8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 3,  2017

PennyMac Financial Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-35916	80-0882793
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

3043 Townsgate Road, Westlake Village, California	91361
(Address of principal executive offices)	(Zip Code)

(818) 224‑7442

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02Results of Operations and Financial Condition.

On August 3, 2017, PennyMac Financial Services, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended June 30,  2017.  A copy of the press release and the slide presentation used in connection with the Company’s recorded presentation of financial results were made available on August 3, 2017 and are furnished as Exhibit 99.1 and Exhibit 99.2, respectively.

The information in Item 2.02 of this report, including the exhibits hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of Section 18, nor shall it be deemed incorporated by reference into any disclosure document relating to the Company, except to the extent, if any, expressly set forth by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit No.	Description
99.1	Press Release, dated August 3, 2017, issued by PennyMac Financial Services, Inc. pertaining to its financial results for the fiscal quarter ended June 30,  2017.
99.2	Slide Presentation for use beginning on August 3, 2017 in connection with a recorded presentation of financial results for the fiscal quarter ended June 30,  2017.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PENNYMAC FINANCIAL SERVICES, INC.
Dated:  August 4, 2017	/s/ Andrew S. Chang
	Andrew S. Chang Senior Managing Director and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated August 3, 2017, issued by PennyMac Financial Services, Inc. pertaining to its financial results for the fiscal quarter ended June 30,  2017.
99.2	Slide Presentation for use beginning on August 3, 2017 in connection with a recorded presentation of financial results for the fiscal quarter ended June 30,  2017.

EX-99.1

Exhibit 99.1

Media	Investors
Stephen Hagey	Christopher Oltmann
(805) 530-5817	(818) 264-4907

PennyMac Financial Services, Inc. Reports

Second Quarter 2017 Results

Westlake Village, CA, August 3, 2017 – PennyMac Financial Services, Inc. (NYSE: PFSI) today reported net income of $50.7 million for the second quarter of 2017, on revenue of $201.7 million.  Net income attributable to PFSI common stockholders was  $10.5 million, or $0.44 per diluted share.   Book value per share increased to  $16.40, up from $16.01 at March 31, 2017.

Second Quarter 2017 Highlights

· Pretax income was $58.0 million, down 7 percent from the prior quarter and down 31 percent from the second quarter of 2016; the quarter-over-quarter decrease reflects a loss in the servicing segment attributable to mortgage servicing rights (MSR) valuation-related changes 

· Production segment pretax income was  $66.7 million, up 40 percent from the prior quarter and down 36 percent from the second quarter of 2016

o Total loan production activity of $17.6 billion in unpaid principal balance (UPB), up 18 percent from the prior quarter and 9 percent from the second quarter of 2016

o $16.3 billion in UPB of correspondent production, up 17 percent from the prior quarter and 12 percent from the second quarter of 2016

o $1.3 billion in UPB of consumer direct originations, up 23 percent from the prior quarter and down 16 percent from the second quarter of 2016

o Interest rate lock commitments (IRLCs) on correspondent government and consumer direct loans totaled $13.5 billion, up 21 percent from the prior quarter and up 4 percent from the second quarter of 2016

· Servicing segment pretax loss was  $11.2 million,  compared to $13.4 million of pretax income in the prior quarter and a pretax loss of $21.0 million in the second quarter of 2016

o Servicing segment pretax income excluding valuation-related changes was $15.3 million, down 31 percent from the prior quarter and 26 percent from the second quarter of 20161

o Acquired four bulk portfolios of Ginnie Mae MSRs with a combined UPB of approximately $16.2  billion

§ Includes completion of the previously announced acquisition of $4.3 billion of Ginnie Mae MSRs

o Servicing portfolio reached $229.0 billion in UPB, up 13 percent from March 31, 2017, and 33 percent from June 30, 2016

· Investment Management segment pretax income was  $2.5 million, compared to $1.1 million in the prior quarter and $0.7 million in the second quarter of 2016

o Net assets under management were $1.6 billion,  essentially the same as $1.6 billion at March 31, 2017 and June 30, 2016

o The Investment Funds agreed to sell their remaining assets to a third party pursuant to agreements that are expected to close in 3Q17 and will reduce net assets under management by approximately $145 million2

o After quarter end, PennyMac Mortgage Investment Trust (NYSE: PMT) issued preferred shares that will increase net assets under management by $195 million

· The Board of Directors authorized a stock repurchase program for up to $50 million of outstanding Class A common stock

 “PennyMac Financial has grown to become the largest issuer of new Ginnie Mae securities, the fourth largest mortgage producer overall and a top-ten loan servicer.” said President and CEO David Spector.  “Our second quarter performance reflects our position as a large player in a highly competitive market.  While the interest rate environment was volatile, with mortgage rates declining overall for the quarter, our operations performed well, and our strong capital position allowed us to grow despite the smaller origination market this year.  Notably, in our correspondent channel, we expanded total lock volumes by nearly $4 billion from the first quarter.  In our consumer direct channel, where we can source loans from a large portfolio of existing customers, we believe our volumes fared better than other consumer direct lenders who depend primarily on the refinance market.  Lower interest rates led to fair value losses on our mortgage servicing rights from higher expected prepayment activity, but the rate changes were not of a magnitude to generate significant offsetting gains from our hedge.  Looking ahead, we intend to continue pursuing our growth initiatives and invest in expanding the capabilities of PennyMac’s operating platform.”

^1. Excludes changes in the fair value of MSRs, the ESS liability, and gains/(losses) on hedging derivatives which were $(36.9) million, $7.2 million, and $(2.0) million, respectively, and reversal of provision for credit losses on active loans of $5.3million in the second quarter.

^2. This transaction is subject to continuing due diligence and customary closing conditions. There can be no assurance regarding the size of the transaction or that the transaction will be completed at all.

2

The following table presents the contribution of PennyMac Financial’s Production, Servicing and Investment Management segments to pretax income:

	Quarter ended June 30, 2017
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
		(in thousands)
Revenue
Net gains on mortgage loans held for sale at fair value	$	74,706	$	23,385	$	98,091	$	—	$	98,091
Loan origination fees		30,193		—		30,193		—		30,193
Fulfillment fees from PMT		21,107		—		21,107		—		21,107
Net servicing fees		—		46,913		46,913		—		93,826
Management fees		—		—		—		6,007		6,007
Carried Interest from Investment Funds		—		—		—		241		241
Net interest income (expense):
Interest income		15,279		19,694		34,973		—		34,973
Interest expense		11,330		25,534		36,864		13		36,877
		3,949		(5,840)		(1,891)		(13)		(1,904)
Other		531		446		977		96		1,073
Total net revenue		130,486		64,904		195,390		6,331		201,721
Expenses		63,780		76,117		139,897		3,864		143,761
Pretax income	$	66,706	$	(11,213)	$	55,493	$	2,467	$	57,960

Production Segment

Production includes the correspondent acquisition of newly originated government-insured mortgage loans for PennyMac Financial’s own account, fulfillment services on behalf of PMT and consumer direct lending.

PennyMac Financial’s loan production activity totaled $17.6 billion in UPB, of which $11.7 billion in UPB was for its own account, and $5.9 billion was fee-based fulfillment activity for PMT.  IRLCs on correspondent government and consumer direct loans totaled $13.5 billion in UPB.

Production segment pretax income was $66.7 million, an increase of 40 percent from the prior quarter and a decrease of 36 percent from the second quarter of 2016.   Production revenue totaled $130.5 million, an increase of 19 percent from the prior quarter and a decrease of 23 percent from the second quarter of 2016.  The quarter-over-quarter increase primarily resulted from a  19 percent increase in net gains on mortgage loans held for sale, reflecting lock volume growth in both the correspondent and consumer direct channels.

The components of net gains on mortgage loans held for sale are detailed in the following table:

	Quarter ended
	June 30,  2017		March 31,  2017		June 30,  2016
	(in thousands)
Receipt of MSRs in loan sale transactions	$	133,062	$	132,143	$	132,472
Mortgage servicing rights recapture payable to PennyMac Mortgage Investment Trust		(1,506)		(1,695)		(1,915)
Provision for representations and warranties, net		(276)		(530)		(2,286)
Cash investment (1)		7,221		(57,574)		(56,763)
Fair value changes of pipeline, inventory and hedges		(40,410)		14,612		58,695
Net gains on mortgage loans held for sale	$	98,091	$	86,956	$	130,203
Net gains on mortgage loans held for sale by segment:
Production	$	74,706	$	62,837	$	115,894
Servicing	$	23,385	$	24,119	$	14,309

⁽¹⁾ Net of cash hedge expense

3

PennyMac Financial performs fulfillment services for conventional conforming and jumbo loans acquired by PMT in its correspondent production business.   These services include, but are not limited to:  marketing;  relationship management;  the approval of correspondent sellers and the ongoing monitoring of their performance;  reviewing loan data, documentation and appraisals to assess loan quality and risk; pricing;  hedging and activities related to the subsequent sale and securitization of loans in the secondary mortgage markets for PMT.  Fees earned from fulfillment of correspondent loans on behalf of PMT totaled $21.1 million in the second quarter, up 27 percent  from $16.6 million in the prior quarter and up 10 percent from $19.1 million in the second quarter of 2016.   The quarter-over-quarter increase in fulfillment fee revenue was driven by an increase in acquisition volumes by PMT.    The weighted average fulfillment fee rate was 36 basis points, unchanged from the prior quarter.

Production segment expenses were $63.8 million, a 2 percent increase from the prior quarter and a 2 percent decrease from the second quarter of 2016.

Servicing Segment

Servicing includes income from owned MSRs, subservicing and special servicing activities.  Servicing segment pretax loss was $11.2 million compared with pretax income of $13.4 million in the prior quarter and a pretax loss of $21.0 million in the second quarter of 2016.   Servicing segment revenues totaled $64.9 million, a  27 percent decrease from the prior quarter and a 102 percent increase from the second quarter of 2016.  The quarter-over-quarter decrease was primarily due to  a decrease in net loan servicing fees.

Net loan servicing fees totaled $46.9 million and included $134.2 million in servicing fees reduced by $55.5 million of amortization and realization of MSR cash flows.   Amortization and realization of MSR cash flows increased 14 percent from the prior quarter, driven by portfolio growth and higher projected prepayment activity due to a decline in mortgage interest rates during the quarter.  MSR fair value losses and impairment for MSRs carried at the lower of amortized cost or fair value was $36.9 million,  and the change in fair value of the ESS liability resulted in a $7.2 million gain,  both driven by higher projected prepayment activity from lower interest rates.    Hedging losses totaled $2.0 million.  The hedge is primarily designed to offset MSR valuation losses resulting from more significant interest rate declines than those experienced in the second quarter.  The primary offset to the second quarter MSR value decline is expected to be higher production-related income in future periods.

The following table presents a breakdown of net loan servicing fees: 

	Quarter ended
	June 30, 2017		March 31, 2017		June 30, 2016
	(in thousands)
Servicing fees (1)	$	134,192	$	129,315	$	120,738
Effect of MSRs:
Amortization and realization of cash flows (2)		(55,482)		(48,460)		(51,092)
Change in fair value and provision for/reversal of impairment of MSRs carried at lower of amortized cost or fair value		(36,927)		12,701		(125,467)
Change in fair value of excess servicing spread financing		7,156		2,773		17,428
Hedging (losses) gains		(2,026)		(22,166)		64,948
Total amortization, impairment and change in fair value of MSRs		(87,279)		(55,152)		(94,183)
Net loan servicing fees	$	46,913	$	74,163	$	26,555

⁽¹⁾ Includes contractually-specified servicing fees

⁽²⁾ Includes realization of cash flows from the mortgage servicing liability which was previously included  in change in fair value of MSRs. Prior periods have been adjusted accordingly.

4

Servicing segment revenue also included $23.4 million in net gains on mortgage loans held for sale from the securitization of reperforming government-insured and guaranteed loans, compared with  $24.1 million in the prior quarter and $14.3 million in the second quarter of 2016. These loans were previously purchased out of Ginnie Mae securitizations (EBOs) and brought back to performing status through PennyMac Financial’s successful servicing efforts, primarily with the use of loan modifications.  Net interest expense totaled $5.8 million, a 40 percent decline from the prior quarter and a 39 percent decrease from the second quarter of 2016. The quarter-over-quarter decline resulted from an $8.8 million increase in interest income, driven by increases in interest income from EBO loans and placement fees from servicing-related escrow balances.  The increase in interest income was partially offset by a $4.9 million increase in interest expense resulting from  the Ginnie Mae MSR term notes and financing of EBO loans held on balance sheet.  

Servicing segment expenses totaled $76.1 million, a 1 percent increase from the prior quarter and a 43 percent increase from the second quarter of 2016.  

The total servicing portfolio reached $229.0 billion in UPB at June 30, 2017, an increase of 13 percent from the prior quarter end and 33 percent from a year earlier, driven by loan production activities and the bulk MSR portfolio acquisitions during the second quarter.  Of the total servicing portfolio, prime servicing was $226.8 billion in UPB and special servicing was $2.2 billion in UPB.  PennyMac Financial subservices and conducts special servicing for $67.1 billion in UPB, an increase of 6 percent from March 31, 2017.  PennyMac Financial’s owned MSR portfolio grew to $157.2 billion in UPB, an increase of 16 percent from the prior quarter end.

The table below details PennyMac Financial’s servicing portfolio UPB:

	Quarter Ended
	June 30, 2017		March 31, 2017		June 30, 2016
	(in thousands)
Loans serviced at period end:
Prime servicing:
Owned
Mortgage servicing rights
Originated	$	105,296,264	$	97,505,384	$	71,436,178
Acquisitions		51,927,645		37,843,903		45,600,625
		157,223,909		135,349,287		117,036,803
Mortgage servicing liabilities		1,698,588		1,900,493		751,193
Mortgage loans held for sale		2,915,346		2,180,760		1,971,903
		161,837,843		139,430,540		119,759,899
Subserviced for Advised Entities		64,924,592		61,144,328		48,894,531
Total prime servicing		226,762,435		200,574,868		168,654,430
Special servicing:
Subserviced for Advised Entities		2,201,340		2,308,468		3,064,105
Total special servicing		2,201,340		2,308,468		3,064,105
Total loans serviced	$	228,963,775	$	202,883,336	$	171,718,535
Mortgage loans serviced:
Owned
Mortgage servicing rights	$	157,223,909	$	135,349,287	$	117,036,803
Mortgage servicing liabilities		1,698,588		1,900,493		751,193
Mortgage loans held for sale		2,915,346		2,180,760		1,971,903
		161,837,843		139,430,540		119,759,899
Subserviced		67,125,932		63,452,796		51,958,636
Total mortgage loans serviced	$	228,963,775	$	202,883,336	$	171,718,535

5

Investment Management Segment

PennyMac Financial manages PMT and two private Investment Funds for which it earns base management fees and may earn incentive compensation.  Net assets under management were $1.6 billion as of June 30,  2017, essentially the same as at March 31, 2017 and June 30, 2016.

Pretax income for the Investment Management segment was $2.5 million compared with $1.1 million in the prior quarter and $0.7 million in the second quarter of 2016.  Management fees, which include base management fees from PMT and the private Investment Funds,  as well as any earned incentive fees from PMT,  increased 12 percent from the prior quarter and 5 percent from the second quarter of 2016.   Management fees in the second quarter included $0.3 million of incentive fees from PMT.

The following table presents a breakdown of management fees and carried interest:

	Quarter ended
		June 30, 2017		March 31, 2017		June 30, 2016
		(in thousands)
Management fees:
PennyMac Mortgage Investment Trust
Base	$	5,334	$	5,008	$	5,199
Performance incentive		304		—		—
		5,638		5,008		5,199
Investment Funds		369		366		531
Total management fees		6,007		5,374		5,730
Carried Interest		241		(128)		244
Total management fees and Carried Interest	$	6,248	$	5,246	$	5,974
Net assets of Advised Entities:
PennyMac Mortgage Investment Trust	$	1,454,832	$	1,458,590	$	1,360,826
Investment Funds		144,744		167,812		201,490
	$	1,599,576	$	1,626,402	$	1,562,316

Investment Management segment expenses totaled $3.9 million, a 10 percent decrease from the prior quarter and a 30 percent decrease from the second quarter of 2016,  primarily resulting from lower compensation expense.

Consolidated Expenses

Total expenses for the second quarter were $143.8 million, a 1 percent increase from the prior quarter and a 16 percent increase from the second quarter of 2016. The year-over-year increase in total expenses was largely driven by the growth in production and servicing volumes.

Executive Chairman Stanford L. Kurland concluded, “PennyMac Financial had a profitable second quarter and has consistently demonstrated an ability to operate in various market conditions as well as invest in initiatives aimed at moving our company forward.  For example, we are excited about the enhancements we are putting in place to expand into the broker channel.  We expect these enhancements to advance the development of our mortgage fulfillment platform which, in addition to supporting our broker channel launch, will support the growth of our consumer direct channel.  Furthermore, we continue to focus on capturing efficiencies across our business to maximize our competitive advantage and returns on equity.  We remain confident that these activities will help ensure our company’s long-term financial and operational success.” 

Management’s slide presentation will be available in the Investor Relations section of the Company’s website at www.ir.pennymacfinancial.com beginning at 1:30 p.m. (Pacific Daylight Time) on Thursday,  August 3,  2017.

6

About PennyMac Financial Services, Inc.

PennyMac Financial Services, Inc. is a specialty financial services firm with a comprehensive mortgage platform and integrated business focused on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market.  PennyMac Financial Services, Inc. trades on the New York Stock Exchange under the symbol “PFSI.”  Additional information about PennyMac Financial Services, Inc. is available at www.ir.pennymacfinancial.com.

This press release 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 results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change.  Words like “believe,” “expect,” “anticipate,” “promise,” “plan,” and other expressions or words of similar meanings, as well as future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements.  Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein.  Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: the continually changing federal, state and local laws and regulations applicable to the highly regulated industry in which we operate; lawsuits or governmental actions that may result from any noncompliance with the laws and regulations applicable to our businesses; the mortgage lending and servicing-related regulations promulgated by the Consumer Financial Protection Bureau and its enforcement of these regulations; our dependence on U.S. government‑sponsored entities and changes in their current roles or their guarantees or guidelines; changes to government mortgage modification programs; the licensing and operational requirements of states and other jurisdictions applicable to the Company’s businesses, to which our bank competitors are not subject; foreclosure delays and changes in foreclosure practices; certain banking regulations that may limit our business activities; our dependence on the multifamily and commercial real estate sectors for future originations of commercial mortgage loans and other commercial real estate related loans; changes in macroeconomic and U.S. real estate market conditions; difficulties inherent in growing loan production volume; difficulties inherent in adjusting the size of our operations to reflect changes in business levels; purchase opportunities for mortgage servicing rights and our success in winning bids; changes in prevailing interest rates; increases in loan delinquencies and defaults; our reliance on PennyMac Mortgage Investment Trust (NYSE: PMT) as a significant source of financing for, and revenue related to, our mortgage banking business; any required additional capital and liquidity to support business growth that may not be available on acceptable terms, if at all; our obligation to indemnify third‑party purchasers or repurchase loans if loans that we originate, acquire, service or assist in the fulfillment of, fail to meet certain criteria or characteristics or under other circumstances; our obligation to indemnify PMT and the Investment Funds if its services fail to meet certain criteria or characteristics or under other circumstances; decreases in the returns on the assets that we select and manage for our clients, and our resulting management and incentive fees; the extensive amount of regulation applicable to our investment management segment; conflicts of interest in allocating our services and investment opportunities among us and our advised entities; the effect of public opinion on our reputation; our recent growth; our ability to effectively identify, manage, monitor and mitigate financial risks; our initiation of new business activities or expansion of existing business activities; our ability to detect misconduct and fraud; and our ability to mitigate cybersecurity risks and cyber incidents.  You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time.  The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this press release are current as of the date of this release only.

7

PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	June 30, 2017		March 31, 2017		June 30,  2016
	(in thousands, except share amounts)
ASSETS
Cash	$	75,978	$	72,767	$	143,715
Short-term investments at fair value		145,440		116,334		41,063
Mortgage loans held for sale at fair value		3,037,602		2,277,751		2,097,138
Derivative assets		70,075		82,001		124,542
Servicing advances, net		291,907		317,513		296,581
Carried Interest due from Investment Funds		71,019		70,778		70,763
Investment in PennyMac Mortgage Investment Trust at fair value		1,372		1,331		1,217
Mortgage servicing rights		1,951,599		1,725,061		1,290,928
Real estate acquired in settlement of loans		822		1,014		1,394
Furniture, fixtures, equipment and building improvements, net		31,418		31,568		27,851
Capitalized software, net		18,197		15,453		6,209
Note receivable from PennyMac Mortgage Investment Trust		150,000		150,000		150,000
Receivable from Investment Funds		1,330		998		1,288
Receivable from PennyMac Mortgage Investment Trust		17,725		20,756		22,054
Deferred tax asset		—		—		4,878
Loans eligible for repurchase		462,487		318,378		286,048
Other		77,767		49,674		50,651
Total assets	$	6,404,738	$	5,251,377	$	4,616,320
LIABILITIES
Assets sold under agreements to repurchase	$	3,021,328	$	2,034,808	$	1,591,798
Mortgage loan participation and sale agreements		243,361		241,638		737,176
Notes payable		429,692		436,725		114,235
Obligations under capital lease		26,641		31,178		22,886
Excess servicing spread financing payable to PennyMac Mortgage Investment Trust at fair value		261,796		277,484		294,551
Derivative liabilities		16,564		15,873		3,734
Mortgage servicing liabilities at fair value		18,295		15,994		4,681
Accounts payable and accrued expenses		132,053		108,489		102,310
Payable to Investment Funds		15,236		18,356		28,209
Payable to PennyMac Mortgage Investment Trust		132,709		164,743		160,712
Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement		73,084		78,712		74,850
Income taxes payable		40,672		31,968		-
Liability for loans eligible for repurchase		462,487		318,378		286,048
Liability for losses under representations and warranties		19,568		19,436		24,277
Total liabilities		4,893,486		3,793,782		3,445,467
STOCKHOLDERS' EQUITY
Class A common stockauthorized 200,000,000 shares of $0.0001 par value; issued and outstanding, 23,472,795, 22,917,545 and 22,189,337 shares, respectively		2		2		2
Class B common stockauthorized 1,000 shares of $0.0001 par value; issued and outstanding, 49, 49 and 50 shares, respectively		—		—		—
Additional paid-in capital		199,146		191,514		176,742
Retained earnings		185,907		175,428		118,120
Total stockholders' equity attributable to PennyMac Financial Services, Inc. common stockholders		385,055		366,944		294,864
Noncontrolling interests in Private National Mortgage Acceptance Company, LLC		1,126,197		1,090,651		875,989
Total stockholders' equity		1,511,252		1,457,595		1,170,853
Total liabilities and stockholders’ equity	$	6,404,738	$	5,251,377	$	4,616,320

8

PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Quarter ended
	June 30,  2017		March 31,  2017		June 30,  2016
	(in thousands, except earnings per share)
Revenue
Net gains on mortgage loans held for sale at fair value	$	98,091	$	86,956	$	130,203
Mortgage loan origination fees		30,193		25,574		28,907
Fulfillment fees from PennyMac Mortgage Investment Trust		21,107		16,570		19,111
Net mortgage loan servicing fees:
Mortgage loan servicing fees
From non-affiliates		112,348		106,467		92,770
From PennyMac Mortgage Investment Trust		10,099		10,486		16,427
From Investment Funds		543		496		723
Ancillary and other fees		11,202		11,866		10,818
		134,192		129,315		120,738
Amortization, impairment and change in estimated fair value of mortgage servicing rights and excess servicing spread		(87,279)		(55,152)		(94,183)
Net mortgage loan servicing fees		46,913		74,163		26,555
Management fees:
From PennyMac Mortgage Investment Trust		5,638		5,008		5,199
From Investment Funds		369		366		531
		6,007		5,374		5,730
Carried Interest from Investment Funds		241		(128)		244
Net interest expense:
Interest income		34,973		23,859		20,554
Interest expense		36,877		29,474		25,466
		(1,904)		(5,615)		(4,912)
Change in fair value of investment in and dividends received from PennyMac Mortgage Investment Trust		76		139		229
Results of real estate acquired in settlement of loans		(119)		(25)		393
Other		1,116		1,465		1,346
Total net revenue		201,721		204,473		207,806
Expenses
Compensation		82,967		85,240		83,147
Servicing		24,702		26,843		13,430
Technology		11,581		11,356		7,733
Loan origination		5,116		4,133		4,910
Professional services		4,523		3,818		4,559
Other		14,872		11,051		9,769
Total expenses		143,761		142,441		123,548
Income before provision for income taxes		57,960		62,032		84,258
Provision for income taxes		7,214		7,646		9,963
Net income		50,746		54,386		74,295
Less: Net income attributable to noncontrolling interest		40,267		43,507		59,820
Net income attributable to PennyMac Financial Services, Inc. common stockholders	$	10,479	$	10,879	$	14,475
Earnings per share
Basic	$	0.45	$	0.48	$	0.66
Diluted	$	0.44	$	0.47	$	0.65
Weighted-average common shares outstanding
Basic		23,388		22,619		22,078
Diluted		77,650		77,143		76,280

###

9

EX-99.2

Exhibit 99.2

Second Quarter 2017 Earnings Report

Forward-Looking Statements 2 This presentation 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 results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like “believe,” “expect,” “anticipate,” “promise,” “plan,” and other expressions or words of similar meanings, as well as future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: the continually changing federal, state and local laws and regulations applicable to the highly regulated industry in which we operate; lawsuits or governmental actions that may result from any noncompliance with the laws and regulations applicable to our businesses; the mortgage lending and servicing-related regulations promulgated by the Consumer Financial Protection Bureau and its enforcement of these regulations; our dependence on U.S. government‑sponsored entities and changes in their current roles or their guarantees or guidelines; changes to government mortgage modification programs; the licensing and operational requirements of states and other jurisdictions applicable to the Company’s businesses, to which our bank competitors are not subject; foreclosure delays and changes in foreclosure practices; certain banking regulations that may limit our business activities; our dependence on the multifamily and commercial real estate sectors for future originations of commercial mortgage loans and other commercial real estate related loans; changes in macroeconomic and U.S. real estate market conditions; difficulties inherent in growing loan production volume; difficulties inherent in adjusting the size of our operations to reflect changes in business levels; purchase opportunities for mortgage servicing rights and our success in winning bids; changes in prevailing interest rates; increases in loan delinquencies and defaults; our reliance on PennyMac Mortgage Investment Trust (NYSE: PMT) as a significant source of financing for, and revenue related to, our mortgage banking business; any required additional capital and liquidity to support business growth that may not be available on acceptable terms, if at all; our obligation to indemnify third‑party purchasers or repurchase loans if loans that we originate, acquire, service or assist in the fulfillment of, fail to meet certain criteria or characteristics or under other circumstances; our obligation to indemnify PMT and the Investment Funds if its services fail to meet certain criteria or characteristics or under other circumstances; decreases in the returns on the assets that we select and manage for our clients, and our resulting management and incentive fees; the extensive amount of regulation applicable to our investment management segment; conflicts of interest in allocating our services and investment opportunities among us and our advised entities; the effect of public opinion on our reputation; our recent growth; our ability to effectively identify, manage, monitor and mitigate financial risks; our initiation of new business activities or expansion of existing business activities; our ability to detect misconduct and fraud; and our ability to mitigate cybersecurity risks and cyber incidents. You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this presentation are current as of the date of this presentation only.

Second Quarter Highlights 3 Pretax income was $58.0 million; diluted earnings per share of common stock were $0.44 Successfully grew production volumes in both the correspondent and consumer direct channels in a competitive market and volatile interest rate environment Deployed capital from the initial term note issuance into mortgage servicing rights (MSRs) both organically-generated from loan production and bulk portfolio acquisitions Book value per share increased to $16.40 from $16.01 at March 31, 2017 and from $13.29 at June 30, 2016 Production segment pretax income was $66.7 million, up 40% from 1Q17 and down 36% from 2Q16 Total production volume was $17.6 billion in unpaid principal balance (UPB), up 18% from 1Q17 and 9% from 2Q16 Total correspondent government and consumer direct locks were $13.5 billion in UPB, up 21% from 1Q17 and 4% from 2Q16 Servicing segment pretax loss of $11.2 million compared to $13.4 million of pretax income in 1Q17 and a pretax loss of $21.0 million in 2Q16 Valuation-related changes include a $36.9 million decrease in MSRs, a $7.2 million gain due to the change in fair value of the excess servicing spread (ESS) liability and $2.0 million in hedging losses Pretax income excluding valuation-related changes was $15.3 million, down 31% from 1Q17, and 26% from 2Q16 Acquired four bulk portfolios of Ginnie Mae MSRs with a combined UPB of approximately $16.2 billion Includes completion of the previously announced acquisition of $4.3 billion of Ginnie Mae MSRs Servicing portfolio grew to $229.0 billion in UPB, up 13% from March 31, 2017 and 33% from June 30, 2016

Second Quarter Highlights (continued) 4 Investment Management segment pretax income was $2.5 million, up from $1.1 million in 1Q17 and $0.7 million in 2Q16 Net assets under management (AUM) were $1.6 billion, essentially the same as $1.6 billion at March 31, 2017 and June 30, 2016 The Investment Funds agreed to sell their remaining assets to a third party pursuant to agreement that are expected to close in 3Q17 and will reduce net assets under management by approximately $145 million(1) After quarter end, PennyMac Mortgage Investment Trust (NYSE: PMT) issued preferred shares that will increase net assets under management by $195 million The Board of Directors authorized a stock repurchase program for up to $50 million of outstanding Class A common stock (1) This transaction is subject to continuing due diligence and customary closing conditions. There can be no assurance regarding the size of the transaction or that the transaction will be completed at all.

Current Market Environment 5 Average 30-year fixed rate mortgage(1) (1) Freddie Mac Primary Mortgage Market Survey. 3.92% as of 7/27/2017 (2) Mortgage Bankers Association Refinance Index (3) Census Bureau (4) Bloomberg (5) Mortgage Bankers Association Mortgage Delinquency Survey. Includes loans that are at least one payment past due but does not include loans in the process of foreclosure 4.14% New and Existing Home Sales(4) (In Millions) Mortgage rates were volatile within a narrow range during the second quarter, with the average 30-year fixed rate mortgage ultimately declining 26 bps to 3.88% during 2Q17(1) Yields on 10-year U.S. Treasuries and Agency MBS decreased 9 bps and 10 bps, respectively After quarter end, mortgage rates have increased to 3.92% as of July 27th Applications for refinance-purposed mortgages slowed 35% from the same period a year ago(2) Current industry-wide application volumes are well below the average over the last five years While home sales have increased in recent years, they have only recovered to levels of the early 2000’s The number of U.S. households has increased 15% since 2000(3) New home sales have lagged behind the pace of recovery in existing home sales Mortgage delinquencies declined to 4.71% at March 31, 2017, down from 4.77% a year ago(5) 3.0% 3.5% 4.0% 4.5% 5.0% Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 3.88% 2 4 6 8 10 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Existing Home Sales New Home Sales

Hedging Approach Continues to Moderate the Volatility of PFSI’s Results 6 PFSI seeks to moderate the impact of interest rate changes through a comprehensive hedge strategy that also considers production-related income MSR fair value declined due to lower mortgage rates resulting in higher projected prepayment activity MSR fair value losses offset by ESS liability gains and increased production income Hedge is primarily designed to offset MSR valuation losses resulting from more significant interest rate declines than those experienced in 2Q17 Primary offset to MSR value decline in 2Q17 is expected to be higher production-related income in future periods MSR Valuation Changes and Offsets ($ in millions) ($125.5) $12.7 ($36.9) $82.3 ($19.4) $5.1 $104.5 $47.5 $66.7 2Q16 1Q17 2Q17 MSR value change Change in value of hedges and ESS liability Production pretax income

Servicing Profitability Excluding Valuation-Related Changes 7 (1) Of average portfolio UPB, annualized (2) Comprised of net gains on mortgage loans held for sale at fair value and net interest income related to EBO loans (3) Changes in fair value do not include realization of MSR cash flows, which are included in amortization and realization of MSR cash flows above (4) Includes fair value changes and provision for impairment (5) Considered in the assessment of MSR fair value changes 2Q16 1Q17 2Q17 Increase in credit losses and provisions for defaulted loans driven in part by a larger transfer from provision for credit losses on active loans as loans changed status Credit losses and provisions for defaulted loans of $(20.4) million and provision for credit losses on active loans of $5.3 million combined for a total of $(15.1) million in 2Q17, a modest increase from a combined total of $(14.6) million in 1Q17 Increases in EBO-related revenue reflect greater buyout activity, funded in part from the term note proceeds, offset by higher interest expense on the term notes and financing of the early buyout (EBO) loans $ basis points (1) $ in millions basis points (1) $ in millions basis points (1) Operating revenue 126.0 $ 29.9 134.9 $ 27.2 143.3 $ 26.5 Amortization and realization of MSR cash flows (51.1) (12.1) (48.5) (9.8) (55.5) (10.3) EBO-related revenue (2) 16.3 3.9 28.1 5.7 32.5 6.0 Servicing expenses: Operating expenses (47.1) (11.2) (57.7) (11.6) (58.8) (10.9) Credit losses and provisions for defaulted loans (7.9) (1.9) (12.4) (2.5) (20.4) (3.8) EBO transaction-related expense (3.2) (0.8) (8.1) (1.6) (6.2) (1.2) Financing expenses: Interest on ESS (5.7) (1.4) (4.6) (0.9) (4.4) (0.8) Interest to third parties (6.6) (1.6) (9.5) (1.9) (15.2) (2.8) Pretax income excluding valuation-related changes 20.7 $ 4.9 22.3 $ 4.5 15.3 $ 2.8 Valuation-related changes (3) MSR fair value (4) (125.5) 12.7 (36.9) ESS liability fair value 17.4 2.8 7.2 Hedging derivatives gains (losses) 64.9 (22.2) (2.0) Provision for credit losses on active loans (5) 1.4 $ (2.2) $ 5.3 $ Servicing segment pretax income (loss) (21.0) $ 13.4 $ (11.2) $ 2Q16 1Q17 2Q17

The broker channel currently comprises approximately 10 percent of the U.S. mortgage origination market Broker channel loan quality has been strong and generally comparable to retail channel production Methods of originating, underwriting, and compliance have improved considerably in recent years Significant opportunity in this channel for PennyMac Financial – set to launch in 4Q17 Leverages our scale and proven ability to produce high volumes of loans Broker channel helps access purchase-money originations Investing to enhance the capabilities of our mortgage fulfillment division (MFD) to support the broker channel Will also have significant benefits for the consumer direct channel Broker margins are typically higher than the correspondent channel since additional value-added services are provided in the broker origination transaction PennyMac’s Broker Channel Set to Launch Soon 8 (1) Inside Mortgage Finance Top Broker Channel Originators(1) Top Wholesale Channel Lenders 1Q17 Mkt. Rank Institution $Bns Share % 1 United Wholesale Mortgage $ 4.5 12.2% 2 Caliber Home Loans 2.7 7.3% 3 Stearns Lending 1.8 4.8% 4 loanDepot 1.5 4.0% 5 Union Bank 1.4 3.8% 6 Freedom Mortgage 1.2 3.1% 7 Provident Funding Associates 1.0 2.8% 8 Flagstar Bank 1.0 2.8% 9 Franklin American Mortgage 1.0 2.8% 10 CMG Mortgage 0.9 2.5% Top 10 broker originators $17.1 46.1% Total broker channel $37.0 100.0% Total U.S. Originations $385.0

Trends in PennyMac Financial’s Businesses Correspondent Production(1) Market Share Market Share Consumer Direct Production(1) Loan Servicing(1) Market Share Investment Management AUM (billions) 9 (1) Source: Inside Mortgage Finance and company estimates. Inside Mortgage Finance estimates total 2Q17 origination market of $455 billion. Correspondent production share estimate is based on PFSI and PMT acquisition volume of $16.3 billion divided by $146 billion for the correspondent market (estimated to be 32% of total origination market). Consumer direct production share is based on PFSI originations of $1.27 billion divided by $263 billion for the retail market (estimated to be 58% of total origination market). Loan servicing market share is based on PFSI’s servicing UPB of $217.0 billion divided by an estimated $10.4 trillion in mortgage debt outstanding as of June 30, 2017. 1.38% 1.70% 1.96% 2.09% 0.0% 0.8% 1.5% 2.3% 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17E 7.34% 9.07% 10.95% 11.19% 0% 2% 4% 6% 8% 10% 12% 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17E 0.41% 0.49% 0.47% 0.48% 0.00% 0.20% 0.40% 0.60% 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17E $1.84 $1.56 $1.63 $1.60 $0.0 $0.5 $1.0 $1.5 $2.0 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17E

10 (UPB in billions) Production Segment Highlights – Correspondent Channel (1) For government-insured and guaranteed loans, PFSI earns income from holding and selling or securitizing the loans (2) For conventional loans, PFSI earns a fulfillment fee from PMT rather than income from holding and selling or securitizing the loans (3) Includes locks related to PMT loan acquisitions, including conventional loans for which PFSI earns a fulfillment fee upon loan funding Correspondent Volume and Mix Correspondent acquisitions by PMT in 2Q17 totaled $16.3 billion, up 17% Q/Q and 12% Y/Y 64% government loans; 36% conventional loans 28% Q/Q growth in conventional conforming acquisitions, and up 14% Y/Y Total lock volume of $18.2 billion, up 26% Q/Q and up 14% Y/Y; government locks totaled $11.2 billion, up 21% Q/Q and 12% Y/Y Increase in acquisition volumes driven by a strong purchase market, with purchase-money loans comprising 82% of total 2Q17 acquisitions volume July correspondent acquisitions totaled $6.1 billion; locks totaled $6.3 billion Continued to add seller relationships, which totaled 589 at quarter end ■ Government loans(1) ■ Total Locks(3) ■ Conventional loans for PMT(2) Selected Operational Metrics 1Q17 2Q17 Correspondent seller relationships 557 589 Purchase money loans, as a % of total acquisitions 73% 82% WA FICO 1Q17 2Q17 Government-insured 696 694 Conventional 752 753 $9.4 $9.3 $10.4 $5.2 $4.6 $5.9 $16.0 $14.5 $18.2 $0 $4 $8 $12 $16 $20 2Q16 1Q17 2Q17

■ Portfolio-sourced fundings ■ Non-portfolio fundings ■ Committed pipeline(1) (UPB in billions) Consumer direct production volume of $1.3 billion in 2Q17, up 23% Q/Q and down 16% Y/Y Committed pipeline totaled $936 million at the end of the second quarter July consumer direct originations totaled $497 million; locks totaled $588 million $799 million committed pipeline at July 31, 2017(1) Significant recapture opportunities from large loan servicing portfolio of over 1.1 million customers As a result, we believe PennyMac’s portfolio-sourced volume fared better than other consumer direct lenders dependent on the refinance market Consumer direct origination volumes will remain predominately portfolio-sourced for the foreseeable future; however, growing non-portfolio volume remains a priority Also pursuing opportunities to refinance FHA borrowers into conventional loans; qualifying borrowers can realize savings from the annual mortgage insurance premium Production Segment Highlights – Consumer Direct Channel Consumer Direct Production Volume (1) Commitments to originate mortgage loans at specified terms at period end 11 $1.5 $1.0 $1.3 $1.2 $0.7 $0.9 $0.0 $0.5 $1.0 $1.5 2Q16 1Q17 2Q17

(UPB in billions) Servicing portfolio totaled $229.0 billion in UPB at the end of the second quarter, up 13% from 1Q17 and 33% from 2Q16 Acquired four bulk portfolios of Ginnie Mae MSRs with a combined UPB of approximately $16.2 billion Portfolios ranged in size from $2 billion to $5 billion, consistent with prior acquisitions and manageable servicing transfers Growth in completed modification volume results in improved borrower outcomes and portfolio performance Servicing Segment Highlights Loan Servicing Portfolio Composition Net Portfolio Growth $17.6 (UPB in billions) (1) 12 (1) Represents PMT’s MSRs (2) Early buyouts of delinquent loans from Ginnie Mae pools during the period (3) Percent of serviced and subserviced loans that have registered on PennyMacUSA.com (4) Includes consumer direct production, government correspondent acquisitions, and conventional conforming and jumbo loan acquisitions subserviced for PMT ■ Prime owned ■ Prime subserviced ■ Special Additions From loan production(4) From MSR acquisitions Selected Operational Metrics 1Q17 2Q17 Loans serviced (in thousands) 1,031 1,102 60+ day delinquency rate 2.7% 2.5% Actual CPR - owned portfolio 12.7% 14.4% Actual CPR - sub-serviced(1) 8.0% 9.6% UPB of completed modifications ($ in millions) $327 $579 0.77064 EBO transactions (in millions)(2) $690 $612 Electronic payments (% of portfolio) 83% 84% Customers registered for the website(3) 74% 76% $202.9 $229.0 ($7.7) $16.2 At 3/31/17 Runoff At 6/30/17 $171.7 $202.9 $229.0 $0 $50 $100 $150 $200 $250 2Q16 1Q17 2Q17

13 ($ in millions) Net assets under management were $1.6 billion, essentially unchanged from March 31, 2017 The Investment Funds agreed to sell their remaining assets to a third party pursuant to agreement that are expected to close in 3Q17 and will reduce net assets under management by approximately $145 million(1); PFSI’s carried interest will begin to be realized PMT issued 7.8 million of preferred shares in July for gross proceeds of $195 million Continued success transitioning PMT’s capital from distressed whole loans toward MSRs and credit risk transfer on its correspondent production Investment Management Segment Highlights Investment Management Revenues Investment management revenues were $6.3 million, up 17% from 1Q17 and 2% from 2Q16 (1) This transaction is subject to continuing due diligence and customary closing conditions. There can be no assurance regarding the size of the transaction or that the transaction will be completed at all. $6.2 $5.4 $6.3 $0 $3 $6 $9 2Q16 1Q17 2Q17 Carried interest & incentive fees Base management fees & other revenue

Financial Results by Operating Segment 14 Unaudited ($ in millions) Note: Figures may not sum exactly due to rounding (1) Represents repricing of payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement (1) 2Q16 104.5 $ (20.9) $ 0.7 $ - $ 84.3 $ 3Q16 149.8 $ (10.7) $ 0.2 $ - $ 139.3 $ 4Q16 93.4 $ 35.1 $ 0.4 $ 0.6 $ 129.4 $ 1Q17 47.5 $ 13.4 $ 1.1 $ - $ 62.0 $ 2Q17 66.7 $ (11.2) $ 2.5 $ - $ 58.0 $ Production Servicing Investment Management Total Pretax Income Non - Segment Activities (1) Production Servicing Investment Management Total Pretax Income Non - Segment Activities (1) Production Servicing Investment Management Total Pretax Income Non - Segment Activities (1) Production Servicing Investment Management Total Pretax Income Non - Segment Activities

15 Mortgage Banking – Production Segment Results (1) Includes net gains on mortgage loans held for sale, loan origination fees and net interest income; adjusted for expected fallout of consumer direct lock commitments, which was 45% in 2Q17 (2) Includes net gains on mortgage loans held for sale, loan origination fees and net interest income for government-insured correspondent loans; adjusted for expected fallout of government-insured correspondent lock commitments, which was 3% in 2Q17 Production revenues for PFSI’s own account (net gains on mortgage loans held for sale at fair value, loan origination fees, net interest income and other) increased 17% Q/Q Driven by an increase in government correspondent and consumer direct lock volumes, partially offset by lower margins Gross margins (revenue per lock) decreased Q/Q; reflects interest rate volatility and a competitive market In recent quarters, consumer direct revenue per lock adjusted for expected fallout has ranged from 198 bps to 323 bps Correspondent revenue per lock adjusted for expected fallout has ranged from 50 bps to 68 bps Fulfillment fee revenue increased 27% Q/Q due to higher conventional loan acquisitions by PMT Weighted average fulfillment fee rate was 36 basis points, unchanged from 1Q17 Production Segment PCG Locks Consumer Direct Locks Unaudited ($ in thousands) Timeframe Totals Timeframe Totals Revenue 2016 Q2 Conf $ 5,957,343,983 2016 Q2 Conf $ 842,055,443 Net gains on mortgage loans held for sale at fair value $ 62,837 $ 74,706 2016 Q2 Govt $ 10,023,369,957 2016 Q2 Govt $ 2,054,278,801 Loan origination fees 25,574 30,193 2016 Q2 Jumbo $ 7,131,150 2016 Q2 Jumbo $ 4,995,728 Fulfillment fees from PennyMac Mortgage Investment Trust 16,570 21,107 2016 Q2 Total $ 15,987,845,090 2016 Q2 Total $ 2,901,329,972 Net interest income 4,114 3,949 2016 Q1 Conf $ 3,856,825,421 2016 Q1 Conf $ 542,287,910 Other 945 531 2016 Q1 Govt $ 6,510,763,537 2016 Q1 Govt $ 1,682,247,218 110,040 130,486 2016 Q1 Jumbo $ 11,393,814 2016 Q1 Jumbo $ 5,029,100 Expenses 62,536 63,780 2016 Q1 Total $ 10,378,982,772 2016 Q1 Total $ 2,229,564,228 Pretax income $ 47,504 $ 66,706 Production Segment Metrics 3Q16 2Q16 1Q16 PFSI Locks PCG Govt. $ 12,868,000,000 $ 10,023,369,957 $ 6,510,763,537 54% Unaudited ($ in thousands) Consumer Direct $ 3,463,000,000 $ 2,901,329,972 $ 2,229,564,228 30% Production revenues excl. fulfillment fees $ 93,470 $ 109,379 $ 16,331,000,000 $ 12,924,699,929 $ 8,740,327,765 48% As basis points of IRLCs 84 bps 81 bps Revenue per consumer direct lock(1) 218 bps 198 bps 323 bps 307 bps Revenue per correspondent lock(2) 53 bps 50 bps 68 bps 61 bps CDL MARGIN 3.07% 2.98% PCG Govt. MARGIN 0.04% 0.66% Servicing Segment Unaudited ($ in thousands) $ 89,070.83 $ 66,441.01 Revenue $ 4,399.17 $ 42,938.25 Net loan servicing fees $ 26,609 $ 17,519 Net interest expense (9,600) (10,993) Net gains on mortgage loans held for sale at fair value 14,308 13,310 Other 798 (232) 32,115 19,604 Expenses 53,085 59,066 Pretax income $ (20,970) $ (39,462) Set to 211 pixels to match servicing fee schedule width Mortgage Banking Segment Total Pretax income $ 26,534 $ 27,244 Quarter ended September 30, 2015 Quarter ended June 30, 2015 Quarter ended September 30, 2015 Quarter ended June 30, 2015 Quarter ended September 30, 2015 Quarter ended June 30, 2015 Quarter ended March 31, 2017 Quarter ended June 30, 2017 Quarter ended June 30, 2016 Quarter ended March 31, 2016 Quarter ended March 31, 2017 Quarter ended June 30, 2017

Mortgage Banking – Servicing Segment Results(1) (1) See servicing segment profitability analysis on page 7 (2) Includes contractually-specified servicing fees (3) Includes realization of cash flows from mortgage servicing liabilities 16 Servicing segment revenue decreased 27% Q/Q driven by a $27.3 million decrease in net loan servicing fees MSR valuation changes net of hedge and ESS liability fair value changes were a $31.8 million loss versus a $6.7 million loss in 1Q17 Net gains on EBO mortgage loans of $23.4 million, compared to $24.1 million in 1Q17 Interest income increased $8.8 million Q/Q from higher interest income on EBO loans Partially offset by a $4.9 million Q/Q increase in interest expense, due to the term notes issued in 1Q17 and financing of EBO loans held on balance sheet ($ in thousands) ($ in thousands) Production Segment Unaudited ($ in thousands) Revenue Net gains on mortgage loans held for sale at fair value $ 115,895 $ 78,214 Loan origination fees 28,907 22,434 Fulfillment fees from PennyMac Mortgage Investment Trust 18,053 12,935 Net interest income 4,704 3,494 Other 848 239 168,407 117,316 Expenses 64,960 48,908 103447 Pretax income $ 103,447 $ 68,408 Production Segment Metrics Calcs Unaudited ($ in thousands) Net gains on mortgage loans $ 115,895 $ 78,214 As % of IRLCs 3.00% 2.03% #DIV/0! Loan origination fees $ 28,907 $ 22,434 As % of PFSI fundings 0.90% 0.63% #DIV/0! Fulfillment fees from PMT $ 18,053 $ 12,935 Average fulfillment fee Servicing Segment Unaudited ($ in thousands) Revenue Net loan servicing fees $ 74,163 $ 46,913 Interest income 10,923 19,694 Interest expense (20,641) (25,534) Net interest expense (9,718) (5,840) Net gains on mortgage loans held for sale at fair value 24,119 23,385 Other 471 446 89,035 64,904 Expenses 75,619 76,117 Set to 211 pixels to match servicing fee schedule width Pretax (loss) income $ 13,416 $ (11,213) Mortgage Banking Segment Total Pretax income $ 116,863 $ 57,194 Quarter ended September 30, 2015 Quarter ended June 30, 2015 Quarter ended September 30, 2015 Quarter ended June 30, 2015 Quarter ended September 30, 2015 Quarter ended June 30, 2015 Quarter ended June 30, 2016 Quarter ended March 31, 2016 Quarter ended March 31, 2017 Quarter ended June 30, 2017 Quarter ended June 30, 2016 Quarter ended March 31, 2016 Unaudited ($ in thousands) Net loan servicing fees: Loan servicing fees (2) 129,315 $ 134,192 $ Effect of MSRs: Amortization and realization of cash flows (3) (48,460) (55,482) Change in fair value and provision for/recovery of impairment of MSRs carried at lower of amortized cost or fair value 12,701 (36,927) Change in fair value of excess servicing spread financing 2,773 7,156 Hedging (losses) (22,166) (2,026) Total amortization, impairment and change in fair value of MSRs (55,152) (87,279) Net loan servicing fees 74,163 $ 46,913 $ Net Loan Servicing Fees Quarter ended March 31 , 2017 Quarter ended June 30 , 2017

Mortgage Servicing Rights (MSR) Asset Valuation 17 PFSI carries most of its originated MSRs at the lower of amortized cost or fair value (“LOCOM”) MSRs where the note rate on the underlying loan is less than or equal to 4.5% Purchased MSRs are carried at fair value; a portion is subject to ESS liability The fair value of MSRs carried at LOCOM was $0.2 million in excess of the carrying value at June 30, 2017 Note: Figures may not sum exactly due to rounding UPB $100,449 $27,725 $29,050 $157,224 Weighted average coupon 3.73% 3.82% 4.18% 3.83% Prepayment speed assumption (CPR) 9.2% 9.8% 10.7% 9.6% Weighted average servicing fee rate 0.30% 0.30% 0.34% 0.31% Fair value of MSR $1,273.4 $318.1 $360.3 $1,951.8 As a multiple of servicing fee 4.16 3.80 3.63 3.99 Carrying value of MSR $1,273.2 $318.1 $360.3 $1,951.6 Related excess servicing spread liability - - $261.8 - Fair value in excess of carrying value $0.2 June 30, 2017 Unaudited ($ in millions) Lower of amortized cost or fair value Total Fair value subject to excess servicing spread liability Fair value not subject to excess servicing spread liability

Investment Management Segment Results 18 Segment revenue increased 17% Q/Q to $6.3 million Carried interest revenue of $241,000 due to performance of the Investment Funds Includes $304,000 of incentive fees from PMT Segment expenses declined 10% Q/Q, driven by lower compensation expense Entered into an agreement to sell the remaining assets of the Investment Funds Quarter ended June 30, 2015 Center Center Unaudited – ($ in thousands) Revenue Management fees: From PennyMac Mortgage Investment Trust $ 5,008 $ 5,638 From Investment Funds 366 369 5,374 6,007 Carried Interest from Investment Funds (128) 241 Other 152 83 5,398 6,331 Expenses 4,286 3,864 Pretax income $ 1,112 $ 2,467 $ (1,355) Quarter ended December $ 5,742 714 6,456 1,483 (141) 7,798 5,618 $ 2,180 30, 2015 Quarter ended June 30, 2015 Quarter ended June 30, 2017 Quarter ended March 31, 2017

Appendix

Overview of PennyMac Financial’s Businesses Complex and highly regulated mortgage industry requires effective governance, compliance and operating systems PFSI’s platform has been developed organically and is highly scalable Commitment to strong corporate governance, compliance and risk management since inception PFSI is well positioned for continued growth in this market and regulatory environment Loan Production Loan Servicing Investment Management Servicing for owned MSRs and subservicing for Advised Entities Major loan servicer for Fannie Mae, Freddie Mac and Ginnie Mae Industry-leading capabilities in special servicing Organic growth results from loan production, supplemented by MSR acquisitions and PMT investment activity Serve as external manager for investment vehicles focused on investing in mortgage-related assets: Distressed whole loans MSRs and ESS GSE credit risk transfers Investments in prime non-Agency MBS and ABS Multifamily loans and securitization interests Synergistic partnership with PMT Correspondent aggregation of newly originated loans from third-party sellers PFSI earns gains on government-insured loans Fulfillment fees for PMT’s conventional loans Consumer direct origination of conventional and government-insured loans Small balance multifamily origination business 20

Issued MSR- backed term notes 2017 Operations launched De novo build of legacy-free mortgage servicer 2008 2009 2010 2011 2012 2013 2014 2015 Correspondent group established with a focus on operations development and process design Added servicing leadership for prime portfolio and to drive scalable growth Correspondent system launches Expanded infrastructure with flagship operations facility in Moorpark, CA Correspondent leadership team expands Expanded infrastructure in Tampa, FL Became largest non-bank correspondent aggregator PFSI completed initial public offering Expanded infrastructure in Fort Worth, TX Continued organic growth Servicing UPB reaches $100 bn Stockholders’ equity surpasses $1 bn 2016 Substantial growth in consumer direct capacity PFSI Has Developed in a Sustainable Manner for Long-Term Growth 72 128 230 435 1,008 1,373 1,816 2,523 3,099 3,028(1) Employees at year end 21 Disciplined growth to address the demands of the GSEs, Agencies, regulators and our financing partners - Since inception, PennyMac has focused on building and testing processes and systems before adding significant transaction volumes Highly experienced management team has created a robust corporate governance system centered on compliance, risk management and quality control (1) As of June 30, 2017

22 PennyMac Financial Is in a Unique Position Among Mortgage Specialists Industry-leading platform built organically – not through acquisitions Not distracted by legacy/regulatory issues Disciplined, sustainable growth for more than 9 years Focused on building and testing processes and systems before large transaction volumes Distinctive expertise and full range of capabilities across mortgage banking and investment management Loan production, e.g., loan fulfillment systems and operations, correspondent counterparty review and management Credit, e.g., loan program development, underwriting and quality control Capital markets, e.g., pooling and securitization, hedging/interest rate risk management Servicing, e.g., customer service, default management, investor accounting Corporate functions, e.g., enterprise risk management, internal audit, treasury, finance and accounting, legal, IT infrastructure and development Over 3,000 employees Highly experienced management team – 50 senior-most executives have, on average, 25 years of relevant industry experience Strong governance and compliance culture Led by distinguished board which includes eight independent Directors Robust management governance structure with 10 committees that oversee key risks and controls External oversight by regulators, business partners and other third parties Desired structure in place to compete effectively as a non-bank Synergistic partnership with PMT, a leading residential mortgage REIT and long-term investment vehicle Provides access to efficient capital and reduces balance sheet constraints on growth

Opportunity in MSR Acquisitions 23 Why Are MSR Sales Occurring? How Do MSRs Come to Market? Large servicers may sell MSRs due to continuing operational pressures, higher regulatory capital requirements for banks (treatment under Basel III) and a re-focus on core customers/businesses Independent mortgage banks sell MSRs from time to time due to a need for capital Intermittent large bulk portfolio sales ($10+ billion in UPB) Require considerable coordination with selling institutions and Agencies Mini-bulk sales (typically $500 million to $5 billion in UPB) Flow/co-issue MSR transactions (monthly commitments, typically $20-$100 million in UPB) Alternative delivery method typically from larger independent originators Which MSR Transactions Are Attractive? GSE and Ginnie Mae servicing in which PFSI has distinctive expertise MSRs sold and operational servicing transferred to PFSI (not subserviced by a third party) Measurable rep and warranty liability for PFSI PFSI is uniquely positioned to be a successful acquirer of MSRs Proven track record of complex MSR and distressed loan transfers Operational platform that addresses the demands of the Agencies, regulators and financing partners Physical capacity in place to sustain servicing portfolio growth plans Potential co-investment opportunity for PMT in the ESS

24 PFSI’s Mortgage Servicing Rights Investments in Partnership with PMT Excess Servicing Spread (e.g., 12.5bp) MSR Asset (e.g., 25bp servicing fee) Acquired by PFSI from Third-Party Seller(1) PMT has co-invested in Agency MSRs acquired from third-party sellers by PFSI; presently only related to certain Ginnie Mae MSRs PMT acquires the right to receive the ESS cash flows over the life of the underlying loans PFSI owns the MSRs and services the loans (1) The contractual servicer and MSR owner is PennyMac Loan Services, LLC, an indirect controlled subsidiary of PennyMac Financial Services, Inc. (2) Subject and subordinate to Agency rights (under the related servicer or issuer guide) and, as applicable, to PFSI’s pledge of MSRs under a note payable; does not change the contractual servicing fee paid by the Agency to the servicer. Excess Servicing Spread(2) Interest income from a portion of the contractual servicing fee Realized yield dependent on prepayment speeds and recapture Base MSR Income from a portion of the contractual servicing fee Also entitled to ancillary income Bears expenses of performing loan servicing activities Required to advance certain payments largely for delinquent loans Base MSR (e.g., 12.5bp) Acquired by PMT from PFSI(1) Example transaction: actual transaction details may vary materially

Acquisitions, Originations, and Locks by Product 25 Note: Figures may not sum exactly due to rounding Unaudited ($ in millions) Correspondent Acquisitions Conventional 5,171 $ 7,263 $ 7,492 $ 4,632 $ 5,918 $ Government 9,433 11,657 12,544 9,280 10,392 Jumbo 3 1 - - - Total 14,607 $ 18,920 $ 20,036 $ 13,912 $ 16,310 $ Correspondent Locks Conventional 5,957 $ 8,687 $ 6,925 $ 5,184 $ 7,022 $ Government 10,023 12,868 12,289 9,292 11,209 Jumbo 7 2 - - - Total 15,988 $ 21,558 $ 19,215 $ 14,476 $ 18,231 $ Consumer Direct Originations Conventional 355 $ 380 $ 492 $ 305 $ 414 $ Government 1,143 1,297 1,548 730 855 Jumbo 3 - - - - Total 1,501 $ 1,677 $ 2,040 $ 1,035 $ 1,268 $ Consumer Direct Locks Conventional 842 $ 1,048 $ 698 $ 669 $ 805 $ Government 2,054 2,410 1,662 1,145 1,476 Jumbo 5 5 1 - - Total 2,901 $ 3,463 $ 2,362 $ 1,814 $ 2,280 $ Total acquisitions/originations 16,109 $ 20,597 $ 22,076 $ 14,947 $ 17,579 $ Total locks 18,889 $ 25,021 $ 21,576 $ 16,290 $ 20,511 $ UPB of loans fulfilled for PMT 5,174 $ 7,492 $ 5,918 $ 4,632 $ 7,264 $ 1Q17 2Q16 3Q16 4Q16 4Q16 2Q17