Pennymac Financial Services, Inc. · NYSE:PFSI
Pennymac Financial Services — Merger or Acquisition (August 2018)
10 slides from Pennymac Financial Services's merger presentation, Aug 2, 2018
Slide 1: Proposed Reorganization to Simplify Corporate Structure
Proposed Reorganization to Simplify Corporate Structure
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, the Company’s financial r
Slide 3: PFSI Proposes Corporate Reorganization
PFSI Proposes Corporate Reorganization Key Implications for Existing PFSI Stockholders • Simplified Corporate Structure – all equity holders will be represented by a single class of common stock • Simplified Financial Reporting • Reorganization would – Eliminates allocation of income and equity betw
Slide 4: Why We Are Pursuing This Reorganization Now
Why We Are Pursuing This Reorganization Now 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 ex
Slide 5: Impact of Reorganization on the Existing Classes of Equity Holders
Impact of Reorganization on the Existing Classes of Equity Holders PNMAC Unitholders Existing PFSI Stockholders • 85% of potential tax benefits • 15% of potential tax benefits resulting resulting from future unit exchanges from future unit exchanges pursuant pursuant to the Tax Receivable to the TRA
Slide 6: Comparison of PFSI to "New PennyMac"
Comparison of PFSI to “New PennyMac” “Old” PennyMac PennyMac – Today Financial Financial “New PennyMac” as Proposed • Market capitalization of approximately • Market capitalization of approximately $500 million(1) $1.5 billion(1) • Two classes of common stock • One class of publicly traded common st
Slide 7: Illustrative Transaction Structure
Illustrative Transaction Structure Current PennyMac Financial Structure Proposed Structure Nonpublic Public Class A Common Stockholders Class B Common Stock (1) Common Stock 100% 68% 32% Old New New PFSI (2) PennyMac Market Cap Class A Common Stock $ 479 $ 1,482 Class A Units 1,003 N/A Total $ 1,482
Slide 8: Financial Impact of the Reorganization
Financial Impact of the Reorganization (1) Pro Forma Balance Sheet Pro forma Historical Pro forma Comments at June 30, 2018 adjustments (in millions except book value per share) Total assets $ 6,841.7 $ (10.1) $ 6,831.6 Special dividend Increase in income taxes payable primarily Total liabilities $
Slide 9: Differences in Book Value Per Share
Differences in Book Value Per Share Pro forma book value per share plus special dividend $20.38 Book value per PFSI share at June 30, 2018 21.19 Difference ($0.81) • Difference results from tax-related items which are not distributed proportionately between PFSI and PNMAC • Most of the difference ex
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 10
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