Financial Performance - Core earnings per share (EPS) increased by 64% year-over-year to $1.36[7] - The Property & Casualty (P&C) combined ratio improved by over 10 points year-over-year to 87.8%[7] - Core return on equity (ROE) was 13.8%[7] - The company repurchased $20 million of shares at an average purchase multiple of 1.06x adjusted book value year-to-date[8] - Total net investment income on the managed portfolio increased nearly 11% year-over-year[8] Growth & Revenue - Total revenues increased 6% year-over-year to $439 million[8] - Net premiums and contract charges earned increased 7% year-over-year[8] - Group new business sales were up 91% year-over-year[8] - Individual Supplemental new business sales were up 41% year-over-year[8] - Life new business sales were up 16% year-over-year[8] - Retirement deposits were up 9% year-over-year[8] - Property new business sales were up 8% year-over-year[8] - Auto new business sales were up 4% year-over-year[8] Portfolio & Investments - The investment portfolio has a fair value of $7.1 billion[13] - The fixed-maturity portfolio is $5.7 billion[14] - The commercial mortgage loan fund portfolio is $593 million[15] - The limited partnership portfolio is $545 million[15] Future Outlook - The company revised its full-year 2025 core EPS guidance to $4.50 to $4.70, representing core earnings of $187 million to $195 million[20] - The company is targeting a 10%+ increase in EPS through strong top-line premium and deposit growth[25] - The company is aiming for a 12%-13% core ROE[26]

Core Insights - Affirm Holdings has reported positive GAAP net income for the first time since fiscal 2019, which may mislead investors regarding its financial health [9][5] - Despite top-line growth, the company continues to experience negative Core Earnings and significant cash burn, indicating underlying financial instability [4][11] - The stock valuation implies unrealistic growth expectations, suggesting a potential decline in stock price [7][31] Financial Performance - In fiscal 4Q25, Affirm's revenue and gross merchandise volume (GMV) grew by 33% and 43% year-over-year, respectively [8] - For the full fiscal year 2025, revenue and GMV increased by 39% and 38% year-over-year [8] - Affirm reported an operating loss of -$87 million in fiscal 2025, while generating $149 million in non-operating income, leading to positive GAAP net income [12][11] Profitability Analysis - Affirm has not achieved positive operating profit or Core Earnings since fiscal 2019, raising questions about the sustainability of its reported GAAP profits [11][13] - Total operating expenses in fiscal 2025 were 103% of revenue, contributing to negative operating income [15] - The company has burned through a cumulative $5.1 billion in free cash flow (FCF) from fiscal 2020 to fiscal 2025 [17] Market Position and Competition - Affirm's stock price suggests it would need to grow GMV to nearly two-thirds of Amazon's fiscal 2024 GMV to justify its current valuation [28] - Compared to competitors like PayPal, Affirm lacks scale and competitive advantages, which impacts its profitability [21][25] - The buy now pay later (BNPL) market is highly competitive, with Affirm and Klarna struggling to generate profits compared to larger financial institutions [22][24] Valuation Concerns - Current stock price implies that Affirm's revenue would need to reach $42.8 billion by fiscal 2035, which is 13.3 times higher than fiscal 2025 revenue [27] - Alternative scenarios suggest significant downside risk, with potential stock values ranging from $28 to $45 per share based on different growth assumptions [31][33] - Affirm's economic book value is estimated at -$2 per share, indicating that equity investors may not see positive economic earnings under normal operations [36]

Financial Data and Key Metrics Changes - The company reported a core EPS of $1.4, a core return on assets of 1.48%, and a core return on tangible common equity of 18.7%, all of which increased compared to the second quarter [5] - Year-over-year, core net income rose by 21%, core PPNR grew by 6%, and core earnings per share increased by 30% [5] - Tangible book value per share increased by 12%, and net interest margin expanded by two basis points to 3.91% quarter over quarter [5][6] Business Line Data and Key Metrics Changes - Core fee revenue was flat quarter over quarter but grew by 5% when excluding the impact of strategic exits in Wealth and Trust [6] - The Wealth and Trust business grew by 13% year over year, with institutional services up 30% and Brimmore Trust of Delaware up 20% [6][32] Market Data and Key Metrics Changes - Total client deposits increased by 1% linked quarter and grew by 5% year over year, with non-interest deposits up 12% year over year [7] - Loans decreased by 1% linked quarter, primarily due to the sale of the Upstart loan portfolio and continued runoff in the Spring EQ portfolio [7] Company Strategy and Development Direction - The company intends to maintain elevated levels of buybacks while adjusting the pace based on macroeconomic conditions and business performance [11] - The management is focused on disciplined originations and proactive engagement with clients to maintain asset quality [24] - The company is exploring talent acquisition in both commercial and wealth businesses to enhance organic growth [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the full-year outlook despite an additional rate cut in October [11] - The company is prepared for potential future rate cuts and has strategies in place to manage margins through deposit repricing and hedging [11][70] Other Important Information - The company returned $56.3 million of capital during the quarter, including $46.8 million in buybacks, representing 1.5% of outstanding shares [10] - Year-to-date, the company has repurchased 5.8% of its outstanding shares, maintaining a strong capital position with a CET1 of 14.39% [11] Q&A Session Summary Question: Achieving CET1 target and organic growth rates - Management indicated that they are currently buying back approximately 100% of net income and have high capital levels despite buybacks, allowing for continued buybacks for the next few years [18] Question: Asset quality and reserve levels - Management noted good momentum in asset quality and indicated a conservative approach to reserves due to macroeconomic volatility [24] Question: Growth in wealth and trust business - Management highlighted growth in new accounts and transactions, particularly in institutional services and Brimmore Trust of Delaware [32] Question: Cash Connect business and NII benefit - Management confirmed that while revenue from Cash Connect may decrease with rate cuts, expenses would offset this, leading to overall profitability benefits [46] Question: Commercial loan growth and consumer partnership payoffs - Management discussed the impact of problem loan payoffs and expected continued growth in the home lending business, offsetting runoff in the Spring EQ portfolio [54]

Core Insights - FirstEnergy Corp. reported third quarter 2025 GAAP earnings of $441 million, or $0.76 per share, on revenue of $4.1 billion, reflecting an increase from $419 million, or $0.73 per share, on revenue of $3.7 billion in the same quarter of 2024 [1][7] - Core Earnings (non-GAAP) for the third quarter of 2025 were $0.83 per share, a 9% increase compared to $0.76 per share in the third quarter of 2024 [2][5] - The company narrowed its full-year 2025 Core Earnings guidance to a range of $2.50 to $2.56 per share, indicating a positive outlook based on year-to-date results [2][9] Financial Performance - Year-to-date GAAP earnings for the first nine months of 2025 were $1,069 million, or $1.85 per share, on revenue of $11.3 billion, compared to $717 million, or $1.25 per share, on revenue of $10.3 billion in the same period of 2024 [7][8] - Core Earnings for the first nine months of 2025 were $2.02 per share, a 15% increase from $1.76 per share in the same period of 2024 [8][9] Capital Investments - The company deployed over $4 billion in capital investments through September 2025 and increased its planned investment program for 2025 by 10% to $5.5 billion [2][3] - Future transmission investments are projected to increase by 30% due to industry transformation, with a compound transmission rate base growth expected to reach up to 18% [3][4] Strategic Initiatives - FirstEnergy's Energize365 capital investment plan includes $28 billion in investments from 2025 to 2029, supporting a compounded annual Core Earnings growth rate target of 6-8% from 2025 through 2029 [2][3] - In West Virginia, the company is pursuing a project to add 1.2 gigawatts of dispatchable combined-cycle generation, which aligns with the state's energy goals and represents a 35% increase in its current regulated generation portfolio [4]

Core Points - Advanced Flower Capital Inc. (AFC) declared a quarterly dividend of $0.15 per share for the quarter ending September 30, 2025, payable on October 15, 2025, to stockholders of record on September 30, 2025 [1] - The third quarter dividend remains consistent with the second quarter dividend, with the Board evaluating Distributable Earnings each quarter due to uncertainties regarding loan repayments [2] Company Overview - Advanced Flower Capital Inc. is a commercial mortgage real estate investment trust (REIT) that specializes in originating, structuring, underwriting, and managing senior secured mortgage loans, particularly for the cannabis industry in legalized states [3] - The company manages loans ranging from $10 million to over $100 million, secured by quality real estate assets and cash flows [3] Distributable Earnings - Distributable Earnings is a non-GAAP financial measure used by the company to evaluate performance, excluding certain transactions and GAAP adjustments [4][6] - The calculation of Distributable Earnings is similar to Core Earnings but includes Incentive Compensation earned during the period [5] - Distributable Earnings is defined as net income excluding stock-based compensation, depreciation, unrealized gains/losses, expected credit losses, and one-time events [6][7] - The company aims to distribute at least 90% of its annual REIT taxable income, with Distributable Earnings serving as a factor in determining dividend levels [7][8]

Core Insights - Annaly Capital (NYSE:NLY) had a normal quarter with minor changes, experiencing a slight decrease in the value of its assets, which was anticipated, and the stock is currently considered overpriced [1][15] Financial Performance - NLY recorded a minor quarterly book value (BV) decrease that aligned with expectations, with a total net valuation gain of $147 million during Q2 2025, outperforming the projected gain of $110 million [2][10] - Core earnings/EAD for NLY matched expectations with a slight increase compared to Q1 2025, driven by a larger on-balance sheet portfolio size [4][10] - The hedging coverage ratio decreased from 102% to 95%, which was anticipated, indicating a slight reduction in risk management strategies [3][6] Valuation Metrics - The reported GAAP BV per share was $18.45, slightly above the projected $18.35, reflecting a 0.54% outperformance [10] - The stock price is currently at $21.14, leading to a dividend yield of 13.25% and a payout ratio of 96%, indicating a high dividend relative to earnings [12] Market Position - NLY's performance in terms of BV decrease and core earnings increase is expected to outperform most agency mREIT peers, suggesting a relatively strong position in the market [5][14] - The company remains in a good position to maintain its quarterly dividend of $0.70 per common share, despite core earnings only slightly covering this amount [14]

Core Viewpoint - Two Harbors Investment (TWO) experienced a significant decline in book value (BV) during Q2 2025, attributed to legal losses and hedging decisions, leading to a recommendation of "hold" on shares [1][8][10]. Performance Summary - The actual quarterly BV decrease for TWO was 17.2%, which was worse than the projected 14.8% decline, indicating a severe underperformance [2][8]. - A unique legal dispute with the previous external manager negatively impacted TWO's BV during the quarter [2][10]. - Hedging decisions made by TWO had a negative effect on BV but positively influenced core earnings/EAD [3][7]. Portfolio Management - TWO maintained the size of its on-balance sheet fixed-rate agency MBS/investment portfolio, contrary to expectations of asset shedding due to legal issues [4][10]. - The company made bulk purchases of $6.4 billion in MSRs, resulting in a $2.0 billion increase in UPB, which was contrary to the anticipated decrease [5][10]. - The derivatives sub-portfolio underperformed expectations, primarily due to the lack of asset sales and an increase in the hedging coverage ratio from 77% to 85% [6][14]. Earnings Performance - Core earnings/EAD for TWO modestly outperformed expectations, driven by lower net interest expenses and higher net servicing income [7][8]. - The reported core earnings were $29.594 million, exceeding the projected $24 million, marking a 23.48% beat [18]. Valuation and Recommendations - TWO's current valuation is deemed appropriate, with a hold recommendation due to the ongoing legal matters and the need for spread stabilization [22][23]. - The company’s dividend yield stands at 15.45%, with a payout ratio of 107% [20].

Core Viewpoint - Armour Residential REIT (ARR) experienced a quarter that was largely as expected, with a slight decline in book value and weaker-than-anticipated earnings, primarily due to market fluctuations early in the quarter, although some recovery in June mitigated the impact [1][23]. Book Value and Earnings Performance - ARR reported a minor decrease in book value (BV) of 1.1% during Q2 2025, which was in line with expectations, but it underperformed compared to stronger peers in the agency mREIT sector [11][23]. - The on-balance sheet investment portfolio valuation gain was $16.5 million, closely matching the projected $20.0 million, leading to a BV underperformance of $0.04 per common share [3][23]. - Core earnings/EAD for Q2 2025 were reported at $67.9 million, which was a modest underperformance compared to the estimated $74.0 million, resulting in a variance of $0.071 per share [11][19]. Interest Income and Operational Expenses - Net interest income decreased from $36.3 million in Q1 2025 to $33.1 million in Q2 2025, a decline of $3.2 million, which was below the projected $37.5 million [7][23]. - Operational expenses increased from $13.1 million in Q1 2025 to $14.3 million in Q2 2025, which also contributed to the core earnings underperformance [8][23]. Hedging and Derivative Performance - ARR increased its hedging coverage ratio from 84% to 93% during Q2 2025, which was slightly above the projected range of 85%-90% [4][16]. - The company experienced a derivative valuation loss of $157 million, which was more severe than the anticipated loss of $150 million, contributing to a BV underperformance of $0.09 per common share [4][23]. Sector Comparison and Future Outlook - ARR's performance was weaker compared to peers like AGNC, DX, and NLY, which reported better results in terms of BV and core earnings [23]. - The company is currently rated as a HOLD, with expectations for stabilization in core earnings/EAD in Q3 2025 before any potential rating downgrades [13][24].

Core Insights - Manulife Financial Corporation (MFC) reported second-quarter 2025 core earnings of 69 cents per share, missing the Zacks Consensus Estimate by 2.8%, but showing a year-over-year improvement of 4.5% [1][9] - Core earnings totaled $1.2 billion (C$1.7 billion), reflecting a year-over-year decrease of 7.6% due to strong business growth in Global WAM, Asia, and Canada being offset by unfavorable life insurance claims experience in the U.S. and increased ECL provisions [1][9] New Business Metrics - New business value (NBV) for the quarter was $611 million (C$846 million), representing a year-over-year increase of 15.7% [2][9] - New business contractual service margin (CSM) reached $637 million (C$882 million), up 38.7% year over year [2][9] - Annualized premium equivalent (APE) sales increased by 12.8% year over year to $1.58 billion (C$2.2 billion), indicating strong sales momentum and margin expansion [2][9] Asset Management Performance - Average assets under management and administration in Global Wealth and Asset Management were $726 billion (C$1,005 billion), up 6.4% year over year [3] - Retail net outflows amounted to $3.2 billion, a significant increase of 32-fold year over year, primarily due to lower net sales through third-party intermediaries in North America and money market funds in Mainland China [3] Profitability and Financial Ratios - Core return on equity decreased by 70 basis points year over year to 15% [4] - Financial leverage ratio improved by 140 basis points to 25.6% at the end of the quarter [4] - Life Insurance Capital Adequacy Test ratio stood at 136% as of June 30, 2025, with adjusted book value per common share increasing by 7.4% year over year to $35.78 [4] Segment Performance - Global Wealth and Asset Management division's core earnings were $334 million (C$463 million), up 14.5% year over year [5] - Asia division's core earnings reached $520 million, a 13% increase year over year, with APE sales, new business CSM, and NBV rising by 31%, 34%, and 28% respectively [5] - Canada division's core earnings were $302 million (C$419 million), up 2.7% year over year, while APE sales decreased by 34% [6] - U.S. division reported core earnings of $141 million, down 53% year over year, despite strong business growth reflected in APE sales, new business CSM, and NBV increasing by 40%, 59%, and 12% respectively [7]

Core Insights - FirstEnergy Corp. reported second quarter 2025 GAAP earnings of $268 million, or $0.46 per share, on revenue of $3.4 billion, a significant increase from $45 million, or $0.08 per share, on revenue of $3.3 billion in the same quarter of 2024 [1][9] - Core Earnings (non-GAAP) for the second quarter of 2025 were $0.52 per share, slightly up from $0.51 per share in the second quarter of 2024, reflecting a year-over-year growth [2][10] - The company has deployed $2.5 billion in capital investments through the first half of 2025, aligning with its $5 billion investment plan for 2025 and a broader $28 billion Energize365 program for 2025-2029 [1][3] Financial Performance - Year-to-date GAAP earnings for June 2025 reached $1.09 per share, with Core Earnings at $1.19 per share, marking a 19% increase in Core Earnings year-over-year [1][10] - FirstEnergy affirmed its full-year 2025 Core Earnings guidance of $2.40 to $2.60 per share, targeting the upper half of this range [3][4] - The company expects a compounded annual growth rate of 6-8% in Core Earnings from 2025 through 2029, supported by its capital investment strategy [3][4] Segment Performance - In the Distribution segment, Core Earnings increased by $0.06 per share compared to the second quarter of 2024, primarily due to new base rates in Pennsylvania and lower operating expenses [5] - The Integrated segment's Core Earnings remained flat year-over-year, benefiting from a 14% growth in transmission rate base but offset by lower customer demand [6] - The Stand-Alone Transmission segment saw a decrease of $0.01 per share in Core Earnings compared to the previous year, despite an 8% increase in rate base due to capital investments [7] Special Items and Adjustments - The GAAP results for both the second quarter and first half of 2025 reflect the impact of special items, which include various adjustments that management believes are not indicative of ongoing core activities [12][16] - For the second quarter of 2025, total special items amounted to $0.06 per share, compared to $0.43 per share in the same quarter of 2024 [12]