
Financial Data and Key Metrics Changes - The adjusted GAAP book value per common share increased to $3.94 as of year-end compared to $3.08 as of September 30 [8] - Net income available to common stockholders for the fourth quarter was approximately $47 million or $1.16 per fully diluted share, driven by asset appreciation and earnings from Arc Home [22] - Total liquidity at the end of the quarter was $54 million, consisting of $48 million in cash and $6 million in unencumbered agency securities [27] Business Line Data and Key Metrics Changes - The portfolio size increased from $1.10 billion to $1.4 billion during the fourth quarter, primarily through agency purchases [14] - Arc Home achieved a 136% year-over-year growth in origination volume and generated $49 million of net income for the year [16] Market Data and Key Metrics Changes - The company reported strong performance in the residential whole loans and CMBs, contributing to the increase in book value [9] - The agency investments are being managed to balance liquidity and earnings power while focusing on whole loans [42] Company Strategy and Development Direction - The company aims to increase long-term earnings power while maintaining adequate liquidity and increasing book value, with a focus on residential whole loans [7] - The strategy includes simplifying the company to focus on growing residential whole loans alongside the growth from Arc Home [20] Management's Comments on Operating Environment and Future Outlook - Management noted that residential assets have largely recovered, with potential for further recovery primarily in the commercial sector [34] - The company expects to continue growing the portfolio and increasing leverage prudently to enhance earnings power [35] Other Important Information - The company reinstated dividends on both common and preferred stock, returning to normal dividend payments [10] - The adjusted book value metric was introduced to provide transparency regarding the impact of liquidation preference on common equity [24] Q&A Session Summary Question: Expected pace of capital deployment into non-QM loans - Management indicated that the market is recovering in terms of volume and they are actively working on bilateral agreements with originators [29] Question: Room for further recovery on book value - Management stated that most unrealized book value is on the commercial side, with residential assets largely recovered [34] Question: Earnings power of the existing portfolio and leverage - Management expressed confidence in the earnings power and indicated room for prudent leverage increases [35] Question: Agency investments focus - Management clarified that agency investments are part of a strategy to manage liquidity and earnings power while focusing on whole loans [42] Question: Thoughts on calling pieces of preferred capital structure - Management confirmed there are no current plans to call the preferred issue but will always look for the best use of capital [45] Question: Financing of re-performing and non-performing loans - Management noted that the majority of the non-performing loans are financed through securitization [46]