Pennymac Financial Services, Inc. · NYSE:PFSI
Pennymac Financial Services — Investor Presentation (September 2019)
14 slides from Pennymac Financial Services's investor presentation, Sep 9, 2019
Slide 1: Forward-Looking Statements
Forward-Looking Statements 2 This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections and assumptions with respect to, among other things, the Company’s financial
Slide 2: PFSI Is a Leading Nonbank Residential Mortgage Specialist
3 PFSI Is a Leading Nonbank Residential Mortgage Specialist (1) Source: Inside Mortgage Finance, for the last twelve months ended June 30, 2019 or as of June 30, 2019 (2) Reflects PMT’s issuance of 9.2 million common shares which settled on August 13, 2019 Loan Production Volume Loan Servicing Portf
Slide 3: PFSI's Earnings Have Driven Strong Book Value Growth
4 PFSI’s Earnings Have Driven Strong Book Value Growth Track record of strong profitability; profitable every year since 2008(2) Retained earnings drive book value growth Book Value Per Share of PFSI 21% CAGR(1) (1) Compounded annual growth rate (2) Private National Mortgage Acceptance Company, LLC
Slide 4: Large Opportunity in the U.S. Mortgage Market
5 Large Opportunity in the U.S. Mortgage Market U.S. Consumer Debt Outstanding(1) The mortgage market is the largest consumer finance market in the U.S. Banks have reduced their presence, representing a significant opportunity for specialists with the requisite operational capabilities, scale and ca
Slide 5: Loan Production, Loan Servicing, Investment Management
Loan Production Loan Servicing Investment Management Large and growing servicing portfolio of nearly 1.7 million customers Organic growth due to substantial loan production volumes, supplemented by opportunistic bulk mortgage servicing rights (MSR) acquisitions Scale and technology investments drivi
Slide 6: Hedging Approach Moderates the Volatility of PFSI's Results
7 Hedging Approach Moderates the Volatility of PFSI’s Results MSR Valuation Changes and Offsets (in millions) PFSI seeks to moderate the impact of interest rate changes on the fair value of its MSR asset through a comprehensive hedge strategy that also considers production-related income In 2019, MS
Slide 7: Balance Sheet Strength and Low Leverage Are Key to Our Success
Balance Sheet Strength and Low Leverage Are Key to Our Success 8 Strong balance sheet with low leverage versus competitors Total debt to equity of 2.7x Diversified liquidity sources and term debt that finances the largest long-term asset (MSRs) Considerable oversight from State regulators, the CFPB,
Slide 8: PennyMac's Enterprise Risk Management (ERM) Foundation
9 PennyMac’s Enterprise Risk Management (ERM) Foundation Effective governance, compliance and operating systems are critical PennyMac has utilized a “three-lines of defense” model to monitor the effectiveness of controls ERM is a fundamental part of our day-to-day operating activities and a core com
Slide 9: PFSI's Unique, Synergistic Partnership with PMT
10 PFSI’s Unique, Synergistic Partnership with PMT Management Agreements Services Agreements Best-in-Class Operating Platform Market Capitalization: $2.3 billion(1) Over 3,600 employees Subsidiaries: PennyMac Loan Services, LLC (PLS) Mortgage production and servicing businesses Holder of required st
Slide 10: Technology Development and Utilization Differentiates PennyMac
11 Technology Development and Utilization Differentiates PennyMac Origination and Fulfillment Workflow Multi-year project nearing completion – focused on automated workflows with sustainable efficiencies and cost savings Incremental implementation through phased release of over 150 modules Customer-
Slide 11: Trends in PennyMac Financial's Businesses
12 Loan Servicing(1) Total Production(1) Trends in PennyMac Financial’s Businesses (1) Source: Inside Mortgage Finance as of 2Q19 Market Share Market Share Correspondent production has driven market share growth historically Consumer-direct and broker-direct lending channels are expected to drive ma
Slide 12: Drivers of Earnings Growth for PennyMac Financial
Drivers of Earnings Growth for PennyMac Financial 13 Organic growth opportunities Expanding our mortgage market presence Infrastructure for new products Continued technology development Scale advantage and efficiency Leverage operational expertise, access to capital and technology investments to ach
Slide 13: Significant Growth in the Current Market Environment
14 Significant Growth in the Current Market Environment Production volumes remain at elevated levels(1) Correspondent acquisitions quarter-to-date totaled $20.7 billion in UPB; locks totaled $23.6 billion Consumer-direct originations quarter-to-date totaled $1.8 billion in UPB; locks totaled $3.0 bi
Slide 14: Significant Growth in the Current Market Environment
Significant Growth in the Current Market Environment Production volumes remain at elevated levels) = Correspondent acquisitions quarter-to-date totaled $20.7 billion in UPB; locks totaled $23.6 billion = Consumer-direct originations quarter-to-date totaled $1.8 billion in UPB; locks totaled $3.0 bil
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