Pennymac Financial Services, Inc. · NYSE:PFSI

Pennymac Financial Services — Q3 2025 Earnings Presentation

32 slides from Pennymac Financial Services's earnings presentation, Oct 21, 2025

  1. Slide 1: 3Q25 Earnings Report

    3Q25 EARNINGS REPORT PennyMac Financial Services, Inc. October 2025

  2. Slide 2: Forward-Looking Statements

    FORWARD-LOOKING STATEMENTS 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, our financial results, fut

  3. Slide 3: 3Q25 Results Highlight Earnings Power of Our Balanced Business Model

    3Q25 RESULTS HIGHLIGHT EARNINGS POWER OF OUR BALANCED BUSINESS MODEL 3Q25 Production Servicing Results Segment Segment Net Diluted Pretax Pretax income EPS(1) income income $182mm $3.37 $123mm $157mm Pretax income MSR(1) fair value Annualized Annualized Total loan acquisitions PFSI correspondent exc

  4. Slide 4: 3Q25 Strategic Update

    3Q25 STRATEGIC UPDATE ™ PENNYMAC

  5. Slide 5: Delivering Mid-to-High-Teens Operating Returns on Equity

    DELIVERING MID-TO-HIGH-TEENS OPERATING RETURNS ON EQUITY Annualized Operating ROE(1) Mortgage Banking Operating Pretax Income ($ in millions) Servicing net of valuation related changes(1) Production • 13 - 20% operating return on equity in recent periods of elevated mortgage rates ‒ Servicing expect

  6. Slide 6: Active Capital Management and Growth in Third-Party Subservicing

    ACTIVE CAPITAL MANAGEMENT AND GROWTH IN THIRD-PARTY SUBSERVICING Completed the sale of an MSR portfolio to Annaly Capital Management, Inc. with an agreement to perform all subservicing and recapture activities Capital Optimization Monetization of a lower-returning asset with Transaction proceeds to

  7. Slide 7: Outright Leader in Correspondent Lending

    OUTRIGHT LEADER IN CORRESPONDENT LENDING Last Twelve Months Correspondent Volume(1) Correspondent Market Share(2) (UPB in billions) 15+ Years of 783 Active clients $150B UPB of annual operational across the U.S production capacity excellence with current levels of fixed expense Note: All data are as

  8. Slide 8: Rapidly-Growing Wholesale Lender

    RAPIDLY-GROWING WHOLESALE LENDER Broker direct continues to present a significant opportunity, and ongoing channel growth has driven significant revenue contributions in recent periods Broker Direct Market Share(1) #3 Largest Trusted Tech-forward wholesale alternative and platform with channel essenti

  9. Slide 9: Earnings Potential from Consumer Direct Recapture Opportunity

    EARNINGS POTENTIAL FROM CONSUMER DIRECT RECAPTURE OPPORTUNITY Gov’t. Loans: Note Rates >5%(1) Gov’t. Loan Refinance Recapture Rates (UPB in billions) Refinance recapture(2) • Strong production > 7.00% Refinance recapture (inc. CES)(3) segment results this 6.50 - 6.99% quarter driven by successful recap

  10. Slide 10: Key Operating Metrics & Other Financial Schedules

    KEY OPERATING METRICS & OTHER FINANCIAL SCHEDULES

  11. Slide 11: PennyMac's Market Share Over Time Across Its Businesses

    PENNYMAC’S MARKET SHARE OVER TIME ACROSS ITS BUSINESSES Correspondent Production Market Share(1) Loan Servicing Market Share(1) Broker Direct Market Share(1) Consumer Direct Market Share(1) Note: All figures are for PFSI and include volume fulfilled or subserviced for PMT (1) Historical market share:

  12. Slide 12: Production Segment Highlights – Volume by Channel

    PRODUCTION SEGMENT HIGHLIGHTS – VOLUME BY CHANNEL Correspondent Broker Direct Consumer Direct (UPB in billions) (UPB in billions) (UPB in billions) Conv. Acquisitions - for PFSI(1) Originations Originations Gov’t. Acquisitions - for PFSI(1) Locks Locks Conv. and Jumbo Acquisitions - for PMT(2) Total

  13. Slide 13: Drivers of Production Segment Results

    DRIVERS OF PRODUCTION SEGMENT RESULTS 3Q24 2Q25 3Q25 Revenue Revenue Revenue Fallout Margin / Contribution % of Fallout Margin / Contribution % of Fallout Margin / Contribution % of ($ in millions) Adjusted Fulfillment (net of Loan Production Adjusted Fulfillment (net of Loan Production Adjusted Fulfil

  14. Slide 14: Servicing Segment Highlights

    SERVICING SEGMENT HIGHLIGHTS • Servicing portfolio totaled $716.6 billion in UPB at September 30, Loan Servicing Portfolio Composition 2025, up 2% Q/Q and 11% Y/Y (UPB in billions) • Sold $12 billion in UPB of MSR to Annaly Capital Management, Inc. with subservicing retained; continuing to pursue op

  15. Slide 15: Servicing Profitability Excluding Valuation-Related Changes

    SERVICING PROFITABILITY EXCLUDING VALUATION-RELATED CHANGES 3Q24 2Q25 3Q25 basis basis basis $ in millions points⁽¹⁾ $ in millions points⁽¹⁾ $ in millions points⁽¹⁾ Loan servicing fees $ 462.0 28.9 $ 506.7 29.4 $ 535.1 30.2 Earnings on custodial balances and deposits and other income 136.7 8.5 115.9

  16. Slide 16: Hedging Approach Moderates the Volatility of PFSI's Results

    HEDGING APPROACH MODERATES THE VOLATILITY OF PFSI’S RESULTS MSR Valuation Changes and Offsets ● Strong 3Q25 hedge results driven by adjustments made ($ in millions) to our hedging practices at the beginning of the quarter MSR fair value change before realization of cash flows ‒ More directly incorpor

  17. Slide 17: PFSI's Strong Balance Sheet and Diverse Capital Structures

    PFSI’S STRONG BALANCE SHEET AND DIVERSE CAPITAL STRUCTURES Low Debt-to-Equity (D/E) Ratio • Active management of targeted D/E ratios: ‒ Total D/E near 3.5x with fluctuations largely driven by the origination environment or other market opportunities ‒ Non-funding D/E ratio near 1.5x (1) Non-funding D

  18. Slide 18: Appendix

    APPENDIX ™ PENNYMAC

  19. Slide 19: Comprehensive Mortgage Banking Platform Is a Flywheel

    COMPREHENSIVE MORTGAGE BANKING PLATFORM IS A FLYWHEEL Large volumes of production grow servicing portfolio Loan Production Loan Servicing 2nd largest in the U.S.(1) 6 th largest in the U.S.(1) Servicing Portfolio UPB(2) (in billions) Correspondent Broker Consumer Production Direct Direct Leading mar

  20. Slide 20: Track Record of Strong Performance Across Market Environments

    TRACK RECORD OF STRONG PERFORMANCE ACROSS MARKET ENVIRONMENTS PFSI's Annualized Return on Average Common Stockholders' Equity (ROE) Proven ability to generate attractive Average: 20% ROEs… U.S. Origination Market(3) 10-Year Treasury Yield(4) (in trillions) …across different market environments… PFSI

  21. Slide 21: Current Market Environment and Macroeconomic Trends

    CURRENT MARKET ENVIRONMENT AND MACROECONOMIC TRENDS Average 30-year fixed rate mortgage(1) 6.77% 6.30% 10-year Treasury Bond Yield(2) 4.23% 4.15% U.S. Origination Market Forecast(3) Macroeconomic Metrics(4) (UPB in trillions) 9/30/24 12/31/24 3/31/25 6/30/25 9/30/25 10-year Treasury bond yield 3.8% 4

  22. Slide 22: Acquisitions and Originations by Product

    ACQUISITIONS AND ORIGINATIONS BY PRODUCT Unaudited ($ in millions) 3Q24 4Q24 1Q25 2Q25 3Q25 Correspondent Acquisitions Conventional Conforming - for PMT $ 5,851 $ 3,241 $ 2,437 $ 2,740 $ 2,786 Conventional Conforming - for PFSI 8,092 13,567 8,961 13,521 13,444 Government - for PFSI 11,788 11,018 11,

  23. Slide 23: Interest Rate Locks by Product

    INTEREST RATE LOCKS BY PRODUCT Unaudited ($ in millions) 3Q24 4Q24 1Q25 2Q25 3Q25 Correspondent Locks Conventional Conforming - for PMT $ 7,373 $ 2,741 $ 2,210 $ 3,009 $ 3,364 Conventional Conforming - for PFSI 8,229 13,810 9,988 14,697 13,936 Government - for PFSI 12,448 11,088 12,107 13,960 10,965

  24. Slide 24: Production Segment Highlights – Business Trends by Channel

    PRODUCTION SEGMENT HIGHLIGHTS – BUSINESS TRENDS BY CHANNEL Multi-channel approach provides flexibility and has proven to be a competitive advantage, supporting profitability and pricing discipline while driving growth of the servicing portfolio Correspondent Broker Direct Consumer Direct ● Pennymac re

  25. Slide 25: Credit Characteristics by Acquisition/Origination Period

    CREDIT CHARACTERISTICS BY ACQUISITION/ORIGINATION PERIOD Correspondent Weighted Average FICO Weighted Average DTI 3Q24 4Q24 1Q25 2Q25 3Q25 3Q24 4Q24 1Q25 2Q25 3Q25 Government-insured 715 719 718 721 722 Government-insured 44 44 45 45 45 Conventional Conforming 770 770 768 769 770 Conventional Confor

  26. Slide 26: MSR Asset Valuation

    MSR ASSET VALUATION September 30, 2025 Mortgage Unaudited ($ in millions) Servicing Rights Pool UPB(1) $470,282 Weighted average coupon 4.9% Weighted average servicing fee/spread 0.39% Weighted average prepayment speed assumption (CPR) 8.9% Fair value $9,654 As a multiple of servicing fee 5.3 26 (1)

  27. Slide 27: Technology Driving Efficiencies and Lower Expenses in Servicing

    TECHNOLOGY DRIVING EFFICIENCIES AND LOWER EXPENSES IN SERVICING Direct Servicing Expense(1) Operating Expenses (annual $ cost per loan) (annualized bps of average servicing portfolio UPB) % Government Portfolio • Pennymac’s per loan servicing expenses are among the lowest in • Culture of continuous

  28. Slide 28: Delinquency Trends and Servicing Advances Outstanding

    DELINQUENCY TRENDS AND SERVICING ADVANCES OUTSTANDING Trends in Delinquency and Foreclosure Rates(1) 30-60 Day 60-90 Day 90+ Day In foreclosure ● Overall, mortgage delinquency rates for the MSR portfolio increased slightly from the prior quarter but declined slightly from the prior year period, and

  29. Slide 29: PFSI's Owned MSR Portfolio Characteristics

    PFSI’S OWNED MSR PORTFOLIO CHARACTERISTICS As of September 30, 2025 Loan Remaining Loan size FICO credit 60+ UPB % of Note Seasoning Original Current Segment count maturity ($ in score at Delinquency ($ in billions)⁽⁴⁾ Total UPB rate (months) LTV LTV (in thousands) (months) thousands) origination (b

  30. Slide 30: Reconciliation of GAAP Net Income to Adjusted EBITDA

    RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA ($ in millions) 3Q24 2Q25 3Q25 Net income $ 69.4 $ 136.5 $ 181.5 Provision for (benefit from) income taxes 24.6 (60.0) 54.9 Income before provision for income taxes 93.9 76.4 236.4 Depreciation and amortization 13.8 14.7 13.0 Decrease (increase) in

  31. Slide 31: Reconciliation of GAAP Items to Non-GAAP Items

    RECONCILIATION OF GAAP ITEMS TO NON-GAAP ITEMS Reconciliation of GAAP net income to operating net income and annualized operating return on equity ($ in millions) 3Q24 4Q24 1Q25 2Q25 3Q25 Net income $ 69.4 $ 104.5 $ 76.3 $ 136.5 $ 181.5 Decrease (increase) in the fair value of MSRs and MSLs due to 4

  32. Slide 32: PennyMac Financial Services

    ™ PENNYMAC FINANCIAL SERVICES,

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