Financial Data and Key Metrics Changes - For Q1 2025, the company reported GAAP net income of $10 million or $0.12 per common share, with a book value per common share of $11.19 and distributable earnings of $0.24 per common share, aligning with the quarterly dividend [14][15] - The company maintained a 100% performing loan portfolio and an unchanged weighted average risk rating of 3.0, with no credit migration [15][18] - The general reserve increased to $67.2 million or 199 basis points from $64 million or 187 basis points, reflecting higher interest rates and potential economic recession risks [18] Business Line Data and Key Metrics Changes - The company closed two multifamily loans totaling $131 million after the quarter end and executed term sheets on another $310 million of transactions [10][15] - The capital markets segment issued a new $1.1 billion CRE CLO, increasing the proportion of non mark to market non recourse term match liabilities to 91% [15][19] - The company repurchased approximately $9 million worth of shares, boosting book value per share by $0.05 [15] Market Data and Key Metrics Changes - The company noted that real estate credit spreads have moved in sympathy with broader credit markets, but real estate credit is viewed as a safer investment compared to corporate credit [7][12] - The investment pipeline has grown significantly, particularly as some lenders have paused their activities due to market pullbacks [12][13] Company Strategy and Development Direction - The company continues to prefer the housing sector, especially multifamily, due to its stable net operating income profile, while also pursuing transactions across various property types and geographies [8][10] - The company is focused on optimizing shareholder returns through the monetization of its REO portfolio, with plans to sell two California office buildings [18][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current uncertain market and capturing special lending opportunities, supported by strong liquidity and a stable balance sheet [21] - The company is positioned to drive growth in net earning assets and distributable earnings without relying on loan repayments [21] Other Important Information - The company has $2 billion of financing capacity available to support loan investment activity and is in compliance with all financial covenants [20] - Liquidity was reported at $457.6 million, which includes cash in excess of covenant requirements [20] Q&A Session Summary Question: Can you provide insights on the risk profile of current originations compared to previous years? - Management noted that the current market has a more disciplined borrower mentality, with lower loan-to-value ratios compared to 2021 and 2022, and elevated borrowing costs [24][25][27] Question: Why were there no originations in the first quarter? - Management indicated that a combination of tighter loan spreads and longer closing times due to heavy refinancing volume contributed to the lack of originations in Q1 [34][35] Question: What is the status of the REO portfolio and expected sales? - Management confirmed plans to stick to the previously described cadence for REO sales, despite increased market uncertainty [37] Question: How do the transaction prices of the upcoming REO sales compare to carrying values? - Management stated that historically, REO has been sold at prices exceeding carrying values, but specific transaction details will be disclosed upon closing [41]