Pennymac Financial Services, Inc. · NYSE:PFSI
Pennymac Financial Services — Q3 2026 Earnings Presentation
25 slides from Pennymac Financial Services's earnings presentation, Oct 29, 2026
Slide 1: 3Q26 Earnings Report
3Q26 EARNINGS REPORT PennyMac Financial Services, Inc. October 2026
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
Slide 3: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS 3Q26 Production Servicing Results Segment Segment Net Book value Pretax Pretax income per share loss income $29mm $83.85 $(7)mm $99mm Pretax income excluding Diluted Adjusted Total loan acquisitions PFSI correspondent MSR fair value changes MSR fair value changes EPS(1) EPS(
Slide 4: Constrained Industry Origination Environment
CONSTRAINED INDUSTRY ORIGINATION ENVIRONMENT 30-Yr Fixed Rate Mortgage(1) 3Q26 Rate & Term Agency Deliveries(2) Sept. 2026 Fannie Mae 30-Year CPR(2) Refinance Incentive Pool 7.4% $22B 6.5% <1% Up 93 bps from June 30, 2026 Down ~80% from 1Q26 Lowest level since March 2025 With >50 bp incentive to refin
Slide 5: Business Updates
BUSINESS UPDATES Continued to make progress on the acquisition of Cenlar’s subservicing business and expect the transaction to close in the first quarter of 2027 Given a smaller projected origination market and the realization of efficiencies due to technology, we are completing proactive expense reduc
Slide 6: Recent and Expected Adjusted Returns on Equity
RECENT AND EXPECTED ADJUSTED RETURNS ON EQUITY Annualized Adjusted ROE(1) Mortgage Banking Adjusted Pretax Income ($ in millions) Servicing net of valuation related changes(1) Production Given the smaller origination market and the ongoing execution of our expense adjustments through year-end, fourt
Slide 7: Accelerating AI Automation Across Our Origination Business
ACCELERATING AI AUTOMATION ACROSS OUR ORIGINATION BUSINESS Progress on Origination Processing Automation AI Automation Driving Measurable Results 22 AI agents have been deployed, with more than 205,000 automated agent 35% executions and 200,000 automated document reviews; an additional 17 Remaining
Slide 8: Earnings Potential from Consumer Direct Recapture Opportunity
EARNINGS POTENTIAL FROM CONSUMER DIRECT RECAPTURE OPPORTUNITY (1) (2) Servicing Portfolio UPB Above 5% Note Rate First Lien Refinance Recapture Rates (in billions) 30-year fixed rate mortgage 7.40% ● Nearly all of our servicing portfolio is out-of-the-money in today's rate environment ● Recent improve
Slide 9: Key Operating Metrics & Other Financial Schedules
KEY OPERATING METRICS & OTHER FINANCIAL SCHEDULES
Slide 10: Production Segment – Volume by Channel
PRODUCTION SEGMENT – 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 (3) Total Locks October (Estimated) October (Estimated) October (Estimated)
Slide 11: Drivers of Production Segment Results
DRIVERS OF PRODUCTION SEGMENT RESULTS(1) 3Q25 2Q26 3Q26 Fallout Margin / Fallout Margin / Fallout Margin / Revenue Revenue Revenue ($ in millions) adjusted fulfillment fee (3) adjusted fulfillment fee (3) adjusted fulfillment fee (3) contribution contribution contribution locks (bps)(2) locks (bps)(2)
Slide 12: Servicing Segment
SERVICING SEGMENT Loan Servicing Portfolio Composition • Servicing portfolio totaled $737 billion in UPB at (UPB in billions) September 30, 2026, up slightly from June 30, 2026 • Production volumes more than offset prepayment activity • 60+ day delinquency rate for owned MSR was up slightly from the
Slide 13: Drivers of Servicing Segment Results
DRIVERS OF SERVICING SEGMENT RESULTS 3Q25 2Q26 3Q26 basis basis basis $ in millions points(1) $ in millions points(1) $ in millions points(1) Loan servicing fees $ 535 30.2 $ 536 29.5 $ 548 30.0 Earnings on custodial balances and deposits and other income(2) 122 6.9 119 6.6 110 6.0 Realization of MS
Slide 14: Hedging Approach Moderates the Volatility of PFSI's Results
HEDGING APPROACH MODERATES THE VOLATILITY OF PFSI’S RESULTS MSR Valuation Changes and Offsets ($ in millions) • In 3Q26, gains from changes in fair value inputs on MSR were offset by hedging declines and costs (1) MSR fair value changes before realization of cash flows • Hedge costs were meaningfully
Slide 15: Strong Balance Sheet and Diverse Capital Structures
STRONG BALANCE SHEET AND DIVERSE CAPITAL STRUCTURES Debt-to-Equity (D/E) Ratio • Active management of targeted D/E ratios: ‒ Non-funding D/E ratio increased as funding facilities were utilized to fund cash impacts from hedges as interest rates increased sharply ‒ Proceeds of approximately $490 milli
Slide 16: Appendix
APPENDIX ™ PENNYMAC
Slide 17: 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 3rd largest in the U.S.(1) 4th largest in the U.S.(2) Servicing Portfolio UPB(2) (in billions) Correspondent Broker Consumer Production Direct Direct Leading mark
Slide 18: 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 Average: 19% generate attractive ROEs… U.S. Origination Market(3) 10-Year Treasury Yield(4) (in trillions) …across different market environments… PFSI
Slide 19: Current Market Environment and Macroeconomic Trends
CURRENT MARKET ENVIRONMENT AND MACROECONOMIC TRENDS Average 30-year fixed rate mortgage(1) 10-year Treasury Bond Yield(2) U.S. Origination Market Forecast(3) Macroeconomic Metrics(4) (UPB in trillions) 9/30/25 12/31/25 3/31/26 6/30/26 9/30/26 10-year Treasury bond 4.2% 4.2% 4.3% 4.5% 5.3% yield Secon
Slide 20: 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:
Slide 21: 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 • Continuing to increase efficiency
Slide 22: Delinquency Trends and Servicing Advances Outstanding
DELINQUENCY TRENDS AND SERVICING ADVANCES OUTSTANDING Trends in Delinquency and Foreclosure Rates(1) ● Overall, mortgage delinquency rates for the MSR portfolio were up slightly from the prior quarter, consistent with typical seasonal trends and within expected ranges for a predominately government-
Slide 23: Reconciliation of GAAP Net Income to Adjusted EBITDA
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA(1) ($ in millions) 3Q25 4Q25 1Q26 2Q26 3Q26 Net income $182 $107 $82 $22 $29 Provision for income taxes 55 28 22 10 14 Income (loss) before provisions for income taxes 236 134 105 32 43 Depreciation and amortization 13 13 14 14 14 (Increase) decre
Slide 24: Reconciliation of GAAP Items to Non-GAAP Items
RECONCILIATION OF GAAP ITEMS TO NON-GAAP ITEMS Reconciliation of GAAP net income to adjusted net income, adjusted EPS and annualized adjusted return on equity 3Q25 4Q25 1Q26 2Q26 3Q26 Net income $182 $107 $82 $22 $29 (Increase) decrease in fair value of MSRs and MSLs due to changes in valuation inpu
Slide 25: PennyMac Financial Services
™ PENNYMAC FINANCIAL SERVICES,
PennyMac Financial Services — Q3 2026 Earnings Presentation on 6ix