Financial Data and Key Metrics Changes - The company reported distributable earnings of $57.3 million or $0.28 per share, and $0.31 per share excluding one-time realized losses from the sale of REO assets [19] - The return on equity (ROE) for the first quarter was approximately 10% [19] - The company anticipates distributable earnings guidance of $0.30 to $0.35 per quarter for 2025 [19][20] Business Line Data and Key Metrics Changes - In the balance sheet lending platform, the company originated $370 million of new bridge loans in the first quarter, with a target of $1.5 billion to $2 billion for 2025 [13] - The agency business had a slow first quarter, producing $6 million in originations and $731 million in loan sales, maintaining strong margins of 1.75% [25] - The investment portfolio grew to $11.5 billion at March 31, with an all-in yield of 7.85% [26] Market Data and Key Metrics Changes - The company experienced a significant backup in long-term rates, creating headwinds for originations [7] - The delinquency rate decreased by 20% to $654 million as of March 31 compared to $819 million at December 31 [22] - The average cost of debt decreased to approximately 6.82% at March 31 from 6.88% at December 31 [28] Company Strategy and Development Direction - The company is focused on resolving REO assets and delinquencies, viewing 2025 as a transitional year [18] - A transformational deal was announced with a $1.1 billion repurchase facility to finance assets in existing CLO vehicles, enhancing liquidity and efficiency [4][5] - The company aims to leverage the securitization market to drive higher returns on capital and increase future earnings [37] Management's Comments on Operating Environment and Future Outlook - Management noted that the current rate environment is volatile and unpredictable, impacting the ability to forecast future earnings [8] - There is optimism regarding a potential reduction in interest rates, which could positively affect agency volumes and earnings [9] - The company is actively working to reposition underperforming assets and improve occupancy and net operating income (NOI) over the next 12 to 24 months [11] Other Important Information - The company has taken back approximately $197 million of REO assets and expects to see these assets grow to between $400 million and $500 million [52] - The average balance on debt facilities was down to approximately $9.4 billion for the first quarter compared to $9.7 billion in the fourth quarter [28] Q&A Session Summary Question: What is the outlook for net growth in the Bridge portfolio in 2025? - Management expects net growth in the Bridge portfolio, targeting $1.5 billion to $2 billion in new business while managing runoff effectively [33] Question: What were the primary weaknesses in the 2022 and 2023 vintages? - Management highlighted that the multifamily sector experienced a long period of growth without corrections, leading to poor performance due to economic factors and management issues [39][41] Question: What is the current cash and liquidity situation? - The company has approximately $325 million in cash and liquidity, with plans to enhance leverage and grow liquidity through the securitization market [48][49] Question: What is the expected trajectory for NPLs and REO? - Management anticipates NPLs to decrease and REO to increase to between $400 million and $500 million, focusing on repositioning these assets [52][54] Question: What is the book value at the end of the quarter? - The book value was reported at $11.98 at the end of the quarter [76]