8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): October 31, 2019

PennyMac Financial Services, Inc.

(formerly known as New PennyMac Financial Services, Inc.)

(Exact name of registrant as specified in its charter)

Delaware	001-38727	83-1098934
(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	PFSI	New York Stock Exchange

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 2.02    Results of Operations and Financial Condition.

On October 31, 2019,  PennyMac Financial Services, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended September 30,  2019.  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 October 31, 2019 and are furnished as Exhibits 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 October 31, 2019, issued by PennyMac Financial Services, Inc. pertaining to its financial results for the fiscal quarter ended September 30, 2019.
99.2	Slide Presentation for use beginning on October 31, 2019 in connection with a recorded presentation of financial results for the fiscal quarter ended September 30, 2019.

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:  November 1, 2019	/s/ Andrew S. Chang
	Andrew S. Chang
	Senior Managing Director and Chief Financial Officer

EX-99.1

Exhibit 99.1

Media	Investors
Janis Allen	Isaac Garden
(805) 330‑4899	(818) 264‑4907

PennyMac Financial Services, Inc. Reports Third Quarter 2019  Results and Initiates Quarterly Dividend

Westlake Village, CA,  October 31,  2019 – PennyMac Financial Services, Inc. (NYSE: PFSI) today reported net income of $121.5 million for the third quarter of 2019,  or $1.51 per share on a diluted basis, on revenue of $436.3 million.  Book value per share increased to $24.37  from $22.72 at June 30, 2019.

PFSI also announced today that it has initiated a quarterly dividend for common stockholders, and the Board of Directors has declared a cash dividend of $0.12 per share of common stock for the third quarter of 2019.  This dividend will be paid on November 29, 2019, to common stockholders of record as of November 15, 2019.  The dividend level will be reviewed each quarter and determined based on a number of factors, including, among other things, PennyMac Financial’s earnings, liquidity, growth outlook, the capital required to support ongoing growth opportunities, the forward-looking economic environment, and compliance with other internal and external requirements.

Third Quarter 2019 Highlights

· Pretax income was $166.2  million, up 67 percent from the prior quarter and 169 percent from the third quarter of 2018

o Record pretax income and operating earnings1 driven by strong Production segment results and disciplined hedging of mortgage servicing rights (MSRs)

· Production segment pretax income was $179.3  million, up 82 percent from the prior quarter and 599 percent from the third quarter of 2018, driven by record production volumes and higher margins

o Total loan acquisitions and originations were $34.9 billion in unpaid principal balance (UPB), up 44 percent from the prior quarter and 94 percent from the third quarter of 2018

o PFSI’s correspondent interest rate lock commitments (IRLCs) totaled $16.8 billion in UPB, up 33 percent from the prior quarter and 80 percent from the third quarter of 20182

o Direct lending IRLCs were a record $5.6 billion in UPB, up 39 percent from the prior quarter and 184 percent from the third quarter of 2018

o Correspondent acquisitions of conventional loans fulfilled for PennyMac Mortgage Investment Trust (NYSE: PMT)  were $16.6 billion in UPB, up 55 percent from the prior quarter and 122 percent from the third quarter of 2018

¹ In the fourth quarter of 2017, diluted earnings per share were $2.44, which included a $1.79 contribution from the remeasurement of deferred tax items due to enactment of the Tax Cuts and Jobs Act of 2017

² Consists of correspondent government and non-delegated IRLCs

· Servicing segment pretax loss was $18.1 million, versus a  pretax loss of $2.7 million in the prior quarter and pretax income of $33.6 million in the third quarter of 2018

o Valuation-related items included a $295.5  million loss in the fair value of MSRs, partially offset by $254.0 million in hedging and other gains; net impact on pretax income was $(43.3) million and on earnings per share was $(0.39)

o Pretax income excluding valuation-related items was $25.2 million, down 46 percent from the prior quarter and 16 percent from the third quarter of 2018

–Additional technology-related expenses of $7 million over the prior quarter related to the development and completion of our servicing system modules; servicing technology expenses are expected to be $15‑20 million lower in 2020 versus 2019

–$9.3 million increase in early buyout (EBO) loan-related expenses over the prior quarter; EBO loan volume more than doubled from the prior quarter and is expected to benefit future period income from loan redeliveries

–Higher realization of MSR cash flows due to higher prepayment expectations from lower interest rates

o The servicing portfolio grew to $348.5  billion in UPB, up 4 percent from June 30, 2019 and 22 percent from September 30, 2018

· Investment Management segment pretax income was  $5.0 million,  up from $4.0 million in the prior quarter and $2.5 million in the third quarter of 2018

o Revenue was $11.8 million, an increase of 14 percent from the prior quarter and 49 percent from the third quarter of 2018

o Net assets under management (AUM) were $2.2 billion, up 14 percent from June 30, 2019, and 42 percent from September 30, 2018, driven by $253 million in new common equity raised by PMT during the quarter

“PFSI delivered exceptional results this quarter, driven by record mortgage loan volumes and market share gains across all of our production channels combined with continued focus and discipline on hedging our mortgage servicing rights during this rapidly changing interest rate environment,” said President and CEO David Spector.  “Our ability to quickly scale our operational capabilities and respond to the larger market environment reflects multi-year investments in our technology and infrastructure.  As a result, I am pleased to note that PennyMac was the largest correspondent aggregator in the U.S. during the third quarter, as reported by Inside Mortgage Finance.  Continued growth in our servicing portfolio and our customer base to more than 1.7 million consumers provides us with a strong foundation for future growth opportunities, while our hedging performance largely offset fair value losses on our MSR asset.  And finally, our investment management segment continues to perform well, driven by PMT’s capital raising activities in support of its strong organic investment growth opportunities.  Given the current market environment, we expect exceptional performance for PennyMac Financial to continue through the fourth quarter, while the continued growth of our production, servicing and investment management businesses is expected to drive long-term earnings performance.”

Executive Chairman Stanford L. Kurland added, “Now in our twelfth year of operations, PennyMac Financial has established itself as a leading independent mortgage banking enterprise with the demonstrated ability to profitably navigate and grow through varying market environments.  We are positioned for continued growth as we evolve our loan production and servicing platforms to provide sustainable long-term competitive advantages.  Notably, I am pleased to announce the successful completion of our servicing system environment, which we believe is a substantial technological advancement for PennyMac Financial.  It will allow us to fully leverage cloud-based infrastructure and real-time processing, and enable us to reduce costs, increase scalability and decrease response times to changes in regulations and the market environment.  I am immensely proud of PFSI’s success and also pleased to announce that our

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Board of Directors has approved the initiation of a quarterly cash dividend.  At the forefront of our strategic mission is to deliver superior returns and value to our stockholders, and we believe the establishment of a quarterly cash dividend is an important component in the structure of providing long-term, sustainable stockholder returns.”

The following table presents the contributions of PennyMac Financial’s  segments to pretax income:

	Quarter ended September, 2019
	Mortgage Banking						Investment
	Production		Servicing		Total		Management		Total
	(in thousands)
Revenue
Net gains on mortgage loans held for sale at fair value	$	216,132	$	19,600	$	235,732	$	—	$	235,732
Loan origination fees		49,434		—		49,434		—		49,434
Fulfillment fees from PMT		45,149		—		45,149		—		45,149
Net servicing fees		—		66,229		66,229		—		66,229
Management fees		—		—		—		10,098		10,098
Net interest income (expense):
Interest income		22,445		61,007		83,452		—		83,452
Interest expense		18,423		37,936		56,359		21		56,380
		4,022		23,071		27,093		(21)		27,072
Other		324		567		891		1,742		2,633
Total net revenue		315,061		109,467		424,528		11,819		436,347
Expenses		135,777		127,581		263,358		6,792		270,150
Pretax income (loss)	$	179,284	$	(18,114)	$	161,170	$	5,027	$	166,197

Production Segment

Production includes the correspondent acquisition of newly originated government-insured mortgage loans for PennyMac Financial’s  own account, the underwriting and acquisition of loans from correspondent sellers on a non-delegated basis, fulfillment services on behalf of PMT and direct lending through the consumer direct and broker direct channels.

PennyMac Financial’s loan production activity for the quarter totaled $34.9 billion in UPB, $18.3 billion of which was for its own account, and $16.6 billion of which was fee-based fulfillment activity for PMT.  Correspondent government, non-delegated and direct lending IRLCs totaled $22.4 billion in UPB, up 34 percent from the prior quarter and 99 percent from the third quarter of 2018.

Production segment pretax income was $179.3 million, up 82 percent from the prior quarter and 599 percent from the third quarter of 2018.  Production revenue totaled $315.1 million, up 60 percent from the prior quarter and 203 percent from the third quarter of 2018.  The quarter-over-quarter increase was driven by a $91.3 million increase in net gains on loans held for sale, due to higher production volumes and margins  across all production channels.

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

	Quarter ended
	September 30,		June 30,		September 30,
	2019		2019		2018
	(in thousands)
Receipt of MSRs in loan sale transactions	$	227,256	$	176,493	$	147,259
Mortgage servicing rights recapture payable to PennyMac Mortgage Investment Trust		(1,896)		(1,408)		(1,157)
Provision for representations and warranties, net		(1,333)		(727)		(687)
Cash investment(1)		(108,408)		(49,005)		(90,199)
Fair value changes of pipeline, inventory and hedges		120,113		22,180		1,698
Net gains on mortgage loans held for sale	$	235,732	$	147,533	$	56,914
Net gains on mortgage loans held for sale by segment:
Production	$	216,132	$	124,860	$	34,947
Servicing		$  19,600	$	22,673	$	21,967

⁽¹⁾ Net of cash hedging results

PennyMac Financial performs fulfillment services for conventional conforming and jumbo loans acquired by PMT from non-affiliates in its correspondent production business.  These services include, but are not limited to,  marketing;  relationship management;  correspondent seller approval and monitoring;  loan file review; underwriting;  pricing;  hedging and activities related to the subsequent sale and securitization of loans in the secondary mortgage markets for PMT.

Fees earned from the fulfillment of correspondent loans on behalf of PMT totaled $45.1 million in the third quarter, up 53 percent  from the prior quarter and 72 percent from the third quarter of 2018.  The quarter-over-quarter increase in  fulfillment fee revenue was driven by a  55 percent increase in acquisition volumes by PMT,  partially offset by a slight decrease in the weighted average fulfillment fee rate to 27  basis points from 28 basis points in the prior quarter, reflecting discretionary reductions to facilitate successful loan acquisitions by PMT.

Net interest income totaled $4.0 million,  down from $5.0 million in the prior quarter and $15.7 million in the third quarter of 2018.  Net interest income in the third quarter included $1.6 million in incentives which the Company was entitled to receive under one of its master repurchase agreements to finance mortgage loans that satisfied certain consumer relief characteristics, down from $3.9 million and $12.8 million in the second quarter of 2019 and the third quarter of 2018, respectively.  As expected, the lender completed the orderly wind down of the incentive program during the quarter ended September 30, 2019.  The related master repurchase agreement expired on August 31, 2019.

Production segment expenses were $135.8 million, up 38 percent from the prior quarter and 73 percent from the third quarter of 2018 as a result of production volume growth.

Servicing Segment

Servicing includes income from owned MSRs,  subservicing and special servicing activities.  Servicing segment pretax loss was $18.1 million, versus a pretax loss of $2.7 million in the prior quarter and pretax income of $33.6 million in the third quarter of 2018.  Servicing segment revenues totaled $109.5 million, up 14 percent from the prior quarter and down 21 percent from the third quarter of 2018.  The quarter-over-quarter increase was primarily driven by lower net valuation-related losses resulting from the decline in mortgage rates and increased interest income related to custodial deposits, partially offset by higher realization of MSR cash flows.

Net loan servicing fees totaled $66.2 million and included $224.9 million in servicing fees reduced by $117.2 million from the realization of MSR cash flows.  Net valuation-related losses totaled $41.5 million, which included  MSR fair value losses of $295.5 million,  partially offset by hedging gains of $250.1  million and a $3.9 million gain due to the change in fair value of the excess servicing spread liability.  The MSR fair value losses primarily resulted from expectations for increased prepayment activity driven by the continued decline in mortgage rates in the quarter.

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

	Quarter ended
	September 30,		June 30,		September 30,
	2019		2019		2018
	(in thousands)
Servicing fees (1)	$	224,949	$	218,329	$	174,262
Effect of MSRs:
Realization of cash flows		(117,220)		(106,774)		(71,362)
Change in fair value of MSRs		(295,510)		(259,205)		60,883
Change in fair value of excess servicing spread financing		3,864		3,604		(1,109)
Hedging gains (losses)		250,146		203,180		(52,971)
Total change in fair value of MSRs		(158,720)		(159,195)		(64,559)
Net loan servicing fees	$	66,229	$	59,134	$	109,703

⁽¹⁾ Includes contractually-specified servicing fees

Servicing segment revenue also included $19.6 million in net gains on loans held for sale from the securitization of reperforming government-insured and guaranteed loans, compared to $22.7 million in the prior quarter and $22.0 million in the third quarter of 2018.  These loans were previously purchased out of Ginnie Mae securitizations as EBO loans and brought back to performing status through PennyMac Financial’s successful servicing efforts, primarily with the use of loan modifications.  Net interest income totaled $23.1  million, up from  $13.0  million in the prior quarter and $6.4  million in the third quarter of 2018.  Interest income increased by $9.0 million from the prior quarter, primarily driven by higher interest income related to custodial deposit balances, while interest expense decreased by $1.1  million.

Servicing segment expenses totaled $127.6 million,  up 29 percent from the prior quarter driven by additional technology-related expenses of approximately $7  million related to the development and completion of our servicing system modules, and $9.3 million of increased expenses related to EBO loan volume, which more than doubled from the prior quarter.

The total servicing portfolio reached $348.5 billion in UPB at September 30,  2019, an increase of 4 percent from June 30, 2019 and 22 percent from September 30,  2018, with the quarter-over-quarter growth driven by the Company’s loan production activities.  PennyMac Financial subservices and conducts special servicing for $120.6 billion in UPB, an increase of 11 percent from June 30, 2019 and 38 percent from September 30,  2018.  PennyMac Financial’s  owned MSR portfolio grew to $227.9 billion in UPB, an increase of 1 percent from the prior quarter end and 16 percent from September 30, 2018.

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

	September 30,		June 30,		September 30,
	2019		2019		2018
	(in thousands)
Prime servicing:
Owned
Mortgage servicing rights
Originated	$	157,437,101	$	152,546,247	$	138,311,827
Acquisitions		63,778,892		68,153,929		55,347,551
		221,215,993		220,700,176		193,659,378
Mortgage servicing liabilities		2,327,687		1,297,421		1,265,461
Mortgage loans held for sale		4,323,252		3,342,187		2,352,771
		227,866,932		225,339,784		197,277,610
Subserviced for PMT		120,460,120		108,856,599		86,389,458
Total prime servicing		348,327,052		334,196,383		283,667,068
Special servicing:
Subserviced for PMT		147,956		274,626		837,003
Total loans serviced	$	348,475,008	$	334,471,009	$	284,504,071
Mortgage loans serviced:
Owned
Mortgage servicing rights	$	221,215,993	$	220,700,176	$	193,659,378
Mortgage servicing liabilities		2,327,687		1,297,421		1,265,461
Mortgage loans held for sale		4,323,252		3,342,187		2,352,771
		227,866,932		225,339,784		197,277,610
Subserviced		120,608,076		109,131,225		87,226,461
Total mortgage loans serviced	$	348,475,008	$	334,471,009	$	284,504,071

Investment Management Segment

PennyMac Financial manages PMT for which it earns base management fees and may earn incentive compensation.  Net AUM were $2.2 billion as of September 30,  2019,  up 14 percent from June 30, 2019 and 42 percent from September 30,  2018.  The quarter-over-quarter growth was driven by PMT’s  issuance of approximately $253 million of common shares during the third quarter.

Pretax income for the Investment Management segment was $5.0 million,  up from $4.0 million in the prior quarter and $2.5 million in the third quarter of 2018.  Management fees, which include base management and performance incentive fees from PMT,  increased 14 percent from the prior quarter and 56 percent from the third quarter of 2018.  Base management fees were $7.9 million in the quarter, up from $6.8 million in the prior quarter and $5.8 million in the third quarter of 2018 as a result of PFSI’s  increased AUM.  Performance-based incentive fees were $2.2  million, up from $2.0 million in the prior quarter and $0.7 million in the third quarter of 2018, driven by PMT’s  continued strong performance.

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

	Quarter ended
	September 30,		June 30,		September 30,
	2019		2019		2018
	(in thousands)
Management fees:
PennyMac Mortgage Investment Trust
Base	$	7,914	$	6,839	$	5,799
Performance incentive		2,184		1,993		683
		10,098		8,832		6,482
Investment Funds		—		—		(11)
Total management fees		10,098		8,832		6,471
Carried Interest		—		—		(17)
Total management fees and Carried Interest	$	10,098	$	8,832	$	6,454
Net assets of Advised Entities:
PennyMac Mortgage Investment Trust	$	2,219,611	$	1,943,934	$	1,558,563

Investment Management segment expenses totaled $6.8 million,  up 7 percent from the prior quarter and 24 percent from the third quarter of 2018.

Consolidated Expenses

Total expenses for the third quarter were $270.2 million, up 33 percent from the prior quarter and 43 percent from the third quarter of 2018.  The year-over-year change was primarily driven by higher volumes of activity in the Production segment and increased expenses in the Servicing segment as noted earlier.

***

Management’s slide presentation will be available in the Investor Relations section of the Company’s website at ir.pennymacfinancial.com beginning at 1:30 p.m. (Pacific Time) on Thursday,  October 31,  2019.

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.  Additional information about PennyMac Financial Services, Inc. is available at 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, the recently completed corporate reorganization, the expected benefits and market and financial impact of the reorganization 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;

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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; 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 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 investment strategies or expansion of existing business activities or investment strategies; our ability to detect misconduct and fraud; our ability to mitigate cybersecurity risks and cyber incidents; our exposure to risks of loss with real estate investments resulting from adverse weather conditions and man-made or natural disasters; and our organizational structure and certain requirements in our charter documents.  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.

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PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	September 30,		June 30,		September 30,
	2019		2019		2018
	(in thousands, except share amounts)
ASSETS
Cash	$	201,268	$	231,388	$	102,627
Short-term investments at fair value		90,663		75,542		145,476
Loans held for sale at fair value		4,522,971		3,506,406		2,416,955
Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell pledged to creditors		107,678		118,716		133,128
Derivative assets		232,948		168,116		73,618
Servicing advances, net		271,501		271,534		259,609
Investment in PennyMac Mortgage Investment Trust at fair value		1,667		1,637		1,518
Mortgage servicing rights		2,556,253		2,720,335		2,785,964
Real estate acquired in settlement of loans		20,328		8,160		2,493
Operating lease right-of-use assets		53,384		53,977		—
Furniture, fixtures, equipment and building improvements, net		32,221		33,373		31,662
Capitalized software, net		57,975		55,642		36,484
Receivable from PennyMac Mortgage Investment Trust		39,744		34,695		27,467
Loans eligible for repurchase		892,631		1,007,435		889,335
Other		221,967		111,420		86,194
Total assets	$	9,303,199	$	8,398,376	$	6,992,530
LIABILITIES
Assets sold under agreements to repurchase	$	3,538,889	$	2,747,084	$	1,739,638
Mortgage loan participation and sale agreements		514,625		523,177		524,667
Notes payable		1,293,625		1,293,180		1,291,847
Obligations under capital lease		23,881		28,295		9,630
Excess servicing spread financing payable to PennyMac Mortgage Investment Trust at fair value		183,141		194,156		223,275
Derivative liabilities		14,035		15,952		12,693
Operating lease liabilities		72,160		73,461		-
Mortgage servicing liabilities at fair value		34,294		12,948		9,769
Accounts payable and accrued expenses		215,379		151,504		140,363
Payable to PennyMac Mortgage Investment Trust		61,862		65,605		91,818
Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement		46,537		46,537		47,605
Income taxes payable		480,559		441,336		74,158
Liability for loans eligible for repurchase		892,631		1,007,435		889,335
Liability for losses under representations and warranties		19,968		18,709		21,022
Total liabilities		7,391,586		6,619,379		5,075,820
STOCKHOLDERS' EQUITY
Common stock—authorized 200,000,000 shares of $0.0001 par value; issued and outstanding 78,434,556, 78,304,899, and 25,195,436 shares, respectively		8		8		3
Additional paid-in capital		1,328,166		1,317,023		236,457
Retained earnings		583,439		461,966		304,386
Total stockholders' equity attributable to PennyMac Financial Services, Inc. common stockholders		1,911,613		1,778,997		540,846
Noncontrolling interests in Private National Mortgage Acceptance Company, LLC		—		—		1,375,864
Total stockholders' equity		1,911,613		1,778,997		1,916,710
Total liabilities and stockholders’ equity	$	9,303,199	$	8,398,376	$	6,992,530

9

PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Quarter ended
	September 30,		June 30,		September 30,
	2019		2019		2018
	(in thousands, except earnings per share)
Revenue
Net gains on loans held for sale at fair value	$	235,732	$	147,533	$	56,914
Loan origination fees		49,434		36,924		26,485
Fulfillment fees from PennyMac Mortgage Investment Trust		45,149		29,590		26,256
Net loan servicing fees:
Loan servicing fees
From non-affiliates		185,967		180,753		147,182
From PennyMac Mortgage Investment Trust		12,964		11,568		10,071
Other fees		26,018		26,008		17,009
		224,949		218,329		174,262
Change in estimated fair value of mortgage servicing rights and excess servicing spread financing		(158,720)		(159,195)		(64,559)
Net loan servicing fees		66,229		59,134		109,703
Net interest income:
Interest income		83,452		70,900		60,964
Interest expense		56,380		52,924		38,775
		27,072		17,976		22,189
Management fees, net:
From PennyMac Mortgage Investment Trust		10,098		8,832		6,482
From Investment Funds		—		—		(11)
		10,098		8,832		6,471
Carried Interest from Investment Funds		—		—		(17)
Change in fair value of investment in and dividends received from PennyMac Mortgage Investment Trust		66		119		129
Results of real estate acquired in settlement of loans		188		743		194
Other		2,379		2,126		2,605
Total net revenue		436,347		302,977		250,929
Expenses
Compensation		141,132		114,717		103,364
Servicing		47,909		29,008		40,797
Technology		20,385		16,080		15,273
Loan origination		34,851		23,071		7,203
Occupancy and equipment		7,257		7,042		7,117
Professional services		9,682		6,313		7,117
Other		8,934		7,156		8,361
Total expenses		270,150		203,387		189,232
Income before provision for income taxes		166,197		99,590		61,697
Provision for income taxes		44,724		26,894		5,545
Net income		121,473		72,696		56,152
Less: Net income attributable to noncontrolling interest		—		—		41,663
Net income attributable to PennyMac Financial Services, Inc. common stockholders	$	121,473	$	72,696	$	14,489
Earnings per share
Basic	$	1.55	$	0.93	$	0.58
Diluted	$	1.51	$	0.92	$	0.57
Weighted-average common shares outstanding
Basic		78,361		78,335		25,125
Diluted		80,382		79,318		78,913

10

EX-99.2

Exhibit 99.2

Third Quarter 2019 Earnings Report

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 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. These forward-looking statements include statements regarding the Company’s corporate reorganization, the expected benefits of such reorganization and the related impact on existing stakeholders, estimates regarding future market capitalization and the anticipated financial impact of the corporate reorganization. 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; 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 if our 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. Our exposure to risks of loss resulting from adverse weather conditions and man-made or natural disasters; and or organizational structure and certain requirements in our charter documents. 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.

Third Quarter Highlights 3 ▪ Net income was $121.5 million; diluted earnings per share (EPS) were $1.51 – Record pretax income and operating earnings(1) driven by strong Production segment results and disciplined hedging of mortgage servicing rights (MSRs) – Book value per share increased to $24.37 from $22.72 at June 30, 2019 – PFSI has initiated a quarterly cash dividend and its Board of Directors has declared a third quarter cash dividend of $0.12 per share, payable on November 29, 2019, to common stockholders of record as of November 15, 2019 ▪ Production segment pretax income was $179.3 million, up 82% from 2Q19 and 599% from 3Q18 driven by record production volumes and higher margins – Total acquisition and origination volume of $34.9 billion in unpaid principal balance (UPB), up 44% from 2Q19 and 94% from 3Q18 – PFSI’s correspondent lock volume totaled $16.8 billion in UPB, up 33% from 2Q19 and 80% from 3Q18(2) – Direct lending locks were a record $5.6 billion in UPB, up 39% from 2Q19 and 184% from 3Q18 – Correspondent acquisitions of conventional loans fulfilled for PennyMac Mortgage Investment Trust (NYSE: PMT) were $16.6 billion in UPB, up 55% from 2Q19 and 122% from 3Q18 (1) In 4Q17, diluted earnings per share were $2.44, which included a $1.79 contribution from the remeasurement of deferred tax items due to enactment of the Tax Cuts and Jobs Act of 2017 (2) Consists of correspondent government and non-delegated interest rate lock commitments (“IRLCs”)

4 ▪ Servicing segment pretax loss was $18.1 million, versus a pretax loss of $2.7 million in 2Q19 and pretax income of $33.6 million in 3Q18 – Valuation-related items included a $295.5 million loss in the fair value of MSRs, partially offset by $254.0 million in hedging and other gains; net impact on pretax income was $(43.3) million and on EPS was $(0.39) – Pretax income excluding valuation-related items was $25.2 million, down 46% from 2Q19 and 16% from 3Q18 o Additional technology-related expenses of $7 million Q/Q primarily related to the development and completion of our servicing system modules; servicing technology-related expenses are expected to be $15-20 million lower in 2020 versus 2019 o $9.3 million increase in early buyout (EBO) loan-related expenses over the prior quarter; EBO loan volume more than doubled from the prior quarter and is expected to benefit future period income from loan redeliveries o Higher realization of MSR cash flows due to higher prepayment expectations from lower interest rates – Servicing portfolio grew to $348.5 billion in UPB, up 4% from June 30, 2019 and 22% from September 30, 2018 ▪ Investment Management segment pretax income was $5.0 million, up from $4.0 million in 2Q19 and $2.5 million in 3Q18 – Revenue of $11.8 million in 3Q19, an increase of 14% from 2Q19 and 49% from 3Q18 – Net assets under management (AUM) were $2.2 billion, up 14% from June 30, 2019 and 42% from September 30, 2018, driven by $253 million in new common equity raised by PMT during the quarter Third Quarter Highlights (continued)

3.0% 3.5% 4.0% 4.5% 5.0% Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 5 Average 30-year fixed rate mortgage(1) ▪ The Federal Reserve again cut the Fed Funds rate by 25 basis points, reflecting uncertainty due to international trade tensions and concerns about the growth rate of the global economy ▪ The average 30-year fixed rate mortgage in the third quarter was 3.66% and remains at comparable levels in October ▪ Continued decline has led to increased origination volumes and increases to 2019 and 2020 origination forecasts – Average monthly MBA Refinance Index in 3Q19 was 42% higher than in 2Q19 ▪ Home price appreciation has moderated to levels more consistent with wage growth – Tight supply continues to support home prices ▪ Credit markets remain strong, as evidenced by spreads on government-sponsored enterprise (GSE) credit risk transfer (CRT) securities, which tightened relative to 2Q19 ▪ Mortgage delinquency rates remain near all-time lows – The total U.S. loan delinquency rate was 3.53% as of September 30, 2019, down from 3.73% at June 30, 2019 and 3.97% at September 30, 2018(3) Current Market Environment 3.73% 3.64% (1) Freddie Mac Primary Mortgage Market Survey. 3.75% as of 10/24/19 (2) Actual Home Sales: National Association of Realtors (existing) and the Census Bureau (new). Home sales Forecast: Average of Mortgage Bankers Association and Fannie Mae. Actual purchase and total originations: Inside Mortgage Finance. Purchase and total originations forecast: Average of Mortgage Bankers Association, Fannie Mae, Freddie Mac. Actual home price appreciation: FHFA Home Price Index. Forecasted home price appreciation: Average of Mortgage Bankers Association, Fannie Mae, Freddie Mac. (3) Black Knight Financial Services. Includes loans that are 30 days or more past due but not in foreclosure Macroeconomic Forecasts(2) 2016 2017 2018 2019E 2020E 2021E New home sales ('000s) 561 616 620 675 687 743 Existing home sales ('000s) 5,440 5,547 5,339 5,376 5,474 5,699 Total originations ($ in billions) $2,065 $1,810 $1,630 $2,064 $1,856 $1,740 Purchase originations ($ in billions) $1,037 $1,144 $1,141 $1,239 $1,266 $1,325 U.S. Home Price Appreciation (Y/Y % Change) 5.8% 6.9% 6.3% 4.3% 3.3% 2.2% Green: denotes improvement since previous earnings report Red: denotes drop since previous earnings report

6 6 Major Milestone in Advancing Proprietary Technology Servicing System Environment ▪ Completed multi-year initiative to develop a proprietary, workflow-driven servicing system with a modern, scalable and flexible architecture to meet PennyMac’s needs ▪ Full cloud-based infrastructure, real-time processing and modern data management ▪ Tested and implemented through the multi-year, phased release of more than 150 modules ▪ Benefits include reduced costs, increased scalability and greater flexibility to advance workflow management and address regulatory and market changes ▪ Reduces reliance on third-party vendors and further distinguishes PFSI as an industry leader Regular new releases enhancing loan officer and broker productivity: ▪ for connecting consumers with our consumer direct lending division ▪ for connecting approved brokers with our broker direct lending division Production Enterprise Platform ▪ Evolving our production platform using a combination of proprietary and vendor systems to support scale and processes across all production channels ▪ Enables process consistency and efficiency while maintaining a best-in-class customer experience Customer- Facing Portals Pricing and Margin Management Systems ▪ Best-in-industry pricing granularity and real-time pricing updates – can compute and disseminate hundreds of thousands of mid-day price updates within a minute ▪ Sophisticated, proprietary loan bidding system to granularly optimize margins

7 $7.27 $12.32 $21.34 $24.37 6/30/13 12/31/15 12/31/18 9/30/19 7 PFSI Initiates Quarterly Dividend ▪ Strong history of profitability since founding in 2008, driving book value growth(1) ▪ Low leverage versus peers with a debt-to- equity ratio of 2.9x at September 30th, 2019 ▪ Track record of successful capital management including $15 million of stock repurchases since 2017 ▪ Industry-leading Production and Servicing businesses generate significant capital ▪ Broad access to capital in a variety of forms to support future growth Book Value Per Share of PFSI (1) Private National Mortgage Acceptance Company, LLC (PNMAC) commenced operations in 2008 and is a wholly-owned subsidiary of PFSI, which completed its initial public offering in May 2013. ▪ $0.12 per share cash dividend declared for third quarter of 2019 ▪ Establishment of quarterly cash dividend is an important component in the structure of providing long-term, sustainable stockholder returns, while continuing to invest in long-term growth of the business ▪ Reflects PFSI’s strong capital base and balanced business model across different market environments ▪ Dividend level will be reviewed each quarter and determined based on a number of factors, including, among other things, PFSI’s earnings, liquidity, growth outlook, the capital required to support ongoing growth opportunities, the forward-looking economic environment, and compliance with other internal and external requirements ▪ Provides opportunity to broaden universe of potential investors Strong Capital Position Dividend Initiation

Correspondent Production(1) Market Share Market Share Consumer Direct Production(1) Loan Servicing(1) Market Share Broker Direct Production(1) Market Share 8 Trends in PennyMac Financial’s Businesses (1) Source: Inside Mortgage Finance and company estimates. Inside Mortgage Finance estimates total 3Q19 origination market of $700 billion. Correspondent production share estimate is based on PFSI and PMT acquisition volume of $31.5 billion divided by $218 billion for the correspondent market (estimated to be 31% of total origination market). Consumer direct production share is based on PFSI originations of $2.7 billion divided by $390 billion for the retail market (estimated to be 56% of total origination market). Broker direct production share is based on PFSI originations of $676 million divided by $92 billion for the broker market (estimated to be 13% of total origination market). Loan servicing market share is based on PFSI’s servicing UPB of $348.5 billion divided by an estimated $10.9 trillion in mortgage debt outstanding as of June 30, 2019. 2.26% 2.64% 3.06% 3.19% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19E 10.36% 11.61% 13.49% 14.46% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19E 0.56% 0.53% 0.61% 0.68% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19E 0.22% 0.53% 0.74% 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19E

$9.0 $10.6 $14.3 $7.5 $10.7 $16.6 $0.1 $0.4 $0.5 $17.7 $25.3 $36.2 3Q18 2Q19 3Q19 Government loans Conventional loans for PMT Non-delegated loans Total locks 9 (UPB in billions) Correspondent Volume and Mix Production Segment Highlights – Correspondent Channel (3) (4) (5) ▪ Correspondent acquisitions by PMT in 3Q19 totaled $31.5 billion in UPB, up 45% Q/Q and 90% Y/Y – 46% government loans; 54% conventional loans – Government acquisitions of $14.3 billion in UPB, up 36% Q/Q and 60% Y/Y – Conventional conforming acquisitions of $16.6 billion in UPB, up 55% Q/Q and 122% Y/Y – Non-delegated acquisitions increased 32% Q/Q to $531 million in UPB ▪ PFSI’s correspondent lock volume(1) totaled $16.8 billion in UPB, up 33% Q/Q and 80% Y/Y – Delegated government locks totaled $15.9 billion in UPB, up 32% Q/Q and 74% Y/Y – Non-delegated locks totaled $853 million in UPB, up 34% Q/Q and up from $157 million in 3Q18 ▪ Largest correspondent aggregator in the U.S. in 3Q19(2) ▪ Increases in market share and margins driven by our ability to maintain high service levels despite substantially elevated industry volumes ▪ E-note pilot launched with first correspondent seller; first notes funded and financed with a bank warehouse line of credit and delivered to Fannie Mae ▪ October correspondent acquisitions estimated to be $14.2 billion in UPB; locks estimated to be $14.2 billion in UPB (1) Includes correspondent government and non-delegated IRLCs (2) Inside Mortgage Finance for 3Q19 (3) For government-insured, guaranteed and non-delegated loans, PFSI earns income from holding and selling or securitizing the loans (4) For conventional and jumbo loans, PFSI earns a fulfillment fee from PMT rather than income from holding and selling or securitizing the loans (5) Includes locks related to PMT loan acquisitions, including conventional loans for which PFSI earns a fulfillment fee upon loan funding (6) Includes net gains on loans held for sale, loan origination fees and net interest income for government-insured and non-delegated correspondent loans; lock volume adjusted for expected fallout for government-insured correspondent locks (4%) and non-delegated correspondent locks (29%) (7) Based on funded loans subject to fulfillment fee. The rate may reflect discretionary adjustments to facilitate the successful completion of certain loan transactions 2Q19 3Q19 Revenue per fallout-adjusted PFSI correspondent lock(6) 30 36 Weighted average fulfillment fee (bps)(7) 28 27 2Q19 3Q19 Correspondent seller relationships 752 770 Purchase-money loans, as a % of total acquisitions 79% 66% Key Financial Metrics Selected Operational Metrics

$1.3 $2.0 $2.7 $0.7 $1.5 $2.3 3Q18 2Q19 3Q19 Portfolio-sourced fundings Non-portfolio fundings Committed pipeline (UPB in billions) Consumer Direct Production Volume 10 Production Segment Highlights – Consumer Direct Channel (1) (1) Commitments to originate mortgage loans at specified terms at period end (2) Includes net gains on loans held for sale, loan origination fees and net interest income; lock volume adjusted for expected fallout, which was 30% in 3Q19 for consumer direct locks ▪ Consumer direct production volume in 3Q19 totaled $2.7 billion in UPB, up 35% Q/Q and 106% Y/Y ▪ Record volumes and higher margins driven by increased volumes of refinance loans ▪ Improvements in our centralized mortgage fulfillment end-to-end process facilitate increased efficiencies – Growth in sales and fulfillment capacity to address increased opportunity provided by the servicing portfolio – Pull-through of 70% in 3Q19, up from 67% in 2Q19 and 65% in 1Q19 ▪ October consumer direct originations estimated to be $1.1 billion in UPB; locks estimated to be $1.9 billion in UPB – $2.6 billion committed pipeline estimated at October 31, 2019(1) 2Q19 3Q19 Revenue per fallout-adjusted consumer direct lock (bps)(2) 433 481 Purchase-money loans, as a % of total originations 14% 10% Consumer Direct Margin

$70 $289 $433 $41 $153 $243 $111 $442 $676 $64 $249 $382 3Q18 2Q19 3Q19 Conventional loans Government loans Committed pipeline 11 Production Segment Highlights – Broker Direct Channel Broker Direct Production Volume (UPB in millions) (1) (1) Commitments to originate mortgage loans at specified terms at period end (2) Includes net gains on loans held for sale, loan origination fees and net interest income; lock volume adjusted for expected fallout, which was 27% in 3Q19 for broker direct locks ▪ Broker direct production volume in 3Q19 totaled $676 million in UPB, up 53% Q/Q and up from $111 million in 3Q18 – Growth of approved brokers and higher levels of engagement driving increase in market share – 39% Q/Q increase in purchase volume; 71% Q/Q increase in refinance volume ▪ Lock volume of $1.0 billion in UPB, up 42% Q/Q and up from $196 million in 3Q18 ▪ Approved brokers totaled 892 at September 30, 2019, up 14% from June 30, 2019 ▪ Updates to our POWER broker portal include an upgraded interface to improve ease of use, desired navigation and operational outcomes as well as improved infrastructure to support increased transactional activity ▪ October broker direct originations estimated to be $280 million in UPB; locks estimated to be $360 million in UPB – $355 million committed pipeline estimated at October 31, 2019(1) 2Q19 3Q19 Revenue per fallout-adjusted broker direct lock (bps)(2) 98 140 Approved brokers 784 892 Purchase-money loans, as a % of total originations 57% 52% Broker Direct Metrics

$334.5 $348.5 ($20.9) $34.9 At 6/30/19 Runoff Additions from loan production At 9/30/19 (1) 12 Servicing Segment Highlights (1) Owned portfolio in predominantly government-insured and guaranteed loans under the FHA (52%), VA (35%), and USDA (8%) programs (2) Represents PMT’s MSRs. Excludes distressed loan investments (3) Early buyouts of delinquent loans from Ginnie Mae pools during the period (4) Also includes loans servicing released in connection with recent asset sales by PMT (5) Includes consumer direct production, broker direct production, government correspondent acquisitions, and conventional conforming and jumbo loan acquisitions subserviced for PMT (UPB in billions) ▪ Servicing portfolio totaled $348.5 billion in UPB at September 30, 2019, up 4% Q/Q and 22% Y/Y – Organic growth from strong production activity ▪ Prepayment activity increased from the prior quarter due to the decline in mortgage rates ▪ Delinquency rates remain low – Modest increase in PFSI’s owned portfolio reflects seasonality ▪ EBO loan volume more than doubled from the prior quarter; reflects the expanded opportunity driven by lower rates Loan Servicing Portfolio Composition Net Portfolio Growth (UPB in billions) (4) (5) $284.5 $334.5 $348.5 9/30/2018 6/30/2019 9/30/2019 Prime owned Prime subserviced and other 2Q19 3Q19 Loans serviced (in thousands) 1,652 1,704 60+ day delinquency rate - owned portfolio(1) 3.0% 3.4% 60+ day delinquency rate - sub-serviced portfolio(2) 0.4% 0.4% Actual CPR - owned portfolio(1) 15.8% 22.8% Actual CPR - sub-serviced(2) 13.1% 21.1% UPB of completed modifications ($ in millions) $584 $604 EBO loan volume ($ in millions)(3) $868 $1,839 Selected Operational Metrics

Investment Management Revenues (1) 13 Investment Management Segment Highlights Investment Management AUM ($ in billions) ▪ Net AUM as of September 30, 2019 were $2.2 billion, up 14% from June 30, 2019 ▪ PMT successfully raised additional capital in 3Q19 as a result of increased investment opportunities and strong results – PMT raised $198 million in net proceeds from an issuance of 9.2 million of its common shares in an underwritten equity offering – Also raised $55 million in net proceeds from the issuance of 2.5 million common shares through PMT’s “At- The-Market” (ATM) equity offering program ▪ Investment Management revenues increased 14% Q/Q, driven by growth in both base management and performance-based incentives fees ($ in millions) $1.56 $1.94 $2.22 9/30/2018 6/30/2019 9/30/2019 $7.3 $8.4 $9.6 $0.7 $2.0 $2.2 $7.9 $10.4 $11.8 3Q18 2Q19 3Q19 Base management fees & other revenue Performance incentive

14 MSR Valuation Changes and Offsets ($ in millions) Hedging Approach Continues to Moderate the Volatility of PFSI’s Results Note: Figures may not sum exactly due to rounding ▪ PFSI seeks to moderate the impact of interest rate changes on the fair value of its MSR asset through a comprehensive hedge strategy that also considers production-related income ▪ In 3Q19, MSR fair value decreased primarily due to higher expected prepayment activity related to the continued decline in interest rates ▪ Market-driven decline represented approximately 11% of the fair value at June 30, 2019 ▪ Gains from hedging activities and rate- driven fair value decrease of the ESS liability largely offset MSR fair value losses – $254.0 million in such gains are net of hedge costs; market volatility has driven higher hedge costs $60.9 ($259.2) ($295.5) ($54.1) $206.8 $254.0 $25.7 $98.2 $179.3 3Q18 2Q19 3Q19 MSR fair value change before recognition of realization of cash flows Hedging and other gains (losses) Production pretax income

15 (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 ▪ Increased operating revenue driven by a larger servicing portfolio, largely offset by higher realization of MSR cash flows due to higher prepayment expectations ▪ Additional technology-related expenses of $7 million Q/Q primarily related to the development and completion of our servicing system modules; servicing technology-related expenses are expected to be $15-20 million lower in 2020 versus 2019 ▪ EBO loan-related expense increased by $9.3 million due to $1.0 billion UPB increase in buyout volumes; expected to drive future period income as loans are modified or reperform and become eligible for redelivery Servicing Profitability Excluding Valuation-Related Changes 3Q18 2Q19 3Q19 $ in millions basis points(1) $ in millions basis points(1) $ in millions basis points(1) Operating revenue 198.3 $ 28.5 253.7 $ 30.8 270.8 $ 31.7 Realization of MSR cash flows (71.4) (10.3) (106.8) (13.0) (117.2) (13.7) EBO loan-related revenue(2) 40.7 5.9 38.2 4.6 33.6 3.9 Servicing expenses: Operating expenses (75.8) (10.9) (84.0) (10.2) (99.4) (11.6) Credit losses and provisions for defaulted loans (18.6) (2.7) (16.0) (1.9) (20.8) (2.4) EBO loan transaction-related expense (14.0) (2.0) (10.6) (1.3) (19.9) (2.3) Financing expenses: Interest on ESS (3.7) (0.5) (2.8) (0.3) (2.3) (0.3) Interest to third parties (25.6) (3.7) (24.6) (3.0) (19.6) (2.3) Pretax income excluding valuation-related changes 29.9 $ 4.3 47.1 $ 5.7 25.2 $ 3.0 Valuation-related changes(3) MSR fair value(4) 60.9 (259.2) (295.5) ESS liability fair value (1.1) 3.6 3.9 Hedging derivatives gains (losses) (53.0) 203.2 250.1 Reversal of liability (provision) for credit losses on active loans(5) (3.1) 2.6 (1.8) Servicing segment pretax income 33.6 $ (2.7) $ (18.1) $ Average servicing portfolio UPB 274,421 $ 329,356 $ 341,370 $

Appendix

▪ Complex and highly regulated mortgage industry requires effective governance, compliance and operating systems ▪ Operating 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 PMT ▪ 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 ▪ External manager of PMT, which is focused on investing in mortgage-related assets: – GSE credit risk transfers – MSRs and ESS – Investments in prime non- Agency MBS and asset-backed securities – HELOC and prime non-QM securitization interests(1) – Distressed whole loans ▪ Synergistic partnership with PMT ▪ Correspondent aggregation of newly originated loans from third-party sellers – PFSI earns gains on delegated government-insured and non- delegated loans – Fulfillment fees for PMT’s delegated conventional loans ▪ Consumer direct origination of conventional and government- insured loans ▪ Broker direct origination launched in 2018 17 Overview of PennyMac Financial’s Businesses (1) Home Equity Line of Credit = HELOC; Non-QM = Non-qualified mortgage

PennyMac Financial Is a Strong Independent Mortgage Company 18 ▪ Comprehensive mortgage platform and balanced model with leading production and servicing businesses ▪ Strong balance sheet with low leverage versus competitors – Debt to equity of 2.9x ▪ Diversified liquidity sources and term debt that finances the largest long-term asset (MSRs) – Unique and cost effective funding structures with strong bank partnerships to support growth ▪ Well-developed and sophisticated risk management structure combines extensive market expertise with technology to identify and monitor risks across the enterprise ▪ Simplified corporate structure in 2018; all equity ownership converted to a single class of common stock Considerable oversight from State regulators, the CFPB, GSEs, ratings agencies and bank counterparties As of September 30, 2019 ($ in millions) Mortgage Servicing Rights $2,556 Servicing Advances $272 Cash & Short-term Investments, receivables, other $1,059 Loans eligible for repurchase, $893 Loans Held for Sale $4,523 Stockholders' Equity $1,912 MSR Financing $1,394 ESS Financing $183 Other Liabilities & Payables $968 Liability for loans eligible for repurchase $893 Warehouse Financing $3,953 $9,303 $9,303 Assets Liabilities & Equity

19 PFSI Has Developed in a Sustainable Manner for Long-Term Growth • 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 ▪ Operations launched; de novo build of legacy-free mortgage servicer ▪ Raised $500 million of capital in private opportunity funds ▪ PMT formed in an initial public offering raising $320 million ▪ 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 billion ▪ Stockholders’ equity surpasses $1 billion ▪ Substantial growth in consumer direct capacity ▪ Issued MSR-backed term notes ▪ PFSI completes corporate reorganization ▪ Record production volumes across all channels Period End: Employees(1): 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 72 128 230 435 1,008 1,373 1,816 2,523 3,099 3,248 3,460 3,911 (1) 2019 figure is as of September 30, 2019

20 Industry-leading platform built organically – not through acquisitions ▪ Disciplined, sustainable growth for more than 11 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 3,900 employees ▪ Highly experienced management team – 132 senior-most executives have, on average, 24 years of relevant industry experience Strong governance and compliance culture ▪ Led by distinguished board which includes eight independent directors ▪ Robust management governance structure with 9 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 PennyMac Financial Is in a Unique Position Among Mortgage Specialists

21 Why Are MSR Sales Occurring? How Do MSRs Come to Market? ▪ Large servicers may sell MSRs due to 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 representation 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 Opportunity in MSR Acquisitions

22 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 PLS, an indirect wholly-owned subsidiary of PFSI (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 PFSI’s Mortgage Servicing Rights Investments in Partnership with PMT

23 MSR Asset Valuation Note: Figures may not sum exactly due to rounding UPB $200,796 $20,420 $221,216 Weighted average coupon 3.97% 4.20% 3.99% Prepayment speed assumption (CPR) 16.0% 11.7% 15.6% Weighted average servicing fee rate 0.34% 0.34% 0.34% Fair value of MSR $2,302.8 $253.5 $2,556.3 As a multiple of servicing fee 3.38 3.64 3.40 Related excess servicing spread liability - $183.1 $183.1 September 30, 2019 Unaudited ($ in millions) Total Subjectto excess servicing spread liability Not subject to excess servicing spread liability

24 Note: Figures may not sum exactly due to rounding (1) Consists of prime jumbo and non-QM loans Acquisitions and Originations by Product First Lien Acquisitions/Originations Second Lien Originations Unaudited ($ in millions) Correspondent Acquisitions Delegated Conventional Conforming 7,503 $ 9,052 $ 8,130 $ 10,737 $ 16,644 $ Delegated Government 8,970 8,885 6,752 10,574 14,346 Delegated Non-Agency(1) 9 5 5 4 3 Non-Delegated 75 120 174 402 531 Total 16,556 $ 18,061 $ 15,061 $ 21,718 $ 31,524 $ Consumer Direct Originations Conventional 832 $ 740 $ 609 $ 838 $ 1,006 $ Government 459 447 748 1,127 1,651 Jumbo - - - - - Total 1,291 $ 1,187 $ 1,357 $ 1,965 $ 2,657 $ Broker Direct Originations Conventional 70 $ 139 $ 121 $ 289 $ 433 $ Government 41 60 75 153 243 Jumbo - - - - - Total 111 $ 199 $ 196 $ 442 $ 676 $ Total acquisitions/originations 17,958 $ 19,448 $ 16,614 $ 24,125 $ 34,856 $ UPB of loans fulfilled for PMT 7,512 $ 9,056 $ 8,136 $ 10,741 $ 16,647 $ 3Q18 4Q18 1Q19 2Q19 3Q19 Consumer Direct Fundings HELOC - $ - $ 1 $ 1 $ 1 $

25 Interest Rate Locks by Product First Lien Locks Note: Figures may not sum exactly due to rounding (1) Consists of prime jumbo and non-QM loans Unaudited ($ in millions) Correspondent Locks Delegated Conventional Conforming 8,392 $ 9,639 $ 8,974 $ 12,628 $ 19,461 $ Delegated Government 9,146 8,962 7,385 12,028 15,933 Delegated Non-Agency(1) 20 11 13 14 1 Non-Delegated 157 227 360 636 853 Total 17,714 $ 18,839 $ 16,732 $ 25,307 $ 36,248 $ Consumer Direct Locks Conventional 1,106 $ 925 $ 1,103 $ 1,413 $ 1,777 $ Government 659 735 1,226 1,938 2,844 Jumbo 24 13 11 6 6 Total 1,789 $ 1,673 $ 2,340 $ 3,357 $ 4,627 $ Broker Direct Locks Conventional 131 $ 195 $ 187 $ 461 $ 617 $ Government 65 84 133 249 390 Jumbo - - - - - Total 196 $ 279 $ 321 $ 710 $ 1,007 $ Total locks 19,699 $ 20,791 $ 19,393 $ 29,373 $ 41,883 $ 3Q18 4Q18 1Q19 2Q19 3Q19

26 Credit Characteristics by Acquisition / Origination Period Correspondent Consumer Direct Broker Direct 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Government-insured 699 700 699 698 701 Government-insured 44 44 44 43 42 Conventional 748 751 750 755 760 Conventional 38 38 38 36 35 Weighted Average DTI Weighted Average FICO 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Government-insured 684 689 680 697 712 Government-insured 44 45 45 44 43 Conventional 751 746 742 752 759 Conventional 37 38 38 37 36 Weighted Average DTI Weighted Average FICO 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Government-insured 700 696 699 703 709 Government-insured 44 44 44 43 42 Conventional 731 730 733 738 743 Conventional 38 38 37 37 36 Weighted Average DTI Weighted Average FICO