Pennymac Financial Services, Inc. · NYSE:PFSI

Pennymac Financial Services — Q4 2025 Earnings Presentation

32 slides from Pennymac Financial Services's earnings presentation, Jan 29, 2026

  1. Slide 1: 4Q25 Earnings Report

    4Q25 EARNINGS REPORT PennyMac Financial Services, Inc. January 2026

  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: Fourth Quarter Highlights

    FOURTH QUARTER HIGHLIGHTS Financial results impacted by increased runoff of mortgage servicing rights, which outpaced the growth in production-related income 4Q25 Production Servicing Results Segment Segment Net Diluted Pretax Pretax income EPS(1) income income $107mm $1.97 $127mm $37mm Pretax incom

  4. Slide 4: 2025 Was Another Year of Steady Growth and Consistent Profitability

    2025 WAS ANOTHER YEAR OF STEADY GROWTH AND CONSISTENT PROFITABILITY Financial Highlights Production Segment Highlights Total Volumes(1) (UPB in billions) - up 25% Y/Y 2025 12% 38% Y/Y Growth 2024 Pretax Income (in millions) - up 19% Y/Y Return on 2025 Equity in Pretax Income 2024 Servicing Segment H

  5. Slide 5: 4Q25 Strategic Update

    4Q25 STRATEGIC UPDATE ™ PENNYMAC

  6. Slide 6: Delivering Double-Digit Operating Returns on Equity

    DELIVERING DOUBLE-DIGIT OPERATING RETURNS ON EQUITY Annualized Operating ROE(1) Mortgage Banking Operating Pretax Income ($ in millions) Servicing net of valuation related changes(1) Production • Through 2026, we expect operating returns on equity to move from low double digits to mid-to-high teens

  7. Slide 7: 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) Refinance recapture (inc. CES)(3) • Strong production > 7.00% segment results in 2025 6.50 - 6.99% driven by successful 6.00 - 6.4

  8. Slide 8: The Vesta Transformation: Driving Consumer Direct Growth and Efficiency

    THE VESTA TRANSFORMATION: DRIVING CONSUMER DIRECT GROWTH AND EFFICIENCY Loan Officer Time Average Loan Spent Locking a Loan Processing Time ~25% (per call) (end-to-end) ~50% efficiency gains reduced loan for loan officers processing time SALES FULFILLMENT ● Enables loan officers to ● Increases capacity wit

  9. Slide 9: A Tech-Enabled Origination Experience to Retain Customers for Life

    A TECH-ENABLED ORIGINATION EXPERIENCE TO RETAIN CUSTOMERS FOR LIFE Leveraging Vesta Deeper Servicing Integrations Our new LOS enables growth in Anticipating borrower needs through capacity, quicker closing times and real-time data to provide timely, higher conversion rates with a personalized loan s

  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) Acquisitions for PFSI(1) Acquisitions for PMT(2) Originations Locks Originations Locks Total Locks(3) January (estimated) January (estimated) January (e

  13. Slide 13: Drivers of Production Segment Results

    DRIVERS OF PRODUCTION SEGMENT RESULTS 4Q24 3Q25 4Q25 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 $733.6 billion in UPB at December 31, Loan Servicing Portfolio Composition 2025, up 2% Q/Q and 10% Y/Y (UPB in billions) • Sold $24 billion in UPB of low note-rate Ginnie Mae MSR; servicing transfer was completed after quarter-end • Producti

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

    SERVICING PROFITABILITY EXCLUDING VALUATION-RELATED CHANGES 4Q24 3Q25 4Q25 basis basis basis $ in millions points⁽¹⁾ $ in millions points⁽¹⁾ $ in millions points⁽¹⁾ Loan servicing fees $ 472.6 28.8 $ 535.1 30.2 $ 532.2 29.4 Earnings on custodial balances and deposits and other income 109.7 6.7 133.6

  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 ● In 4Q25, gains from changes in fair value inputs on MSR ($ in millions) were offset by hedging declines and costs MSR fair value change before realization of cash flows ● Hedge costs are expected to remain

  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) 5th largest in the U.S.(2) Servicing Portfolio UPB(2) (in billions) Correspondent Broker Consumer Production Direct Direct Leading mark

  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) 6.30% 6.18% 10-year Treasury Bond Yield(2) 4.15% 4.17% U.S. Origination Market Forecast(3) Macroeconomic Metrics(4) (UPB in trillions) 12/31/24 3/31/25 6/30/25 9/30/25 12/31/25 10-year Treasury bond yield 4.6%

  22. Slide 22: Acquisitions and Originations by Product

    ACQUISITIONS AND ORIGINATIONS BY PRODUCT Unaudited ($ in millions) 4Q24 1Q25 2Q25 3Q25 4Q25 Correspondent Acquisitions Conventional Conforming - for PMT $ 3,241 $ 2,437 $ 2,740 $ 2,786 $ 2,903 Conventional Conforming - for PFSI 13,567 8,961 13,521 13,444 14,525 Government - for PFSI 11,018 11,263 13

  23. Slide 23: Interest Rate Locks by Product

    INTEREST RATE LOCKS BY PRODUCT Unaudited ($ in millions) 4Q24 1Q25 2Q25 3Q25 4Q25 Correspondent Locks Conventional Conforming - for PMT $ 2,741 $ 2,210 $ 3,009 $ 3,364 $ 3,282 Conventional Conforming - for PFSI 13,810 9,988 14,697 13,936 14,669 Government - for PFSI 11,088 12,107 13,960 10,965 13,08

  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 4Q24 1Q25 2Q25 3Q25 4Q25 4Q24 1Q25 2Q25 3Q25 4Q25 Government-insured 719 718 721 722 721 Government-insured 44 45 45 45 45 Conventional Conforming 770 768 769 770 769 Conventional Confor

  26. Slide 26: MSR Asset Valuation

    MSR ASSET VALUATION December 31, 2025 Mortgage Unaudited ($ in millions) Servicing Rights Pool UPB(1) $462,020 Weighted average coupon 5.0% Weighted average servicing fee/spread 0.39% Weighted average prepayment speed assumption (CPR) 9.0% Fair value $9,599 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, consistent with typical seasonal trends and within ex

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

    PFSI’S OWNED MSR PORTFOLIO CHARACTERISTICS As of December 31, 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 (by

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

    RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA ($ in millions) 4Q24 3Q25 4Q25 Net income $ 104.5 $ 181.5 $ 106.8 Provision for (benefit from) income taxes 24.9 54.9 27.6 Income before provision for income taxes 129.4 236.4 134.4 Depreciation and amortization 13.8 13.0 12.8 (Increase) decrease i

  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 4Q25 Net income $ 69.4 $ 104.5 $ 76.3 $ 136.5 $ 181.5 $ 106.8 (Increase) decrease in fair value of MSRs and MSLs

  32. Slide 32: PennyMac Financial Services

    ™ PENNYMAC FINANCIAL SERVICES,

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