PennyMac Mortgage Investment Trust (PMT) Q1 2025 earnings summary

Executive summary

• Reported a Q1 2025 net loss attributable to common shareholders of $0.8–$1 million, or $(0.01) per diluted share, primarily due to fair value declines from interest rate volatility and credit spread widening, despite strong core income excluding market-driven value changes.

• Book value per common share decreased to $15.43 at March 31, 2025, from $15.87 at year-end 2024.

• Declared a $0.40 per common share dividend for Q1 2025, maintaining payout stability.

• Total assets increased 3% to $14.88 billion as of March 31, 2025, primarily due to higher loans at fair value.

• Net new investments included $66 million in credit sub-bonds and $29–$47 million in MSR investments.

Financial highlights

• Net loss to common shareholders of $0.8–$1 million in Q1 2025, with diluted EPS of $(0.01); annualized return on average common equity was 0%.

• Book value per share was $15.43 at quarter-end.

• Net investment income was $44.5 million; net gains on investments and financings rose to $62.3 million, driven by MBS valuation gains.

• Net loan servicing fees swung to a loss of $27.2 million, reflecting MSR valuation losses; tax benefit of $16 million recorded.

• Expenses increased 21% to $50.8 million, mainly due to higher professional services and compensation.

Outlook and guidance

• Run-rate return potential for Q2 2025 is $0.35 per share, with targeted ROE of 8.9% and continued monthly NOO and quarterly jumbo securitizations.

• PMT expects to retain all jumbo production and 15–25% of conventional conforming correspondent production in Q2 2025.

• Dividend expected to remain stable at $0.40 per share despite lower run-rate earnings.

• Management expects PLS to become the initial purchaser of correspondent loans starting July 2025, after which PMT will no longer purchase government loans but retains the right to buy non-government production.

• Market volatility, interest rate changes, and economic uncertainty are expected to impact origination volumes, prepayment speeds, and credit performance.