This will help small and midsize lenders to compete more effectively with the large banks and drive more the total origination market to these lenders. These factors have created significant opportunity for non-bank financial intermediaries such as PMT to fill the resulting void and we think there is still considerable amount of growth potential for non-bank financial intermediaries in this channel. The current low mortgage rate environment coupled with the challenges that banks are facing with their mortgage related exposure have helped to increase the attractiveness of investments in mortgage servicing rights, Newly originated MSRs have relatively low prepayment risks given the historically low interest rate environment which enhances their return profile. Also regularity complexities and Basel III capital considerations will likely drive many large bank services to sell legacy MSRs.

We anticipate that opportunities to acquire bulk servicing rights will remain for the foreseeable future. Against this backdrop to turn to slide four, PMT is a unique enterprise that is focused on investing in the U.S. residential mortgage market; it engages opportunistic investments while capitalizing on emerging opportunities of the market converges towards normalization. PMT is an externally managed REIT leveraging the capabilities of PNMAC Capital Management, PCM and its affiliate PennyMac Loan Services, PLS.

PCM currently manages 1.7 billion of equity and provides investment management, knowledge and expertise to invest in distressed mortgage loans and engages in counter-activity for purchases of newly originated prime mortgages from correspondence sellers. PLS provides the operational infrastructure and capabilities for both loan fulfillment and mortgage servicing together PCM and PLS enable PMT to purchase opportunistic investments in residential mortgages and provide synergies that we believe maximize shareholder returns.

Now let’s turn to slide five and review PMT second quarter and also some of the highlights in the third quarter thus far. Our second quarter’s results demonstrated significant earnings power of PMT with both of the company’s business segments. Correspondent lending and investment activities delivered double-digit pretax earnings growth from the first quarter. Net income was 29.6 million in the second quarter a 55% from the first-quarter on revenue of 64.4 million. Diluted earnings per share reached an all-time high of $0.79, a 22% increase from the first quarter. Return on average equity was 17%, we believe this is particularly notable considering the raising of over 200 million in new equity in the quarter corner roughly a third of our market capitalization at that time demonstrating our ability to quickly and effectively deploy capital in accretive opportunities.

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