manager†). The CLO will have a 4.6-year reinvestment period and a 15-year legal final. The ratings reflect initial cre...## KBRA Releases Research – Home Improvement ABS: Promotional Products, Delayed LossesNEW YORK--([BUSINESS WIRE])--KBRA releases research examining the credit characteristics and loss profiles of securitized home improvement (HI) loans by product type (promotional versus traditional) and provides an update on ABS issuance trends and credit performance. Home improvement ABS is a subsecto ...

Key insight: M&T Bank's Wilmington Trust subsidiary plans to defend itself against allegations that it didn't appropriately fulfill its duties as custodian to several Tricolor-related trusts.What's at stake: The collapse of the subprime auto lender in September led to hundreds of millions of dollars in losses across lenders and investors. Federal prosecutors have brought fraud charges against several former Tricolor executives.Forward look: Wilmington Trust may take a financial hit, though the company hasn' ...

Financial Data and Key Metrics Changes - As of December 31, GAAP book value was $13.20 per share, and economic book value was $13.75 per share, both showing modest increases from the end of September [21] - Total economic return for the fourth quarter was 3.1% and 9% for the full year of 2025, with total shareholder return for the year at 6% [11][21] - GAAP earnings for the fourth quarter were $54.3 million, or $0.42 per basic common share, with net interest income at $55.5 million, a decline from $56.8 million in the third quarter [23] Business Line Data and Key Metrics Changes - In the fourth quarter, the company acquired $1.9 billion of loans and securities, including $1.2 billion of agencies and $443 million of non-QM loans [13] - The agency portfolio grew by over 50% to $3.3 billion during the quarter, with significant investments made before spreads tightened [29] - Distributable earnings for the fourth quarter were approximately $27.8 million, or $0.27 per share, an increase from $0.20 per share in the third quarter [26] Market Data and Key Metrics Changes - The Bloomberg US Aggregate Index was up 7.3% in 2025, following a decline of 7.1% over the previous three years [6] - Treasury rates declined, with 2-year yields dropping 77 basis points and 10-year yields dropping by 39 basis points [7] - The MOVE Index, which measures bond market volatility, ended the year at just under 64, down from above 100 for most of the previous three years [8] Company Strategy and Development Direction - The company is focused on increasing earnings and growing return on equity (ROE) through strategic initiatives, including deploying excess cash into target assets [12] - The company plans to relaunch multifamily lending and has hired 45 new salespeople at Lima One, indicating a push for growth in 2026 [14] - The company is also working on resolving delinquent loans, with over $150 million resolved in the fourth quarter, unlocking capital for redeployment [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, citing favorable conditions for the mortgage market due to lower rates and government support for housing affordability [9][10] - The company expects to see the results of its strategic initiatives reflected in financials in 2026, with a focus on enhancing earnings and ROEs [20] - Management noted that while the delinquency rate across the loan portfolio ended the year at just over 7%, it is expected to remain elevated in the legacy portfolio as it winds down [35] Other Important Information - The company reported a decline in general and administrative (G&A) expenses, totaling $119 million for 2025, down from $132 million in 2024 [25] - Approximately 40% of the 2025 common dividends were treated as a tax-deferred return of capital, enhancing after-tax yield for shareholders [21][22] - The company has reauthorized a stock buyback program, utilizing proceeds from preferred stock issuance to repurchase common stock at a discount [20] Q&A Session Summary Question: Can you talk about the run rate ROE on your EAD once loss provisions are through? - Management indicated that DE on a lossless basis was in the 8%-9% range, expected to rise to 10-11% in the back half of 2026 [44] Question: Can you discuss the re-entry into the multifamily market? - The company is targeting higher quality loans with larger average amounts, focusing on an originate-to-sell model [46] Question: How do you think about the potential deals that could be called? - Management noted that several deals could unlock $50 million-$100 million of capital for redeployment [51] Question: What are your expectations for margins and total volumes throughout the year? - The company anticipates healthy spreads and significant growth potential, particularly in the back half of the year [68]

Chief Financial Officer Anthony Rossiello said GAAP net income available to common shareholders was $8 million, or $0.25 per share, “primarily driven by EAD,” with net unrealized gains partially offset by transaction-related expenses largely tied to securitization activity. Rossiello also said net interest income increased 4% sequentially in the fourth quarter, which he attributed to ongoing capital rotation into higher-earning assets and a full-quarter benefit from legacy WMC debt refinancing completed in ...

Core Insights - Golub Capital is expanding its Broadly Syndicated Loan (BSL) CLO strategy to Europe, appointing Tyler Wallace to lead this initiative [1][2] - The expansion is driven by increasing demand from European partners and aims to leverage the firm's existing U.S. CLO platform [3] Company Performance - As of December 31, 2025, Golub Capital managed over $14 billion in broadly syndicated loans and completed more than 60 BSL CLO transactions since 2007 [3] - The firm closed over $9 billion in financing commitments in Europe since 2020, achieving a record of over $3.2 billion in new European commitments in 2025 [3] - Golub Capital executed a record $24.4 billion of securitizations in 2025, maintaining its position as the No. 1 U.S. CLO manager and No. 16 U.S. BSL CLO manager based on 2025 issuance [4] Team and Expertise - The London-based team now consists of 14 professionals with expertise in direct lending, structured products, and other debt solutions, focusing on core verticals such as software, financial services, and business services [5]

Mergers and Acquisitions - GreenShield has acquired Kii Health's Canadian mental health services segment, integrating it into its digital health platform GreenShield+ [1] - RFA Capital Holdings Inc. has rebranded to RFA Financial Inc. after acquiring Artis Real Estate Investment Trust in an all-share deal, with former Artis unitholders owning 68% of the combined company [2] - Navacord and Acera have completed their merger, creating one of Canada's largest privately held insurance and wealth advisory firms with $7.2 billion in insurance premiums and $7.5 billion in retirement assets [3] - ATB Financial has launched ATB Cormark Capital Markets following its acquisition of Cormark Securities Inc., expanding its capital markets capabilities [3] - Morguard Corp. has rebranded Lincluden Investment Management to Morguard Lincluden Global Investments after acquiring the firm, managing over $4 billion in assets [4] - Beazley has agreed to a $10.9 billion cash takeover offer from Zurich Insurance, representing a 60% premium to its closing share price [5] Financial Developments - Neo Financial has raised $68.5 million for its inaugural securitization program, allowing it to grow its lending portfolio significantly [2]

Financial Data and Key Metrics Changes - For 2025, the company reported net income before taxes of approximately $80 million, representing a 16.4% increase, while total revenue reached $284 million, up 10.6% from $257 million in 2024 [5][24] - The EPS for Q4 was $0.65, with a full-year basic EPS of $2.21 and diluted EPS of $2.18, reflecting increases of 12% and 11% over 2024 results [8][24] - Tangible book value grew significantly, ending 2025 at $12.19 compared to approximately $6.92 at the beginning of the year [9][14] Business Line Data and Key Metrics Changes - The alternative loan program (ALP) has shown strong performance, with a focus on long-term loans that provide lower monthly payments and flexibility for clients [4][15] - The efficiency ratio at the holding company improved from 63.2% to 58.3%, while the bank's efficiency ratio is approximately 47% [12][24] - Non-performing loans (NPLs) declined for two consecutive quarters, from 7.3% to 6.9% in Q4 2025 [10][22] Market Data and Key Metrics Changes - The company opened 9,000 new depository accounts and reached a total of 34,000 active depository accounts [3] - Business deposits increased by $34 million in Q4 and $164 million for the year, while consumer deposits grew by $167 million in Q4 and $293 million for the year [11] - The held-for-investment portfolio increased by approximately 44% in 2025, with unguaranteed portions of SBA 7(a) loans comprising roughly 60% of the portfolio [25][26] Company Strategy and Development Direction - The company aims to serve independent business owners and small to medium-sized businesses (SMBs), focusing on providing better loan products with longer amortization periods and no fees [4][5] - The strategic acquisition of National Bank of New York City in January 2023 has significantly expanded the company's asset base, now approximately $1.4 billion to $1.5 billion [6][9] - The company is enhancing its technology and operational infrastructure to support growth and improve customer service, aiming to create a frictionless banking experience [29] Management's Comments on Operating Environment and Future Outlook - Management noted a K-shaped economy, with businesses serving the lower end struggling while those serving the middle and upper markets are performing well [60] - The company expects to see improved business confidence and spending, particularly in technology investments, which could drive growth in 2026 [60] - Management expressed optimism about the future, highlighting the potential for continued growth in deposits and loan originations, particularly in the ALP segment [10][24] Other Important Information - The company has initiated the offering of life insurance to business lending clients, with 25% of borrowers purchasing life insurance through the Newtek Agency [11] - The company has maintained healthy capital ratios while experiencing balance sheet growth and profitability [24][25] Q&A Session Summary Question: What drove the increase in deposit account openings? - Management attributed the 50% increase in deposit account openings to the frictionless digital access for both business and consumer deposits, along with strong margins and competitive rates [38][39] Question: What are the trends in non-interest income and expectations for next year? - Management expects the 7(a) business to pick up, citing recent changes in SBA regulations that may benefit their lending volumes [43][44] Question: How are SBA loans performing compared to competitors? - Management indicated that their charge-off rates are in line with industry averages, while their margins are significantly better than those of larger competitors [88]

Financial Data and Key Metrics Changes - For 2025, the company reported net income before taxes of approximately $80 million, representing a 16.4% increase, while total revenue reached $284 million, up 10.6% from $257 million in 2024 [5][24] - The earnings per share (EPS) for Q4 was $0.65, with the annual EPS for 2025 at $2.21 basic and $2.18 diluted, reflecting increases of 12% and 11% respectively over 2024 [8][24] - Tangible book value grew significantly, ending 2025 at $12.19 compared to approximately $6.92 at the beginning of the year [9][14] Business Line Data and Key Metrics Changes - The alternative loan program (ALP) has shown strong performance, with a significant increase in loan originations and a focus on long-term loans with lower monthly payments [10][15] - The efficiency ratio at the holding company improved from 63.2% to 58.3%, indicating better operational efficiency as assets grew by 33% [12][26] - The payments business contributed approximately $16.8 million of adjusted EBITDA in 2025, with expectations of $17.9 million in 2026 [19] Market Data and Key Metrics Changes - The company opened 9,000 new depository accounts and reached a total of 34,000 active depository accounts, indicating strong market penetration [3][11] - Business deposits increased by $34 million in Q4 and $164 million for the year, while consumer deposits grew by $167 million in Q4 and $293 million for the year [11][12] Company Strategy and Development Direction - The company aims to serve independent business owners and small to medium-sized businesses (SMBs), focusing on providing better loan products with longer amortization periods and lower interest rates [4][5] - The strategic acquisition of National Bank of New York City in January 2023 has significantly expanded the company's asset base and operational capabilities [6][9] - The company is leveraging technology to create a frictionless banking experience, integrating services such as payroll and insurance with banking products [29][30] Management's Comments on Operating Environment and Future Outlook - Management noted a K-shaped economic recovery, with businesses serving the lower end of the market facing challenges, while those serving the middle and upper markets are performing well [60] - The company expects to see continued growth in SBA loan originations and is well-positioned to adapt to changes in the lending environment [44][46] - Management expressed optimism about the future, highlighting the potential for productivity improvements and inflation stabilization in 2026 [60] Other Important Information - The company has initiated the offering of life insurance to business lending clients, with 25% of borrowers purchasing life insurance through the Newtek Agency [12] - The efficiency ratio at the bank is approximately 47%, indicating strong operational performance [12] Q&A Session Summary Question: What drove the increase in deposit account openings? - Management attributed the 50% increase in deposit account openings to the frictionless digital access for both business and consumer deposits, along with competitive rates and no fees [38][41] Question: What are the trends in non-interest income and expectations for next year? - Management expects the 7(a) business to pick up, citing recent changes in SBA regulations that may benefit their lending volumes [43][44] Question: How are SBA loans performing compared to competitors? - Management indicated that their charge-off rates are in line with industry averages, while their margins are significantly better than larger competitors [88]

Financial Data and Key Metrics Changes - For 2025, the company reported net income before taxes of approximately $80 million, representing a 16.4% increase, while total revenue reached $284 million, up 10.6% from $257 million in 2024 [5][12] - The earnings per share (EPS) for Q4 was $0.65, with the annual EPS for 2025 at $2.21 basic and $2.18 diluted, reflecting increases of 12% and 11% respectively over 2024 [8][9] - Tangible book value grew significantly, ending 2025 at $12.19 compared to approximately $6.92 at the beginning of the year [9][13] Business Line Data and Key Metrics Changes - The alternative loan program (ALP) has shown strong performance, with a total of $820 million in originations and low levels of non-performing loans (NPLs) at $27.6 million [10][16] - The payments business contributed approximately $16.8 million of adjusted EBITDA in 2025, with expectations of $17.9 million in 2026 [19] - The insurance agency generated $740 million in pre-tax income for 2025, projected to increase to $1.6 million in 2026 [19] Market Data and Key Metrics Changes - The company opened 9,000 new depository accounts and reached a total of 34,000 active depository accounts, indicating strong market penetration [3][11] - Business deposits increased by $34 million in Q4 and $164 million for the year, while consumer deposits grew by $167 million in Q4 and $293 million for the year [11][12] Company Strategy and Development Direction - The company focuses on serving independent business owners and small to medium-sized businesses (SMBs), emphasizing the underserved nature of this demographic [5][7] - The strategic acquisition of the National Bank of New York City in January 2023 has significantly expanded the company's asset base, now approximately $2.4 billion to $2.5 billion [6][12] - The company aims to leverage technology to provide a frictionless banking experience, enhancing customer service and operational efficiency [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a strong start to 2026 and the successful closing of a major securitization deal [9][10] - The operating environment is characterized as K-shaped, with varying performance across different market segments, but overall business confidence is reported as good [40][41] - The company anticipates continued growth in SBA loan originations and expects to benefit from changes in SBA regulations that may favor its business model [36][38] Other Important Information - The efficiency ratio at the holding company improved from 63.2% to 58.3%, with assets up 33% [12][25] - The company has maintained healthy capital ratios while managing the runoff of its non-bank lending subsidiary, NSBF, which is expected to continue to decline in losses [12][22] Q&A Session Summary Question: What drove the increase in deposit account openings? - Management attributed the increase to the frictionless digital access for both business and consumer deposits, along with strong margins and stable deposit rates [33][34] Question: What are the expectations for non-interest income trends? - Management expects the 7(a) business to pick up again, despite recent disruptions in the SBA world [36][37] Question: How is the company positioned in the SBA loan market? - Management believes their underwriting and business services create better long-term customer relationships, resulting in performance that meets industry averages [53][54]

Group 1 - KBRA has assigned preliminary ratings to three classes of FREMF Series 2026-K176 mortgage pass-through certificates and three classes of Freddie Mac structured pass-through certificates, with the total transaction amounting to $1.3 billion [1] - The underlying transaction is backed by 49 fixed-rate multifamily mortgage loans, with principal balances ranging from $2.1 million to $110.6 million, and the largest loan being Crystal Square at 8.8% of the pool [2] - The five largest loans account for 35.1% of the cut-off date balance, with significant concentrations in Virginia (20.5%), New York (10.8%), and Washington D.C. (8.5%) [2] Group 2 - KBRA's analysis utilized its CMBS Multi-Borrower rating process, estimating a weighted average KNCF that is 4.2% lower than the issuer's NCF, and applying capitalization rates that resulted in property values being 40.3% lower than third-party appraisals [3] - The weighted average KBRA capitalization rate for the transaction is 8.51%, and the credit model incorporates various stresses and calculations to determine potential losses for each loan [3]