Pennymac Financial Services, Inc. · NYSE:PFSI
Pennymac Financial Services — New PennyMac Financial Services — Merger or Acquisition (September 2018)
13 slides from Pennymac Financial Services's merger presentation, Sep 12, 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: PennyMac Financial Is a Leader in the Mortgage Industry
3 (1) As of or through June 30, 2018. LTM = Last 12 months (2) Inside Mortgage Finance as of 2Q18 (3) Market Capitalization as of August 31, 2018 including Class A Common Stock and PNMAC Partnership Units exchangeable for PFSI Class A common stock PennyMac Financial Is a Leader in the Mortgage Indus
Slide 3: Mortgage Market Environment
5 Mortgage Market Environment Mortgage Origination Forecasts(3) ($ in trillions) 30-year fixed mortgage rates have averaged 4.44% thus far in 2018, the highest average rate since 2011 Resulting in a significant reduction in refinancing volumes Home sales have slowed recently(2) Higher mortgage rates
Slide 4: Overview of PennyMac Financial's Businesses
Overview of PennyMac Financial’s Businesses 6 Highly-experienced management team; 120 of the most senior executives have an average 25 years of relevant industry experience and an average 7 years at PennyMac Operating platform has been developed organically and is highly scalable Commitment to stron
Slide 5: Leadership in Technology Remains Core to Our Success
7 Leadership in Technology Remains Core to Our Success Consumer Direct Released our consumer-facing mortgage access center, making the loan application and management processes easier and faster than ever Provides key functionality necessary to drive further non-portfolio originations and market sha
Slide 6: Trends in PennyMac Financial's Businesses
Loan Servicing(1) Total Production(1) Trends in PennyMac Financial’s Businesses (1) Source: Inside Mortgage Finance Market Share Market Share 8 Market share growth in each full-year period since IPO Modest dip in market share during 1H18 reflects a combination of factors Maintained pricing disciplin
Slide 7: PennyMac Financial's Production Business Consists of Three Channels
9 PennyMac Financial’s Production Business Consists of Three Channels Strong growth in purchase volume and non-portfolio volume Purchase volume up 83% Y/Y and non-portfolio accounted for 17% of 2Q18 volume, up from 8% in 2Q17 Continue to grow full-doc and purchase-money loans to offset decline in st
Slide 8: Loan Servicing portfolio growth
10 (UPB in billions) Mortgage production driving consistent portfolio growth across different interest rate / prepayment environments #1 non-bank GNMA loan servicer(3) with portfolio of $167 billion in UPB #13 conventional conforming loan servicer(3) with $78 billion in UPB subserviced for PMT Organ
Slide 9: Improved Financing for Ginnie Mae MSRs at Lower Cost
11 Improved Financing for Ginnie Mae MSRs at Lower Cost(1) (1) Further described in PFSI’s Current Report on Form 8-K filed on December 21, 2016 (2) Effective advance rate (3) Pro forma GMSR Issuer Trust balance, leverage and term following the issuance of Ginnie Mae Secured Term Note Series 2018-GT
Slide 10: Investment Management Segment Highlights
Investment Management Segment Highlights 12 (1) As of June 30, 2018 (2) ESS = Excess Servicing Spread (3) As of June 30, 2018, except for credit risk transfer which is presented on a pro forma basis reflecting the settlement of the commitments to fund deposits securing CRT agreements related to our
Slide 11: Origination market transition presents challenges and opportunities
13 Origination market transition presents challenges and opportunities Continued competition expected for the foreseeable future as originators adjust their operations and strategies to the current market environment More opportunities to acquire bulk MSR portfolios – PennyMac Financial is well posi
Slide 12: Reorganization Proposed to Simplify Corporate Structure
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 14 Reorganization Proposed to Simplify Corporate Structure No change in ownership percentages as a result of t
Slide 13: Reorganization Proposed to Simplify Corporate Structure
Reorganization Proposed to Simplify Corporate Structure = 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 Key Implications for Existing Stockholders + Simpl
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