Looking back on thrifts & mortgage finance stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including PennyMac Mortgage Investment Trust (NYSE:PMT) and its peers.
Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.
The 22 thrifts & mortgage finance stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 18.5%.
In light of this news, share prices of the companies have held steady as they are up 3.4% on average since the latest earnings results.
PennyMac Mortgage Investment Trust (NYSE:PMT)
Operating as a real estate investment trust since 2009 to maintain tax advantages, PennyMac Mortgage Investment Trust (NYSE:PMT) is a specialty finance company that invests in mortgage-related assets and operates a correspondent lending business.
PennyMac Mortgage Investment Trust reported revenues of $44.47 million, down 40.1% year on year. This print fell short of analysts’ expectations by 52.7%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EPS and tangible book value per share estimates.
“PMT produced strong levels of income excluding market-driven value changes in the first quarter,” said Chairman and CEO David Spector.
Unsurprisingly, the stock is down 3.7% since reporting and currently trades at $12.65.
Read our full report on PennyMac Mortgage Investment Trust here, it’s free.
Best Q1: Northwest Bancshares (NASDAQ:NWBI)
Founded in 1896 and operating across Pennsylvania, New York, Ohio, and Indiana, Northwest Bancshares (NASDAQ:NWBI) is a bank holding company that operates Northwest Bank, providing personal and business banking, investment management, and trust services.
Northwest Bancshares reported revenues of $156.2 million, up 19% year on year, outperforming analysts’ expectations by 9.9%. The business had a stunning quarter with an impressive beat of analysts’ EPS and net interest income estimates.
The market seems happy with the results as the stock is up 12.5% since reporting. It currently trades at $13.29.
Is now the time to buy Northwest Bancshares? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Ladder Capital (NYSE:LADR)
Founded during the 2008 financial crisis when traditional lenders retreated from commercial real estate, Ladder Capital (NYSE:LADR) is a real estate investment trust that originates commercial real estate loans, owns commercial properties, and invests in real estate securities.
Ladder Capital reported revenues of $51.28 million, down 18.9% year on year, falling short of analysts’ expectations by 7.1%. It was a disappointing quarter as it posted a significant miss of analysts’ tangible book value per share and EPS estimates.
Interestingly, the stock is up 4.4% since the results and currently trades at $11.13.
Read our full analysis of Ladder Capital’s results here.
Mr. Cooper Group (NASDAQ:COOP)
Born from the 2018 merger of Nationstar Mortgage and WMIH Corp, Mr. Cooper Group (NASDAQ:COOP) is a non-bank servicer of residential mortgage loans that collects payments, manages escrow funds, and performs loss mitigation activities for 4.6 million customers.
Mr. Cooper Group reported revenues of $560 million, flat year on year. This number missed analysts’ expectations by 9.1%. It was a disappointing quarter as it also recorded a significant miss of analysts’ tangible book value per share estimates and EPS in line with analysts’ estimates.
The stock is up 11.4% since reporting and currently trades at $147.
Read our full, actionable report on Mr. Cooper Group here, it’s free.
Columbia Financial (NASDAQ:CLBK)
Founded during the Roaring Twenties in 1926 and headquartered in Fair Lawn, New Jersey, Columbia Financial (NASDAQ:CLBK) operates federally chartered savings banks in New Jersey that offer traditional banking services including loans, deposits, and insurance products.
Columbia Financial reported revenues of $55.86 million, up 25.9% year on year. This result beat analysts’ expectations by 11.8%. Taking a step back, it was a satisfactory quarter as it also logged a narrow beat of analysts’ tangible book value per share estimates but a slight miss of analysts’ EPS estimates.
The stock is up 10% since reporting and currently trades at $14.82.
Read our full, actionable report on Columbia Financial here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.