Financial Data and Key Metrics Changes - For Q4 2025, the company reported GAAP net income of $18.3 million, or $0.13 per share, compared to a GAAP loss of $9.5 million, or $0.08 per share in Q3 2025 [22] - Book value per common share was $7.36 at December 31, 2025, slightly up from $7.35 at September 30, 2025 [22] - Economic return on book value was 2.6% for the quarter, including $0.04 from share repurchases and $0.18 per share common dividend [22] - Non-GAAP earnings available for distribution (EAD) increased from $0.01 in Q3 to $0.20 in Q4, exceeding the common dividend [22][23] Business Line Data and Key Metrics Changes - The Sequoia platform locked $5.3 billion of loans in Q4 2025, a 5% increase from Q3 and up 130% from Q4 2024 [12] - Aspire locked a record $1.5 billion of loans during Q4 2025, a 20% sequential increase, with total 2025 lock volume exceeding $3 billion [16] - CoreVest closed out 2025 with full-year volumes up 13% versus 2024, with RTL representing nearly 40% of Q4 production [17] Market Data and Key Metrics Changes - The company estimates that between $200 billion and $300 billion of jumbo mortgages could become refinanceable as mortgage rates hover just above 6% [8] - The company’s full-year 2025 jumbo market share was approximately 7%, significantly up from prior years [13] Company Strategy and Development Direction - The company is shifting focus towards increasing capital to mortgage banking platforms, with over 80% of capital now invested in core operating activities, up from 57% in 2024 [6] - The company plans to leverage AI to enhance risk management, accelerate capital deployment, and improve operating leverage [10] - The company is winding down its legacy investment portfolio to free up capital for core activities [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for increased volume in 2026, driven by a favorable economic environment and housing affordability initiatives [10] - The company expects core operating performance to drive consolidated earnings above the common dividend in 2026, enabling earnings retention and reinvestment [11] Other Important Information - The company reported a 44% year-over-year reduction in operating costs per loan, attributed to technology enablement and operational efficiencies [20] - The company is focused on maintaining a flexible balance sheet and strong liquidity, with $256 million of unrestricted cash at quarter end [28] Q&A Session Summary Question: Impact of recent mortgage rate changes on business volume - Management reported January volume at $3.6 billion, indicating continued acceleration from Q4 [30][31] Question: Opportunities in the Aspire non-QM platform - Management highlighted strong momentum in non-QM products and expected growth in the non-QM market, estimating it to be $130 billion for 2025 [32][34] Question: Future of third-party capital providers - Management noted strong demand for production and ongoing discussions with capital partners to support growth [40][41] Question: Current margins in non-QM and jumbo channels - Management indicated targeting margins in non-QM similar to Sequoia, with expectations for improved execution through securitization [44][46] Question: Competitive landscape in non-QM - Management acknowledged increased competition but expressed confidence in their ability to grow market share [48][49] Question: CoreVest originations and margins - Management projected higher volumes in Q1 with consistent margins, focusing on smaller balance products [73][75]

Financial Data and Key Metrics Changes - In Q4 2025, core earnings per share were reported at $0.02, while the full-year core loss per share was $0.35 [12] - The company exceeded its $400 million expense reduction target, achieving a total operating expense of $88 million in Q4 2025, a 40% improvement compared to Q4 2024 [21] - Full-year total expenses for 2025 were $438 million, a decrease of nearly 50% compared to 2023 [21] Business Line Data and Key Metrics Changes - Earnest achieved its highest-ever refi loan origination volume of $2.1 billion in 2025, doubling the volume from the prior year [6][13] - In-school lending originated $401 million in new loans in 2025, marking a significant increase [7][14] - Consumer lending segment net income for Q4 was $25 million, down from $37 million in Q4 2024, primarily due to lower outstanding balances [16] Market Data and Key Metrics Changes - The private charge-off rates decreased from 2.48% in Q3 to 2.24% in Q4, while delinquency rates increased slightly [17] - The total delinquency rate for the federal education loan segment improved from 18.1% in Q3 to 17.5% in Q4 [19] Company Strategy and Development Direction - The company is transitioning to a holding company management structure to better align with its business strategy for Earnest and Navient [10] - For 2026, the company is targeting total loan originations of $4 billion, representing a growth of approximately 60% over 2025 [8][24] - The company plans to continue returning capital to shareholders through share repurchases and dividends in 2026 [9] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment has deteriorated, impacting delinquency rates and necessitating increased provisions for the private legacy portfolio [30] - The company remains optimistic about loan growth, particularly in the refi and in-school lending segments, driven by strong demand and improved capital efficiency [6][40] Other Important Information - The company completed its fourth securitization of the year in Q4 2025, totaling nearly $2.2 billion in term ABS financing [22] - The adjusted tangible equity ratio stood at 9.1% at the end of the year [23] Q&A Session Summary Question: Concerns about reserve adequacy in the private legacy portfolio - Management explained that the increase in reserves was due to a deterioration in the macroeconomic scenario and sequential increases in delinquency rates in the private legacy portfolio [30][31] Question: Outlook for loan growth and personal loan opportunities - Management indicated that while the personal loan product is still in pilot, they are optimistic about its potential and expect to see growth in the private book in 2026 [39][40] Question: Drivers of higher delinquencies in the private legacy portfolio - Management attributed the higher delinquencies to various factors, including macroeconomic conditions and the impact of the pandemic on borrowers [66][68] Question: Expectations for net interest margin and provisions - Management expects a stable outlook for net interest margin and provisions, with adjustments made based on new originations and reserve levels [70][71]

Group 1 - The Central Political Bureau of the Communist Party of China emphasizes the need for sustained macroeconomic policies, including proactive fiscal policies and moderately loose monetary policies to enhance policy effectiveness [1] - The meeting highlights the importance of accelerating government bond issuance and improving fund utilization efficiency, while maintaining ample liquidity in monetary policy to lower overall financing costs [1] - The focus for the second half of the year includes addressing key areas such as "bottleneck" technologies and promoting domestic demand growth under the "dual circulation" strategy [2][4] Group 2 - The meeting introduces the concept of "effective, orderly, and powerful" clearing of local financing platforms, with a timeline set for completion by June 2027 [2] - The number of local financing platforms has significantly decreased from over 15,000 to around 3,000, indicating a clear progress in the clearing process [2] - Future efforts will focus on increasing the speed and intensity of clearing, while ensuring that the process is orderly and does not lead to a resurgence of past issues [3] Group 3 - The economic growth in the first half of the year is attributed to several factors, including active fiscal policies, effective management of local government debt, and a series of industrial policies that have spurred productivity [4] - The narrowing gap in the urban-rural structure and between different regions is also noted, with significant investment opportunities in rural infrastructure and healthcare [4] - Financial support is needed in three key areas: market-oriented interest rates, loan securitization, and asset securitization, particularly in the real estate sector [5]