Earnings Conference Call Q3 2025 Q3 2025 EARNINGS November 6, 2025 Important Notice Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. Our actual results may differ from our beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predi ...

Financial Data and Key Metrics Changes - The company reported GAAP net income of $17.6 million, or $0.13 per fully converted common share, with distributable earnings of $26.7 million, or $0.22 per fully converted share [11] - Distributable earnings included $1.7 million of realized losses related to a REO sale, which adjusted the distributable earnings to $0.23 per fully converted share when excluding this loss [11] - Book value at quarter end was $14.29 per fully converted share, with a decrease attributed to dividend undercoverage and the NewPoint acquisition [11] Business Line Data and Key Metrics Changes - NewPoint contributed $9.3 million to distributable earnings in its first full quarter, with a record volume of $2.2 billion in originations [6][13] - The core portfolio size declined slightly, ending the quarter at $4.4 billion across 147 loans, with multifamily assets making up 75% of the portfolio [18] - The company originated approximately $304 million in new loan commitments during the quarter, funding $196 million primarily in multifamily [6] Market Data and Key Metrics Changes - The CRE market is seeing a reset, with borrowers and lenders adjusting asset valuations, particularly outside of the office sector [18] - The average cost of debt on the core portfolio was SOFR +231 basis points, with net leverage at 2.55 times and recourse leverage at 0.84 times [14] - The company expects to return its core portfolio to a target size of at least $5 billion over the next few quarters [7] Company Strategy and Development Direction - The company is focused on integrating NewPoint, redeploying liquidity, and leveraging expanded capabilities to grow earnings and book value [10] - The integration of NewPoint is expected to generate $0.04 to $0.06 per fully converted share annually to earnings once the migration of loan servicing is complete [16] - The company is exploring additional investment opportunities outside of whole loans, including CMBS B-pieces and CRE CLO bond investments [19] Management's Comments on Operating Environment and Future Outlook - Management views the third quarter as transitional but believes it sets the stage for stronger results ahead [9] - The company is optimistic about the contribution from NewPoint growing over time, with expectations for it to be accretive to GAAP earnings and book value per share in the first half of 2026 [17] - Management noted that while the market is competitive, they continue to find attractive opportunities for risk-adjusted returns [19] Other Important Information - The company has resumed share repurchases, buying back 540,000 shares for approximately $6 million, with $25.6 million remaining on the buyback allocation [9] - The company sold two properties from its REO portfolio during the quarter and has more slated to close in Q4 [8] Q&A Session Summary Question: What led to the higher origination volumes and expectations for Q4? - Management indicated that they cultivated the balance sheet and converted loans from floating rates into CMBS products, leading to a strong Q4 outlook [29] Question: What should be expected regarding the compensation and benefits expense line item? - Management stated that expenses will trend with volume and will be variable, making it difficult to extrapolate from Q3 alone [32] Question: Are repayments expected to remain elevated in Q4? - Management expects repayments to be in line with previous quarters, noting variability as year-end approaches [38] Question: What is the target size for the core portfolio? - The company is targeting a stabilized portfolio size of between $5 billion and $5.5 billion [40] Question: Is the record quarter for NewPoint a sustainable run rate? - Management cautioned that while it was a great quarter, it may not be repeatable every quarter and advised looking at overall annual guidance [43]

Core Insights - The company successfully closed the acquisition of NewPoint, which contributed significantly to its earnings and loan origination capacity [3][25][23] - The third quarter was characterized as a transitional period, with a focus on integrating NewPoint and managing legacy portfolio issues [4][25] - The company expects to return its core portfolio size to at least $5 billion in the coming quarters [2][34] Financial Performance - The company reported GAAP net income of $17.6 million, or $0.13 per fully converted common share, with distributable earnings of $26.7 million, or $0.22 per share [7][8] - The average risk rating of the loan portfolio remained stable at 2.3, with a slight decline in the core portfolio size due to liquidity management for acquisitions [1][2] - Book value at quarter end was $14.29 per fully converted share, impacted by dividend under coverage and the NewPoint acquisition [8] Loan Origination and Portfolio Management - The company originated approximately $304 million in new loan commitments during the quarter, primarily in multifamily, and funded $196 million of those [2][18] - The average cost of debt on the core portfolio was SOFR plus 2.31, with 75% of the core book financed through non-recourse structures [11][12] - The company has resumed share repurchases, buying back 540,000 shares for approximately $6 million, with $25.6 million remaining on the buyback allocation [5] NewPoint Integration and Contributions - NewPoint achieved a record volume quarter with $2.2 billion in originations, contributing $9.3 million to distributable earnings in its first full quarter [3][10] - The integration of NewPoint is progressing well, with expectations for increased earnings contributions linked to agency and FHA origination volume [14][23] - The migration of Franklin BSP Realty Trust's loan servicing is underway, expected to enhance earnings by $0.04 to $0.06 per share annually once completed [13][14] Market Conditions and Future Outlook - The company is observing a healthier CRE market with improved borrower-lender dynamics, particularly in multifamily assets [15][17] - The fourth quarter pipeline is strong, with approximately $120 million in new loan commitments already closed [18] - The company anticipates that the recent CLO transactions will generate additional cash and reduce financing costs, contributing to future earnings growth [9][10]

Financial Data and Key Metrics Changes - The company reported GAAP net income of $8 million or $0.12 per share for Q3 2025, with a book value of $13.78 per share as of September 30, 2025 [3][4] - A distributable loss of $2 million was reported, primarily due to taking ownership of a multifamily property, with distributable earnings before net realized losses at $12 million or $0.18 per share [4][9] - The company paid a cash dividend of $0.25 for the third quarter [4] Business Line Data and Key Metrics Changes - The company expects over $400 million in originations for Q4 2025, having already closed $110 million across the U.S. and Europe [6] - The portfolio managed by KSTAR is over $37 billion in loans, with the company acting as special servicer on $45 billion of CMBS [8] - The company downgraded the risk rating of the Cambridge Life Science loan from risk rated three to four, leading to increased CECL provisions [10] Market Data and Key Metrics Changes - The commercial real estate lending market remains robust, with a $1.5 trillion wall of maturities expected over the next 18 months [5] - The company received repayments of $480 million in Q3 2025, with year-to-date repayments totaling $1.1 billion [10][11] - The company anticipates over $1.5 billion in repayments for 2026, aiming to match repayments with originations [11] Company Strategy and Development Direction - The company is focused on optimizing its REO portfolio and redeploying capital efficiently for growth [17] - The company is strategically building its European real estate credit platform, having originated over $2.5 billion to date [7] - The company aims to maintain a disciplined approach to lending, targeting institutional sponsors and high-quality real estate [7] Management's Comments on Operating Environment and Future Outlook - Management noted a positive sentiment in the real estate market as investors recognize lagging values and strengthening fundamentals [5] - The company is encouraged by the market backdrop and momentum, with a focus on safety and lending on reset values below replacement costs [5][14] - Management expressed optimism about the origination pipeline and the potential for significant opportunities ahead [17] Other Important Information - The company ended the quarter with near-record liquidity levels of $933 million, including over $200 million in cash [13] - The overall financing availability is $7.7 billion, with 77% of financing being non-mark-to-market [13][14] - The company has repurchased $34 million of common stock year-to-date, totaling over $140 million since inception [13] Q&A Session Summary Question: Clarification on lower leverage and higher liquidity - Management indicated that the lower leverage and higher liquidity were primarily due to timing issues related to repayments and originations, rather than a defensive positioning [20][25] Question: Impact of repayment lag on earnings - Management stated that while there may be some lag in earnings due to timing, they do not expect to always be behind in capital deployment [30][32] Question: Update on life science loan portfolio - Management noted early signs of recovery in tenant demand within the life science sector, although most assets are leased to larger pharma companies [34] Question: State of dialogue with life science sponsors - Management confirmed ongoing negotiations with the sponsor of the downgraded Cambridge loan, with no significant discussions on other loans at this time [38][39] Question: NPV analysis on sub-performing deals - Management regularly evaluates the trade-offs between holding and liquidating assets, focusing on maximizing outcomes for quality real estate [41][42] Question: Current ROE and timeline for improvement - Management outlined a timeline for improving ROE, with expectations for near-term recovery from specific assets [56][58] Question: Comparison of EU loans to U.S. loans - Management highlighted similarities in quality and sponsorship between EU and U.S. loans, with some differences in loan sizes and market dynamics [66][68]

Financial Performance - Net income was $42.9 million, or $0.45 per share[11] - Economic return was 3.3% for the quarter (non-annualized)[11] - Adjusted Distributable Earnings were $45.0 million, or $0.47 per share[11] - The company declared total dividends of $0.39 for the quarter, resulting in a book value per common share of $13.49[11] Portfolio Composition and Strategy - The adjusted long credit portfolio increased by 1% to $3.32 billion as of June 30, 2025, compared to $3.30 billion as of March 31, 2025[11, 18] - The long Agency portfolio increased by 5% to $268.5 million, driven by net purchases[11, 26] - The Longbridge portfolio decreased by 1% to $545.6 million, as a securitization slightly exceeded new originations[11, 29] - 87% of deployed capital was allocated to credit, 2% to agency, and 11% to Longbridge[12] Leverage and Capital Structure - Recourse debt-to-equity ratio was 1.7:1[11] - Total debt-to-equity ratio was 8.7:1, including non-recourse borrowings[11] - Total stockholders' equity was $1.67 billion, including $1.33 billion of common equity and $332 million of preferred equity[11]

Core Viewpoint - Mr. Cooper Group reported disappointing earnings for Q2 2025, with both EPS and revenue falling short of analyst expectations despite operational gains in its mortgage servicing segment [1][5]. Financial Performance - Reported EPS was $3.04, missing the consensus estimate of $3.18 by $0.14 [2][5]. - Revenue for the quarter was $608 million, below the expected $674.24 million, missing by $66.24 million [2][5]. - Return on common equity (ROCE) improved to 15.9% [2][5]. - Tangible book value per share increased to $75.90, indicating growth in equity and balance sheet stability [5]. Operational Highlights - The servicing portfolio ended the quarter at $1,509 billion, a 25% increase year-over-year but slightly down from $1,514 billion in the previous quarter [6]. - The subservicing book remained nearly flat at $778 billion, while owned mortgage servicing rights (MSR) portfolio dipped to $731 billion [6]. - Asset quality showed stability with 60+ day delinquency rates improving to 1.4% from 1.5% in the previous quarter [7]. Originations Segment - The originations segment saw pretax income rise to $64 million, up from $45 million in the prior quarter [8]. - Funded volume increased by 13.5% quarter-over-quarter to $9.44 billion, with direct-to-consumer originations at $2.6 billion and correspondent channel originations at $6.8 billion [9]. - The refinance recapture rate fell to 47% from 51%, indicating potential challenges in customer retention [9]. Strategic Focus - The company is focusing on strengthening its core mortgage servicing business, growing its subservicing segment, and enhancing originations through various channels [4]. - Technology investments are aimed at improving operational efficiency and customer focus [4]. - A planned merger with Rocket Companies is a significant forward-looking item, though specific financial targets or timelines were not provided [12]. Recent Developments - The company launched an MSR Fund with an initial commitment of $200 million after the quarter-end [11]. - No new regulatory or legal expenses were reported, and the company remains in good standing with regulators [10].

Summary of BrightSpire Capital (BRSP) 2025 Conference Call Company Overview - BrightSpire Capital was formed from the merger of Colony Capital and North Star, transitioning from Colony Credit in 2020 during the COVID-19 pandemic [4][5] - The company has internalized its management and is one of the few internally managed commercial mortgage REITs [6] Financial Performance and Strategy - The current portfolio stands at $2.5 billion, with 43% in multifamily, 22% in office, 14% in net lease, 8% in industrial, and 13% in other categories [24] - The company aims to increase its multifamily exposure to over 50% of the loan book and grow the portfolio to approximately $3.5 billion [24][25] - The stock price is currently $5, while the book value is estimated at $8.75, indicating a significant market dislocation [11] - The company plans to cover its dividend of 16 cents per quarter and aims to increase it back to 20 cents as earnings grow [12][55] Origination Activity - The company has originated approximately $300 million in loans since late 2022, with a focus on middle-market lending [10] - The origination market is currently challenging, with a high percentage of refinancing requests and a lack of actionable deals [15][18] - The market is described as "zombie-like," driven by lenders rather than organic borrower activity [18][19] Market Dynamics - Interest rates remain high, with SOFR in the low fours, impacting borrower activity and refinancing options [23] - The company is experiencing a shift in its origination focus, with multifamily remaining a priority, while also exploring industrial and lodging opportunities [25][26] Asset Management and Foreclosures - The company recently foreclosed on a significant asset in San Jose, which is expected to be a source of capital in the future [35][41] - The asset is currently undergoing management improvements to enhance its value before potential sale [42][43] Capital Structure and Future Plans - BrightSpire aims to issue another CLO by the end of the year, contingent on origination volume [47][49] - The company is committed to its dividend policy despite potential negative coverage in the short term, with plans to resolve low-earning assets [55] Conclusion - BrightSpire Capital is navigating a challenging market environment with a focus on stabilizing its portfolio, increasing multifamily exposure, and managing its capital structure effectively [60]

Financial Data and Key Metrics Changes - In Q1 2025, the company facilitated RMB 35.15 billion in loans, representing an 8.8% sequential increase and a 63.4% year-over-year growth [4] - Total revenue reached RMB 1.94 billion, up 13.4% from Q4 and over 60% year-over-year, driven by higher borrower volumes and originations [5][9] - Non-GAAP adjusted net income for Q1 was RMB 457 million, a 44.9% year-over-year increase, with basic earnings per ADS improving to USD 1.5, a 45.6% year-over-year increase [11] - Return on equity increased to 25.5%, rising 1.4 percentage points year-over-year and 3.2 points sequentially [12] Business Line Data and Key Metrics Changes - The total loan outstanding balance, excluding loans over sixty days delinquent, reached RMB 58.4 billion, growing by more than 33% from Q1 2024 [9] - The company facilitated over 3,140,000 loans with an average loan amount of approximately RMB 11,181 [9] Market Data and Key Metrics Changes - The delinquency rate for loans 31 to 60 days overdue was 1.25%, down from 1.61% a year ago, reflecting a 22% improvement year-over-year [6] - The delinquency rate for loans 91 to 180 days overdue was 2.7%, down from 4.7% in Q1 2024, a 37% reduction year-over-year [6] Company Strategy and Development Direction - The company is focused on expanding opportunities through new partnerships and enhancing its technology platform and underwriting models to support profitability and scalability [4] - A new share repurchase plan has been authorized, allowing the company to buy back up to USD 100 million worth of Class A shares and ADS over an 18-month period [12] - The company remains committed to compliance with regulatory changes and views increased oversight as a positive step for long-term industry development [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current macroeconomic environment, indicating that it remains favorable for portfolio growth [20] - The company expects total loan amounts facilitated in Q2 2025 to be in the range of RMB 37.5 billion to RMB 39.5 billion, reflecting continued strong demand [14] Other Important Information - The company has been investing significantly in acquiring new customers, which is expected to support future growth [21] - Management noted that the risk profile remains stable, with no significant changes expected in Q1 or Q2 [26] Q&A Session Summary Question: Current macroeconomic environment and loan market outlook - Management believes the current environment is still good for portfolio growth and is focused on managing growth based on future assessments [20][21] Question: Delinquency rate concerns - Management acknowledged a slight uptick in delinquency rates but stated that the overall portfolio remains healthy and that any increases will be offset by overall scale [22][23] Question: Share repurchase program - Management indicated that no shares were repurchased in Q1 due to the closed window but plans to utilize the newly authorized repurchase program during the upcoming open window [28][29] Question: Loan growth guidance and credit demand - Management expects continued growth driven by customer acquisition and is confident in achieving a 30% volume growth for the year, despite potential regulatory impacts [40][41]

Financial Data and Key Metrics Changes - In Q1 2025, the company facilitated RMB 35.15 billion in loans, representing an 8.8% sequential increase and a 63.4% year-over-year growth [6][11] - Total revenue reached RMB 1.94 billion, up 13.4% from Q4 and over 60% year-over-year, reflecting strong borrower demand [7][11] - Non-GAAP adjusted net income for Q1 was RMB 457 million, a 44.9% year-over-year increase, indicating sustained earnings strength [13] - Return on equity increased to 25.5%, rising 1.4 percentage points year-over-year [14] Business Line Data and Key Metrics Changes - The total loan outstanding balance, excluding loans over sixty days delinquent, reached RMB 58.4 billion, growing by more than 33% from Q1 2024 [11] - The average loan amount facilitated was approximately RMB 11,181, with over 3,140,000 loans issued [11] Market Data and Key Metrics Changes - The delinquency rate for loans 31 to 60 days overdue was 1.25%, down from 1.61% a year ago, reflecting a 22% improvement [8] - The delinquency rate for loans 91 to 180 days overdue was 2.7%, down from 4.7% in Q1 2024, a 37% reduction year-over-year [8] Company Strategy and Development Direction - The company is focused on expanding opportunities through new partnerships and enhancing its technology platform to support profitability and scalability [6] - A new share repurchase plan has been authorized, allowing the company to buy back up to USD 100 million worth of Class A shares and ADS [14] - The company remains committed to compliance with regulatory changes and views increased oversight as a positive step for long-term industry development [15] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the current macroeconomic environment, indicating that the overall environment is still favorable for portfolio growth [24] - The company expects total loan amounts facilitated in Q2 2025 to be between RMB 37.5 billion and RMB 39.5 billion, reflecting continued strong demand [16] Other Important Information - The company has been investing significantly in acquiring new customers, which is expected to support future growth [24] - Management noted that the risk profile remains stable, with no significant changes anticipated in the delinquency rate in the near term [29] Q&A Session Summary Question: Current macroeconomic environment and loan market outlook - Management believes the current environment is still good for portfolio growth and is focused on managing the portfolio based on future assessments [24] Question: Delinquency rate concerns with loan volume growth - Management acknowledged a slight uptick in delinquency rates but stated that the overall portfolio remains healthy and profit will not be impacted [24][26] Question: Share repurchase activity during market volatility - Management indicated that no shares were repurchased in Q1 due to the closed window but plans to utilize the remaining funds in the upcoming open window [30] Question: Loan growth guidance and underlying credit demand - Management expects continued growth driven by customer acquisition and is confident in achieving a 30% volume growth for the year [41] Question: Feedback from funding partners regarding loan pricing - Management is in close conversation with funding partners about upcoming regulatory changes and is confident in compliance before the October deadline [38]

Financial Data and Key Metrics Changes - In Q1 2025, the company facilitated RMB 35.15 billion in loans, reflecting an 8.8% sequential increase and 63.4% year-over-year growth [6][11] - Total revenue reached RMB 1.94 billion, up 13.4% from Q4 and over 60% year-over-year [7][12] - Non-GAAP adjusted net income for Q1 was RMB 457 million, a 44.9% year-over-year increase [14] - Basic earnings per ADS improved to USD 1.5, a 45.6% year-over-year increase [14] - Return on equity increased to 25.5%, rising 1.4 percentage points year-over-year [14] Business Line Data and Key Metrics Changes - The total loan outstanding balance, excluding loans over sixty days delinquent, reached RMB 58.4 billion, growing by more than 33% from Q1 2024 [11] - The company facilitated over 3,140,000 loans with an average loan amount of approximately RMB 11,181 [11] Market Data and Key Metrics Changes - The thirty-one to sixty days delinquency rate improved to 1.25% from 1.61% a year ago, reflecting a 22% improvement [8] - The ninety-one to one hundred and eighty days delinquency rate decreased to 2.7% from 4.7% in Q1 2024, a 37% reduction [8] Company Strategy and Development Direction - The company is focused on expanding opportunities through new partnerships and enhancing its technology platform and underwriting models [6] - There is a commitment to improving borrower experience by delivering faster decisions and simplifying application processes [7] - The company has authorized a new share repurchase plan for up to USD 100 million worth of Class A shares and ADS [15] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the current macroeconomic environment, indicating it is favorable for portfolio growth [26] - The company expects total loan amounts facilitated in Q2 2025 to be between RMB 37.5 billion and RMB 39.5 billion, reflecting continued strong demand [16] - Management acknowledged potential regulatory changes but expressed confidence in compliance and the ability to adapt [43] Other Important Information - The regulatory environment in China is described as dynamic, with a focus on responsible credit assets and financial stability [16] - The company is actively engaging with regulatory authorities to ensure compliance with upcoming regulations [43] Q&A Session Summary Question: Current macroeconomic environment and loan market outlook - Management believes the current environment is still good for portfolio growth and is focused on managing growth responsibly [25][26] Question: Delinquency rate concerns - Management noted that while there may be some uptick in delinquency rates, overall portfolio health remains strong and profit will not be impacted [26][28] Question: Share repurchase program - Management indicated that no shares were repurchased in Q1 due to the open window policy but plans to utilize the remaining funds in the upcoming open window [36] Question: Loan growth guidance and credit demand - Management expects continued growth driven by customer acquisition and is confident in achieving a 30% volume growth for the year despite potential regulatory impacts [46]