Financial Data and Key Metrics Changes - In Q1 2025, the company generated distributable earnings of $25.5 million or $0.20 per share, achieving a return on equity of 6.6% with adjusted leverage of 1.4 times [4][14] - As of March 31, 2025, the company had $1.3 billion in liquidity, with 83% of its asset base unencumbered and 72% of its debt comprised of unsecured corporate bonds [6][7] - The carrying value of the securities portfolio increased by 37% from year-end to $1.5 billion, with a weighted average yield of 5.67% [19] Business Line Data and Key Metrics Changes - The loan portfolio stood at $1.7 billion, representing 38% of total assets, with a weighted average yield of 8.7% [8] - New loan originations in Q1 totaled $329 million, with 74% backed by multifamily or industrial assets [9][24] - The real estate portfolio generated $12.2 million of net operating income during the first quarter, primarily consisting of net leased properties [11][20] Market Data and Key Metrics Changes - The company noted that the current macroeconomic environment is characterized by persistent interest rate volatility and geopolitical uncertainty, impacting commercial real estate demand [12][13] - The company expects to see more attractive lending opportunities as acquisitions become more common and newly built multifamily units come off construction loans [22][23] Company Strategy and Development Direction - The company is focused on redeploying liquidity generated from loan payoffs into new loans at lower reset basis, reflecting current market conditions [5] - The strategy includes a shift towards unsecured debt as the primary funding source, aiming for potential investment-grade ratings [8][17] - The company plans to maintain a disciplined approach to capital deployment, prioritizing higher-yielding loans over securities [25][75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating market volatility due to substantial liquidity and a robust balance sheet [6][13] - The company anticipates an increase in loan originations for the remainder of 2025, despite potential slowdowns in certain areas [39][44] - Management highlighted the importance of being well-capitalized to capitalize on opportunities that arise from market fluctuations [13][81] Other Important Information - The company repurchased $20 million in principal value of unsecured bonds during the first quarter and declared a $0.23 per share dividend [16][18] - The CECL reserve remained at $52 million, which management believes is sufficient to cover potential losses [10][19] Q&A Session Summary Question: What was the origination activity in the quarter? - The company noted that the blended spread was wide, with opportunities arising from market volatility and special situations [30][31] Question: Do you expect originations to maintain or exceed the pace generated in the first quarter? - Management expects originations to exceed the first quarter pace [39] Question: How are you thinking about the net lease portfolio longer term? - The company is open to selling properties but is not actively managing to sell; they are prepared to hold assets [45][49] Question: What is the outlook for the ten-year treasury yield? - Management anticipates the ten-year yield will rise due to the U.S. deficit, projecting it could reach around 4.75% in six months [57] Question: How do you protect against interest rate risk when adding CMBS? - The company hedges with swaps and focuses on floating rate instruments to mitigate volatility [63]