Kenya plans to raise up to $4 billion by securitizing an import levy to fund expansion of its China-built railway https://t.co/0ys5JDH08g ...

Financial Data and Key Metrics Changes - Ellington Financial reported GAAP net income of $0.45 per share, with an annualized economic return of nearly 14% and book value per share increasing to $13.49 [4][15] - Adjusted distributable earnings (ADE) per share increased by $0.08 to $0.47, significantly exceeding the $0.39 dividends per share [4][10] - The total economic return for the second quarter was 3.3% non-annualized [15] Business Line Data and Key Metrics Changes - The Longbridge segment contributed $0.13 to ADE, driven by strong performance in origination profits and servicing income [7][12] - The credit portfolio saw net interest income grow sequentially, with positive results from equity investments and loan originators [11] - The adjusted long credit portfolio increased by 1% to $3.32 billion, with growth in commercial mortgage bridge loans and non-QM loans [13] Market Data and Key Metrics Changes - The agency portfolio experienced a modest loss due to volatile yield spreads, while the Longbridge portfolio decreased by 1% sequentially [11][14] - The weighted average borrowing rate on recourse borrowings decreased by two basis points to 6.07% [14] Company Strategy and Development Direction - The company is focused on vertical integration and expanding partnerships with mortgage originators to secure a steady pipeline of high-quality loans [18][19] - Ellington Financial aims to strengthen its liability structure through additional securitizations and increasing unsecured borrowings over time [29][68] - The company is exploring opportunities in new loan sectors as GSEs potentially shrink their footprint [22][79] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the third quarter, citing strong performance across investment portfolios and origination platforms [27] - There is a cautious outlook on home price appreciation, with expectations for muted growth nationally [42][43] - The company is monitoring economic indicators closely and adjusting lending guidelines in response to market conditions [25] Other Important Information - The company completed six securitizations in the second quarter, a record for Ellington Financial, enhancing the stability of its balance sheet [20] - The Longbridge HELOC for Seniors program was launched, which management believes could become a meaningful contributor to earnings [28][64] Q&A Session Summary Question: Outlook for Longbridge and impact of declining rates - Management indicated that declining rates would increase the attractiveness of reverse mortgages, leading to higher origination volumes [33][34] Question: Impact of increased volumes in other mortgage asset types - Management noted that originators are primarily focused on non-QM and residential transition lending, with potential shifts depending on market conditions [38] Question: Outlook on home prices and credit spreads - Management observed a broadening weakness in home prices and is pricing for risk accordingly, with expectations for muted home price appreciation [42][43] Question: Opportunities in mortgage originator space - Management is focused on making equity investments in platforms they know well, securing volume with smaller investments [48][49] Question: Credit quality and workouts - Management reported one significant workout remaining, with overall resolutions moving through the pipeline quickly and minimal drag on earnings [54][57] Question: Long-term run rate earnings contribution from Longbridge - Management expressed optimism about Longbridge's contributions exceeding previous expectations, particularly with the new HELOC product [63][64] Question: Thoughts on dividend trajectory - Management is confident that earnings will continue to cover the dividend, with potential for an increase in the future [100][102]

Financial Data and Key Metrics Changes - The company reported a record quarterly net income increase of 76% and new loan production up 72% compared to Q2 2024 [5] - Revenue grew by $31 million, with pretax income increasing by $14 million, resulting in a core pretax return on equity of 24% [5][6] - The net interest margin (NIM) for the quarter increased to 3.82%, up 47 basis points from the previous quarter [9][17] Business Line Data and Key Metrics Changes - The total loan portfolio grew by 30.8% year over year, reaching $5.9 billion in UPB [16] - Record loan production in Q2 was just over $725 million, a 13.3% increase from Q1 [14] - The weighted average coupon on new held-for-investment originations was strong at 10.5% [15] Market Data and Key Metrics Changes - The company experienced a significant increase in transactions, particularly in commercial and residential properties, with a portfolio increase of approximately $1.4 billion [6] - Nonperforming loans slightly decreased to 10.3%, reflecting effective asset management and resolution efforts [9][19] Company Strategy and Development Direction - The company aims to leverage its unique business structure as a C Corp to retain earnings and grow book value [11][12] - There is a focus on technology improvements to enhance operational efficiency over the next 12 to 18 months [35][36] - The company is exploring opportunities for alternative financing sources, including private capital, to support portfolio growth [43][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing healthy market conditions and a strong pipeline for new loans [22] - The target NIM is set at 3.5%, with expectations for sustainable growth in loan production [26][30] - The company believes it has not reached peak performance and sees room for improvement in efficiency [35][36] Other Important Information - The company completed four securitizations in Q2, issuing nearly $1 billion in securities, which provided significant liquidity [7][21] - Total liquidity at the end of Q2 was $139.2 million, with ample warehouse capacity to support growth [21] Q&A Session Summary Question: Can you discuss NIM expectations going into Q3 and loan growth for H2? - Management targets a consistent NIM of 3.5% and expects continued loan growth, although it may not be linear [26][30] Question: Are there opportunities for improvement or is this optimal performance? - Management believes there is room for improvement, particularly through technology enhancements to increase productivity [35][36] Question: How broad is the company's origination platform geographically? - The company operates in 48 states, with a strong presence in major MSAs, including a high-performing office in Miami [38][39] Question: Will the company consider incorporating loan sales into its financing strategy? - Management is open to exploring private credit sources and alternative financing structures to support growth [43][44] Question: What is driving the increase in prepayment rates? - Prepayment activity is driven by property sales and refinancing, with the company indifferent to the reasons due to prepayment penalty fees [45][46]

Carlyle AlpInvest bundled and sold private equity fund stakes in a $1.25 billion securitization, using a deal that’s grown popular with insurance companies looking to access to private markets https://t.co/wxOsGMVzcL ...

Financial Performance - Net income reached $26.0 million, a 75.9% increase compared to $14.8 million in 2Q24[7] - Core net income increased by 72.6% to $27.5 million from $15.9 million in 2Q24[7] - Portfolio net interest margin (NIM) increased to 3.82%, up 47 bps from 3.35% in 1Q25[7] - Diluted book value per share as of June 30, 2025, was $15.62, a 5.1% increase from $14.87 as of March 31, 2025[15] Loan Portfolio and Production - Loan production reached a record of $725.4 million in UPB, a 13.3% increase from 1Q25 and a 71.8% increase from 2Q24[7, 18] - The total loan portfolio was $5.9 billion in UPB as of June 30, 2025, a 30.8% increase from $4.5 billion in UPB as of June 30, 2024[7, 21] - The UPB of fair value option (FVO) loans was $3.6 billion, or 62.3% of total loans, as of June 30, 2025, an increase from 42.0% as of June 30, 2024[21] Capital and Financing - The company completed four securitizations totaling $985.5 million of securities issued[6] - The company collapsed and refinanced two securitizations totaling $68.0 million in debt outstanding, which released $53.5 million of capital[6] - Nonperforming loans (NPL) as a % of HFI loans decreased to 10.3%, down from 10.8% as of March 31, 2025[7]

Financial Data and Key Metrics Changes - The company reported distributable earnings of $52.1 million or $0.25 per share, and $62.5 million or $0.30 per share excluding one-time realized losses of $10.5 million from the sale of two REO assets in the second quarter [17] - The total delinquencies decreased to $529 million as of June 30 from $654 million at March 31, with non-performing loans (NPLs) at approximately $472 million compared to $511 million last quarter [19][20] - The average yield on core investments decreased to 7.95% from 8.15% last quarter, primarily due to less back interest collected and additional delinquencies [24] Business Line Data and Key Metrics Changes - In the agency business, the company originated $850 million in loans during the second quarter and $1.5 billion for the first six months, with a strong July resulting in $1 billion in agency loans [11][12] - The single-family rental business generated approximately $230 million in new business in the second quarter, with a strong pipeline and successful conversion of construction loans into bridge loans [13] - The construction lending business closed $265 million in deals in the first six months and an additional $144 million in July, with a strong pipeline of applications [14] Market Data and Key Metrics Changes - The prolonged elevated rate environment has created challenges in the agency originations business, affecting borrowers' ability to transition to fixed-rate loans [7] - The company anticipates that the current year will be challenging due to the significant drag on earnings from REO assets and delinquencies, with expectations for a transitional year [9][15] - The competitive landscape in balance sheet lending remains strong, with a significant appetite for deals and a large amount of capital chasing transactions [10] Company Strategy and Development Direction - The company views 2025 as a transitional year focused on resolving REO assets and delinquencies to build a strong earnings foundation for 2026 [16] - The company aims to leverage its securitization platform to scale up its single-family rental business and gain market share, enhancing competitive advantages [6] - The strategy includes being selective in closing deals, with a focus on maintaining credit quality and structure despite competitive pressures [10] Management's Comments on Operating Environment and Future Outlook - Management noted that the current elevated rate environment has created volatility and uncertainty, making it difficult to predict interest rate movements for the remainder of the year [7] - The company is optimistic about future earnings growth and dividend increases in 2026 if there is a sustained reduction in interest rates [9] - Management emphasized the importance of managing through the loan book effectively despite the challenges posed by the current economic environment [7] Other Important Information - The company successfully completed a high-yield unsecured debt offering, raising $500 million to pay off convertible debt and enhance liquidity [4][5] - The investment portfolio grew to $11.6 billion at June 30, with originations outpacing runoff for the second consecutive quarter [23] - The company recorded an additional $16 million in loan loss reserves in the second quarter, reflecting changes in the outlook on real estate values [22] Q&A Session Summary Question: Drop in net interest income from $75 million to $69 million - Management explained that the drop was due to increased delinquencies and less back interest collected on delinquent loans, with reversals impacting the figures [28][29] Question: Future REO levels and potential peak - Management indicated that they are aggressively managing non-performing loans and expect to see a peak in REO levels, with a focus on transitioning assets quickly [31][32] Question: Increased lending spreads and capital markets activity - Management noted that lower interest rates create opportunities for distressed deals, leading to increased interest in their REO and sub-performing loan books [37][38] Question: Losses related to REO this quarter - Management confirmed that losses were primarily from one property that was foreclosed and sold quickly, with another asset marked close to its value [50][51] Question: PIK interest on the balance sheet - Management confirmed that PIK interest is being capitalized in loan balances, with $95 million of PIK on the balance sheet as of June 30 [56][58] Question: Absorption of vacancy and property strategy - Management discussed that their portfolio is primarily in workforce housing, which is seeing steady growth in occupancy, and they are focused on repositioning underperforming assets [62][63] Question: Capital expenditures for portfolio repositioning - Management estimated that capital expenditures for repositioning assets would be in the range of $25 million to $50 million over time [70]

Core Viewpoint - NewtekOne, Inc. has amended its revolving credit facility with Capital One, increasing the facility from $60 million to $100 million and extending its maturity by two years, which supports the origination of Alternative Loan Program loans before securitization [1][2]. Group 1: Company Overview - NewtekOne is a financial holding company that provides a variety of business and financial solutions to independent business owners across all 50 states since 1999 [3]. - The company's offerings include banking, business lending, SBA lending solutions, electronic payment processing, accounts receivable financing, inventory financing, insurance solutions, payroll and benefits solutions, and technology solutions [4]. Group 2: Partnership and Financing - The relationship between NewtekOne and Capital One spans nearly 15 years, with Capital One playing a crucial role in NewtekOne's growth as a non-bank lender and financial holding company [2]. - The recent amendment to the Capital One facility follows a similar amendment to the Deutsche Bank ALP facility, indicating a strategic expansion in financing capabilities [1][2].

Securitization's Role - Securitization faced negative perception in Europe following the 2008 financial crisis [1] - The industry is now portraying securitization as a potential solution [1]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 15% in Q2 2025, reaching $78.2 million compared to $61 million in Q2 2024 [14] - Earnings per share (EPS) guidance for 2024 remains unchanged at $2.1 to $2.5, with a midpoint implying a growth rate of 17% [23][24] - The net interest margin at the bank increased by 56 basis points, reaching 5.46% [34] - The cost of deposits declined from 3.99% to 3.71% [34] Business Line Data and Key Metrics Changes - Business deposits grew by $50 million sequentially, with most coming from demand deposit accounts [16] - Losses in Newtek Small Business Finance decreased from $10.7 million to $3.7 million over recent quarters [18] - The alternative loan program (ALP) has completed three successful securitizations and is growing with high-quality loans [19][21] Market Data and Key Metrics Changes - The company estimates that by the end of the year, its loan book will consist of approximately 10,000 borrowers and $4.4 billion in servicing [30] - The average net premium from SBA 7 loans for Q2 2025 was 110.91, with expectations for a slight decrease to 110 for the second half of the year [56] Company Strategy and Development Direction - The company aims to provide integrated solutions for small and medium-sized businesses (SMBs) and independent business owners, focusing on technology and digital banking [6][12] - The strategy includes acquiring deposits below the risk-free rate and enhancing customer analytics and transactional capabilities [27] - The company is positioning itself for future opportunities in stablecoin transactions [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, despite challenges in finding good credits and tariffs impacting borrowing appetite [92] - The company anticipates a higher provision for the second half of the year, with a reserve ratio expected to be between 4.5% to 5.5% [119] Other Important Information - The company has a historical charge-off rate of 1% in its ALP portfolio [36] - The tangible book value per share increased by 3.7% sequentially and 21% year-over-year [35] Q&A Session Summary Question: What helped bring in $50 million of growth on the commercial deposit side? - Management highlighted the benefits of their banking account offerings and integrated solutions for clients, which have driven deposit growth [63][64] Question: What were the total charge-offs this quarter for the held-for-investment portfolio? - Total charge-offs were reported at $5 million, consistent with the previous quarter [68] Question: Can you break down the various drivers that went through the net fair value line item? - The primary component of the negative $11.7 million was the reversal of previous unrealized gains on ALP loans, which were written down to zero [72][73] Question: Will the net gain in residuals and securitizations only occur with ALP securitizations? - Management confirmed that this is the first time they own 100% of the residual, which differs from previous joint ventures [88] Question: What are the expectations for SBA originations for the current year? - Management confirmed they are sticking with the expectation of $1 billion in SBA originations for the year [99]

Securitization pools assets and repackages them into interest-bearing securities. https://t.co/ATSybD1f69 ...