Financial Data and Key Metrics Changes - FBRT reported GAAP net income of $18.4 million, or $0.13 per fully converted common share, with distributable earnings of $17.9 million, or $0.12 per fully converted share [16] - The company decided to reset the quarterly dividend to $0.20 per common share starting Q1 2026 to stabilize book value and better match current earnings to dividends [9][10] - Book value per share ended the quarter at $14.15, reflecting the dividend outpacing earnings [18] Business Line Data and Key Metrics Changes - The core portfolio finished Q4 at approximately $4.4 billion, with 77% of loans backed by multifamily assets [23] - During Q4, the company originated 37 loans at a weighted average spread of 284 basis points, with multifamily representing 76% of new loan originations [23] - The agency volume came in at $1.1 billion of new loan originations in the quarter, with expectations for agency volumes to be between $4.5 billion and $5.5 billion in 2026 [19] Market Data and Key Metrics Changes - Market conditions are improving, with abundant liquidity and tighter spreads, the tightest seen since pre-GFC days [13] - Regional banks are slowly returning to the market, primarily in the multifamily space, but the company is cautious about chasing current market spreads [14][15] Company Strategy and Development Direction - The company has transitioned from being a pure play mortgage REIT to a commercial real estate investment platform, focusing on sustainable dividend coverage, book value growth, and durable earnings [10][12] - The acquisition of NewPoint is expected to provide steadier recurring servicing and fee revenue, which typically trades at a lower yield but offers more consistent cash flow [11] - The company aims to balance attractive current income with disciplined book value growth, positioning itself with a differentiated mix of dividend yield, stability, and growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow earnings, despite current challenges, and indicated that the earnings potential remains unchanged [31][32] - The company is navigating a significantly better market than two years ago, but the timing of asset sales and borrower behavior has delayed progress [32][63] - Management believes that the disconnect between book value and share price is inexplicable and is committed to demonstrating the company's value in 2026 [63][64] Other Important Information - The company completed a $1 billion CLO that increased non-recourse financing capacity and is expected to lower financing costs in 2026 [17] - Share buybacks continued in Q4, repurchasing $14.4 million of common stock, contributing $0.05 to book value [18] Q&A Session Summary Question: How should we think about capital allocation this quarter? - Management indicated that they are not slowing down origination but are focusing on a mix of business areas to avoid tight spreads in the market [29][30] Question: Should we expect the dividend reset to be a good baseline for run rate earnings going forward? - Management expects to grow earnings over the next several quarters and aims to return to a higher dividend coverage level [31][32] Question: Will the company have some percentage of capital in direct real estate investments going forward? - Management confirmed that they have multiple equity investments and expect to allocate a slightly higher percentage of capital to equity investments over the next few years [39][40] Question: How is the multifamily volume progressing year to date in 2026? - Management noted that the business is highly sensitive to interest rates, and any movement could significantly impact volume [59] Question: Are most of the repayments behind the company? - Management indicated that they are cycling through the legacy portfolio and expect to continue addressing legacy positions while maintaining a strong credit quality [62][63]