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 Viewpoint - Arbor Realty's (ABR) dividend stability and growth have historically made it a strong performer in the mortgage REIT sector, but recent dividend cuts and declining coverage have led to a neutral stance on the stock [1]. Company Summary - Arbor Realty has been recognized for its consistent dividend payments and growth, positioning it as one of the top tickers in the mortgage REIT space [1]. - The recent decision to cut dividends has raised concerns about the company's financial health and its ability to maintain coverage [1]. Industry Summary - The equity market is characterized by daily price fluctuations that can lead to significant wealth creation or destruction over time [1]. - Pacifica Yield is focused on long-term wealth creation by investing in undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1].

Financial Data and Key Metrics Changes - The company reported distributable earnings (DE) of $151 million or $0.43 per share, while GAAP net income was $130 million or $0.38 per share [4] - Capital deployment for the first six months of the year reached $5.5 billion, surpassing the total for all of 2024 [4] - The adjusted debt to undepreciated equity ratio ended the quarter at 2.5 times, slightly increasing from the previous quarter [14] Business Line Data and Key Metrics Changes - Commercial and residential lending contributed DE of $174 million for the quarter, with a loan portfolio growth of $946 million, bringing the total to $15.5 billion [5] - The residential lending portfolio ended the quarter at $2.3 billion, with $60 million in repayments [9] - The infrastructure lending segment contributed DE of $21 million, with a record $700 million of loans committed [12] Market Data and Key Metrics Changes - The company’s active servicing portfolio ended the quarter at $10.3 billion, with $1 billion of new transfers dominated by office properties [11] - The CMBS portfolio increased by $55 million due to new purchases [12] - The weighted average risk rating of the portfolio remained stable at 2.9 [7] Company Strategy and Development Direction - The acquisition of Fundamental Income Properties for $2.2 billion is expected to enhance the company’s capabilities in the net lease sector, with a focus on leveraging existing expertise [13][18] - The company aims to grow its diversified business model, reducing reliance on CRE loans, which now represent only 52% of total assets compared to 65% in 2022 [22] - The strategy includes optimizing the balance sheet by refinancing at lower spreads and maintaining a strong liquidity position [14][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for lower interest rates and a recovery in the real estate market, which could lead to increased transaction volumes [29][30] - The company is well-positioned to navigate challenges and is focused on becoming investment grade, with plans to grow earnings materially over time [41][36] - The management highlighted the importance of maintaining a fortress balance sheet and the benefits of diversification in sustaining dividends [35][36] Other Important Information - The company received recognition from rating agencies for its diversity, leverage profile, liquidity position, and stable earnings [14] - The company has maintained its dividend for 47 consecutive quarters, reflecting its commitment to shareholder returns [22] Q&A Session Summary Question: Expectations for CRE loan growth and impact of Fed rate cuts - Management expects to end the year close to $10 billion in CRE loans, with lower rates likely accelerating loan growth and refinancing opportunities [46][48] Question: Ramp up of the net lease portfolio business - The company is optimistic about growing the net lease portfolio, with potential for larger acquisitions as the pipeline rebuilds [56][60] Question: Sustainability of spreads in the infrastructure business - Management indicated that while spreads have widened, they are maintaining margins through more direct deals and expect continued growth in infrastructure origination [62][71] Question: Credit portfolio stabilization and hotel exposure - Management believes credit in the portfolio has stabilized, with no significant losses in the hotel sector, which comprises 6% of the overall asset base [78][82]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported a GAAP net loss of $1.3 per share and a distributable loss of $0.77 per share, with distributable earnings prior to realized losses at $0.10 per share [13] - The held for investment loan portfolio decreased to $5 billion at June 30 from $5.9 billion at March 31, primarily due to loan resolutions [13][14] - Total liquidity increased to $323 million as of August 5, representing a $221 million increase compared to December 31 [9][29] Business Line Data and Key Metrics Changes - The company resolved eight loans totaling $873 million of UPB during the second quarter, including four loans paid off in full and four watch list loans [6][7] - Year-to-date resolutions total $1.9 billion of UPB, consisting of $1.55 billion of loan repayments and sales, and $305 million of multifamily property foreclosures [17][29] - The watch list loans decreased to 17 loans and $2.1 billion of UPB, a net decline of $758 million of UPB and seven loans from the first quarter [7][17] Market Data and Key Metrics Changes - The elevated rate environment remains a headwind for commercial real estate, but investor sentiment has improved and transaction volumes have been recovering [5] - The company has seen significant turnover in its loan portfolio, with a higher percentage of resolutions compared to peers [65] Company Strategy and Development Direction - The company outlined three strategic priorities for 2025: resolving watch list loans, improving liquidity, and redeploying capital [5] - The management believes that their experience as a value-add owner and operator of real estate assets provides a competitive advantage in evaluating opportunities [10] - The company is optimistic about monetizing multifamily REO assets in the coming quarters [11][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the healing of the real estate capital markets and the potential for continued loan resolutions and liquidity generation [5][32] - The company is focused on addressing the upcoming maturity of its Term Loan B in August 2026, with potential uses for liquidity including partial paydowns or replacement financing [28][29] Other Important Information - The total CECL reserve on loans increased to $333 million or 6.4% of UPB at June 30, compared to $243 million or 4.1% at March 31, reflecting a conservative outlook amidst market uncertainty [22] - The company completed the commercial condomization of a mixed-use building in New York City, generating $29 million in gross proceeds [10] Q&A Session Summary Question: Does the liquidity number reflect the discounted payoff of the New York City multifamily? - Yes, the $323 million amount reflects the liquidity generated by the New York multifamily loan in July [31] Question: What is the outlook for continued resolutions and liquidity generation in the second half? - The capital markets are healing, and additional payoffs are expected, but the company will rely more on regular repayments moving forward [32][34] Question: What are the signposts for deploying liquidity? - The company will continue to focus on deleveraging the balance sheet and may consider stock buybacks, but will prioritize resolving watch list assets [35][36] Question: Can you provide an update on the REO balance and strategies for the assets? - The REO balance is approximately $525 million, and the company is pursuing various strategies for asset sales and operational improvements [40][41] Question: How is the term loan refinancing process progressing? - The company is engaging with private credit providers and expects to reduce the size of the financing, while also considering preferred equity in the future [72]

Financial Data and Key Metrics Changes - The economic book value decreased by 1% to $13.69 per share, while GAAP book value also fell by 1% to $13.12 per share [14] - Distributable earnings (DE) for the quarter were $0.24 per share, down from $0.29 per share in the previous quarter, primarily due to credit losses [17] - GAAP earnings were $33.2 million or $0.22 per basic common share, driven by an increase in net interest income to $61.3 million [14][15] Business Line Data and Key Metrics Changes - The company sourced $876 million in loans and securities, including $500 million in non-QM loans and $217 million in business purpose loans [12][20] - The delinquency rate for loans over 60 days decreased from 7.5% to 7.3% [15][24] - Lima One originated $217 million in business purpose loans, with an increase in mortgage banking income from $5.4 million to $6.1 million [23] Market Data and Key Metrics Changes - The market for securitized mortgage credit assets continues to deepen, with increased liquidity and strong investor appetite [6][9] - Mortgage credit spreads widened in April but retraced to levels seen at the end of Q1 by the end of the second quarter [6][22] - The company completed its eighteenth non-QM securitization in May, selling $291 million of bonds at an average coupon of 5.76% [21] Company Strategy and Development Direction - The company aims to continue focusing on non-QM loans, business purpose loans, and agency securities, with plans to grow the business purpose loan originations [20][23] - The management is optimistic about the economic return potential of the portfolio, indicating that the economic earnings power is closer to a 10% dividend yield [29] - The company is actively resolving non-performing loans and expects to utilize additional loan sales to accelerate the resolution of underperforming assets [16] Management's Comments on Operating Environment and Future Outlook - The management noted that the economic and macro environments appear clearer as the year progresses, with resilient growth despite slower than expected rates [8][9] - There is a consensus for two rate cuts later this year, which is favorable for mortgage REITs [9] - The management expressed confidence in the current earnings power of the portfolio and the sustainability of the common dividend [18] Other Important Information - The company expects to lower its G&A expenses by 7% to 10% per year from 2024 levels due to ongoing expense reduction initiatives [18] - Subsequent to the quarter end, the economic book value is estimated to have increased by approximately 1% to 2% [19] Q&A Session Summary Question: Economic return for the portfolio - Management discussed the economic return of the portfolio and indicated that the economic earnings power is much closer to a 10% dividend yield, with potential upside as capital is redeployed from troubled loans [28][29] Question: New loan officers at Lima One - The new hires are focused on the West and Midwest, with expectations for aggressive growth in the latter half of the year as they ramp up [40][41] Question: Capital allocation trends - Management indicated that they would continue to deploy capital across non-QM, HC, and business purpose loans, with a preference for increasing business purpose loan originations [33][49] Question: Distribution potential for new transitional loans - Management noted that they have been selling rental loans and expect to grow originations, with a balance between securitization financing and loan sales [56] Question: Execution risk for developers - Management stated that they are not seeing material pressure on rental income and exit prices, tracking these metrics month to month [65][66] Question: Relative risk of loan vintages - Management indicated that the 2023 vintage for multifamily loans was tougher, but overall LTVs are low, minimizing concerns about losses [67] Question: Callability of non-QM portfolio - Management explained that lower interest rates could lead to more callable deals, but the impact would be marginal due to offsetting swaps [70][72]

Company Strategy & Performance - Chimera Investment Corp is a hybrid mortgage REIT focused on diversified investment solutions across the mortgage credit product spectrum[10, 13] - The company reported earnings available for distribution of $039 per share[19] - Book value per share was $2091, a 12% decrease from the previous quarter[22] - Economic return for the quarter was 05%[19, 22] HomeXpress Acquisition - Chimera entered into a definitive agreement to acquire HomeXpress Mortgage Corp, expected to close in Q4 2025[11, 21, 22] - The acquisition consideration includes cash equal to HomeXpress's book value plus a $120 million premium and 2,077,151 shares of CIM common stock[22] - HomeXpress has originated over $107 billion in loans since 2016[25, 27] - HomeXpress generated $47 million in pre-tax earnings in 2024[27] Portfolio Composition & Activity - The company purchased $19 billion in notional Agency pass-throughs, with an additional $402 million settling in Q3[22] - Recourse leverage increased to 18x from 12x in Q1 due to growth in Agency RMBS allocation[22] - Loans under third-party asset management grew 43% year-over-year to $254 billion[57, 58]

Core Insights - Annaly Capital Management, Inc. (NLY) reported second-quarter 2025 adjusted earnings available for distribution (EAD) per average share of 73 cents, exceeding the Zacks Consensus Estimate by 1.4% and reflecting a 7.4% increase from the previous year, primarily driven by a significant rise in net interest income (NII) [1][10] Financial Performance - NLY's net interest income (NII) for the second quarter of 2025 was $273.2 million, a substantial increase from $53.6 million in the same quarter of the previous year, attributed to rising loan demand and lower mortgage rates [3][10] - The company's 2025 earnings outlook has been raised, supported by tightening spreads and improving asset prices [10] Market Conditions - The Federal Reserve's decision to lower interest rates by 100 basis points in 2024 has led to a slight decline in mortgage rates, improving housing affordability [2] - With lower rates and balanced supply/affordability in the mortgage market, loan demand is increasing, which is beneficial for NLY's NII [3] Competitive Landscape - AGNC Investment's NII also benefited from lower mortgage rates, reporting $162 million in the second quarter of 2025, compared to a net interest expense of $3 million in the prior-year quarter [5] - Arbor Realty Trust (ABR) experienced a decline in NII by 21.9% year over year to $68.7 million in the second quarter of 2025, but is expected to see an increase in net interest spreads due to declining mortgage rates [7] Valuation Metrics - NLY shares have appreciated by 22.3% over the past year, outperforming the industry growth of 8.1% [8] - The company trades at a forward price-to-tangible book (P/TB) ratio of 1.07X, which is above the industry average of 0.96X [12] Earnings Estimates - The Zacks Consensus Estimate for NLY's 2025 earnings implies a year-over-year growth of 6.3%, with the estimate revised upward over the past week [15]

Financial Data and Key Metrics Changes - The book value per share decreased by 3% from the prior quarter to $18.45, while earnings available for distribution per share increased by $0.01 to $0.73, exceeding the dividend for the quarter [19][20] - The economic return for Q2 was 0.7%, bringing the year-to-date economic return to 3.7% [7][20] - The net interest spread excluding PAA increased to 1.47% in Q2 compared to 1.24% a year ago, and the net interest margin excluding PAA was 1.71% in Q2 compared to 1.58% in Q2 2024 [21] Business Line Data and Key Metrics Changes - The Agency portfolio ended the quarter at nearly $80 billion in market value, up 6% quarter over quarter, with a growth of approximately $4.5 billion in notional terms [9][10] - The residential credit portfolio remained relatively unchanged at $6.6 billion in market value, with Onslow Bay achieving its highest quarterly securitization activity to date, closing $3.6 billion across seven transactions [12][13] - The MSR portfolio ended the quarter unchanged at $3.3 billion in market value, with solid fundamental performance and a three-month CPR of 4.6% [15][16] Market Data and Key Metrics Changes - The U.S. economy is expected to grow around 1% annualized for the first half of the year, with an unemployment rate marginally lowered to 4.1% [5][6] - Inflation is likely to have run at the slowest level in the past three quarters, with the Fed expected to deliver two interest rate cuts in 2025 [6][7] - Agency MBS spreads widened by 5 to 10 basis points on the quarter, despite a positive reversal in sentiment towards risk assets [7][9] Company Strategy and Development Direction - The company remains optimistic about the agency sector, citing sound fundamentals and potential catalysts for improvement in Agency MBS technicals [11] - The focus is on further building out flow servicing relationships and expanding subservicing and recapture partnerships to capitalize on MSR opportunities [17] - The company plans to strategically grow its residential credit and MSR portfolios while maintaining a flexible investment approach with low leverage and ample liquidity [17] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment has shown resilience, with a balanced labor market and muted layoffs, affirming the Fed's wait-and-see stance [5][6] - The company expects to be overweight in agency investments due to historically attractive spread levels, while also anticipating growth in residential credit and MSR portfolios [17] - Management expressed confidence in covering and potentially out-earning the dividend for the remainder of the year, given the current economic return [27][28] Other Important Information - The company raised over $750 million of accretive capital in Q2, predominantly deployed in the agency sector, with leverage increasing modestly to 5.8 turns [8] - The company has diversified its funding sources significantly, with non-mark-to-market capacity growing from $150 million to $1.9 billion [22][23] Q&A Session Summary Question: Update on book value quarter to date - The book value was up about 0.5% pre-dividend accrual, indicating a 1.5% economic return [26] Question: Comfort level with the dividend - Management expressed confidence in covering the dividend, expecting to out-earn it for the remainder of the year [27][28] Question: Managing the portfolio through volatility - Management was comfortable allowing leverage to rise due to a strong liquidity position and focused on managing rate exposure [32][34] Question: Dynamics of the credit portfolio - The quality of the credit portfolio is high, with proactive measures taken to tighten credit standards [45][46] Question: Expectations for GSE reform - Management expects GSE reform to be prioritized now that the tax bill is completed, which could create opportunities for the company [56] Question: Demand for Agency MBS - Demand from fixed income funds has been strong, and the company expects MBS spreads to tighten even without additional demand from banks [76][77]

Core Insights - AGNC Investment Corp. reported a tangible net book value (TNBV) decline of 7.0% and net spread earnings that fell short of expectations, with non-GAAP earnings per share at $0.38, below the $0.41 analyst estimate [1][2] - Revenue for the quarter was $830 million, lower than the estimated $862.75 million, although it represented a 19.4% increase year-over-year [2][6] - The company faces ongoing pressure on margins and capital, with a narrowing buffer between earnings and dividend obligations [1][10] Financial Performance - Non-GAAP EPS decreased from $0.53 in Q2 2024 to $0.38 in Q2 2025, reflecting a year-over-year decline of 28.3% [2] - TNBV per share fell from $8.40 to $7.81, a 7.0% decrease year-over-year [2][6] - Net income per share (diluted) reported a loss of $0.17, compared to a loss of $0.11 in the previous year, marking a 54.5% decline [2] Business Overview - AGNC operates as a mortgage REIT, primarily investing in securities backed by U.S. government agencies [3] - The company's strategy focuses on profiting from the spread between yields on mortgage-backed securities and borrowing costs [3] Market Conditions - The company faced significant spread widening due to interest rate swings and negative sentiment towards Agency MBS, leading to margin compression [5][9] - The annualized net interest spread declined to 2.01% from 2.12% in the prior quarter, with average asset yields at 4.83% and funding costs at 2.86% [5] Risk Management - AGNC's risk management strategy includes using interest rate swaps and short positions in U.S. Treasuries to hedge funding costs, with a notional swap hedge of $45.1 billion [9] - The company maintained a leverage ratio of 7.6 times at quarter-end, with a robust liquidity position of $6.4 billion in unencumbered cash and Agency MBS [7][9] Dividend and Future Outlook - The declared dividend remained unchanged at $0.36 per share, reflecting the company's REIT status requirement [10] - Management expressed a favorable outlook for levered and hedged Agency MBS investments, citing high mortgage spreads and potential regulatory changes [11]

Company Announcement - Sachem Capital Corp. will release its second quarter 2025 financial results before market open on August 5, 2025 [1] - A webcast and conference call to discuss the results will be held on August 5, 2025, at 8:00 a.m. Eastern Time [1] Webcast and Conference Call Details - A webcast of the conference call will be available on the Investors section of the Company's website [2] - Participants should register and install necessary audio software at least 15 minutes prior to the scheduled start time [2] Telephone Conference Call Participation - Domestic dial-in number: 1-844-825-9789; International dial-in number: 1-412-317-5180 [3] - Conference call playback available until August 19, 2025, with domestic playback number: 1-844-512-2921; International playback number: 1-412-317-6671 [3] - Passcode for playback: 10201468 [3] Company Overview - Sachem Capital Corp. is a mortgage REIT specializing in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property [3] - The Company offers short-term secured, nonbanking loans to real estate investors for property acquisition, renovation, development, rehabilitation, or improvement [3] - Primary underwriting criteria include a conservative loan to value ratio, with loans secured by first mortgage liens on real estate and personally guaranteed by the borrower’s principal(s) [3] - The Company also engages in opportunistic real estate purchases apart from its lending activities [3]