Let’s dig into the relative performance of Rithm Capital (NYSE: RITM) and its peers as we unravel the now-completed Q1 thrifts & mortgage finance earnings season.

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 17.7%.

In light of this news, share prices of the companies have held steady as they are up 3.3% on average since the latest earnings results.

Rithm Capital (NYSE: RITM)

Evolving from a mortgage-focused REIT to a diversified asset manager with its 2023 acquisition of Sculptor Capital, Rithm Capital (NYSE: RITM) is a global asset manager focused on real estate, credit, and financial services that invests in mortgage servicing rights, residential properties, and loan portfolios.

Rithm Capital reported revenues of $565.8 million, down 31.9% year on year. This print fell short of analysts’ expectations by 35.1%. Overall, it was a slower quarter for the company with a miss of analysts’ tangible book value per share estimates.

“Rithm Property Trust continued its track record of earnings growth under Rithm in the first quarter of 2025, despite a challenging macro-economic environment,” said Michael Nierenberg, Chief Executive Officer of Rithm Capital.

Interestingly, the stock is up 2.8% since reporting and currently trades at $12.

Read our full report on Rithm Capital 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 a solid beat of analysts’ EPS and net interest income estimates.

The market seems happy with the results as the stock is up 14.3% since reporting. It currently trades at $13.50.

Is now the time to buy Northwest Bancshares? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Dynex Capital (NYSE: DX)

Operating in the financial markets since 1988 with a focus on capital preservation during economic turbulence, Dynex Capital (NYSE: DX) is a mortgage real estate investment trust that invests primarily in government-backed residential mortgage securities to generate income for shareholders.

Dynex Capital reported revenues of $17.13 million, up 637% year on year, falling short of analysts’ expectations by 22.4%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 1.5% since the results and currently trades at $12.66.

Read our full analysis of Dynex Capital’s results here.

Two Harbors Investment (NYSE: TWO)

Operating in the complex world of mortgage finance since 2009, Two Harbors Investment (NYSE: TWO) is a real estate investment trust that invests in mortgage servicing rights and agency residential mortgage-backed securities.

Two Harbors Investment reported revenues of -$28.33 million, down 110% year on year. This print came in 125% below analysts' expectations. It was a softer quarter as it also logged a significant miss of analysts’ EPS estimates.

Two Harbors Investment had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 16.5% since reporting and currently trades at $10.01.

Read our full, actionable report on Two Harbors Investment here, it’s free.

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 result lagged analysts' expectations by 52.7%. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts’ EPS estimates and a slight miss of analysts’ tangible book value per share estimates.

The stock is down 3.8% since reporting and currently trades at $12.63.

Read our full, actionable report on PennyMac Mortgage Investment Trust here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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