PennyMac Mortgage Investment Trust

Our expenses are summarized below:

Expenses increased $4.5 million, or 9%, during the quarter ended March 31, 2026, as compared to the same period in 2025, as discussed below.

Loan Servicing Fees

Loan servicing fees payable to PLS are summarized below:

Loan servicing fees decreased by $2.0 million during the quarter ended March 31, 2026, as compared to the same period in 2025, reflecting a decrease in the MSR portfolio as well as reduction in the subservicing fee rate implemented in October 2025, as described in Note 4—Transactions with Related Partiesto the consolidated financial statements included in this Report.

Management Fees

Management fees payable to PCM are summarized below:

Management fees decreased by $250,000 during the quarter ended March 31, 2026, as compared to the same period in 2025. This decrease reflects the effect of the decrease in our average shareholders’ equity on our base management fee.

Loan Fulfillment Fees

Loan fulfillment fees represent fees we pay to PLS for the services it performs on our behalf in connection with our acquisition, packaging and sale of loans. Fulfillment fees increased by$0.4 million duringthe quarter ended March 31, 2026, as compared to the same period in 2025. The increase was due to the increase in the volume of loans purchased for sale to nonaffiliates and an increase in our non-Agency sales and securitizations. Our loan fulfillment fee structure is described in Note 4 –Transactions with Related Partiesto the consolidated financial statements included in this Report.

Professional services

Professional services expense increased by $6.5 million duringthe quarter ended March 31, 2026, as compared to the same period in 2025, due to increased legal and consulting fees in support of the increase in our securitization activities.

Loan collection and liquidation

Loan collection and liquidation expenses increased by $155,000 duringthe quarter ended March 31, 2026, as compared to the same period in 2025, due to increased servicing costs related to delinquent loans serviced for the Agencies' foreclosure avoidance programs.

Other Expenses

Other expenses are summarized below:

Income Taxes

We have elected to treat PennyMac Corp. (“PMC”) as a taxable REIT subsidiary (“TRS”). Income from a TRS is only included as a component of REIT taxable income to the extent that the TRS makes dividend distributions of income to us. A TRS is subject to corporate federal and state income tax. Accordingly, a provision for income taxes for PMC is included in the accompanying consolidated statements of operations.

The Company’s effective tax rate was 8.5% and 253.7% with consolidated pretax income of $26.9 million and pretax loss of $6.3 million for the quarters ended March 31, 2026 and March 31, 2025, respectively. The Company’s TRS recognized a tax expense of $2.9 million on pretax income of $964,000 for the quarter ended March 31, 2026. For the same period in 2025, the TRS recognized a tax benefit of $17.2 million on a pretax loss of $75.3 million. The primary difference between the Company’s effective tax rate and the statutory tax rate is generally attributable to nontaxable REIT income resulting from the dividends paid deduction.

The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. On the basis of this evaluation, as of March 31, 2026, the valuation allowance remains zero. The TRS has a significant net deferred tax liability position, which indicates the TRS will utilize all of its deferred tax assets. The amount of deferred tax assets considered realizable could be adjusted in future periods based on future income.

In general, cash dividends declared by the Company will be considered ordinary income to the shareholders for income tax purposes. Some portion of the dividends may be characterized as capital gain distributions or a return of capital. The 2017 Tax Cuts and Jobs Act (subject to certain limitations) provides a 20% deduction from taxable income for ordinary REIT dividends which was made permanent under the One Big Beautiful Bill Act of 2025.