10-Q · May 5, 2026
PennyMac Mortgage Investment Trust (PMT) reported disappointing Q1 results with diluted EPS of $0.16, significantly missing expectations by $0.20. Revenue for the quarter was $82.1 million, falling short of the $92.7…
Earnings analysis · 10-Q
PMT earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
PMT reported Q2 diluted EPS of $0.23, improving from a $0.04 loss in the prior-year quarter and $0.16 in Q1, while net investment income increased 4% year over year to $72.729 million but declined sequentially.…
Read full summary
PMT reported Q2 diluted EPS of $0.23, improving from a $0.04 loss in the prior-year quarter and $0.16 in Q1, while net investment income increased 4% year over year to $72.729 million but declined sequentially. Interest-rate-sensitive strategies recovered to $8.991 million of pretax income, although credit-sensitive and aggregation/securitization segment pretax income fell year over year. The balance sheet expanded through non-Agency securitization activity, but debt reached $22.955 billion and first-half operating cash use widened to $5.469 billion; management is also reducing MSR exposure through an expected August closing on a $13.0 billion-UPB MSR sale.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.23
What stood out
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Net investment income up modestly year over year
Net investment income, the filing's revenue-like operating measure, rose to $72.729 million in Q2 2026 from $70.201 million a year earlier, but declined from $82.134 million implied by first-half net investment income of $154.863 million less Q2 results.
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EPS rebounds versus year ago and Q1
Diluted EPS improved to $0.23 from a $0.04 loss in Q2 2025 and from $0.16 in Q1 2026. Net income rose to $30.919 million from $7.534 million, aided by a $14.099 million income-tax benefit.
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MSR and hedging performance improved
Interest-rate-sensitive strategies generated $8.991 million of pretax income versus a $4.888 million pretax loss a year earlier. Net loan servicing fees increased $16.094 million to $40.041 million, principally because hedging losses declined.
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Portfolio shifting from MSRs to subordinate MBS
The company is repositioning assets: it agreed to sell conventional MSRs with approximately $13.0 billion UPB, held $3.6 billion of MSRs at June 30, and invested $309.3 million in non-Agency subordinate MBS during the first six months.
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Securitization activity expands asset base
Assets increased $3.747 billion, or 18%, since year-end to $25.094 billion, led by a $3.926 billion increase in loans held for investment as non-Agency securitizations are accounted for as on-balance-sheet financings.
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Liquidity covenant compliance maintained
Management states it was compliant with funding conditions for the most recent quarter. It had $420.850 million of cash and short-term investments at June 30, above the stated $75 million minimum unrestricted-cash covenant at the Company and Operating Partnership.
What to watch
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Higher leverage and securitization financing
Leverage increased as total debt rose to $22.955 billion at June 30 from $19.132 billion at year-end; the reported total debt-to-equity ratio was 12.4:1. Non-recourse debt increased to $11.393 billion from $7.827 billion, largely alongside VIE securitization financing.
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Operating cash outflow widened materially
Operating cash use widened to $5.469 billion in the first six months of 2026 from $2.610 billion a year earlier, including $5.693 billion used in loans held for sale. Management attributes this principally to transferring loans to held for investment for securitization, whose cash proceeds are financing cash flows.
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Meaningful rates and prepayment sensitivity
Interest-rate exposure remains substantial: a hypothetical 200-basis-point rate increase would reduce MBS fair value by $476.679 million, while a 20% increase in MSR prepayment speed would reduce MSR fair value by $168.902 million. MBS valuation gains were only $0.4 million in Q2 2026 versus $14.6 million a year earlier as rates increased.
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CRT earnings and mortgage-credit risk
Credit-sensitive segment pretax income declined $10.586 million year over year to $11.248 million as CRT gains fell. The company has $18.090 billion UPB of loans underlying CRT obligations and warns that weaker home prices or economic conditions could increase delinquencies, defaults and losses.
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No formal risk-factor update; repurchases rose
Item 1A states there were no material changes from the risk factors in the December 31, 2025 Form 10-K. Nonetheless, the filing reports $52.812 million of loans repurchased in Q2 2026, versus $8.251 million a year earlier, illustrating representation-and-warranty exposure.
Management's outlook
The 10-Q provides no explicit numeric EPS or revenue guidance. Management expects the June 2026 agreement to sell conventional MSRs with approximately $13.0 billion of UPB to close in August 2026, expects to purchase all of PLS's non-Agency correspondent loans and none of its conventional conforming correspondent loans in Q3 2026, and expects continued subordinate-MBS investment to increase VIE asset-backed financings.
Earlier filings 4
10-K · February 18, 2026
PennyMac Mortgage Investment Trust (PMT) continues to execute a mortgage-asset focused strategy, externally managed by Pennymac Capital Management (PCM) and using PennyMac Loan Services (PLS) for production and…
10-K · February 20, 2025
PMT (PennyMac Mortgage Investment Trust) is a mortgage-focused specialty finance REIT that grew its correspondent production footprint in 2024 while earnings and net investment income declined year-over-year. The…
10-Q · October 30, 2024
PennyMac Mortgage Investment Trust (PMT) reported Q3 2024 net investment income of $80,864,000 (Q3 2023: $163,429,000) and net income of $41,407,000 (Q3 2023: $61,422,000). Basic EPS was $0.36 in Q3 2024 versus $0.59 in…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.