Financial Data and Key Metrics Changes - GAAP net loss for Q3 2025 was $22 million or $0.27 per share, with GAAP book value at $20.24 per share [11] - Economic return on GAAP book value was negative 1.4% for Q3, while year-to-date return was 8.3% [11] - Economic net interest income for Q3 was $69 million, with a yield on average interest-earning assets of 5.9% and an average cost of funds of 4.5% [11] Business Line Data and Key Metrics Changes - Home Express originated $2.4 billion by UPB in Q3, up 36% year-over-year, with expectations of around $1 billion in Q4 originations [9][10] - For 2026, projected originations are between $4 billion and $4.4 billion, with pre-tax earnings of $62 million to $80 million [10] Market Data and Key Metrics Changes - The non-QM market share is expected to grow from 1.1% in 2021 to 5.1% or more than $100 billion in 2025, indicating a five-fold increase [5] - Primary mortgage rates declined approximately 35 basis points to 6.32%, leading to a rise in refinance activity [18] Company Strategy and Development Direction - The acquisition of Home Express for $267 million is aimed at enhancing earnings, diversifying revenue streams, and supporting long-term growth [9][10] - The company is focused on building a balanced and diversified portfolio, reducing reliance on residential credit [21] Management's Comments on Operating Environment and Future Outlook - The U.S. economy remains mixed but resilient, with growth supported by non-residential investment and gradual cooling in labor conditions [17] - The Federal Reserve has shifted to a more growth-oriented policy, cutting rates to support employment [17] Other Important Information - The company ended Q3 with $752 million in total cash and unencumbered assets, up from $561 million at the end of Q2 [12] - The acquisition of Home Express is expected to create synergies and enhance the company's asset management capabilities [25] Q&A Session Summary Question: Can you walk through the change in book value? - Management explained that the change was due to a lag in the timing of spreads changing in the securitization markets compared to the loan market, along with the steepening yield curve affecting securitized debt more significantly [29][30] Question: What is the update on book value for the quarter? - Management reported a 2.4% increase in book value through October 31 [31] Question: Is Goodwill $120 million from the acquisition? - Management confirmed that the total premium was above the $120 million book value, with ongoing evaluations for purchase accounting [32] Question: How will Home Express's earnings impact dividends? - Management indicated that the board will consider various factors regarding the retention of earnings for growth versus dividend payouts [36][37] Question: What are the near-term expectations for loan retention and securitization? - Management stated the intent to retain loans without disrupting existing partnerships, with expectations of one securitization per quarter [40][42]

Financial Data and Key Metrics Changes - The company achieved a record net effective spread of $97.8 million and core earnings of $49.6 million for Q3 2025 [6][25] - Year-to-date net effective spread and core earnings reached $281 million and $143 million, respectively, reflecting double-digit year-over-year growth [7][25] - The total allowance for losses was $37.2 million, or 12 basis points of total outstanding business volume [11] Business Line Data and Key Metrics Changes - The infrastructure finance line of business grew by $600 million this quarter to $11 billion, driven by strong interest in data centers and renewable energy projects [17] - The renewable energy segment more than doubled year-over-year to $2.3 billion, with expectations for continued growth [18] - The broadband infrastructure segment also doubled year-over-year to $1.3 billion, reflecting increased demand for data centers [20] - The agricultural finance portfolio grew by $285 million in Q3, outpacing scheduled maturities [21] Market Data and Key Metrics Changes - The company reported a modest uptick in 90-day delinquencies, attributed to seasonal impacts rather than identifiable trends [11] - Despite market uncertainties, the company has not seen significant effects on its portfolio related to political developments or government actions [12] Company Strategy and Development Direction - The company is focused on diversifying its loan portfolio into newer lines of business, including renewable energy and broadband infrastructure, to leverage competitive advantages [7][14] - The securitization program is a strategic initiative aimed at optimizing the balance sheet and enhancing growth opportunities [15] - The company plans to continue evaluating capital management tools to optimize its overall capital position [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall health of the portfolio, supported by strong asset quality metrics [4][24] - The company anticipates continued growth in its diversified business segments despite broader market uncertainties [24] - Management noted that the agricultural sector is experiencing financial pressures, but they believe farmers are adapting to market conditions [42][45] Other Important Information - The company successfully issued $100 million of Series H preferred stock, strengthening its capital position [13] - Management is in the process of searching for a new CFO, with expectations for an announcement in Q4 2025 [26] Q&A Session Summary Question: Outlook for spreads given Fed rate cuts - Management indicated that a cut in interest rates should have no impact on the net effective spread due to their asset-liability management strategy [30] Question: Impact of tariffs on crops - Management noted that while there are financial pressures in major crops, some prices have increased, and they do not see systemic risks affecting their portfolio [42][45] Question: Changes in loan structure and prepayment expectations - Management confirmed that they are seeing significant increases in loan applications and approvals, with a focus on new money loans [52][58] Question: Credit provision levels - Management characterized the provision as episodic and not indicative of systemic issues, with no significant increases expected in the near term [38][66] Question: Share repurchase activity - Management disclosed a repurchase of approximately 30,000 shares for about $5 million [68]

Financial Data and Key Metrics Changes - The company reported distributable earnings of $73 million or $0.35 per share for the third quarter [21] - The investment portfolio grew to $11.67 billion at September 30, with an all-in yield of 7.27% [31] - The average yield in core assets decreased to 6.95% from 7.95% in the previous quarter [33] Business Line Data and Key Metrics Changes - The agency business originated $2 billion in loans during the third quarter, marking the second highest production quarter in the company's history [16] - The single-family rental business originated approximately $150 million in the third quarter, totaling $1.2 billion for the year [17] - The construction lending business closed $145 million in deals during the third quarter, with a strong pipeline of $900 million in applications [19] Market Data and Key Metrics Changes - The company closed about $400 million in bridge lending in the third quarter, with a total of $850 million for the first nine months of the year [13] - The securitization market remains constructive, allowing the company to access liquidity effectively [4] - The company expects to originate between $8.5 and $9 billion in volume for the year, despite a challenging environment [19] Company Strategy and Development Direction - The company aims to resolve legacy assets aggressively, targeting a significant reduction in troubled assets by the second quarter of next year [9] - The strategy includes modifying loans, taking back assets as REOs, and bringing in new sponsors to stabilize income streams [11] - The company is optimistic about future origination volumes due to recent interest rate cuts [10] Management's Comments on Operating Environment and Future Outlook - Management believes the third and fourth quarters of the year will represent the bottom of the cycle, with expectations for improved market conditions [9] - The company is focused on creating efficiencies and generating strong returns on capital despite a competitive landscape [14] - Management expressed optimism about the interest rate environment improving, which could lead to increased origination volumes [20] Other Important Information - The company recorded a $48 million gain from the sale of a portion of the Lexford portfolio, contributing to a total of $55 million in income from legacy investments [6][8] - Delinquencies rose to $750 million as of September 30, reflecting the current cycle's stress [26] - The company expects fluctuations in quarterly earnings as it resolves legacy issues [22] Q&A Session Summary Question: Can you estimate the stability of performing loans in the portfolio? - Management indicated that the stability of performing loans varies by market and emphasized the importance of capital and management in stabilizing assets [37][38] Question: What is the expected run rate of interest income? - Management clarified that the $18 million accrued interest reversal was a one-time adjustment, with a projected ongoing reduction in interest income of about $16 million [48][50] Question: Can you provide details on the Homewood sale? - The company expects a $1 million realized loss on the Homewood sale, with a reserve reversal of $9 million due to selling above the written-down value [59][60] Question: What is the outlook for REO properties? - Management noted that while property income fell, they are actively working to improve occupancy and stabilize REO assets for future sales [64][66]

Financial Data and Key Metrics Changes - The company reported basic and diluted earnings per share of $0.68 and $0.67 for Q3 2025, with year-to-date earnings of $1.57 and $1.54, reflecting a growth rate of 47% and 22% respectively compared to the previous year [11][12] - Revenue growth was reported at 19% for the quarter, with a tangible book value increase from $6.92 to $11.22 per share [12][20] - The efficiency ratio improved from 61.8% to 56.3%, while return on average assets was 3.15%, significantly ahead of industry standards [14][17] Business Line Data and Key Metrics Changes - Core deposits increased, with business deposits rising by $52 million (17%) and consumer deposits by $95 million (12%) [12][20] - The alternative loan program (ALP) is expected to see its largest securitization to date, ranging from $325 million to $350 million, indicating strong growth potential [13][22] - The company has opened 22,000 depository accounts and has 10,000 borrowers in its database, showcasing its ability to operate without traditional banking methods [8][9] Market Data and Key Metrics Changes - The company is focusing on independent business owners, a market that represents 43% of U.S. GDP, with over 36 million business owners in the U.S. [10] - The company has stabilized its credit quality, with non-performing loans (NPLs) at 8.1%, which is high compared to community banks but has been written off or written down [17][19] - The company is avoiding volatile industries such as oil and gas, transportation, and agriculture, while maintaining a strong consumer side [40][41] Company Strategy and Development Direction - The company aims to leverage technology and efficiency to create a future-oriented business model for a technology-enabled bank [3][4] - There is a strategic focus on diversifying the loan portfolio by adding more commercial and industrial (C&I) and commercial real estate (CRE) loans [59] - The company plans to continue its growth trajectory while managing risks effectively, with a goal to enhance transparency and provide better insights into its operations [63][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current economic environment, despite challenges such as a government shutdown [42][44] - The company anticipates that the current credit cycle will stabilize, with expectations of lower provisions and a more favorable lending environment [18][41] - Management highlighted the importance of maintaining a strong capital position and the potential for increased leverage in the future [64] Other Important Information - The company has raised significant capital, including $80 million in Tier 1 capital and $30 million in common equity, to support its growth [13][35] - The company is also focusing on enhancing its payment processing, payroll, and insurance services, which are expected to contribute positively to its overall business model [33] Q&A Session Summary Question: Update on credit trends and market pressures - Management noted that the economy is experiencing a divide, with stress in small businesses due to rising rates, but the consumer side remains strong [40][41] Question: Guidance for Q4 amidst government shutdown - Management did not pull guidance but acknowledged the uncertainty due to the government shutdown, indicating that it could impact loan originations [42][44] Question: Impact of government shutdown on loan processing - Management confirmed that they are still able to process loans that were approved before the shutdown and have provisions to bridge borrowers through this period [43][44] Question: Tier 1 and total capital risk-based ratios - The company reported a Tier 1 capital ratio of about 12.5% and total risk-based capital just shy of 16% [45] Question: SBA lenders leaving the market - Management highlighted that some SBA lenders are exiting due to regulatory changes and increased competition, but the company remains well-positioned to capture market share [70]

Core Viewpoint - Freddie Mac has announced the pricing of the Seasoned Loans Structured Transaction Trust (SLST) Series 2025-2, which involves a securitization of approximately $343.2 million backed by seasoned residential mortgage loans [1][2]. Group 1: Transaction Details - The transaction comprises approximately $308.8 million in guaranteed senior certificates and about $34.3 million in non-guaranteed subordinate certificates, with the subordinate certificates auctioned on October 24, 2025 [2]. - The expected settlement date for the transaction is October 30, 2025 [2]. Group 2: Underlying Collateral - The collateral backing the certificates consists of 1,985 seasoned loans, including fixed, adjustable, and step-rate loans, with none being more than 150 days delinquent as of the cut-off date [3]. - The loans include both modified loans aimed at assisting borrowers at risk of foreclosure and loans that were never modified [3]. Group 3: Advisory and Management - Advisors for this transaction include Citigroup Global Markets Inc. and Nomura Securities International, Inc. as co-lead managers and joint bookrunners, along with several co-managers [4]. Group 4: Freddie Mac's Strategy - Freddie Mac's seasoned loan offerings aim to reduce less-liquid assets in its mortgage-related investments portfolio through economically sensible transactions, including the sale of Non-Performing Loans (NPLs) and securitizations of re-performing loans (RPLs) [5]. - Since 2011, Freddie Mac has sold approximately $10.7 billion of NPLs and securitized about $81.3 billion of RPLs, which includes $30.4 billion of fully guaranteed MBS, $37.6 billion through the Seasoned Credit Risk Transfer (SCRT) program, and $13.3 billion through the SLST program [5].

Investment Strategy - RT Strategy is securitizing Bitcoin ($BTC) for equity and credit investors [1] Companies Mentioned - Companies mentioned include $MSTR, $STRC, $STRK, $STRF, and $STRD [1]

Will the EU prosper? Its plans for securitization don't bode well (via @opinion) https://t.co/LNlTXXQczn ...

Core Insights - Sunrun has successfully priced a securitization of leases and power purchase agreements, marking its fifteenth securitization since 2015 and fifth issuance in 2025 [1][2] Group 1: Securitization Details - The recent securitization includes two classes of A- rated notes (Class A-1 and Class A-2) totaling $510 million, with Class A-1 Notes priced at $260 million and Class A-2 Notes at $250 million [2][3] - Class A Notes have a coupon rate of 6.15%, a spread of 240 basis points, and a yield of 6.21% [2] - The initial balance of Class A Notes represents a 69% advance rate on the Securitization Share of ADSAB, with an expected weighted average life of 6.93 years and a final maturity date of January 30, 2061 [2][3] Group 2: Financial Performance and Strategy - In Q3 2025, Sunrun is expected to raise over $1.5 billion in senior and subordinated non-recourse debt financings, demonstrating strong capital market access [2] - The transaction is backed by a diversified portfolio of 29,929 systems across 19 states, Washington D.C., and Puerto Rico, with a weighted average customer FICO of 743 [3] Group 3: Previous Transactions - Prior to the recent securitization, Sunrun completed a privately placed transaction in August 2025, which included an A- rated loan of $441 million and a retained BB rated loan [4] - In July 2025, Sunrun priced a public securitization of $431 million with a spread of 240 basis points and a yield of 6.374% [4]

Core Viewpoint - KBRA has assigned preliminary ratings to four classes of notes issued by Upstart Securitization Trust 2025-3, which is a $320 million consumer loan asset-backed security (ABS) collateralized by unsecured consumer loans [1][3]. Summary by Relevant Sections Ratings and Credit Enhancement - The preliminary ratings indicate initial credit enhancement levels of 56.45% for Class A notes, 43.50% for Class B notes, 33.30% for Class C notes, and 20.50% for Class D notes [2]. - Credit enhancement is composed of overcollateralization, excess spread, a non-declining cash reserve account, and subordination (excluding Class D notes) [2]. Company Background - UPST 2025-3 marks the 47th ABS securitization backed by unsecured consumer loans originated through Upstart Network, Inc., a wholly-owned subsidiary of Upstart Holdings, Inc. (NASDAQ: UPST) [3]. Methodology and Analysis - KBRA utilized its Consumer Loan ABS Global Rating Methodology, Global Structured Finance Counterparty Methodology, and ESG Global Rating Methodology in analyzing the portfolio pool data, underlying collateral pool, and capital structure [4]. - The analysis included operational reviews of Upstart and periodic update calls with the company, with operative agreements and legal opinions to be reviewed prior to closing [4].

Financial Data and Key Metrics Changes - Total revenue for the quarter was $341.3 million, a decrease of 1.9% from the prior year, primarily due to fewer retail units sold [12] - Gross margin expanded to 36.6%, a 160 basis point increase over the prior year quarter [14] - Interest income increased by 7.5%, supported by a larger portfolio and more payments collected year over year [12] - Total collections rose by 6.2% to $183.6 million, highlighting the effectiveness of the Pay Your Way platform [19] - Operating expenses for SG&A totaled $51.4 million, a 10.1% increase from $46.7 million in the prior year [18] Business Line Data and Key Metrics Changes - Volumes declined by 5.7% to 13,568 units compared to 14,391 units a year ago [13] - The average selling price of vehicles decreased by $144 year over year [13] - The company saw a 10% year-over-year increase in credit applications, indicating strong customer demand [15] Market Data and Key Metrics Changes - The procurement costs rose by an incremental $500 per unit during the quarter, impacting inventory capacity [7] - Delinquencies greater than thirty days increased to 3.8%, representing a 30 basis point increase [20] - The average FICO score for new contracts improved by approximately 20 points year over year [50] Company Strategy and Development Direction - The company is focused on quality, growth with affordability, and protecting returns while modernizing payment and collections processes [29] - The rollout of LOS V2 and risk-based pricing is expected to drive improvements in deal quality and cash flow predictability [27] - The company is actively exploring alternative financing solutions to address capital constraints impacting working capital and inventory management [26] Management's Comments on Operating Environment and Future Outlook - Management noted that demand remained solid, with a significant increase in credit applications, particularly in July and August [15][33] - The company expects to see a positive effect on revenue from average selling prices, excluding ancillary products, while remaining disciplined on gross margin [14] - Management expressed confidence in the company's ability to navigate current challenges and position for long-term growth [27] Other Important Information - The company completed a $216 million term securitization at a weighted average interest rate of 6.27% [22] - The recent securitization transaction was nearly eight times oversubscribed for Class A notes and nearly 16 times for Class B notes, indicating strong market interest [22] - The company has taken significant steps to remediate material weaknesses in financial reporting and enhance transparency [25] Q&A Session Summary Question: What has been observed regarding procurement costs subsequent to the quarter end? - Management indicated that pricing has smoothed out and has come down slightly, with demand remaining strong [33] Question: How quickly can delinquencies stabilize with the new LOS systems? - Management expects normal seasonal fluctuations in net charge-offs and believes the portfolio is now weighted with mostly new underwriting in place [36] Question: What are the expectations for SG&A expenses moving forward? - Management anticipates that roughly half of the SG&A increase from this quarter will unwind in the second half of the year as technology implementations are completed [38] Question: What is the outlook for used car pricing and the duration of impacts from tariffs? - Management expects some seasonality and pricing decline in the back half of the year, as the effects of tariffs become known [45] Question: How is the health of the consumer characterized given the increase in delinquencies? - Management noted that while the consumer base is generally strained, the structures in place today are much better than a year ago, with a significant portion of the portfolio under enhanced underwriting standards [60]