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): February 3, 2016

PennyMac Financial Services, Inc.

(Exact name of registrant as specified in its charter)

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

6101 Condor Drive, Moorpark, California	93021
(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:

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

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

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

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

Item 2.02 Results of Operations and Financial Condition.

On February 3, 2016, PennyMac Financial Services, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2015. 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 February 3, 2016 and are furnished as Exhibit 99.1 and Exhibit 99.2, respectively.

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

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated February 3, 2016, issued by PennyMac Financial Services, Inc. pertaining to its financial results for the fiscal quarter and year ended December 31, 2015.
99.2	Slide Presentation for use beginning on February 3, 2016 in connection with a recorded presentation of financial results for the fiscal quarter and year ended December 31, 2015.

2

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: February 4, 2016	By:	/s/ Anne D. McCallion
		Anne D. McCallion Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated February 3, 2016, issued by PennyMac Financial Services, Inc. pertaining to its financial results for the fiscal quarter and year ended December 31, 2015.
99.2	Slide Presentation for use beginning on February 3, 2016 in connection with a recorded presentation of financial results for the fiscal quarter and year ended December 31, 2015.

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EX-99.1

Exhibit 99.1

Investors and Media

Christopher Oltmann

(818) 264-4907

PennyMac Financial Services, Inc. Reports

Fourth Quarter 2015 Results

Moorpark, CA, February 3, 2016 – PennyMac Financial Services, Inc. (NYSE: PFSI) today reported net income of $68.9 million for the fourth quarter of 2015, on revenue of $187.2 million. Net income attributable to PFSI common stockholders was $12.8 million or $0.58 per diluted share.

Fourth Quarter 2015 Highlights

· Pretax income of $77.2 million, up 4 percent from the prior quarter and the highest level on record for PennyMac Financial

· Total net revenue of $188.9 million, essentially unchanged from the prior quarter

o Production revenue of $104.5 million, down 23 percent from the prior quarter

o Servicing revenue of$78.2 million, up 70 percent from the prior quarter

o Investment Management revenue of $6.2 million, down 21 percent from the prior quarter

· Total loan production activity of $11.1 billion in unpaid principal balance (UPB), down
28 percent from the prior quarter

· Servicing portfolio reached $160.3 billion in UPB, up 4 percent from September 30, 2015

· Net assets under management were approximately $1.7 billion, down 1 percent from the prior quarter

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Full-Year 2015 Highlights

· Pretax income of $279.2 million, up 25 percent from the prior year

· Total net revenue of $713.1 million, up 38 percent from the prior year

· Loan production totaled $48.4 billion in UPB, an increase of 67 percent from the prior year, which included $4.1 billion in UPB of consumer direct production, an increase of 113 percent from the prior year

· Servicing portfolio reached $160.3 billion in UPB, up 51 percent from December 31, 2014, driven by the organic additions from loan production and $32.8 billion in UPB of mortgage servicing rights (MSR) acquisitions

“PennyMac Financial concluded another record year with solid financial and operational performance in the fourth quarter, which reflected balanced earnings contributions from the production and servicing segments,” said Chairman and Chief Executive Officer Stanford L. Kurland. “Our mortgage production volumes remained strong despite a seasonally smaller mortgage market and higher interest rates during the quarter. Our servicing segment delivered record pretax income, driven primarily by growth in core servicing profitability and MSR valuation gains that were largely offset by hedging activities. Our consistently strong financial performance reflects our dedicated approach to interest rate risk management across the production pipeline and the MSR asset.”

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

	Quarter ended December 31, 2015
	Mortgage Banking
	Production		Servicing			Total			Investment Management			Total
	(in thousands)
Revenue
Net gains on mortgage loans held for sale at fair value	$	65,893	$	12,843		$	78,736		$	–		$	78,736
Loan origination fees		20,969		–			20,969			–			20,969
Fulfillment fees from PMT		12,855		–			12,855			–			12,855
Net servicing fees		–		76,969			76,969			–			76,969
Management fees		–		–			–			6,329			6,329
Carried Interest from Investment Funds		–		–			–			(270	)		(270	)
Net interest income (expense):
Interest income		9,197		2,788			11,985			–			11,985
Interest expense		4,841		14,635			19,476			–			19,476
		4,356		(11,847	)		(7,491	)		–			(7,491	)
Other		438		247			685			91			776
Total net revenue		104,511		78,212			182,723			6,150			188,873
Expenses		54,219		50,287			104,506			5,494			110,000
Income before provision for income taxes and non-segment activities		50,292		27,925			78,217			656			78,873
Non-segment activities (1)		–		–			–			–			(1,640	)
Income before provision for income taxes	$	50,292	$	27,925		$	78,217		$	656		$	77,233

(1) Consists primarily of the expense associated with an increase to the payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement

Production Segment

Production includes the correspondent acquisition of newly originated mortgage loans for PennyMac Financial’s own account, fulfillment services on behalf of PennyMac Mortgage Investment Trust (NYSE: PMT), and consumer direct lending.

2

PennyMac Financial’s loan production totaled $11.1 billion in UPB, of which $7.6 billion in UPB was for its own account, and $3.5 billion was fee-based fulfillment activity for PMT. Interest rate lock commitments (IRLCs) on correspondent government-insured and consumer direct loans totaled $8.8 billion in UPB.

Production segment pretax income was $50.3 million, a decrease of 35 percent from the third quarter. Production revenue totaled $104.5 million, a decrease of 23 percent from the third quarter, primarily resulting from a 19 percent quarter-over-quarter decrease in net gains on mortgage loans held for sale. The decrease in preduction revenue was driven by a reduction in government-insured correspondent lock volumes from the elevated levels in the third quarter and reduced margins in the consumer direct lending channel during the fourth quarter. The lower volumes were primarily the result of higher mortgage rates and a seasonally smaller mortgage origination market.

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

	Quarter ended
	December 31, 2015			September 30, 2015			December 31, 2014
	(in thousands)
MSR value	$	112,196		$	153,338		$	59,511
Mortgage servicing rights recapture payable to PennyMac Mortgage Investment Trust		(1,993	)		(3,098	)		(1,270	)
Provision for representations and warranties		(1,978	)		(2,292	)		(1,652	)
Cash investment (1)		(7,885	)		(85,426	)		(20,099	)
Fair value changes of pipeline, inventory and hedges		(21,604	)		20,124			8,159
Net gains on mortgage loans held for sale	$	78,736		$	82,646		$	44,649
Net gains on mortgage loans held for sale by segment:
Production	$	65,893		$	81,005
Servicing	$	12,843		$	1,641
(1) Net of cash hedge expense

PennyMac Financial performs fulfillment services for conventional conforming and jumbo loans acquired by PMT in its correspondent production business. These services include, but are not limited to: marketing; relationship management; the approval of correspondent sellers and the ongoing monitoring of their performance; review of loan data, documentation and appraisals to assess loan quality and risk; pricing; hedging and activities related to the subsequent sale and securitization of loans in the secondary mortgage markets for PMT. Fees earned from fulfillment of correspondent loans on behalf of PMT totaled $12.9 million in the fourth quarter, compared to $17.6 million in the third quarter. The decrease was driven by a 15 percent reduction in conventional loan acquisitions from the third quarter and a decline in the average fulfillment fee rate to 37 basis points, compared to 43 basis points in the third quarter, primarily resulting from contractual discretionary reductions in the fulfillment fee in order to facilitate PMT's successful acquisition of certain loan transactions.

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Production segment expenses were $54.2 million, a 6 percent decrease from the third quarter, primarily driven by the decrease in loan production volumes.

Servicing Segment

Servicing includes income from owned MSRs, in addition to subservicing and special servicing activities. The Servicing segment posted pretax income of $27.9 million in the fourth quarter, versus a pretax loss of $6.1 million in the third quarter. Servicing segment revenues in the fourth quarter totaled $78.2 million, a 70 percent increase from the third quarter, primarily resulting from a 34 percent increase in net loan servicing fees.

Net loan servicing fees totaled $77.0 million for the quarter and included $112.7 million in servicing fees reduced by $47.4 million of amortization and realization of MSR cash flows. Net loan servicing fees also included $45.5 million of fair value gains and impairment reversal related to MSRs, partially offset by a $6.9 million loss from the change in fair value of the excess servicing spread (ESS) financing and $27.0 million of related hedging losses.

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

	Quarter ended
	December 31, 2015			September 30, 2015			December 31, 2014
	(in thousands)
Servicing fees (1)	$	112,699		$	106,052		$	69,901
Effect of MSRs:
Amortization and realization of cash flows		(47,403	)		(41,594	)		(21,690	)
Change in fair value and reversal of (provision for) impairment of MSRs carried at lower of amortized cost or fair value		45,513			(47,926	)		(8,755	)
Change in fair value of excess servicing spread financing		(6,864	)		10,271			4,271
Hedging (losses) gains		(26,976	)		30,455			18,551
Total amortization, impairment and change in fair value of MSRs		(35,730	)		(48,794	)		(7,623	)
Net loan servicing fees	$	76,969		$	57,258		$	62,278

(1) Includes contractually-specified servicing fees

Servicing segment revenue also included $12.8 million in net gains on mortgage loans held for sale at fair value in the fourth quarter resulting from the securitization of reperforming government-insured loans, versus $1.6 million in the third quarter. These loans were previously purchased out of Ginnie Mae securitizations and brought back to performing status through PennyMac Financial’s successful servicing efforts, primarily with the use of loan modifications.

Servicing segment expenses totaled $50.3 million, a $1.9 million decrease from the third quarter, largely due to a decline in credit and advance losses partially offset by a modest increase in direct operating expenses driven by the larger portfolio.

The total servicing portfolio reached $160.3 billion in UPB at December 31, 2015, an increase of 4 percent from the prior quarter end. Of the total servicing portfolio, prime servicing was $156.4 billion in UPB and special servicing was $3.8 billion in UPB. The Company subservices and services under contract $47.8 billion in UPB, an increase of 6 percent from September 30, 2015, primarily due to new correspondent acquisitions by PMT. PennyMac Financial’s MSR portfolio grew to $110.6 billion in UPB, an increase of 3 percent over the prior quarter, primarily resulting from the acquisition of government-insured loans in correspondent production and from consumer direct lending activities.

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

	December 31, 2015		September 30, 2015		December 31, 2014
	(in thousands)
Loans serviced at period end:
Prime servicing:
Owned
Mortgage servicing rights
Originated	$	59,880,349	$	54,259,297	$	36,564,434
Acquisitions		50,722,355		52,717,209		28,126,179
		110,602,704		106,976,506		64,690,613
Mortgage servicing liabilities		806,897		957,113		478,581
Mortgage loans held for sale		1,052,485		1,602,692		1,100,910
		112,462,086		109,536,311		66,270,104
Subserviced for Advised Entities		43,963,378		41,303,357		35,416,466
Total prime servicing		156,425,464		150,839,668		101,686,570
Special servicing:
Subserviced for Advised Entities		3,847,254		3,990,744		4,293,479
Total special servicing		3,847,254		3,990,744		4,293,479
Total loans serviced	$	160,272,718	$	154,830,412	$	105,980,049
Mortgage loans serviced:
Owned
Mortgage servicing rights	$	110,602,704	$	106,976,506	$	64,690,613
Mortgage servicing liabilities		806,897		957,113		478,581
Mortgage loans held for sale		1,052,485		1,602,692		1,100,910
		112,462,086		109,536,311		66,270,104
Subserviced		47,810,632		45,294,101		39,709,945
Total mortgage loans serviced	$	160,272,718	$	154,830,412	$	105,980,049

Investment Management Segment

PennyMac Financial manages PMT and certain private investment funds, for which it may earn base management fees and incentive compensation. Net assets under management were approximately $1.7 billion as of December 31, 2015, down 1 percent from September 30, 2015.

Pretax income for the Investment Management segment was $0.7 million, a decrease of $1.5 million from the third quarter of 2015. Management fees, which include base management fees from PMT and the private investment funds and any earned incentive fees from PMT, decreased 2 percent from the prior quarter. Carried interest from the private investment funds decreased by $1.8 million from the prior quarter resulting from the reduced performance of the funds during the quarter.

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

	Quarter ended
	December 31, 2015			September 30, 2015		December 31, 2014
	(in thousands)
Management fees:
PennyMac Mortgage Investment Trust
Base	$	5,670		$	5,742	$	5,938
Performance incentive		–			–		2,488
		5,670			5,742		8,426
Investment Funds		659			714		1,596
Total management fees		6,329			6,456		10,022
Carried Interest		(270	)		1,483		263
Total management fees and Carried Interest	$	6,059		$	7,939	$	10,285
Net assets of Advised Entities:
PennyMac Mortgage Investment Trust	$	1,496,112		$	1,514,430	$	1,578,172
Investment Funds		231,744			238,349		424,182
	$	1,727,856		$	1,752,779	$	2,002,354

Investment Management segment expenses totaled $5.5 million, a 2 percent decrease from the third quarter.

Consolidated Expenses

Total expenses for the fourth quarter were $110.0 million, a 5 percent decrease from the third quarter. The decline in total expenses was largely due to a $2.6 million decrease in compensation expense from the third quarter to refine performance and incentive-based compensation accruals to actual headcount and payment rate.

Mr. Kurland concluded, “PennyMac Financial’s consistently strong financial performance and outperformance relative to the mortgage industry reflects the significant investments we have made in our operational infrastructure, dedicated approach to risk management, and governance culture. We are building the PennyMac platform for continued growth in mortgage lending and for long-term success. We believe our operational infrastructure is highly scalable and well positioned to respond to market opportunities, including the most recent decline in mortgage rates that could drive higher refinance demand.”

Management’s slide presentation will be available in the Investor Relations section of the Company’s website at www.ir.pennymacfinancial.com beginning at 1:30 p.m. (Pacific Standard Time) on Wednesday, February 3, 2016.

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About PennyMac Financial Services, Inc.

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

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections and assumptions with respect to, among other things, the Company’s financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like “believe,” “expect,” “anticipate,” “promise,” “plan,” and other expressions or words of similar meanings, as well as future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: changes in federal, state and local laws and regulations applicable to the highly regulated industry in which we operate; lawsuits or governmental actions if we do not comply with the laws and regulations applicable to our businesses; the creation of the Consumer Financial Protection Bureau, or CFPB, and enforcement of its rules; changes in existing U.S. government-sponsored entities, 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 our 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. residential real estate market conditions; difficulties in growing loan production volume; changes in prevailing interest rates; increases in loan delinquencies and defaults; our reliance on PennyMac Mortgage Investment Trust as a significant source of financing for, and revenue related to, our correspondent production business and purchased mortgage servicing rights; availability of required additional capital and liquidity to support business growth; our obligation to indemnify third-party purchasers or repurchase loans that we originate, acquire or assist in with fulfillment; our obligation to indemnify advised entities or investment funds to meet certain criteria or characteristics or under other circumstances; decreases in the historical returns on the assets that we select and manage for our clients, and our resulting management and incentive fees; regulation applicable to our investment management segment; conflicts of interest in allocating our services and investment opportunities among ourselves and our advised entities; the potential damage to our reputation and adverse impact to our business resulting from ongoing negative publicity; and our rapid growth. 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)

	December 31, 2015		September 30, 2015		December 31, 2014
	(in thousands, except share data)
ASSETS
Cash	$	105,472	$	47,415	$	76,256
Short-term investments at fair value		46,319		24,766		21,687
Mortgage loans held for sale at fair value		1,101,204		1,696,980		1,147,884
Derivative assets		50,280		53,569		38,457
Servicing advances, net		299,354		252,172		228,630
Carried Interest due from Investment Funds		69,926		70,196		67,298
Investment in PennyMac Mortgage Investment Trust at fair value		1,145		1,160		1,582
Mortgage servicing rights		1,411,935		1,307,392		730,828
Furniture, fixtures, equipment and building improvements, net		16,311		14,107		11,339
Note receivable from PennyMac Mortgage Investment Trust secured		150,000		150,000		–
Receivable from Investment Funds		1,316		1,542		2,291
Receivable from PennyMac Mortgage Investment Trust		18,965		17,220		23,871
Capitalized software, net		3,025		2,035		567
Deferred tax asset		18,378		25,878		46,038
Loans eligible for repurchase		166,070		97,455		72,539
Other		45,594		53,435		37,419
Total assets	$	3,505,294	$	3,815,322	$	2,506,686
LIABILITIES
Assets sold under agreements to repurchase	$	1,166,731	$	1,286,411	$	822,252
Mortgage loan participation and sale agreement		234,872		247,410		143,568
Note payable		61,136		406,990		146,855
Obligations under capital lease		13,579		–		–
Excess servicing spread financing at fair value		412,425		418,573		191,166
Derivative liabilities		9,083		4,632		6,513
Mortgage servicing liabilities at fair value		1,399		10,724		6,306
Accounts payable and accrued expenses		89,914		85,530		62,715
Payable to Investment Funds		30,429		30,211		35,908
Payable to PennyMac Mortgage Investment Trust		162,379		147,326		123,315
Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement		74,315		72,275		75,024
Liability for loans eligible for repurchase		166,070		97,455		72,539
Liability for losses under representations and warranties		20,612		18,478		13,259
Total liabilities		2,442,944		2,826,015		1,699,420
STOCKHOLDERS' EQUITY
Class A common stock¾authorized 200,000,000 shares of $0.0001 par value; issued and outstanding, 21,990,831, 21,842,868 and 21,577,686 shares, respectively		2		2		2
Class B common stock¾authorized 1,000 shares of $0.0001 par value; issued and outstanding, 51, 51 and 54 shares, respectively		–		–		–
Additional paid-in capital		172,354		169,297		162,720
Retained earnings		98,470		85,699		51,242
Total stockholders' equity attributable to PennyMac Financial Services, Inc. common stockholders		270,826		254,998		213,964
Noncontrolling interests in Private National Mortgage Acceptance Company, LLC		791,524		734,309		593,302
Total stockholders' equity		1,062,350		989,307		807,266
Total liabilities and stockholders’ equity	$	3,505,294	$	3,815,322	$	2,506,686

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PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Quarter ended
	December 31, 2015			September 30, 2015			December 31, 2014
	(in thousands, except per share data)
Revenue
Net gains on mortgage loans held for sale at fair value	$	78,736		$	82,646		$	44,649
Loan origination fees		20,969			29,448			12,528
Fulfillment fees from PennyMac Mortgage Investment Trust		12,855			17,553			11,887
Net servicing fees:
Loan servicing fees
From non-affiliates		90,081			83,424			48,944
From PennyMac Mortgage Investment Trust		11,880			11,736			11,426
From Investment Funds		720			796			(329	)
Ancillary and other fees		10,018			10,096			9,860
		112,699			106,052			69,901
Amortization, impairment and change in estimated fair value of mortgage servicing rights		(35,730	)		(48,794	)		(7,623	)
Net servicing fees		76,969			57,258			62,278
Management fees:
From PennyMac Mortgage Investment Trust		5,670			5,742			8,426
From Investment Funds		659			714			1,596
		6,329			6,456			10,022
Carried Interest from Investment Funds		(270	)		1,483			263
Net interest expense:
Interest income		11,985			15,053			8,434
Interest expense		19,415			20,944			10,426
		(7,430	)		(5,891	)		(1,992	)
Change in fair value of investment in and dividends received from PennyMac Mortgage Investment Trust		65			(158	)		(26	)
Other		(984	)		410			2,116
Total net revenue		187,239			189,205			141,725
Expenses
Compensation		71,566			74,129			52,475
Servicing		12,979			16,770			19,732
Technology		7,059			6,676			4,525
Professional services		4,763			3,803			2,958
Loan origination		4,583			4,314			3,602
Other		9,056			9,590			5,200
Total expenses		110,006			115,282			88,492
Income before provision for income taxes		77,233			73,923			53,233
Provision for income taxes		8,327			8,575			7,337
Net income		68,906			65,348			45,896
Less: Net income attributable to noncontrolling interest		56,135			52,668			37,133
Net income attributable to PennyMac Financial Services, Inc. common stockholders	$	12,771		$	12,680		$	8,763
Earnings per share
Basic	$	0.58		$	0.58		$	0.41
Diluted	$	0.58		$	0.58		$	0.41
Weighted-average common shares outstanding
Basic		21,912			21,810			21,549
Diluted		76,132			76,138			76,004

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PENNYMAC FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Year ended December 31,
	2015			2014			2013
	(in thousands, except per share data)
Revenue
Net gains on mortgage loans held for sale at fair value	$	320,715		$	167,024		$	138,013
Loan origination fees		91,520			41,576			23,575
Fulfillment fees from PennyMac Mortgage Investment Trust		58,607			48,719			79,712
Net loan servicing fees:
Loan servicing fees
From non-affiliates		290,474			173,005			61,523
From PennyMac Mortgage Investment Trust		46,423			52,522			39,413
From Investment Funds		2,636			6,425			7,099
Ancillary and other fees		43,139			26,469			11,426
		382,672			258,421			119,461
Amortization, impairment and change in fair value of mortgage servicing rights		(153,129	)		(41,502	)		(29,451	)
Net loan servicing fees		229,543			216,919			90,010
Management fees:
From PennyMac Mortgage Investment Trust		24,194			35,035			32,410
From Investment Funds		4,043			7,473			7,920
		28,237			42,508			40,330
Carried Interest from Investment Funds		2,628			6,156			13,419
Net interest expense:
Interest income		49,155			27,771			15,632
Interest expense		68,537			37,257			16,673
Net interest expense		(19,383	)		(9,486	)		(1,041	)
Change in fair value of investment in and dividends received from PennyMac Mortgage Investment Trust		(230	)		(6	)		41
Other		1,472			4,867			2,500
Total net revenue		713,110			518,277			386,559
Expenses
Compensation		274,256			190,707			148,576
Servicing		68,085			48,430			7,028
Technology		25,164			15,439			9,205
Professional services		15,473			11,108			10,571
Loan origination		17,396			9,554			9,943
Other		33,543			20,006			19,110
Total expenses		433,917			295,244			204,433
Income before provision for income taxes		279,193			223,033			182,126
Provision for income taxes		31,635			26,722			9,961
Net income		247,558			196,311			172,165
Less: Net income attributable to noncontrolling interest		200,330			159,469			157,765
Net income attributable to PennyMac Financial Services, Inc. common stockholders	$	47,228		$	36,842		$	14,400
Earnings per share
Basic	$	2.17		$	1.73		$	0.83
Diluted	$	2.17		$	1.73		$	0.82
Weighted-average common shares outstanding
Basic		21,755			21,250			17,311
Diluted		76,104			75,955			75,892

11

EX-99.2

Exhibit 99.2

Fourth Quarter 2015 Earnings Report

Forward - Looking Statements 2 This presentation contains forward - looking statements within the meaning of Section 21 E 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, from past results discussed herein, or from illustrative examples provided herein . Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to : changes in federal, state and local laws and regulations applicable to the highly regulated industry in which we operate ; lawsuits or governmental actions if we do not comply with the laws and regulations applicable to our businesses ; the creation of the Consumer Financial Protection Bureau, or CFPB, and enforcement of its rules ; changes in existing U . S . government - sponsored entities, 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 our 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 . residential real estate market conditions ; difficulties in growing loan production volume ; changes in prevailing interest rates ; increases in loan delinquencies and defaults ; our reliance on PennyMac Mortgage Investment Trust as a significant source of financing for, and revenue related to, our correspondent lending business and purchased mortgage servicing rights ; availability of required additional capital and liquidity to support business growth ; our obligation to indemnify third - party purchasers or repurchase loans that we originate, acquire or assist in with fulfillment ; our obligation to indemnify advised entities or investment funds to meet certain criteria or characteristics or under other circumstances ; decreases in the historical returns on the assets that we select and manage for our clients, and our resulting management and incentive fees ; regulation applicable to our investment management segment ; conflicts of interest in allocating our services and investment opportunities among ourselves and our advised entities ; the potential damage to our reputation and adverse impact to our business resulting from ongoing negative publicity ; and our rapid growth . 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 .

Fourth Quarter Highlights 3 ▪ Pretax income of $77.2 million ; diluted earnings per common share of $0.58 – Segment pretax earnings: Production: $50.3 million; Servicing: $27.9 million; Investment Management: $0.7 million – Record pretax income driven by strong earnings contributions from both the Production and Servicing segments despite reduced origination market volumes for the quarter – Reflects disciplined approach to managing interest rate risk across the production pipeline and mortgage servicing rights (MSR) asset ▪ Loan production totaled $11.1 billion in unpaid principal balance (UPB), down 28% from 3Q15, driven by a reduced origination market and a decline in government correspondent funding volumes – Correspondent production was $ 10.0 billion, down 30% from 3Q15 ; consumer direct originations were $1.0 billion, down 1% from 3Q15 – Production segment revenue was $104.5 million, down 23% from record levels in 3Q15 ▪ Servicing portfolio grew to $160.3 billion in UPB, up 4% from September 30, 2015 – Net portfolio growth primarily due to additions from loan production – Pretax servicing operating income was $18.9 million, up 20% from 3Q15 – Servicing segment revenue was $78.2 million which included an $11.7 million increase in MSR value net of hedges and excess servicing spread (ESS) liability ▪ Net assets under management were $1.7 billion, down 1% from September 30, 2015 – Revenue of $6.2 million, down 21% from 3Q15 due to a reduction in carried interest

$0.82 $1.73 $2.17 2012 2013 2014 2015 Strong Earnings and Book Value Growth Expected to Continue Book Value per Share 4 Earnings per Share (1) Represents partial year. PFSI completed its IPO on May 9 th , 2013 (1) N/A $7.27 $8.04 $9.92 $12.40 6/30/13 12/31/13 12/31/14 12/31/15 Growth Drivers in 2016 • Market share growth across production channels, accelerated by the exit or retreat of certain competitors • Continued dedication to risk management and disciplined pricing in a volatile market • Increasing operating margins resulting from larger scale and capturing efficiencies +25% +25%

$32.1 $29.1 $48.4 $0 $10 $20 $30 $40 $50 2013 2014 2015 $78.2 $106.0 $160.3 $0 $60 $120 $180 December 31, 2013 December 31, 2014 December 31, 2015 National leader in production and servicing Continued Growth in PFSI’s Core Mortgage Banking Businesses 5 Production (1) Servicing • 11 th largest in the U.S . (2 ) • Sixth largest in the U.S . (2) +67% +51% ($ in billions) ($ in billions) (1) Includes correspondent aggregation of conventional loans for which PFSI earns a fulfillment fee from PennyMac Mortgage Investment Trust (PMT) rather than income from holding and securitizing the loans (2) Source: Inside Mortgage Finance

Servicing Segment Profitability Improved in Q415 6 (1) Of average servicing portfolio UPB, annualized (2) Includes fair value changes and reversal of ( provision for) impairment • Pretax operating income increased to 4.8 bps from 4.3 bps – Operating expenses, as a ratio of UPB, declined to 10.7 bps driven by a larger portfolio – Realized credit and advance losses decreased from 3Q15 • Fair value gains on MSRs largely offset by performance of ESS and hedges, reflecting our disciplined approach to interest rate risk management • Non - core revenues reflect gains from the securitization of reperforming loans, which offset higher provisions for credit losses $ in thousands basis points (1) $ in thousands basis points (1) Operating revenue 112,946$ 28.7 106,173$ 29.2 Amortization and realization of MSR cash flows (47,403) (12.0) (41,594) (11.4) - Direct servicing expenses: Operating expenses (42,184) (10.7) (40,310) (11.1) Realized credit and advance losses (4,464) (1.1) (8,458) (2.3) Pretax servicing operating income 18,895$ 4.8 15,811$ 4.3 Financing expenses: Interest on ESS (7,769) (8,026) Interest to third parties (3,028) (2,719) Pretax servicing operating income net of financing expenses: 8,097$ 5,066$ Changes in FV: MSR (2) 45,513$ (47,926)$ ESS liability (6,864) 10,271 Hedging derivatives (losses) gains (26,976) 30,455 Non-core servicing expenses: Provision for credit losses (5,378) (2,364) EBO transaction-related expense (575) (3,737) Non-core servicing revenues 14,108 2,180 Non-core servicing gain (loss) 19,827$ (11,122)$ GAAP Pretax Income 27,925$ (6,056)$ 3Q154Q15

Current Market Environment and Outlook 7 (1) Freddie Mac Primary Mortgage Market Survey. 3.81% as of 1/21/2016 (2) National Association Realtors - seasonally adjusted ( 3) Census Bureau - seasonally adjusted 3.0% 3.5% 4.0% 4.5% 5.0% Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Hundreds Average 30 - year fixed rate mortgage (1) 4.0 4.5 5.0 5.5 6.0 6.5 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 New Home Sales Existing Home Sales Home Sales, Seasonally Adjusted Annual Pace • Concerns about the global economy and falling oil prices have driven significant market volatility, resulting in credit spread widening • Mortgage rates remain low – Increased slightly in 4Q15 – Have fallen after quarter end driven by flight to quality in U.S. Treasuries • FHFA Scorecard for the GSEs reflects their central role in the mortgage market – Calls for increased volume of credit risk transfer • Housing fundamentals poised for continued improvement – Pace of total home sales continues to grow steadily – Increased new construction expected to boost supply • TILA - RESPA Integrated Disclosure (TRID) went into effect in October – Some initial delays and extended closing timelines 3.85% 4.01% (Units in millions) (2) (3) 6.0 5.1

Mortgage Origination Market Outlook for 2016 8 Source: Average of forecasts from the Mortgage Bankers Association (as of 1/20/16), Fannie Mae (as of 1/11/16) and Freddie Ma c ( as of 1/20/16) Total U.S. Single Family Mortgage Originations $875 $966 $761 $486 $1,636 $1,452 2015 Estimate 2016 Forecast Refinance Purchase • Refinance volumes may be stronger than forecast if interest rates remain low • Purchase origination volumes have increased annually for each of the last 4 years – Potential to outperform if housing sales continue to improve ($ in billions)

PFSI Initiatives to Grow Production in 2016 9 • Continuing market share gains driven by new seller relationships – Grow sellers from 432 to 500 by year end • Capturing opportunities as sub - scale, new entrants exit • Increasing share in conventional conforming as a result of strategies that provide greater revenue opportunity • Expect limited margin pressures given PFSI’s capabilities and right - sizing of other market participants • Comprises 10% of the total mortgage origination market – Opportunity to expand production at attractive margin levels – Industry - standard tools combined with PennyMac Financial’s fulfillment process should result in high - quality loans • Brokers value lenders with strong technical expertise and customer service • Goal is to work toward leadership role – top 5 wholesale lenders account for ~30% market share • Targeting full launch mid - year 2016 Correspondent Production Consumer Direct Lending Wholesale Lending • Infrastructure investments provide greater fulfillment capacity for higher volumes • Optimize portfolio recapture opportunities – Improve from current rate (21 % in 4Q15 ), especially in conventional conforming loans • Rollout of enhanced mobile and web interface functionality • Optimize capacity utilization for non - portfolio business by efficiently converting aggregation leads • Margin impact depends on mortgage rates and recapture / non - portfolio mix

- 5.6% - 25.6% - 0.1% - 11.2% - 16.2% 30.2% NSM WAC OCN PHH SGM 2015 through September 30 26.0% - 10.4% - 27.0% - 17.5% - 15.8% 31.0% NSM WAC OCN PHH SGM 2014 PFSI Continues to Deliver Strong Performance in the Mortgage Industry 10 Pre - Tax Return on Equity (1) Our strong performance has been attributable to the considerable investments we have made in our industry - leading capabilities including: • Best - in - class operating platform built organically – not distracted by legacy/regulatory issues • Balanced model with leading production and servicing businesses • Focus on and expertise in risk management, including active management of interest rate risk • Strong governance and compliance culture (1) Calculated by dividing GAAP pre - tax income by average shareholders’ equity for the period, as reported by the company. 2015 figures are annualized. Source: Company filings PFSI PFSI

8.74% 7.89% 0% 2% 4% 6% 8% 10% 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Trends in PennyMac Financial’s Businesses Correspondent Production (1) Market Share 0.42% 0.47% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Market Share Consumer Direct Production (1 ) $1.75 $1.73 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1.56% 1.61% 0.0% 0.3% 0.6% 0.9% 1.2% 1.5% 1.8% 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Loan Servicing (1) Market Share Investment Management AUM (billions) 11 (1) Source : Inside Mortgage Finance and company estimates. Inside Mortgage Finance estimates total 4Q15 origination market of $385 billion. Correspondent production share estimate is based on PFSI and PMT acquisition volume of $10.0 billion divided by $127 billion for the correspondent market (estimated to be 33% of total origination market). Consumer direct production share is based on PFSI originations of $1.0 billion divided by $219 billion for the retail market (estimated to be 57% of total origination market). Loan servicing mar ket share is based on PFSI’s servicing UPB of $160.2 billion divided by $9.94 trillion in mortgage debt outstanding as of September 30, 20 15.

12 $4.4 $5.1 $8.3 $10.3 $6.6 $2.9 $2.9 $3.6 $4.1 $3.5 $7.5 $9.5 $14.4 $13.6 $10.6 $0 $4 $8 $12 $16 4Q14 1Q15 2Q15 3Q15 4Q15 (UPB in billions) Quarterly Highlights – Correspondent Production (1) For government - insured loans, PFSI earns gain on mortgage loans (2) For conventional loans, PFSI earns a fulfillment fee from PMT rather than income from holding and securitizing the loans (3) Includes locks related to PMT loan acquisitions, including conventional loans for which PFSI earns a fulfillment fee upon loa n f unding Correspondent Volume and Mix Operational Highlights Ŷ Government - insured loans (1) Strategic Initiatives ▪ Ongoing success in growing volume from relationships with small to medium sized lenders – Accounted for $2.5 billion of lock volume in 4Q15 ▪ Correspondent acquisitions by PMT in 4Q15 totaled $10.0 billion, down 30% Q/Q – Primarily driven by a reduced market resulting from higher rates, seasonal factors and, t o a lesser extent, TRID – 65% government - insured loans ; 35% conventional loans ▪ 4Q15 acquisition volumes increased 38% from 4Q14 ▪ January correspondent acquisitions totaled $3.3 billion; locks totaled $2.9 billion ▪ Purchase - money loans were 86% of 4Q15 acquisitions 3Q15 4Q15 Correspondent seller relationships 400 432 Purchase money loans, as a % of total 77% 86% acquisitions 3Q15 4Q15 Government-insured 693 697 Conventional 744 746 Selected Operational Metrics WA FICO Ŷ Total Locks (3) Ŷ Conventional loans for PMT (2)

(UPB in millions ) ▪ Consumer direct production totaled $1.0 billion in 4Q15, down 1% Q/Q – Strong volumes in spite of a reduced origination market – TRID impact delayed some funding timelines ▪ 4Q15 consumer direct volumes increased 51% from 4Q14 ▪ January consumer direct originations totaled $347 million ; locks totaled $586 million – $592 million committed pipeline at January 31, 2016 (1) Quarterly Highlights – Consumer Direct Production Consumer Direct Production Volume Operational Highlights Strategic Initiatives Ŷ Portfolio - sourced fundings Ŷ Non - portfolio fundings Ŷ Committed pipeline (1) (1) C ommitments to purchase or originate mortgage loans at specified terms at period end (2 ) Includes conforming and jumbo loan originations . ▪ Continued investment in infrastructure to fulfill higher volumes of loans ▪ Optimize portfolio recapture opportunities ▪ Efficiently convert non - portfolio aggregator leads 13 3Q15 4Q15 Government-insured 684 687 Conventional (2) 744 734 WA FICO $682 $897 $1,138 $1,042 $1,028 $585 $713 $504 $550 $691 $0 $200 $400 $600 $800 $1,000 $1,200 4Q14 1Q15 2Q15 3Q15 4Q15

$154.8 $160.3 at 9/30/15 Runoff Additions from loan production MSR acquisitions At 12/31/15 (UPB in billions ) ▪ Servicing portfolio totaled $160.3 billion in UPB at quarter end, up 4% from 3Q15 ▪ Expansion of servicing operations with a third site to open in 2Q16 in Plano, TX ▪ Redesigned PennyMacUSA.com provides a wide variety of information and tools to PennyMac servicing customers – Recent enhancements include responsive design, e - statements, text notifications, increased security Quarterly Highlights – Loan Servicing Loan Servicing Portfolio Composition Operational Highlights Ŷ Prime owned Ŷ Prime subserviced Ŷ Special Net Portfolio Growth ($6.2) $11.1 $0.6 (UPB in billions ) (1) 14 (1) Includes consumer direct production, government correspondent acquisitions, and conventional conforming and jumbo loan acquisitions subserviced for PMT (2) For PMT’s MSR portfolio only (3) Early buyouts of delinquent loans from Ginnie Mae pools during the period Additions From loan p roduction (1) From MSR acquisitions $106 $115 $136 $155 $160 $0 $50 $100 $150 $200 4Q14 1Q15 2Q15 3Q15 4Q15 3Q15 4Q15 Loans serviced (in thousands) 803 814 60+ day delinquency rate 2.9% 2.9% Actual CPR - owned portfolio 15.8% 13.5% Actual CPR - sub-serviced (2) 9.6% 9.2% Completed modifications 1,063 1,063 EBO transactions (in millions) (3) $377 $47 Selected Operational Metrics

$10.4 $10.0 $6.9 $ 7.8 $6.2 $0 $3 $6 $9 $12 $15 4Q14 1Q15 2Q15 3Q15 4Q15 Carried interest & incentive fees Base management fees & other revenue 15 ($ in millions) ▪ Net assets under management were $1.7 billion at December 31, 2015 ▪ PMT’s book value decreased to $20.28 at quarter end versus $20.52 at September 30, 2015 ▪ Nearing completion of PMT’s second GSE risk transfer transaction with Fannie Mae – Invested $107 million to date; investment expected to total $140 million when completed Quarterly Highlights – Investment Management Investment Management Revenues Operational Highlights Strategic Initiatives ▪ Focus on optimizing returns for PMT and the private investment funds ▪ PMT’s recent capital deployment focused on: – MSRs resulting from correspondent acquisitions – GSE risk transfers on PMT’s production – Small balance CRE loans and securitization interests ▪ Investment management revenues were $6.2 million, down 21% from 3Q15 – Carried Interest from the private investment funds decreased to $(0.3) million from $1.5 million in 3Q15 – No incentive fees received in 4Q15 as a result of PMT’s return on equity over the four - quarter period for which incentive fees are calculated

4Q14 37.8$ 11.4$ 2.6$ 51.9$ 1Q15 67.4$ (18.1)$ 3.9$ 53.2$ 2Q15 76.3$ (2.4)$ 1.0$ 74.8$ 3Q15 77.7$ (6.1)$ 2.2$ 73.9$ 4Q15 50.3$ 27.9$ 0.7$ 78.9$ ($ in millions) Production Servicing Investment Management Total Pretax Income Financial Results by Operating Segment 16 Note: Figures may not sum exactly due to rounding

Net gains on mortgage loans held for sale at fair value 65,893$ 81,005$ Loan origination fees 20,969 29,448 Fulfillment fees from PennyMac Mortgage Investment Trust 12,855 17,553 Net interest income 4,356 6,938 Other 438 272 104,511$ 135,216$ 54,219$ 57,477$ Pretax income 50,292$ 77,739$ Net gains on mortgage loans 65,893$ 81,005$ As % of IRLCs 0.75% 0.72% Loan origination fees 20,969$ 29,448 As % of PFSI fundings 0.28% 0.26% Fulfillment fees from PMT 12,855$ 17,553$ Average fulfillment fee 37 bps 43 bps Production Segment Metrics Unaudited ($ in thousands) Expenses Production Segment Unaudited ($ in thousands) Revenue Quarter ended September 30 , 2015 Quarter ended June 30 , 2015 Quarter ended September 30, 2015 Quarter ended June 30 , 2015 Quarter ended December 31 , 2015 Quarter ended September 30 , 2015 Quarter ended Dectember 31, 2015 Quarter ended September 30, 2015 17 Mortgage Banking – Production Segment Results ( 1 ) Fulfillment fees paid by PMT divided by unpaid principal balance of loans fulfilled for PMT during the quarter (2) Includes revenues from net gains on mortgage loans held for sale, loan origination fees and net interest income; adjusted for 39% expected fallout of consumer direct lock commitments (1) ▪ Gains on production for PFSI’s own account (net gains on mortgage loans held for sale, loan origination fees, and net interest income) decreased 23% Q/Q – Fallout - adjusted margin on consumer direct originations was approximately 257 bps (2) in 4Q15 versus 271 bps in 3Q15 – Loan origination fees decreased 29% Q/Q resulting from a 37% decrease in government correspondent acquisitions ▪ Fulfillment fee revenue decreased 27% Q/Q – Conventional loan acquisitions by PMT decreased 15% Q/Q – Weighted average fulfillment fee rate was 37 bps compared to 43 bps in 3Q15, primarily resulting from contractual discretionary reductions in the fulfillment fee in order to facilitate PMT's successful acquisition of certain loan transactions

Mortgage Banking – Servicing Segment Results (1) Includes contractually - specified servicing fees (2) See servicing core operating profitability analysis on page 6. 18 Unaudited ($ in thousands) Net loan servicing fees: Loan servicing fees (1) 112,699$ 106,052$ Effect of MSRs: Amortization and realization of cash flows (47,403) (41,594) Change in fair value and provision for impairment of MSRs carried at lower of amortized cost or fair value 45,513 (47,926) Change in fair value of excess servicing spread financing (6,864) 10,271 Hedging (losses) gains (26,976) 30,455 Total amortization, impairment and change in fair value of MSRs (35,730) (48,794) Net loan servicing fees 76,969$ 57,258$ Net Loan Servicing Fees Quarter ended December 31 , 2015 Quarter ended September 30 , 2015 Revenue Net loan servicing fees 76,969$ 57,258$ Net interest expense (11,847) (12,889) Net gains on mortgage loans held for sale at fair value 12,843 1,641 Other 247 121 78,212 46,131 Expenses 50,287 52,187 Pretax income 27,925$ (6,056)$ Servicing Segment Unaudited ($ in thousands) Quarter ended September 30 , 2015 Quarter ended June 30 , 2015 Quarter ended December 31 , 2015 Quarter ended September 30 , 2015 ▪ Servicing segment revenue increased 70% Q/Q, primarily driven by a $11.7 million fair value gain in the MSR carrying value net of losses from hedges and ESS liability fair value – MSR valuation gains resulted from modestly higher interest rates and a reduction in expectations for prepayments – Higher gains on mortgage loans held for sale from securitization of reperforming loans – Loan servicing fees increased 6% Q/Q ▪ Servicing segment expenses decreased 4% Q/Q (2) – Lower credit and advance losses – Partially offset by a modest increase in direct operating expenses driven by a larger portfolio

Mortgage Servicing Rights (MSR) Asset Valuation 19 ▪ PFSI carries most of its originated MSRs at the lower of amortized cost or fair value (“LOCOM”) – MSRs where the note rate on the underlying loan is equal to or less than 4.5 % ▪ Purchased MSRs subject to ESS are carried at fair value and the ESS is also carried at fair value ▪ The fair value of MSRs carried at LOCOM was $14.7 million in excess of the carrying value at December 31, 2015 Note: Figures may not sum exactly due to rounding UPB $56,420 $2,792 $51,390 Weighted average coupon 3.83% 4.65% 4.10% Prepayment speed assumption (CPR) 9.5% 14.4% 9.5% Weighted average servicing fee rate 0.32% 0.30% 0.32% Fair value of MSR $766.3 $29.6 $630.6 As a multiple of servicing fee 4.22 3.53 3.81 Carrying value of MSR $751.7 $29.6 $630.6 Related excess servicing spread liability - - $412.4 Fair value in excess of carrying value $14.7 December 31, 2015 Unaudited ($ in millions) Lower of amortized cost or fair value Fair value not subject to excess servicing spread Fair value subject to excess servicing spread

Investment Management Segment Results 20 ▪ Segment revenue decreased 21% Q/Q to $6.2 million ▪ Negative carried interest accrued for the quarter reflects adjustments to the cumulative amount due to PFSI assuming payment at 12/31/15; carried interest receivable from the funds totaled $69.9 million at 12/31/15 Management fees: From PennyMac Mortgage Investment Trust 5,670$ 5,742$ From Investment Funds 659 714 6,329 6,456 Carried Interest from Investment Funds (270) 1,483 Other 91 (141) 6,150 7,798 5,494 5,618 Pretax income 656$ 2,180$ Revenue Expenses Unaudited ($ in thousands) Quarter ended December Quarter ended September 30 , 2015 Quarter ended December 31 , 2015

Appendix

Overview of PennyMac Financial’s Businesses • Complex and highly regulated mortgage industry requires effective governance, compliance, and operating systems • PFSI’s platform has been developed organically and is highly scalable • Commitment to strong corporate governance, compliance, and risk management since inception • PFSI is well positioned for continued growth in this market and regulatory environment Loan Production Loan Servicing Investment Management • Servicing for owned MSRs and subservicing for Advised Entities • Major loan servicer for Fannie Mae, Freddie Mac and Ginnie Mae • Industry - leading capabilities in special servicing • Organic growth results from loan production, supplemented by MSR acquisitions and PMT investment activity • Serve as external manager for investment vehicles focused on investing in mortgage - related assets: – Distressed whole loans – MSRs and ESS – Prime non - Agency loans – MBS and ABS – GSE risk transfers – Commercial real estate loans and securitization interests • Synergistic partnership with PMT • Correspondent aggregation of newly originated loans from third - party sellers – PFSI earns gains on government - insured loans – Fulfillment fees for PMT’s conventional and jumbo loans • Consumer - direct origination of conventional, government - insured and jumb o loans • Small balance commercial mortgage originations 22

PFSI Has Developed in a Sustainable Manner for Long - Term Growth 72 128 230 435 1,008 1, 373 1,816 2,523 • Operations launched • De novo build of legacy - free mortgage servicer 2008 E mployees at year end 23 2009 2010 2011 2012 2013 2014 2015 • Correspondent group established with a focus on operations development and process design • Added servicing leadership for prime portfolio and to drive scalable growth • Correspondent system launches • Expanded infrastructure with flagship operations facility in Moorpark, CA • Correspondent leadership team expands • Expanded infrastructure in Tampa, FL • Became largest non - bank correspondent aggregator • PFSI completed initial public offering • Expanded infrastructure in Fort Worth, TX • Continued organic growth • Servicing UPB reaches $100 bn • Launched Commercial Real Estate Finance (PCREF) • 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

24 PennyMac Financial Is in a Unique Position Among Mortgage Specialists Industry - leading platform built organically – not through acquisitions • Not distracted by legacy/regulatory issues • Disciplined, sustainable growth for more than 7 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 2,500 employees • Highly experienced management team – 60 senior - most executives have on average 25 years of relevant industry experience Strong governance and compliance culture • Led by distinguished board which includes seven independent Directors • Robust management governance structure with 10 committees that oversee key risks and controls • External oversight by regulators, business partners and other third parties Desired structure in place to compete effectively as a non - bank • Synergistic partnership with PMT, a leading residential mortgage REIT and long - term investment vehicle • Provides access to efficient capital and reduces balance sheet constraints on growth

Opportunity for PFSI and PMT in MSR Acquisitions 25 Why Are MSR Sales Occurring? How Do MSRs Come to Market? • Large servicers may sell MSRs due to continuing operational pressures, higher regulatory capital requirements for banks (treatment under Basel III) and a re - focus on core customers/businesses • Independent mortgage banks sell MSRs from time to time due to a need for capital • Intermittent large bulk portfolio sales ($10+ billion in UPB) – Require considerable coordination with selling institutions and Agencies • Mini - bulk sales (typically $500 million to $5 billion in UPB) • Flow/co - issue MSR transactions (monthly commitments, typically $20 - 100 million in UPB) – Alternative delivery method typically from larger independent originators Which MSR Transactions Are Attractive? • GSE and Ginnie Mae servicing in which PFSI has distinctive expertise • MSRs sold and operational servicing transferred to PFSI (not subserviced by a third party) • Measurable rep and warranty liability for PFSI PFSI is uniquely positioned to be a successful acquirer of MSRs • Proven track record of complex MSR and distressed loan transfers • Operational platform that addresses the demands of the Agencies, regulators, and financing partners • Physical capacity in place to service over $200 billion in UPB • Co - investment opportunity for PMT in the excess servicing spread

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

Acquisitions, Originations, and Locks by Product 27 Note: Figures may not sum exactly due to rounding Unaudited ($ in millions) Correspondent Acquisitions Conventional 2,772$ 2,831$ 3,553$ 4,055$ 3,460$ Government 4,389 5,106 8,316 10,348 6,558 Jumbo 116 59 26 19 12 Total 7,276$ 7,996$ 11,895$ 14,421$ 10,030$ Correspondent Locks Conventional 2,844$ 3,433$ 4,404$ 4,085$ 3,630$ Government 4,473 6,010 9,936 9,483 7,001 Jumbo 172 70 41 32 14 Total 7,489$ 9,512$ 14,381$ 13,599$ 10,645$ Consumer Direct Originations Conventional 232$ 274$ 256$ 163$ 195$ Government 444 620 880 877 832 Jumbo 7 3 2 1 1 Total 682$ 897$ 1,138$ 1,042$ 1,028$ Consumer Direct Locks Conventional 621$ 630$ 348$ 390$ 404$ Government 800 1,147 1,300 1,363 1,406 Jumbo 14 7 5 2 2 Total 1,435$ 1,784$ 1,652$ 1,755$ 1,811$ Total acquisitions/originations 7,958$ 8,893$ 13,033$ 15,464$ 11,058$ Total locks 8,924$ 11,296$ 16,034$ 15,354$ 12,456$ UPB of loans fulfilled for PMT 3,472$ 4,073$ 3,579$ 2,890$ 2,887$ 4Q14 1Q15 2Q15 3Q15 4Q15