Good afternoon and welcome to the Fourth Quarter and Full-Year 2021 Earnings Discussion for PennyMac Financial Services, Inc. The slides that accompany this discussion are available on PennyMac Financials website at ire pennymacfinancial.com. Before we begin, let me remind you that our discussion contains forward-looking statements that are subject to risks identified on Slide 2 that could cause our actual results to differ materially as well as non - GAAP measures that have been reconciled to their GAAP equivalent in our earnings presentation. Now I'd like to begin by introducing David Spector, PennyMac Financials Chairman and Chief Executive Officer, who will review the company's fourth quarter and full-year 2021 results.

Thank you Isaac. PennyMac Financial, again, delivered strong performance in the fourth quarter, demonstrating the earnings power of our balanced business model with pretax income from our servicing business exceeding that from our production business. Net income was $173 million or diluted earnings per share of $2.79, representing an annualized return on equity of 20%. Book value per share grew 4% from September 30th to $60.11 at December 31st. We continued to repurchase shares and this quarter, we repurchased 3.9 million shares of PFSI's common stock for an approximate cost of $257 million. And in January, we repurchased an additional 848,000 shares for an approximate cost of $56 million. PFSI Board of Directors also declared a fourth quarter cash dividend of $0.20 per share. Dan karate, PFSI, Senior Managing Director and Chief Financial Officer, will review additional details of our financial performance later on in this discussion. In total, loan acquisition origination volumes were $47 billion dollars in the 4th quarter. These production volumes again, led to Servicing Portfolio growth despite continued elevated prepayment activity. PennyMac Financial Servicing Portfolio totaled $510 billion in unpaid principal balance at December 31st. Up 3% from the end of the prior quarter, and 19% from December 31st 2020. In PFSI's investment management segment, net assets under management were $2.4 billion at year-end, down from the prior quarter due to PMT's net loss in the fourth quarter. 2021 was another record year operationally for PFSI. Total production, including acquisitions made by PMT, were $234 billion in UPB, up 19% from 2020. Importantly, in our most profitable channel, Consumer Direct, originations totaled $43 billion, a meaningful increase from $23 billion in 2020. These production volumes led to servicing portfolio growth of 19%, despite elevated prepayment activity throughout the year. And as I said earlier, we ended…

Thanks, David. As you can see on Slide 8 of our presentation, PennyMac maintained its leadership position in the correspondent channel and we estimate that throughout this year, we represent an approximately 16.8% of the overall channel. In the fourth quarter, total correspondent loan acquisition volume was $33 billion down 25% from the prior quarter and 42% from the fourth quarter of 2020. 52% of the acquisitions were conventional loans and 48% were government loans compared to 65% and 35% respectively in the third quarter. Government loan acquisitions in the quarter totaled $15.7 billion up 2% from the prior quarter and down 17% from the fourth quarter of 2020.Conventional correspondent acquisitions for which PFSI earns a fulfillment fee from PMT, totaled $17.2 billion, down 40% from the prior quarter, and 55% from the fourth quarter of 2020, as a result of significant levels of competition for conventional loans, including from the GSEs. Government correspondent locks were $15.5 billion down 4% from the prior quarter and 21% from the fourth quarter of 2020. Revenue per fallout adjusted government lock in the fourth quarter was 24 basis points down from 27 basis points in the prior quarter. At the scale we have achieved in our correspondent business combined with our low cost structure and operational excellence in the channel allow us to operate profitably through volatile market environments. In January, our correspondent acquisitions were $7.6 billion in UPB and locks were $7.5 billion. As David mentioned, we estimated that our market shares and Consumer Direct has increased meaningfully from the last year and we accounted for approximately 1.4% of total originations in the channel through 2021. Origination volumes in the channel for the fourth quarter were $10.6 billion, down 5% from the prior quarter and up 32% from the fourth quarter of…

Thanks, Doug. As David mentioned earlier, PFSI's net income was $173.1 million or diluted earnings per share of $2.79. I will cover each segment's results and then briefly review our forbearance and servicing advance trends. Production segment pretax income was $106.5 million, down 68% from the prior quarter and 81% from the 4th quarter of 2020, primarily due to lower volumes and margins resulting from a transitioning mortgage market and a return to more seasonal trends. As you'll see on Slide 10, we provide a breakdown of the revenue contribution from each of PFSI's loan production channels, net of loan origination expenses, including fulfillment fees received from PMT for conventional correspondent loans. The direct lending channels have an outsized impact on PFSI's production earnings as David mentioned earlier. As you can see, consumer and broker direct represented 31% of fallout-adjusted lock volume in the fourth quarter, but accounted for approximately 90% of segment pretax income. Production revenue margins and consumer direct remained attractive, but decreased from the prior quarter, while broker direct margins remained below normalized levels. Government correspondent margins were down slightly. Revenue per fallout-adjusted lock for PFSI's own account was 113 basis points in the fourth quarter, down from 165 basis points in the prior quarter. This includes $75.6 million in losses realized related to the timing of revenue and loan origination expense recognition, hedging, pricing and execution changes, and other items. Our costs vary by channel, ranging from approximately 10 basis points in Correspondent to a 140 basis points in Consumer Direct. And as our production mix continues to shift toward direct lending, production expenses as a percentage of fallout adjusted locks are expected to trend higher. The Servicing segment recorded pre -tax income of a $126.1 million, up from pretax income of $8 million in the…

Thank you, Dan. 2022 brings us a transitioning mortgage market that presents headwinds for PFSI's performance. Our newly evolved brand and marketing focus, along with deployment of transformational technologies in our direct link channels, are key components of multiyear investments to achieve our medium-term goals. At the same time, as the market is transitioning to a higher rate environment with elevated levels of competition, we will remain disciplined, taking advantage of our operational scale, while staying focused on profitability and shareholder returns. We encourage investors with any questions to reach out to our investor relations team by email or phone. Thank you.

This concludes PennyMac Financial Services, Inc.’s fourth quarter earnings discussion. For any questions, please visit our website at ir.pennymacfinancial.com or call our Investor Relations department at (818) 264-4907. Thank you.