Good afternoon, and welcome to the Fourth Quarter and Full Year 2022 Earnings Discussion for PennyMac Financial Services, Inc. The slides that accompany this discussion are available on PennyMac Financial's website at pfsi.pennymac.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 Financial's Chairman and Chief Executive Officer who will review the Company's fourth quarter and full-year 2022 results.

Thank you, Isaac. In the fourth quarter, PennyMac Financial delivered net income of $38 million, or $0.71 in earnings per share. These results include a non-recurring tax rate change which negatively impacted earnings per share by $0.22. Dan Perotti, PFSI's Senior Managing Director and Chief Financial Officer will provide greater detail later on in this discussion. For the full year, PFSI achieved a return on equity of 14%, driving continued growth in book value per share, which ended 2022 at $69.44. Our servicing portfolio ended the year at $552 billion in unpaid principal balance as additions from loan production continued to exceed prepayment activity. The growth of our servicing portfolio continues to differentiate PFSI from its competition, serving as an increasingly important asset, which I will discuss later on. We remained active in stock buybacks and in the fourth quarter we repurchased 1.1 million shares of PFSI common stock at an average price of $46.99 for an approximate cost of $51 million. Repurchase levels were down meaningfully from the third quarter as we prefer to maintain flexibility to address potential risks and opportunities in the evolving market environment. In PFSI's Investment Management segment, net assets under management were $2 billion at quarter end, down slightly from the prior quarter due to PMT's financial performance. PFSI's Board of Directors also declared a fourth quarter cash dividend of $0.20 per share. While 2022 was a challenging year for the mortgage industry due to the rapid and significant increase in interest rates, our operating discipline combined with the meaningful actions we took throughout the year to right-size our business for a smaller origination market, led to strong financial performance. In fact, for the full year PFSI produced net income of $476 million, which drove book value per share up 16% from year end…

Thanks, David. Overall production was solid in the fourth quarter with total production volumes down only 12% from the prior quarter, while industry volumes were down 34%, according to Inside Mortgage Finance. PennyMac widened its leadership position in correspondent lending as our strong capital position and consistent commitment to the channel provides our partners with the stability and support they need to successfully navigate the challenging mortgage market. We estimate that over the past 12 months we represented approximately 15% of the channel overall. Total correspondent loan acquisition volume in the fourth quarter was $20.8 billion. 51% were conventional loans and 49% were government-insured or guaranteed loans. Purchase loans accounted for 93% of total correspondent acquisitions during the quarter. Acquisitions for PFSI’s own account totaled $14 billion, up 15% from the prior quarter due to the acquisition of certain conventional loans from PMT in addition to government loans during the quarter. Conventional acquisitions for PMT’s account totaled $6.8 billion, down from $10.2 billion in the prior quarter, as a result of the previously mentioned sales to PFSI. Similarly, correspondent lock volume for PFSI’s account was up 25% from the prior quarter. Revenue per fallout-adjusted lock in the fourth quarter was 21 basis points, down from 24 basis points in the prior quarter, driven primarily by PFSI’s purchase of lower margin conventional loans from PMT. While we respected Wells Fargo as a competitor in the correspondent channel, we believe their exit from the channel creates additional opportunities for PennyMac, particularly in the community bank and credit union sector of the market where they previously had a strong presence. 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 efficiently through the volatile market environment, even as…

Thanks, Doug. As David mentioned earlier PFSI’s net income was $38 million or diluted earnings per share of $0.71. The fourth quarter included non-recurring tax items, which resulted in an effective tax rate of 44.4% versus 27.1% in the prior quarter. The increase in the effective tax rate was primarily driven by an increase in the provision tax rate, which increased from 26.5% to 26.85% for 2022. The increase in tax rate resulted in the repricing of PFSI’s net deferred tax liability, which was the primary driver of a non-recurring tax expense of approximately $11.9 million in the quarter. The impact of this tax rate change was negative $0.22 in earnings per share. Production segment pretax income was negative $9 million. As you will see on Slide 12, we provide a breakdown of the revenue contribution from each of PFSI’s loan production channels, net of loan origination expenses, including the fulfillment fees received from PMT for the conventional correspondent loans it retains. Production revenue margins were lower across all three channels. Revenue per fallout-adjusted lock for PFSI’s own account was 55 basis points in the fourth quarter, down from 99 basis points in the prior quarter driven by lower volumes in Consumer Direct and lower overall margins. This includes $24 million in gains realized related to the timing of revenue and loan origination expense recognition, hedging, pricing & execution changes, and other items. As David mentioned earlier, we remain focused on managing expenses in the current market environment, and although fallout adjusted locks were up 11% from the prior quarter, production expenses net of loan origination expense were down 13%. The Servicing segment recorded pretax income of $76 million, down from pretax income of $145 million in the prior quarter and $126 million in the fourth quarter of 2021. Pretax…

Thank you, Dan. More than 15 years ago, we founded PennyMac with a vision to help revitalize the mortgage market and become a trusted partner in home ownership. Since then, we have grown responsibly and profitably into one of the largest residential mortgage producers and servicers in the country with an industry-leading correspondent production business, and a growing presence in the direct lending channels. Though 2023 is expected to be another challenging year for the mortgage industry, I remain confident in PennyMac Financial’s ability to continue executing given its balanced business model and long history of generating stockholder value through different mortgage market cycles and environments. 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 pfsi.pennymac.com, or call our Investor Relations department at 818‐264‐4907. Thank you. End of Q&A: