Financial Data and Key Metrics Changes - The book value increased to $11.13 per share at December 31, 2025, compared to $11.04 per share at September 30, 2025, resulting in a quarterly economic return of +3.9% [13] - The company generated comprehensive income of $50.4 million or $0.48 per share, with net interest and servicing income decreasing due to MSR sales and lower float income [13][14] - For the full calendar year 2025, the total economic return on book value was -12.6%, but excluding a litigation settlement expense, the return was +12.1% [6][7] Business Line Data and Key Metrics Changes - The company settled on the sale of an additional $10 billion UPB of MSR, increasing total third-party subservicing to $40 billion at year-end compared to $30 billion at the end of Q3 [11] - The direct-to-consumer (DTC) platform funded $94 million in first and second liens, a 90% increase from Q3, with an additional $38 million in the pipeline [11] - The MSR portfolio experienced a minor 0.4 percentage point pickup in prepayment rates to 6.4%, remaining below projections for most of the portfolio [23][24] Market Data and Key Metrics Changes - The yield curve steepened, with two-year Treasury yields down 14 basis points to 3.47%, while 10-year Treasury yields rose by 2 basis points to 4.17% [10] - The nominal spread for current coupon RMBS tightened by 30 basis points to 114 basis points of the swap curve, indicating a positive response to lower interest rate volatility [18][19] - The share of 30-year loans eligible for refinance returned to nearly 20%, with refinanceable coupon speeds increasing [20] Company Strategy and Development Direction - The merger with United Wholesale Mortgage (UWM) is expected to double the size of the MSR portfolio to a pro forma $400 billion, enhancing competitive positioning and growth potential [6][12] - The company aims to leverage UWM's expertise in capital markets and asset management while benefiting from RoundPoint's servicing capabilities [6] - The strategic focus is on maintaining a paired portfolio construction of MSR and Agency RMBS to mitigate exposure to fluctuations in mortgage spreads [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the merger with UWM will yield significant benefits and position the company for accelerated growth [12] - The administration's commitment to lower mortgage rates is anticipated to stimulate increased mortgage and origination activity in 2026 [7] - Management noted that while no decisions have been made regarding the securities portfolio post-merger, they will be thoughtful about future actions [9] Other Important Information - The company ended the quarter with over $800 million in cash and repaid $261.9 million in convertible senior notes on their maturity date [14][15] - The economic debt to equity ratio was slightly lower at 7 times, with portfolio sensitivity to spread changes marginally increasing [17] Q&A Session Summary Question: How is the merger impacting portfolio construction? - Management confirmed that they are operating as an independent company and managing the portfolio as usual, with changes reflecting market assessments [30] Question: What is the current book value? - The book value is up about 1.5%-2% as of January 30, 2026 [32] Question: How is leverage being considered in the current market? - Management has become more defensive due to market conditions and has reduced leverage and mortgage risk slightly [36] Question: What are the chances of an LLPA or guarantee fee reduction at the GSEs? - There is a reasonable chance for changes on the LLPA grid, but the market is still digesting the potential impacts [40] Question: How are prospective returns affected by recent spread tightening? - Spreads are tighter since the end of December, which may marginally affect return potential [45] Question: What is the impact of GSE activity on MSR valuations? - Management noted that the MSR market remains strong, and they have not seen notable changes in bank interest or activity [41][62]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income applicable to common stockholders of $2 million, or $0.05 per diluted share, with comprehensive income of $4.5 million, or $0.12 per diluted share [14][15] - Book value per common share increased to $3.36 from $3.34 as of June 30, 2025, reflecting a slight growth [5][15] - Earnings available for distribution (EAD) were $3.3 million, or $0.09 per share [15] Business Line Data and Key Metrics Changes - The MSR portfolio had an unpaid principal balance (UPB) of $16.2 billion and a market value of approximately $219 million, representing about 41% of equity capital [10] - The RMBS portfolio stood at approximately $782 million, up from $756 million in the previous quarter, indicating a strategic shift towards lower and middle-of-the-coupon stack mortgages [12] - The net interest spread for the RMBS portfolio was approximately 2.87%, higher than the previous quarter, driven by increased asset purchases [12] Market Data and Key Metrics Changes - The 10-year yield ended the quarter marginally lower at 4.15%, with mortgage rates hovering around 6% [4][7] - The average net CPR for the MSR portfolio was approximately 5.9%, consistent with the previous quarter, while the RMBS portfolio's prepayment speeds held steady at 6.1% CPR [10][11] Company Strategy and Development Direction - The company adjusted its dividend to $0.10 per share, aligning it with earnings power for sustainability [6] - A strategic partnership with Real Genius LLC was highlighted, focusing on enhancing the digital mortgage experience, which is expected to accelerate growth as mortgage rates decrease [6][8] - The company aims to monitor the economic environment closely while seeking investment opportunities that are accretive to its business [8] Management's Comments on Operating Environment and Future Outlook - Management noted a reduction in macro volatility and anticipated continued easing from the Fed, which could lead to higher prepayment speeds for high coupon mortgages [4][5] - The company expressed optimism regarding the potential for accelerated growth due to lower mortgage rates, which may encourage refinancing and home purchases [8] Other Important Information - Financial leverage remained consistent at 5.3 times, with $55 million of unrestricted cash, indicating a solid liquidity profile [5] - Operating expenses for the quarter were reported at $3.8 million [16] Q&A Session Summary Question: Regarding the Real Genius partnership, was it opportunistic, or can more partnerships be expected? - Management indicated that while they are not prepared to forecast, they are open to exploring interesting and creative opportunities that align with their skill set [19][20] Question: Thoughts on expenses going forward, particularly G&A and compensation? - Management acknowledged a 12.5% sequential rise in G&A and compensation, attributing it to personnel changes and professional fees, but anticipates costs to decrease moving forward [25][28] Question: Update on current book value? - Management reported that the book value per share as of October 31 was up about 1.2% from September 30, before any fourth-quarter dividend accrual [33]