Pennymac Financial Services, Inc. · NYSE:PFSI
Pennymac Financial Services — New PennyMac Financial Services — Merger or Acquisition (August 2018)
10 slides from Pennymac Financial Services's merger presentation, Aug 2, 2018
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 Proposes Corporate Reorganization
PFSI Proposes Corporate Reorganization 3 Reorganization would convert all equity ownership into a single class of publicly-traded common stock of “New PennyMac” Contingent on stockholder approval; closing expected by year-end 2018 Simplified Corporate Structure – all equity holders will be represent
Slide 3: Why We Are Pursuing This Reorganization Now
Why We Are Pursuing This Reorganization Now 4 The existing “Up-C” structure was put in place with PFSI’s IPO in 2013. Since then Corporate Tax Reform The Tax Cuts and Jobs Act reduced the corporate tax rate from 35% to 21% This change reduced the potential value of tax assets created under the exist
Slide 4: Impact of Reorganization on the Existing Classes of Equity Holders
Impact of Reorganization on the Existing Classes of Equity Holders 5 PNMAC Unitholders Existing PFSI Stockholders Give Up 85% of potential tax benefits resulting from future unit exchanges pursuant to the Tax Receivable Agreement (TRA) – but value likely limited due to taxable income outlook Potenti
Slide 5: Comparison of PFSI to "New PennyMac"
Comparison of PFSI to “New PennyMac” 6 Market capitalization of approximately $500 million(1) Two classes of common stock Class A Common Stock Class B Common Stock (representing one vote per Class A Unit of PNMAC; not publicly traded) Approximately 68% of economic ownership is in the form of private
Slide 6: Illustrative Transaction Structure
Illustrative Transaction Structure 7 Proposed Structure PFSI New PennyMac Common Stockholders 100% PNMAC LLC Current PennyMac Financial Structure PFSI PNMAC LLC Public Class A Common Stock 32% Nonpublic Class B Common Stock (1) 68% PFSI Class A Common Stock and PNMAC Class A Units to be contributed
Slide 7: Financial Impact of the Reorganization
8 No change in earnings per share for six months ended June 30, 2018 5 Earnings per share for the year ended December 31, 2017 would increase due to the remeasurement of tax-related items as a result of the Tax Cuts and Jobs Act Historical Pro forma adjustments Pro forma (in millions except book val
Slide 8: Differences in Book Value Per Share
Net tax benefits from Deferred Tax Asset and TRA at PFSI Reflects the recognition of deferred tax liability associated with pre-IPO income as PNMAC unitholders convert; difference exists under current structure when PNMAC unitholders exchange for PFSI Class A Common Stock Differences in Book Value P
Slide 9: Key Takeaways for Proposed Reorganization
Key Takeaways for Proposed Reorganization 10 Simplified corporate structure – single class of common stock Simplified financial reporting Expands potential investor universe and demand for the stock Business strategy, stockholder rights and governance structure remain unchanged
Slide 10: Key Takeaways for Proposed Reorganization
Key Takeaways for Proposed Reorganization Simplified corporate structure — single class of common stock Simplified financial reporting Expands potential investor universe and demand for the stock Business strategy, stockholder rights and governance structure remain unchanged PennyMac’ 10 Financial S
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