PFSI

​ Overview ​ The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our consolidated results of operations and financial condition. Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q to the words “we,” “us,” “our” and the “Company” refer to PFSI and its subsidiaries. ​ Our Company ​ We are a specialty financial services firm primarily focused on the production and servicing of U.S. residential mortgage loans (activities which we refer to as mortgage banking) and the management of investments related to the U.S. mortgage market. We believe that our operating capabilities, specialized expertise, access to long-term investment capital, and the experience of our management team across all aspects of the mortgage business allow us to profitably engage in mortgage banking and investing activities and capitalize on other related opportunities as they arise in the future. ​ Our primary assets are equity interests in Private National Mortgage Acceptance Company, LLC (“PNMAC”). We are the managing member of PNMAC, and we operate and control all of the businesses and affairs of PNMAC, and consolidate the financial results of PNMAC and its subsidiaries. We conduct our business in two segments: production and servicing: ​ ● The production segment performs loan origination, acquisition and sale activities. ● The servicing segment performs loan servicing for both newly originated loans we are holding for sale and loans we service for others, including for PennyMac Mortgage Investment Trust, a mortgage real estate investment trust separately listed on the New York Stock Exchange under the ticker symbol “PMT”. ​ Our principal mortgage banking subsidiary, PennyMac Loan Services, LLC (“PLS”), is a non-bank producer and servicer of mortgage loans in the United States. PLS is a seller/servicer for the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), each of which is a government sponsored entity. PLS is also an approved issuer of securities guaranteed by the Government National Mortgage Association (“Ginnie Mae”), a lender of the Federal Housing Administration (“FHA”), and a lender/servicer of the U.S. Department of Veterans Affairs (“VA”) and the U.S. Department of Agriculture (“USDA”). We refer to each of Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA and USDA as an “Agency” and collectively as the “Agencies.” PLS is able to service loans in all 50 states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands, and originate loans in all 50 states and the District of Columbia, either because PLS is properly licensed in a particular jurisdiction or exempt or otherwise not required to be licensed in that jurisdiction. ​ Our investment management subsidiary is Pennymac Capital Management, LLC (“PCM”), a Delaware limited liability company registered with the Securities Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended. PCM has an investment management contract with PMT. ​ 60 Table of Contents Business Trends ​ Recent macroeconomic trend and U.S. federal government administration actions with respect to trade, tariffs, government cost reduction efforts and foreign military action have led to significant volatility in financial markets and uncertainty regarding the economic outlook, including inflation and interest rates. Elevated interest rates in recent years have constrained the mortgage origination market, which is currently projected to increase from $1.9 trillion in 2025 to $2.2 trillion in 2026 according to mortgage industry economists, although recent increases in interest rates may lead to a reduction in origination estimates for 2026. ​ Recent increases in interest and mortgage rates have limited consumers’ opportunity for refinancing. If mortgage rates remain at recent levels or continue to increase, mortgage production activity and prepayment speeds will decrease from levels observed in late 2025 and early 2026. Additionally, reductions in the Federal Reserve’s federal funds rate have reduced the costs of floating rate borrowings and placement fees we receive in relation to custodial funds that we manage as compared to prior periods; however, market indicators currently suggest that the Federal Reserve could begin increasing short-term interest rates later in 2026. The current period of economic uncertainty and market volatility may also lead to a reduction in economic activity and slowing home price growth or depreciation, which could lead to increasing mortgage delinquencies or defaults and increase losses from the representations and warranties we provide in our loan sales transactions. ​ Due to declining mortgage production volumes and improving technology, we implemented cost reduction measures in the third quarter of 2026 to reduce expenses. However, despite our expectation that mortgage production volumes will decline, we expect our volumes of non-qualified mortgage production to increase as we continue to expand our presence in that market. We also expect to sell all of our non-agency correspondent loans and none of our conventional conforming correspondent loans to PMT in the third quarter of 2026. ​ 61 Table of Contents Results of Operations ​ Our results of operations are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (dollars in thousands, except per share amounts) ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan production revenues (1) ​ $ 354,860 ​ $ 299,564 ​ $ 778,028 ​ $ 572,502 ​ Net loan servicing fees ​ ​ 145,821 ​ ​ 150,395 ​ ​ 298,651 ​ ​ 314,681 ​ Net interest expense ​ ​ (28,258) ​ ​ (17,648) ​ ​ (69,801) ​ ​ (35,859) ​ Other ​ ​ 24,542 ​ ​ 12,419 ​ ​ 35,071 ​ ​ 24,309 ​ Total net revenues ​ ​ 496,965 ​ ​ 444,730 ​ ​ 1,041,949 ​ ​ 875,633 ​ Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Compensation ​ ​ 222,820 ​ ​ 187,541 ​ ​ 439,213 ​ ​ 369,529 ​ Loan origination ​ ​ 93,855 ​ ​ 68,836 ​ ​ 173,551 ​ ​ 112,932 ​ Technology ​ ​ 44,442 ​ ​ 42,257 ​ ​ 90,574 ​ ​ 82,454 ​ Servicing ​ ​ 42,505 ​ ​ 28,286 ​ ​ 80,738 ​ ​ 50,161 ​ Marketing and advertising ​ ​ 16,881 ​ ​ 12,389 ​ ​ 37,975 ​ ​ 21,821 ​ Other ​ ​ 44,937 ​ ​ 28,979 ​ ​ 83,682 ​ ​ 58,098 ​ Total expenses ​ ​ 465,440 ​ ​ 368,288 ​ ​ 905,733 ​ ​ 694,995 ​ Income before provision for income taxes ​ ​ 31,525 ​ ​ 76,442 ​ ​ 136,216 ​ ​ 180,638 ​ Provision for income taxes ​ ​ 9,799 ​ ​ (60,021) ​ ​ 32,168 ​ ​ (32,105) ​ Net income ​ $ 21,726 ​ $ 136,463 ​ $ 104,048 ​ $ 212,743 ​ Earnings per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.42 ​ $ 2.64 ​ $ 2.00 ​ $ 4.12 ​ Diluted ​ $ 0.41 ​ $ 2.54 ​ $ 1.94 ​ $ 3.97 ​ Annualized return on average stockholders' equity ​ ​ 2.0% ​ ​ 13.9% ​ ​ 4.8% ​ ​ 10.9% ​ Dividends declared per share ​ $ 0.30 ​ $ 0.30 ​ $ 0.60 ​ $ 0.60 ​ Income before provision for income taxes by reportable segment and corporate and other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Production ​ $ 38,439 ​ $ 57,788 ​ $ 172,014 ​ $ 119,731 ​ Servicing ​ ​ 21,726 ​ ​ 54,152 ​ ​ 34,377 ​ ​ 130,153 ​ Corporate and other ​ ​ (28,640) ​ ​ (35,498) ​ ​ (70,175) ​ ​ (69,246) ​ ​ ​ $ 31,525 ​ $ 76,442 ​ $ 136,216 ​ $ 180,638 ​ Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") (3) ​ $ 203,787 ​ $ 260,976 ​ $ 454,989 ​ $ 542,357 ​ During the period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate lock commitments issued (2) ​ $ 33,288,987 ​ $ 39,597,584 ​ $ 74,400,098 ​ $ 71,054,404 ​ Unpaid principal balance of loans originated and purchased by PFSI and fulfilled for PMT ​ $ 34,891,440 ​ $ 37,611,130 ​ $ 71,930,184 ​ $ 66,463,876 ​ At end of period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate lock commitments outstanding ​ ​ ​ ​ ​ ​ ​ $ 12,053,063 ​ $ 10,998,207 ​ Unpaid principal balance of loan servicing portfolio: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage servicing rights and liabilities ​ ​ ​ ​ ​ ​ ​ $ 488,097,617 ​ $ 463,150,304 ​ Loans held for sale ​ ​ ​ ​ ​ ​ ​ ​ 7,656,960 ​ ​ 6,783,240 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 495,754,577 ​ ​ 469,933,544 ​ Subserviced for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PMT ​ ​ ​ ​ ​ ​ ​ ​ 223,817,562 ​ ​ 228,838,699 ​ Non-affiliates ​ ​ ​ ​ ​ ​ ​ ​ 11,496,726 ​ ​ 822,525 ​ Interim servicing ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ 72,153 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 235,314,288 ​ ​ 229,733,377 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 731,068,865 ​ $ 699,666,921 ​ Book value per share ​ ​ ​ ​ ​ ​ ​ $ 83.49 ​ $ 78.04 ​ (1) Includes Net gains on loans held for sale at fair value, Loan origination fees and Fulfillment fees from PennyMac Mortgage Investment Trust. ​ (2) Amounts exclude interest rate locks for loans to be fulfilled for PMT. ​ (3) To provide investors with information in addition to our results as determined by accounting principles generally accepted in the United States (“GAAP”), we disclose Adjusted EBITDA as a non-GAAP measure. Adjusted EBITDA is a measure that is frequently used in our industry to measure performance and we believe that this measure provides supplemental information that is useful to investors. Adjusted EBITDA is not a financial measure 62 Table of Contents calculated in accordance with GAAP and should not be considered as a substitute for net income, or any other performance measure calculated in accordance with GAAP. ​ We define “Adjusted EBITDA” as net income plus provision for income taxes, depreciation and amortization, excluding decrease (increase) in fair value of mortgage servicing rights (“MSRs”) net of mortgage servicing liabilities (“MSLs”) due to changes in the valuation inputs we use in our valuation models, hedging (gains) losses associated with MSRs, principal-only stripped mortgage-backed securities (“MBS”) valuation-related accretion changes, provision for (reversal of) losses on active loans, stock-based compensation, interest expense on corporate debt or corporate revolving credit facilities and capital lease and certain unusual or non-recurring items. ​ We believe that the presentation of Adjusted EBITDA provides useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. However, other companies may define Adjusted EBITDA differently, and as a result, our measures of Adjusted EBITDA may not be directly comparable to those of other companies. ​ Adjusted EBITDA measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: a) they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments; b) they do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt; and c) they are not adjusted for all non-cash income or expense items that are reflected in our consolidated statements of cash flows. ​ Because of these limitations, Adjusted EBITDA measures are not intended as alternatives to net income as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. ​ The following table presents a reconciliation of Adjusted EBITDA to our net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) Net income ​ $ 21,726 ​ $ 136,463 ​ $ 104,048 ​ $ 212,743 Provision for (benefit from) income taxes ​ ​ 9,799 ​ ​ (60,021) ​ ​ 32,168 ​ ​ (32,105) Income before provision for income taxes ​ ​ 31,525 ​ ​ 76,442 ​ ​ 136,216 ​ ​ 180,638 Depreciation and amortization ​ ​ 14,422 ​ ​ 14,731 ​ ​ 27,932 ​ ​ 28,627 Principal-only stripped MBS valuation-related accretion changes ​ ​ 1,704 ​ ​ 2,539 ​ ​ 15,518 ​ ​ (902) (Increase) decrease in fair value of MSRs net of MSLs due to changes in valuation inputs used in valuation models ​ ​ (118,307) ​ ​ (15,929) ​ ​ (301,336) ​ ​ 189,565 Hedging losses associated with MSRs ​ ​ 185,581 ​ ​ 109,102 ​ ​ 392,868 ​ ​ 2,328 Valuation gains relating to investment in closely held entities ​ ​ (8,506) ​ ​ — ​ ​ (8,506) ​ ​ — Provision for (reversal of) losses on active loans ​ ​ 8,381 ​ ​ (3,584) ​ ​ 14,372 ​ ​ (6,795) Stock‑based compensation ​ ​ 4,464 ​ ​ 7,518 ​ ​ 6,911 ​ ​ 18,602 Interest expense on corporate debt ​ ​ 83,325 ​ ​ 70,157 ​ ​ 166,604 ​ ​ 130,294 Cenlar acquisition related expenses ​ ​ 1,198 ​ ​ — ​ ​ 4,410 ​ ​ — Adjusted EBITDA ​ $ 203,787 ​ $ 260,976 ​ $ 454,989 ​ $ 542,357 ​ 63 Table of Contents Income Before Provisions for Income Taxes ​ For the quarter ended June 30, 2026, income before income taxes decreased $44.9 million compared to the same quarter in 2025. The decrease was primarily due to increases in compensation expense of $35.3 million, origination expense of $25.0 million, servicing expense of $14.2 million and other expense of $16.0 million, partially offset by a $55.3 million increase in loan production revenue due to higher volume in the broker and consumer direct channels and a $12.1 million increase in other income. ​ For the six months ended June 30, 2026, income before income taxes decreased $44.4 million compared to the same period in 2025. The decrease was primarily due to increases in compensation expense of $69.7 million, origination expense of $60.6 million, servicing expense of $30.6 million and other expense of $25.6 million, partially offset by a $205.5 million increase in loan production revenue due to higher volume in the broker and consumer direct channels and a $10.8 million increase in other income. ​ Net Gains on Loans Held for Sale at Fair Value ​ In our production segment, revenues reflect the effects of larger mortgage market volumes and increased share in our broker and consumer direct lending channels during the quarter and six months ended June 30, 2026 compared to the same periods in 2025. During the quarter and six months ended June 30, 2026, we recognized Net gains on loans held for sale at fair value totaling $280.3 million and $625.3 million, respectively, representing an increase of $45.7 million and $169.6 million, respectively, compared to the same periods in 2025. ​ 64 Table of Contents Our net gains on loans held for sale are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) From non-affiliates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ $ (279,801) ​ $ (573,210) ​ $ (808,152) ​ $ (849,520) Hedging activities ​ ​ (307,618) ​ ​ (105,772) ​ ​ 16,421 ​ ​ (416,471) Total cash losses ​ ​ (587,419) ​ ​ (678,982) ​ ​ (791,731) ​ ​ (1,265,991) Non-cash gains: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Changes in fair values of loans and derivative financial instruments outstanding at end of period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate lock commitments ​ ​ 32,326 ​ ​ 32,211 ​ ​ 13,335 ​ ​ 108,588 Loans ​ ​ (73,829) ​ ​ (15,268) ​ ​ (8,829) ​ ​ (102,307) Hedging derivatives ​ ​ 248,608 ​ ​ 76,919 ​ ​ 26,039 ​ ​ 242,572 ​ ​ ​ 207,105 ​ ​ 93,862 ​ ​ 30,545 ​ ​ 248,853 Mortgage servicing rights resulting from loan sales ​ ​ 648,681 ​ ​ 814,538 ​ ​ 1,368,267 ​ ​ 1,464,887 Provisions for losses relating to representations and warranties: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pursuant to loan sales ​ ​ (5,807) ​ ​ (4,054) ​ ​ (10,275) ​ ​ (7,601) Reductions in liability due to changes in estimate ​ ​ 3,662 ​ ​ 2,220 ​ ​ 6,652 ​ ​ 3,635 Total non-cash gains ​ ​ 853,641 ​ ​ 906,566 ​ ​ 1,395,189 ​ ​ 1,709,774 Total gains on sale from non-affiliates ​ ​ 266,222 ​ ​ 227,584 ​ ​ 603,458 ​ ​ 443,783 From PennyMac Mortgage Investment Trust ​ ​ 14,097 ​ ​ 7,075 ​ ​ 21,846 ​ ​ 11,913 ​ ​ $ 280,319 ​ $ 234,659 ​ $ 625,304 ​ $ 455,696 During the period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate lock commitments issued (1): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ By loan type: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Government-insured or guaranteed ​ $ 16,788,600 ​ $ 18,209,041 ​ $ 37,002,027 ​ $ 34,324,614 Conventional conforming ​ ​ 13,185,900 ​ ​ 19,340,043 ​ ​ 31,267,227 ​ ​ 32,913,808 Jumbo ​ ​ 2,178,215 ​ ​ 1,383,209 ​ ​ 4,374,951 ​ ​ 2,602,313 Non-qualified ​ ​ 515,289 ​ ​ — ​ ​ 666,218 ​ ​ — Closed-end second lien ​ ​ 620,983 ​ ​ 665,291 ​ ​ 1,089,675 ​ ​ 1,213,669 ​ ​ $ 33,288,987 ​ $ 39,597,584 ​ $ 74,400,098 ​ $ 71,054,404 By production channel: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Correspondent ​ $ 18,634,455 ​ $ 28,657,935 ​ $ 41,001,782 ​ $ 50,753,289 Broker direct ​ ​ 8,519,394 ​ ​ 7,151,449 ​ ​ 18,058,576 ​ ​ 12,629,818 Consumer direct ​ ​ 6,135,138 ​ ​ 3,788,200 ​ ​ 15,339,740 ​ ​ 7,671,297 ​ ​ $ 33,288,987 ​ $ 39,597,584 ​ $ 74,400,098 ​ $ 71,054,404 At end of period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for sale at fair value ​ ​ ​ ​ ​ ​ ​ $ 7,819,890 ​ $ 6,961,224 Commitments to fund and purchase loans ​ ​ ​ ​ ​ ​ ​ $ 12,053,063 ​ $ 10,998,207 (1) Amounts exclude interest rate locks for loans to be fulfilled for PMT. 65 Table of Contents ​ Non-Cash Elements of Gain on Sale of Loans Held for Sale ​ Our gains on loans held for sale include both cash and non-cash elements. We recognize a significant portion of our gains on loans held for sale when we make commitments to purchase or fund mortgage loans. Therefore, we recognize a substantial portion of our net gains before we fund or purchase the loans. We recognize this gain in the form of interest rate lock commitment (“IRLC”) derivatives. We adjust our initial gain amount as the loan purchase or origination process progresses until the loan is either funded or cancelled. ​ We also receive non-cash proceeds on sale that include our estimate of the fair value of MSRs and we incur MSLs (which represent the fair value of the costs we expect to incur in excess of the fees we receive for delinquent loans we have bought out of Ginnie Mae guaranteed securities and have resold to and service for investors) and we recognize the fair value of our estimate of the losses we expect to incur relating to the representations and warranties we provide in our loan sale transactions. ​ The MSRs, MSLs, and liabilities for representations and warranties we recognize represent our estimate of the fair value of future benefits and costs we will realize for years in the future. These estimates represented approximately 231% and 218% of our gains on sales of loans held for sale at fair value for the quarter and six months ended June 30, 2026, respectively, as compared to 346% and 321% for the same periods in 2025. These estimates change as circumstances change and changes in these estimates are recognized in income in subsequent periods. Subsequent changes in the fair value of our MSRs may significantly affect our income. ​ Interest Rate Lock Commitments, Mortgage Servicing Rights and Mortgage Servicing Liabilities ​ The methods and key inputs we use to measure and update our measurements of IRLCs, MSRs and MSLs are detailed in Note 7 – Fair Value – Valuation Techniques and Inputs to the consolidated financial statements included in this Quarterly Report. ​ Representations and Warranties ​ Our agreements with purchasers and insurers include representations and warranties related to the loans we sell. The representations and warranties require adherence to purchaser and insurer origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. ​ In the event of a breach of our representations and warranties, we may be required to either repurchase the loans with the identified defects or indemnify the purchaser or insurer. In such cases, we bear any subsequent credit loss on the loans. Our credit loss may be reduced by any recourse we have to correspondent originators that sold such loans to us and breached similar or other representations and warranties. In such event, we have the right to seek a recovery of related repurchase losses from that correspondent seller. ​ Our representations and warranties are generally not subject to stated limits of exposure. However, we believe that the current unpaid principal balance (“UPB”) of loans sold by us and subject to representation and warranty liability to date represents the maximum exposure to repurchases related to representations and warranties. ​ The level of the liability for losses under representations and warranties is difficult to estimate and requires considerable judgment. The level of loan repurchase losses is dependent on economic factors, purchaser or insurer loss mitigation strategies, and other external conditions that may change over the lives of the underlying loans. Our estimate of the liability for representations and warranties is developed by our credit risk administration staff and reviewed by our Management Risk Committee that includes our senior executives and senior management in our loan production, loan servicing, and credit risk management areas. ​ The method used to estimate our losses on representations and warranties is a function of our estimate of future defaults, loan repurchase rates, the severity of loss in the event of default, if applicable, and the probability of reimbursement by the correspondent loan seller. We establish a liability at the time loans are sold and periodically assess the adequacy of our recorded liability. 66 Table of Contents ​ We recorded provisions for losses under representations and warranties relating to current loan sales as a component of Net gains on loans held for sale at fair value totaling $5.8 million and $10.3 million for the quarter and six months ended June 30, 2026, respectively, compared to $4.1 million and $7.6 million for the same periods in 2025. The increases in the provision relating to current loan sales was primarily attributable to a change in the mix of loans sold for the quarter and six months ended June 30, 2026 compared to the same periods in 2025 ​ We also recorded reductions in the liability of $3.7 million and $6.7 million for the quarter and six months ended June 30, 2026, respectively, compared to $2.2 million and $3.6 million for the same periods in 2025. The reductions in the liability resulted from previously sold loans meeting performance criteria established by the Agencies which significantly limit the likelihood of certain repurchase or indemnification claims. ​ Following is a summary of loan repurchase and loss activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) During the period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Indemnification activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans indemnified at beginning of period ​ $ 122,706 ​ $ 112,547 ​ $ 120,130 ​ $ 101,867 New indemnifications ​ ​ 8,753 ​ ​ 6,367 ​ ​ 13,334 ​ ​ 18,403 Less indemnified loans sold, repaid or refinanced ​ ​ 10,748 ​ ​ 2,881 ​ ​ 12,753 ​ ​ 4,237 Loans indemnified at end of period ​ $ 120,711 ​ $ 116,033 ​ $ 120,711 ​ $ 116,033 Repurchase activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans repurchased ​ $ 31,491 ​ $ 25,418 ​ $ 56,413 ​ $ 45,360 Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans repurchased by correspondent lenders ​ ​ 18,858 ​ ​ 15,585 ​ ​ 32,433 ​ ​ 31,077 Loans repaid by borrowers or resold ​ ​ 3,723 ​ ​ 952 ​ ​ 10,738 ​ ​ 8,653 Net loans repurchased with losses chargeable to liability for representations and warranties ​ $ 8,910 ​ $ 8,881 ​ $ 13,242 ​ $ 5,630 Losses charged to liability for representations and warranties ​ $ 659 ​ $ 845 ​ $ 1,226 ​ $ 1,332 At end of period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unpaid principal balance of loans subject to representations and warranties ​ ​ ​ ​ ​ ​ ​ $ 521,743,590 ​ $ 452,998,620 Liability for representations and warranties ​ ​ ​ ​ ​ ​ ​ $ 37,291 ​ $ 31,763 ​ During the quarter and six months ended June 30, 2026, we repurchased loans totaling $31.5 million and $56.4 million, respectively. We charged losses of $659,000 and $1.2 million against the liability during the quarter and six months ended June 30, 2026, respectively. Our losses arising from representations and warranties have historically been minimized by our ability to either recover most of the losses from our correspondent sellers or from our ability to profitably refinance and resell repurchased loans. ​ Elevated interest rate levels may affect certain of our correspondent sellers’ ability to honor their obligations to repurchase defective loans, may increase the level of borrower defaults and may increase the level of repurchases we are required to make. We expect these developments may increase the losses we incur in relation to our recorded liability for representations and warranties compared to our historical experience. However, we believe our recorded liability is presently adequate to absorb such losses. ​ Loan Origination Fees ​ Loan origination fees increased $10.4 million and $36.2 million during the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025 primarily due to an increase in production volumes in the broker and consumer direct lending channels. ​ 67 Table of Contents Fulfillment Fees from PennyMac Mortgage Investment Trust ​ Fulfillment fees from PMT represent fees we collect for services we perform on behalf of PMT in connection with the acquisition, packaging, sale and securitization of loans. The fulfillment fees are calculated based on the number of loans we fulfill for PMT and an increase in the number of loans included in PMT’s non-Agency securitization and loan sales. ​ Fulfillment fees decreased $791,000 and $344,000 during the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025; the decrease was primarily due to a decrease in correspondent loan production volumes for PMT’s account. ​ Net Loan Servicing Fees ​ Our net loan servicing fee income has two primary components: fees earned for servicing the loans and the effects of MSR and MSL valuation changes, net of hedging results, as summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) Loan servicing fees ​ $ 515,293 ​ $ 485,022 ​ $ 1,026,453 ​ $ 951,761 Subservicing fees ​ ​ 20,616 ​ ​ 21,645 ​ ​ 41,566 ​ ​ 43,374 Effects of MSRs and MSLs net of hedging results ​ ​ (390,088) ​ ​ (356,272) ​ ​ (769,368) ​ ​ (680,454) Net loan servicing fees ​ $ 145,821 ​ $ 150,395 ​ $ 298,651 ​ $ 314,681 ​ Loan Servicing Fees ​ Following is a summary of our loan servicing fees: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) Owned servicing: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan servicing fees ​ $ 470,775 ​ $ 435,517 ​ $ 940,141 ​ $ 853,204 Other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Late charges ​ ​ 23,239 ​ ​ 22,959 ​ ​ 48,122 ​ ​ 46,026 Other ​ ​ 21,279 ​ ​ 26,546 ​ ​ 38,190 ​ ​ 52,531 ​ ​ ​ 515,293 ​ ​ 485,022 ​ ​ 1,026,453 ​ ​ 951,761 Subservicing: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ From PennyMac Mortgage Investment Trust ​ ​ 19,640 ​ ​ 21,645 ​ ​ 39,363 ​ ​ 43,374 From non-affiliates ​ ​ 976 ​ ​ — ​ ​ 2,203 ​ ​ — ​ ​ ​ 20,616 ​ ​ 21,645 ​ ​ 41,566 ​ ​ 43,374 ​ ​ $ 535,909 ​ $ 506,667 ​ $ 1,068,019 ​ $ 995,135 Average UPB of loans serviced: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ MSRs and MSLs ​ $ 481,276,109 ​ $ 452,077,317 ​ $ 475,375,868 ​ $ 443,765,594 Subservicing ​ $ 235,785,275 ​ $ 230,362,073 ​ $ 240,225,945 ​ $ 230,771,395 ​ Loan servicing fees from non-affiliates generally relate to our MSRs which are primarily related to servicing we provide for loans included in Agency securitizations. These fees are contractually established at an annualized percentage of the UPB of the loan serviced and we collect these fees from borrower payments. Loan servicing fees from PMT are primarily related to PMT’s MSRs and are established at monthly per-loan amounts based on whether the loan is a fixed-rate or adjustable-rate loan and the loan’s delinquency or foreclosure status as detailed in Note 5–Transactions with Related Parties to the consolidated financial statements included in this Quarterly Report. Subservicing fees from non-affiliates are based upon rates negotiated between the Company and the owner of the servicing rights at the time a subservicing agreement is entered into. Other loan servicing fees are comprised primarily of borrower-contracted fees such as late charges and reconveyance fees. ​ 68 Table of Contents Loan servicing fees from non-affiliates increased during the quarter and six months ended June 30, 2026 compared to the same periods in 2025. The increases were primarily due to growth of our loan servicing portfolio. Other servicing fees decreased primarily due to decreased incentives received for loss mitigation activities. ​ Effects of Mortgage Servicing Rights and Mortgage Servicing Liabilities ​ We have elected to carry our servicing assets and liabilities at fair value. Changes in fair value have two components: changes due to realization of cash flows of the MSRs and MSLs and changes due to changes in market inputs used to estimate the fair value of MSRs and MSLs. We endeavor to moderate the effects of changes in fair value arising from changes in market inputs by entering into derivatives transactions and holding principal-only stripped MBS. ​ Change in fair value of MSRs and MSLs and the related hedging results are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) MSR and MSL valuation changes and hedging results: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Changes in fair value attributable to changes in fair value inputs ​ $ 118,307 ​ $ 15,929 ​ $ 301,336 ​ $ (189,565) Hedging results ​ ​ (185,581) ​ ​ (109,102) ​ ​ (392,868) ​ ​ (2,328) ​ ​ ​ (67,274) ​ ​ (93,173) ​ ​ (91,532) ​ ​ (191,893) Changes in fair value attributable to realization of cash flows ​ ​ (322,814) ​ ​ (263,099) ​ ​ (677,836) ​ ​ (488,561) Total change in fair value of mortgage servicing rights and mortgage servicing liabilities net of hedging results ​ $ (390,088) ​ $ (356,272) ​ $ (769,368) ​ $ (680,454) Average balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage servicing rights ​ $ 10,419,488 ​ $ 9,284,824 ​ $ 10,090,215 ​ $ 9,087,827 Mortgage servicing liabilities ​ $ 1,539 ​ $ 1,640 ​ $ 1,556 ​ $ 1,654 At end of period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage servicing rights ​ ​ ​ ​ ​ ​ ​ $ 10,586,794 ​ $ 9,531,249 Mortgage servicing liabilities ​ ​ ​ ​ ​ ​ ​ $ 1,522 ​ $ 1,643 ​ Changes in fair value of MSRs attributable to changes in fair value inputs increased during the quarter and six months ended June 30, 2026 compared to the same periods in 2025 due to increases in interest rates during the quarter and six months ended June 30, 2026 as compared to flat to decreasing interest rates during the same periods in 2025. Increasing interest rates reduce the rate of prepayments of the underlying loans, which increases the cash flows expected from the servicing rights, while decreasing interest rates have the opposite effect. ​ Hedging results reflect valuation losses offsetting the valuation gains from increasing interest rates in the quarter and six months ended June 30, 2026 and in the same periods in 2025. ​ Changes in fair value attributable to realization of cash flows are influenced by changes in the level of servicing assets and liabilities and changes in estimates of the remaining cash flows to be realized. During the quarter and six months ended June 30, 2026, realization of cash flows increased compared to the same periods in 2025, primarily due to higher prepayment speeds in the 2026 periods and the growth in our investment in MSRs. ​ ​ 69 Table of Contents Following is a summary of our loan servicing portfolio: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) Owned: ​ ​ ​ ​ ​ ​ Mortgage servicing rights and liabilities ​ ​ ​ ​ ​ ​ Originated ​ $ 474,869,927 ​ $ 448,035,447 Purchased and assumed ​ ​ 13,227,690 ​ ​ 13,999,998 ​ ​ ​ 488,097,617 ​ ​ 462,035,445 Loans held for sale ​ ​ 7,656,960 ​ ​ 8,930,477 ​ ​ ​ 495,754,577 ​ ​ 470,965,922 Subserviced for: ​ ​ ​ ​ ​ ​ PennyMac Mortgage Investment Trust ​ ​ 223,817,562 ​ ​ 226,774,067 Non-affiliates ​ ​ 11,496,726 ​ ​ 11,616,738 Interim servicing ​ ​ — ​ ​ 24,257,095 ​ ​ ​ 235,314,288 ​ ​ 262,647,900 Total loans serviced ​ $ 731,068,865 ​ $ 733,613,822 Delinquencies: ​ ​ ​ ​ ​ ​ Owned servicing: ​ ​ ​ ​ ​ ​ 30-89 days ​ $ 16,753,926 ​ $ 18,562,892 90 days or more ​ ​ 13,339,471 ​ ​ 11,364,962 ​ ​ $ 30,093,397 ​ $ 29,927,854 Subservicing: ​ ​ ​ ​ ​ ​ 30-89 days ​ $ 2,574,809 ​ $ 4,018,484 90 days or more ​ ​ 1,167,071 ​ ​ 1,922,015 ​ ​ $ 3,741,880 ​ $ 5,940,499 ​ Following is a summary of characteristics of our MSR and MSL servicing portfolio as of June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ Loan type ​ Unpaid principal balance ​ Loan count ​ Note rate ​ Age (months) ​ Remaining maturity (months) ​ ​ Loan size ​ FICO credit score at origination ​ Original LTV (1) ​ Current LTV (1) ​ 60+ Delinquency (by UPB) ​ ​ (Dollars and loan count in thousands) Government insured or guaranteed (2): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FHA ​ $ 170,495,110 ​ 769 ​ 4.9% ​ 46 ​ 316 ​ $ 222 ​ 687 ​ 92% ​ 73% ​ 7.8% VA ​ ​ 122,588,947 ​ 427 ​ 4.4% ​ 43 ​ 317 ​ $ 287 ​ 734 ​ 91% ​ 73% ​ 1.7% USDA ​ ​ 20,591,849 ​ 137 ​ 4.4% ​ 65 ​ 298 ​ $ 150 ​ 702 ​ 98% ​ 67% ​ 5.2% Government-sponsored entities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Freddie Mac ​ ​ 88,016,991 ​ 243 ​ 6.0% ​ 21 ​ 330 ​ $ 362 ​ 762 ​ 77% ​ 71% ​ 0.7% Fannie Mae ​ ​ 66,524,921 ​ 201 ​ 5.3% ​ 33 ​ 316 ​ $ 330 ​ 763 ​ 76% ​ 65% ​ 0.7% Closed-end second lien mortgage loans ​ ​ 3,197,832 ​ 41 ​ 9.0% ​ 15 ​ 248 ​ $ 79 ​ 745 ​ 20% ​ 19% ​ 0.3% Other (3) ​ ​ 16,681,967 ​ 39 ​ 6.6% ​ 15 ​ 345 ​ $ 427 ​ 775 ​ 75% ​ 71% ​ 0.3% ​ ​ $ 488,097,617 ​ 1,857 ​ 5.1% ​ 38 ​ 318 ​ $ 263 ​ 727 ​ 86% ​ 71% ​ 3.6% (1) Loan-to-Value. (2) Government loans include loans securitized in Ginnie Mae pools as well as loans sold to private investors. (3) Represents conventional loans sold to private investors. ​ 70 Table of Contents Net Interest Expense ​ Following is a summary of net interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) Interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and short-term investment ​ $ 10,993 ​ $ 10,919 ​ $ 20,562 ​ $ 20,926 Principal-only stripped mortgage-backed securities ​ ​ 8,905 ​ ​ 6,948 ​ ​ 3,929 ​ ​ 18,543 Loans held for sale ​ ​ 120,822 ​ ​ 105,725 ​ ​ 234,004 ​ ​ 193,119 Placement fees relating to custodial funds ​ ​ 101,258 ​ ​ 97,975 ​ ​ 191,197 ​ ​ 177,770 Other ​ ​ 474 ​ ​ 362 ​ ​ 939 ​ ​ 1,442 ​ ​ ​ 242,452 ​ ​ 221,929 ​ ​ 450,631 ​ ​ 411,800 Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term debt ​ ​ 135,917 ​ ​ 116,853 ​ ​ 250,129 ​ ​ 214,886 Long-term debt ​ ​ 107,891 ​ ​ 105,900 ​ ​ 213,559 ​ ​ 202,615 Interest shortfall on repayments of mortgage loans serviced for Agency securitizations ​ ​ 23,364 ​ ​ 14,058 ​ ​ 49,495 ​ ​ 23,832 Interest on mortgage loan impound deposits ​ ​ 2,686 ​ ​ 2,263 ​ ​ 5,423 ​ ​ 4,844 Other ​ ​ 852 ​ ​ 503 ​ ​ 1,826 ​ ​ 1,482 ​ ​ ​ 270,710 ​ ​ 239,577 ​ ​ 520,432 ​ ​ 447,659 ​ ​ $ (28,258) ​ $ (17,648) ​ $ (69,801) ​ $ (35,859) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest expense increased $10.6 million and $33.9 million during the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increases were primarily due to an increase in interest expense on borrowings attributable to the Company financing a larger investment in MSRs and increased interest shortfalls on repayments of loans serviced for Agency securitizations during 2026, partially offset by an increase in interest income from loans held for sale and placement fees. ​ Management Fees from PennyMac Mortgage Investment Trust ​ Management fees decreased $59,000 and $309,000 during the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025, due to decreases in PMT’s average shareholders’ equity which is the basis for the base management fees. ​ Expenses ​ Compensation ​ Compensation expenses are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) ​ Salaries and wages ​ $ 142,303 ​ $ 111,866 ​ $ 278,219 ​ $ 220,839 ​ Incentive compensation ​ ​ 48,575 ​ ​ 46,079 ​ ​ 97,046 ​ ​ 84,150 ​ Taxes and benefits ​ ​ 27,478 ​ ​ 22,078 ​ ​ 57,037 ​ ​ 45,938 ​ Stock and unit-based compensation ​ ​ 4,464 ​ ​ 7,518 ​ ​ 6,911 ​ ​ 18,602 ​ ​ ​ $ 222,820 ​ $ 187,541 ​ $ 439,213 ​ $ 369,529 ​ Head count: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ 5,633 ​ ​ 4,589 ​ ​ 5,518 ​ ​ 4,524 ​ Period end ​ ​ ​ ​ ​ ​ ​ ​ 5,543 ​ ​ 4,779 ​ ​ 71 Table of Contents Compensation expenses increased $35.2 million and $69.7 million during the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increases were primarily due to an increase in head count and increased incentive compensation reflecting higher loan production volume. ​ Loan Origination ​ Loan origination expenses increased $25.0 million and $60.6 million for the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increases were primarily due to higher origination volumes in the broker and consumer direct lending channels. ​ Technology ​ Technology expenses increased $2.2 million and $8.1 million during the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increases were primarily due to an increase in software license expenses and a $1.2 million and $1.5 million impairment of capitalized software recorded during the quarter and six months ended June 30, 2026, respectively. ​ Servicing ​ Servicing expenses increased $14.2 million and $30.6 million during the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to increases in provision for losses on servicing advances resulting from higher delinquent loan balances reflecting a larger servicing portfolio and a larger proportion of delinquencies of 90 days or greater. ​ Marketing and advertising ​ Marketing and advertising expenses increased $4.5 million and $16.2 million during the quarter and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increases were primarily due to additional marketing expenses incurred as an Official Supporter of Team USA, including marketing during the 2026 winter Olympics. ​ Provision for Income Taxes ​ Our effective income tax rates were 31.1% and (78.5)% for the quarters ended June 30, 2026 and 2025, respectively, and 23.6% and (17.8)% for the six months ended June 30, 2026 and 2025, respectively. The increase in the effective income tax rates for the quarter and six months ended June 30, 2026 compared to the same periods ended in 2025 is primarily due the non-recurrence of a $81.6 million net income tax benefit recognized in the prior year period, due to the repricing of deferred tax liabilities resulting from changes to California’s apportionment rules enacted into law in June 2025 requiring the Company to apportion income to California using a single sales factor instead of a factor equally weighted among property, payroll and sales. ​ ​ 72 Table of Contents Balance Sheet Analysis ​ Following is a summary of key balance sheet items as of the dates presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) ASSETS ​ ​ ​ ​ ​ ​ Cash and short-term investment ​ $ 748,621 ​ $ 711,717 Principal-only stripped mortgage-backed securities ​ ​ 609,103 ​ ​ 722,528 Loans held for sale at fair value ​ ​ 7,819,890 ​ ​ 9,123,410 Derivative assets ​ ​ 201,681 ​ ​ 187,775 Servicing advances, net ​ ​ 589,386 ​ ​ 589,542 Mortgage servicing rights at fair value ​ ​ 10,586,794 ​ ​ 9,598,941 Investments in and advances to affiliates ​ ​ 19,775 ​ ​ 18,063 Loans eligible for repurchase ​ ​ 8,290,697 ​ ​ 7,409,800 Other ​ ​ 993,504 ​ ​ 1,026,913 Total assets ​ $ 29,859,451 ​ $ 29,388,689 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ Short-term debt ​ $ 9,131,867 ​ $ 9,490,620 Long-term debt ​ ​ 6,262,984 ​ ​ 6,157,763 ​ ​ ​ 15,394,851 ​ ​ 15,648,383 Liability for loans eligible for repurchase ​ ​ 8,290,697 ​ ​ 7,409,800 Income taxes payable ​ ​ 1,215,638 ​ ​ 1,184,020 Other ​ ​ 621,379 ​ ​ 837,510 Total liabilities ​ ​ 25,522,565 ​ ​ 25,079,713 Stockholders' equity ​ ​ 4,336,886 ​ ​ 4,308,976 Total liabilities and stockholders' equity ​ $ 29,859,451 ​ $ 29,388,689 Leverage ratios: ​ ​ ​ ​ ​ ​ Total debt / Stockholders' equity ​ ​ 3.5 ​ ​ 3.6 Total debt / Tangible stockholders' equity (1) ​ ​ 3.6 ​ ​ 3.7 (1) Tangible stockholders’ equity represents total stockholders’ equity reduced by intangible assets, comprised of capitalized software, for the dates presented. ​ Total assets increased $470.8 million from $29.4 billion at December 31, 2025 to $29.9 billion at June 30, 2026. The increase was primarily due to an increase of $987.9 million of mortgage servicing rights and an increase of $880.9 million of loans eligible for repurchase, partially offset by a decrease of $1.3 billion in loans held for sale at fair value. ​ Total liabilities increased $442.9 million from $25.1 billion at December 31, 2025 to $25.5 billion at June 30, 2026. The increase was primarily due to an increase of $880.9 million in liability for loans eligible for repurchase, partially offset by a decrease of $358.8 million in short-term borrowings due to a decrease in loans held for sale. As a result of our decreased inventory financing requirements, our leverage ratios slightly decreased during the period ended June 30, 2026 from December 31, 2025. ​ 73 Table of Contents Cash Flows ​ Our cash flows are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended June 30, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ (in thousands) ​ Operating ​ $ 801,097 ​ $ 934,642 ​ $ (133,545) ​ Investing ​ ​ (533,618) ​ (127,033) ​ (406,585) ​ Financing ​ ​ (354,886) ​ (883,905) ​ 529,019 ​ Net decrease in cash ​ $ (87,407) ​ $ (76,296) ​ $ (11,111) ​ ​ The net decrease in cash of $87.4 million during the six months ended June 30, 2026 is discussed below. ​ Operating activities ​ Net cash provided by operating activities totaled $801.1 million during the six months ended June 30, 2026 compared with net cash provided by operating activities of $934.6 million during the same period in 2025. Our cash flows from operating activities are primarily influenced by changes in the levels of our inventory of mortgage loans held for sale as shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended June 30, ​ ​ 2026 ​ 2025 ​ ​ (in thousands) Cash flows from: ​ ​ ​ ​ ​ ​ Loans held for sale ​ $ 648,911 ​ $ 382,339 Other operating sources ​ ​ 152,186 ​ ​ 552,303 ​ ​ $ 801,097 ​ $ 934,642 ​ The decrease in cash flows from other operating sources was primarily driven by an increase in servicing advances and the payment of several large accrued liabilities during the six months ended June 30, 2026, compared to the same period in 2025 ​ Investing activities ​ Net cash used in investing activities during the six months ended June 30, 2026 totaled $533.6 million, primarily due to $262.9 million in net settlement of derivative financial instruments used to hedge our investment in MSRs, a $229.8 million increase in margin deposit and a $124.3 million increase in short-term investment. Net cash used in investing activities during the six months ended June 30, 2025 totaled $127.0 million, primarily due to a $140.7 million increase in margin deposits. ​ Financing activities ​ Net cash used in financing activities totaled $354.9 million during the six months ended June 30, 2026, primarily due to a decrease of $261.7 million in borrowings and a $50.0 million repurchase of common shares. The decrease in borrowings primarily reflects the decrease in inventory of loans held for sale. Net cash used in financing activities totaled $883.9 million during the six months ended June 30, 2025, primarily due to a decrease of $811.5 million in borrowings. The decrease in borrowings primarily reflects the decrease in inventory of loans held for sale during the six months ended June 30, 2026 and 2025. ​ 74 Table of Contents Liquidity and Capital Resources ​ Our liquidity reflects our ability to meet our current obligations (including our operating expenses and, when applicable, the retirement of, and margin calls relating to, our debt, and margin calls relating to hedges on our commitments to purchase or originate mortgage loans and on our MSR investments), fund new originations and purchases, and make investments as we identify them. We expect our primary sources of liquidity to be through cash flows from business activities, proceeds from bank borrowings and proceeds from and issuance of equity or debt offerings. We believe that our capital resources are sufficient to meet our current liquidity requirements. ​ Our current borrowing strategy is to finance our assets where we believe such borrowing is prudent, appropriate and available. Our primary borrowing activities are in the form of sales of assets under agreements to repurchase, sales of mortgage loan participation purchase and sale certificates, notes payable secured by mortgage servicing rights and unsecured senior notes. A significant amount of our borrowings have short-term maturities and provide for advances with terms ranging from 30 days to 364 days. Because a significant portion of our current debt facilities consist of short-term debt, we expect to renew these facilities in advance of maturity in order to ensure our ongoing liquidity and access to capital or otherwise allow ourselves sufficient time to replace any necessary financing. ​ Secured debt facilities for MSRs and servicing advances take various forms. Fannie Mae MSRs, Ginnie Mae MSRs and servicing advances may be pledged to special purpose entities, each of which may issue variable funding notes (“VFNs”) and term notes and term loans that are secured by such Ginnie Mae or Fannie Mae assets. Term notes are issued to qualified institutional buyers under Rule 144A of the Securities Act and term loans are syndicated to banking entities, while the VFNs are sold to bank partners under agreements to repurchase. Freddie Mac MSRs are pledged to lenders under a bi-lateral loan and security agreement. On May 27, 2026, the Company, through its wholly-owned subsidiaries PNMAC, PLS and the Issuer Trust, issued $300 million in Term Notes with a spread of 2.25% due in May 2031 and partially redeemed $300 million Term Notes in with a spread of 3.20% due in March 2029. Our repurchase agreements represent the sales of assets together with agreements for us to buy back the respective assets at a later date. The table below presents the average, maximum daily and ending balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended June 30, ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ (in thousands) ​ (in thousands) ​ Average balance ​ $ 9,378,290 ​ $ 7,183,987 ​ $ 8,679,015 ​ $ 6,649,802 ​ Maximum daily balance ​ $ 10,648,718 ​ $ 8,581,781 ​ $ 10,648,718 ​ $ 8,690,936 ​ Balance at period end ​ ​ ​ ​ ​ ​ ​ $ 8,440,064 ​ $ 7,351,846 ​ ​ The differences between the average and maximum daily balances on our repurchase agreements reflect both the effect of increasing loan inventory levels during the quarter ended June 30, 2026 and the fluctuations throughout the periods of our inventory as we fund and pool mortgage loans for sale in guaranteed mortgage securitizations. ​ Our repurchase agreements also contain margin call provisions that, upon notice from the applicable lender at its option, require us to transfer cash or, in some instances, additional assets in an amount sufficient to eliminate any margin deficit. A margin deficit will generally result from any decrease in the market value (as determined by the applicable lender) of the assets subject to the related financing agreement. Upon notice from the applicable lender, we will generally be required to satisfy the margin call on the day of such notice or within one business day thereafter, depending on the timing of the notice. ​ Our secured financing agreements at PLS require us to comply with various financial and other restrictive covenants. The most significant financial covenants currently include the following: ​ ● a minimum in unrestricted cash and cash equivalents of $100 million; ​ ● a minimum tangible net worth of $1.25 billion; ​ 75 Table of Contents ● a maximum ratio of total indebtedness to tangible net worth of 10:1; and ​ ● at least one other warehouse or repurchase facility that finances amounts and assets that are similar to those being financed under certain of our existing secured financing agreements. ​ With respect to servicing performed for PMT, PLS is also subject to certain covenants under PMT’s debt agreements. Covenants in PMT’s debt agreements are equally, or sometimes less, restrictive than the covenants described above. ​ PFSI has issued unsecured senior notes (the “Unsecured Notes”) to qualified institutional buyers under Rule 144A of the Securities Act. The Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company’s existing and future wholly-owned domestic subsidiaries (other than certain excluded subsidiaries defined in the indentures under which the Unsecured Notes were issued). ​ Our Unsecured Notes’ indentures contain financial and other restrictive covenants that limit the Company and our restricted subsidiaries’ ability to engage in specified types of transactions, including, but not limited to the following: ● pay dividends or distributions, redeem or repurchase equity, prepay subordinated debt and make certain loans or investments; ● incur, assume or guarantee additional debt or issue preferred stock; ● incur liens on assets; ● merge or consolidate with another person or sell all or substantially all of our assets to another person; ● transfer, sell or otherwise dispose of certain assets including capital stock of subsidiaries; ● enter into transactions with affiliates; and ● allow to exist certain restrictions on the ability of our non-guarantor restricted subsidiaries to pay dividends or make other payments to us. Although financial and other covenants limit the amount of indebtedness that we may incur and affect our liquidity through minimum cash reserve requirements, we believe that these covenants currently provide us with sufficient flexibility to successfully operate our business and obtain the financing necessary to achieve that purpose. ​ We are also subject to liquidity and net worth requirements established by the Federal Housing Finance Agency (“FHFA”) for Agency seller/servicers and Ginnie Mae for single-family issuers. FHFA and Ginnie Mae have established minimum liquidity and net worth requirements for their approved non-depository single-family sellers/servicers in the case of Fannie Mae, Freddie Mac, and Ginnie Mae for its approved single-family issuers, and Ginnie Mae has issued risk-based capital requirements. We believe that we are in compliance with each Agency’s requirements as of June 30, 2026. ​ We have a common stock repurchase program which allows us to repurchase common shares of up to $2 billion. Share repurchases may be effected through open market purchases or privately negotiated transactions in accordance with applicable rules and regulations. The stock repurchase program does not have an expiration date and the authorization does not obligate us to acquire any particular amount of common stock. From inception through June 30, 2026, we have repurchased approximately $1.8 billion of common shares under our stock repurchase program. ​ We continue to explore a variety of means of financing our business, including debt financing through bank warehouse lines of credit, bank loans, repurchase agreements, securitization transactions and corporate debt. However, there can be no assurance as to how much additional financing capacity such efforts will produce, what form the financing will take or whether such efforts will be successful. ​ 76 Table of Contents Debt Obligations ​ As described further above in “Liquidity and Capital Resources,” we currently finance certain of our assets through short-term borrowings with major financial institutions in the form of sales of assets under agreements to repurchase and mortgage loan participation purchase and sale agreements. We access the capital market for long-term debt through the issuance of secured term notes, term loans and Unsecured Notes. The issuer under our secured term note facilities is PLS or a wholly-owned issuer trust guaranteed by PNMAC. In addition, PFSI has issued Unsecured Notes guaranteed by certain of its restricted wholly-owned domestic subsidiaries. ​ PLS is required to comply with financial and other restrictive covenants in certain financing agreements, as described further above in “Liquidity and Capital Resources”. As of June 30, 2026, we believe PLS was in compliance in all material respects with these covenants. ​ Many of our debt financing agreements contain a condition precedent to obtaining additional funding that requires PLS to maintain positive net income for at least one of the previous two consecutive quarters, or other similar measures. PLS is compliant with all such conditions. ​ The financing agreements also contain margin call provisions that, upon notice from the applicable lender, require us to transfer cash or, in some instances, additional assets in an amount sufficient to eliminate any margin deficit. Upon notice from the applicable lender, we will generally be required to satisfy the margin call on the day of such notice or within one business day thereafter, depending on the timing of the notice. ​ In addition, the financing agreements contain events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and/or certain representations and warranties, cross-defaults, guarantor defaults, servicer termination events and defaults, material adverse changes, bankruptcy or insolvency proceedings and other events of default customary for these types of transactions. The remedies for such events of default are also customary for these types of transactions and include the acceleration of the principal amount outstanding under the agreements and the liquidation by our lenders of the mortgage loans or other collateral then subject to the agreements. ​ 77 Table of Contents Our debt obligations have the following sizes and maturities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ Total ​ Committed ​ Facility Lender ​ ​ ​ indebtedness (1) ​ ​ ​ facility size (2) ​ ​ ​ facility (2) ​ ​ ​ Maturity date (2) ​ ​ (dollar amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans sold under agreements to repurchase ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bank of America, N.A. ​ $ 1,589,125 ​ $ 2,500,000 ​ $ 1,500,000 ​ June 7, 2028 Atlas Securitized Products, L.P. ​ $ 1,080,310 ​ $ 1,080,310 ​ $ 300,000 ​ December 10, 2027 Wells Fargo Bank, N.A. ​ $ 560,255 ​ $ 1,250,000 ​ $ 500,000 ​ May 19, 2028 Royal Bank of Canada ​ $ 550,025 ​ $ 1,000,000 ​ $ 600,000 ​ May 10, 2027 Nomura Corporate Funding Americas ​ $ 548,012 ​ $ 700,000 ​ $ — ​ August 4, 2027 BNP Paribas ​ $ 452,424 ​ $ 600,000 ​ $ 250,000 ​ September 30, 2027 Morgan Stanley Bank, N.A. ​ $ 437,266 ​ $ 1,000,000 ​ $ 350,000 ​ June 9, 2028 JP Morgan Chase Bank, N.A. ​ $ 357,106 ​ $ 1,000,000 ​ $ 150,000 ​ June 25, 2028 Barclays Bank PLC ​ $ 249,332 ​ $ 440,000 ​ $ 250,000 ​ May 15, 2028 Goldman Sachs Bank USA ​ $ 246,712 ​ $ 500,000 ​ $ 100,000 ​ March 15, 2028 Citibank, N.A. ​ $ 215,499 ​ $ 1,000,000 ​ $ 550,000 ​ August 21, 2027 Mizuho Bank, Ltd. ​ $ 183,970 ​ $ 250,000 ​ $ 125,000 ​ October 14, 2026 Servicing assets sold under agreements to repurchase ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Atlas Securitized Products, L.P. ​ $ 580,000 ​ $ 2,169,690 ​ $ 350,000 ​ December 10, 2027 Nomura Corporate Funding Americas ​ $ 285,000 ​ $ 550,000 ​ $ 550,000 ​ August 4, 2027 Goldman Sachs Bank USA ​ $ 225,000 ​ $ 650,000 ​ $ 200,000 ​ October 28, 2026 Barclays Bank PLC ​ $ 210,000 ​ $ 210,000 ​ $ 100,000 ​ January 29, 2027 Mizuho Bank, Ltd. ​ $ 55,000 ​ $ 350,000 ​ $ 350,000 ​ October 14, 2027 Mortgage-backed securities sold under agreements to repurchase ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ JP Morgan Chase Bank, N.A. ​ $ 214,970 ​ ​ ​ ​ ​ ​ ​ ​ Santander US Capital Markets LLC ​ $ 201,540 ​ ​ ​ ​ ​ ​ ​ ​ Wells Fargo Bank, N.A. ​ $ 171,258 ​ ​ ​ ​ ​ ​ ​ ​ Bank of America, N.A. ​ $ 27,260 ​ ​ ​ ​ ​ ​ ​ ​ Mortgage loan participation purchase and sale agreements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bank of America, N.A. ​ $ 696,475 ​ $ 750,000 ​ $ — ​ June 9, 2027 Notes payable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ GMSR 2023-GTL1 Loans ​ $ 480,000 ​ $ 480,000 ​ ​ ​ ​ February 25, 2028 GMSR 2023-GTL2 Loans ​ $ 125,000 ​ $ 125,000 ​ ​ ​ ​ October 25, 2028 GMSR 2024-GT1 Notes ​ $ 125,000 ​ $ 125,000 ​ ​ ​ ​ March 26, 2029 GMSR 2025-GT1 Notes ​ $ 300,000 ​ $ 300,000 ​ ​ ​ ​ August 26, 2030 GMSR 2026-GT Note ​ $ 300,000 ​ $ 300,000 ​ ​ ​ ​ May 27, 2031 Citibank, N.A. FHLMC MSR Facility ​ $ 100,000 ​ $ 150,000 ​ $ 150,000 ​ August 21, 2027 Unsecured senior notes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unsecured Notes - 4.25% ​ $ 650,000 ​ ​ ​ ​ ​ ​ ​ February 15, 2029 Unsecured Notes - 5.75% ​ $ 500,000 ​ ​ ​ ​ ​ ​ ​ September 15, 2031 Unsecured Notes - 7.875% ​ $ 750,000 ​ ​ ​ ​ ​ ​ ​ December 15, 2029 Unsecured Notes - 7.125% ​ $ 650,000 ​ ​ ​ ​ ​ ​ ​ November 15, 2030 Unsecured Notes - 6.875% ​ $ 850,000 ​ ​ ​ ​ ​ ​ ​ February 15, 2033 Unsecured Notes - 6.875% ​ $ 850,000 ​ ​ ​ ​ ​ ​ ​ May 15, 2032 Unsecured Notes - 6.75% ​ $ 650,000 ​ ​ ​ ​ ​ ​ ​ February 15, 2034 (1) Outstanding indebtedness as of June 30, 2026. (2) Total facility size, committed facility and maturity date include contractual changes through the date of this Report. 78 Table of Contents The amount at risk (the fair value of the assets pledged plus the related margin deposit, less the amount advanced by the counterparty and accrued interest) relating to our assets sold under agreements to repurchase is summarized by counterparty below as of June 30, 2026: ​ Loans held for sale and MSRs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average ​ ​ Counterparty ​ ​ ​ Amount at risk ​ ​ ​ maturity of advances ​ ​ ​ Facility maturity ​ ​ (in thousands) ​ ​ ​ ​ Atlas Securitized Products, L.P., Goldman Sachs Bank USA, Nomura Corporate Funding Americas and Mizuho Bank, Ltd. (1) ​ $ 6,587,150 ​ June 1, 2027 ​ June 1, 2027 Barclays Bank PLC (2) ​ $ 986,064 ​ January 26, 2027 ​ October 12, 2027 Bank of America, N.A. ​ $ 119,545 ​ August 21, 2026 ​ June 7, 2028 Atlas Securitized Products, L.P. ​ $ 103,365 ​ December 16, 2026 ​ December 10, 2027 Nomura Corporate Funding Americas ​ $ 57,828 ​ July 25, 2026 ​ August 4, 2026 Royal Bank of Canada ​ $ 33,415 ​ August 4, 2026 ​ May 10, 2027 Morgan Stanley Bank, N.A. ​ $ 29,039 ​ September 17, 2026 ​ October 22, 2027 Wells Fargo Bank, N.A. ​ $ 28,711 ​ August 5, 2026 ​ May 19, 2028 BNP Paribas ​ $ 21,631 ​ September 13, 2026 ​ September 30, 2027 JP Morgan Chase Bank, N.A. ​ $ 21,034 ​ September 24, 2026 ​ June 25, 2027 Mizuho Bank, Ltd. ​ $ 17,884 ​ October 4, 2026 ​ October 14, 2026 Goldman Sachs Bank USA ​ $ 11,993 ​ September 11, 2026 ​ March 15, 2028 Citibank, N.A. ​ $ 9,314 ​ August 24, 2026 ​ ​ ​ August 21, 2027 (1) The borrowing facilities are in the form of a sale of a variable funding note under an agreement to repurchase. The facility maturity date represents a weighted average with maturity dates ranging from August 4, 2026 through December 10, 2027. ​ (2) The facility maturity dates are shown as weighted averages. ​ Principal-only stripped MBS ​ ​ ​ ​ ​ ​ ​ Counterparty ​ ​ ​ Amount at risk ​ ​ ​ Maturity ​ ​ (in thousands) ​ ​ Bank of America, N.A. ​ $ 2,553 ​ July 28, 2026 JP Morgan Chase Bank, N.A. ​ $ 14,143 ​ July 6, 2026 Wells Fargo Bank, N.A. ​ $ 13,990 ​ July 23, 2026 Santander US Capital Markets LLC ​ $ 11,663 ​ July 15, 2026 ​ Critical Accounting Estimates Preparation of financial statements in compliance with GAAP requires us to make estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Certain of these estimates significantly influence the portrayal of our financial condition and results, and they require us to make difficult, subjective or complex judgments. Our critical accounting policies primarily relate to our fair value estimates. Our Annual Report on Form 10-K for the year ended December 31, 2025 contains a discussion of our critical accounting policies, which utilize relevant critical accounting estimates. There have been no significant changes in our critical accounting policies and estimates during the quarter ended June 30, 2026 as compared to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. ​ ​ 79 Table of Contents