at historic highs, with conventional nearing 30% and government above 50%, driven by leadership, workflow, and technology.

• The goal remains to reach 10% broker market share, though the timeline has shifted beyond this year.