PennyMac Mortgage Investment Trust Earnings Per Share Disclosure
Note 24—Earnings Per Common Share
The Company determines earnings per Common Share using the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to Common Shares and participating securities based on their respective rights to receive dividends. The Company’s participating securities are certain grants of restricted share units that provide the recipients the nonforfeitable right receive dividend equivalents during the vesting period on a basis equivalent to the dividends paid to holders of Common Shares.
Basic earnings per share is determined by dividing net income available to common shareholders (net income reduced by preferred dividends and income attributable to the participating securities) by the weighted average Common Shares outstanding during the period.
Diluted earnings per share is determined by dividing net income by the weighted average number of Common Shares and dilutive securities. The Company’s potentially dilutive securities are share-based compensation awards and the exchangeable senior notes described in Note 15— Long-Term Debt. The number of dilutive securities included in diluted earnings per share is calculated using either the treasury stock or if-converted method (whichever is most dilutive) for share-based compensation awards and the if-converted method for the exchangeable senior notes. The number of potentially dilutive securities relating to the exchangeable senior notes is calculated based on the exchange obligation in excess of the principal amount of the exchangeable senior notes as described in Note 15— Long-Term Debt.
The following table summarizes the basic and diluted earnings per share calculations:
|
|
Year ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands except per share amounts) |
|
|||||||||
Net income |
|
$ |
127,872 |
|
|
$ |
160,984 |
|
|
$ |
199,654 |
|
Dividends on preferred shares |
|
|
(41,819 |
) |
|
|
(41,819 |
) |
|
|
(41,819 |
) |
Effect of participating securities—share-based compensation awards |
|
|
(148 |
) |
|
|
(417 |
) |
|
|
(454 |
) |
Net income attributable to common shareholders |
|
$ |
85,905 |
|
|
$ |
118,748 |
|
|
$ |
157,381 |
|
Interest on exchangeable senior notes, net of income taxes |
|
|
— |
|
|
|
— |
|
|
|
25,055 |
|
Loss attributable to participating securities |
|
|
— |
|
|
|
— |
|
|
|
(44 |
) |
Diluted net income attributable to common shareholders |
|
$ |
85,905 |
|
|
$ |
118,748 |
|
|
$ |
182,392 |
|
Weighted average basic and diluted shares outstanding |
|
|
86,988 |
|
|
|
86,815 |
|
|
|
87,372 |
|
Dilutive securities—Shares issuable pursuant to exchange of the |
|
|
— |
|
|
|
— |
|
|
|
24,328 |
|
Diluted weighted average shares outstanding |
|
|
86,988 |
|
|
|
86,815 |
|
|
|
111,700 |
|
Basic earnings per share |
|
$ |
0.99 |
|
|
$ |
1.37 |
|
|
$ |
1.80 |
|
Diluted earnings per share |
|
$ |
0.99 |
|
|
$ |
1.37 |
|
|
$ |
1.63 |
|
Calculation of diluted earnings per share requires certain potentially dilutive shares to be excluded when the inclusion of such shares would be anti-dilutive. The following table summarizes the potentially dilutive shares excluded from the diluted earnings per share calculation:
|
|
Year ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands) |
|
|||||||||
Shares issuable under share-based compensation plan |
|
|
349 |
|
|
|
204 |
|
|
|
180 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2020 | Feb 26, 2021 | |
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.