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CFO Matthew Engel acknowledged Q4 margin headwinds from rates but noted conditions were improving in Q1, making Q3 2024 a good comparison. CEO Graham Fleming added that because they hold rates for consumers, Q4 volatility lowered margins, but full-year 2024 margins were stable and are expected to be similar in 2025. Regarding volume, Engel confirmed an expected ramp-up during 2025, particularly in the second half. President Kristen Sieffert detailed a major brand and advertising platform transition launching in Q2 to modernize their marketing approach beyond traditional TV and capture more of the addressable market.

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Chief Financial Officer Matthew Engel explained that while October was a strong month for volume, the holiday slowdowns in November and December would likely result in Q4 volumes being similar to Q3, with any seasonality impacting Q1. President Kristen Sieffert added that sustained higher rates are driving more interest from traditional mortgage bankers. Regarding fair value marks, CEO Graham Fleming acknowledged that rising rates are a negative factor but noted that tightening credit spreads, as seen in recent securitizations, would provide a partial offset, with the final impact also depending on home price appreciation.

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President and CEO Chris Farrar stated that the current production run rate is a reliable forecast for 2025, with a potential for a slight upward trend due to strong demand. He attributed the larger average loan size to an increased mix of commercial assets, which naturally have higher balances. Regarding capital, Farrar explained that for current growth rates, retained earnings, ATM issuance, and the potential sale of retained bonds are sufficient, but significantly accelerated growth might require a balanced approach of raising additional equity and debt.

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President and CEO Chris Farrar explained that Velocity's niche is less rate-sensitive, and production is hedged, dampening volatility. He noted October was a record month for applications. Farrar projected over $150 million in originations from the government-insured loan niche in 2025, which would be sold for immediate cash gains. He clarified that collapsing the 2020-2 deal would provide a positive earnings lift due to its unique low-leverage structure, but this is not expected for most other deals.

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Executive Andrew Ahlborn explained that the SBA business is highly free cash flow positive because the company recovers its full basis in an origination very quickly through the sale of the guaranteed portion and financing of the unguaranteed piece. He noted that while recent capital contributions have been made to the business pending warehouse line approvals, the incremental growth in the segment essentially drops directly to the bottom line, improving the company's overall free cash flow from operations.

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President Jeffrey DiModica explained that the higher Q4 expenses were due to hurricane-related maintenance and are not expected to be a run-rate cost. He noted the debt has 2.5 years remaining and will be refinanced opportunistically. DiModica clarified the Q4 valuation gain was driven by a mandatory annual third-party appraisal using a discounted cash flow method, which he stated is in line with or conservative to recent market transactions.

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President Jeff DiModica explained that for every $1 billion in new capital deployed at current leverage, the company could add approximately $50 million to distributable earnings. He detailed that issuing unsecured debt currently has a slight negative carry while holding excess cash, but becomes accretive once invested, supporting the strategic goal of achieving an investment-grade rating.

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President and CEO Ivan Kaufman stated that most modified loans are performing well, as the strategy focuses on sponsors bringing in more capital to improve assets. Executive Paul Elenio clarified that the lower earnings on cash and escrows, projected at $80-$85 million versus $120 million in 2024, are driven by the full-year impact of a lower SOFR and a reduced corporate cash balance.

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President and CEO Ivan Kaufman explained the strategic focus on SFR and construction lending due to superior spreads and noted that an improving securitization market now makes bridge lending more attractive. He confirmed they will manage liquidity based on loan runoff and market opportunities. Executive Paul Elenio added that Arbor uses a 'barbell approach' to capital, is currently at a low leverage point, and expects a long-term earnings lift from NPL resolutions after a near-term 'low water mark' for net interest income.

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Executive Doug Bouquard stated that life sciences exposure was reduced to three loans after one paid off, highlighting that all are built-out assets with high-quality borrowers, and noted a recent uptick in leasing activity. Executive Robert Foley clarified that the Q4 REO expense increase was a one-time event related to a San Antonio property. He projected that roughly half of the current REO portfolio could be sold by the end of 2025, with two California properties already being marketed.

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Executive Doug Bouquard stated that he anticipates leverage will increase as the company deploys its balance sheet cash and recycles capital from REO sales, noting TRTX is modestly levered compared to the market. Executive Robert Foley quantified the REO impact, explaining that every $100 million of recycled capital equates to about $0.03 per share per quarter. Regarding life sciences, Doug Bouquard highlighted TPG's deep expertise in the sector and confirmed that the existing loans are performing well, with two nearly stabilized and two in lease-up.

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President Michael Comparato noted that while origination opportunities are plentiful, the company is being patient to manage its legacy book. He confirmed the Georgia office loan will remain 5-rated for now. The plan for the Denver office is to stabilize and liquidate, though the outcome is harder to predict. CFO Jerome Baglien added the asset has been significantly written down. Comparato also stated that the CRE CLO market is very attractive and a new issuance in 2025 would be highly accretive.

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President Michael Comparato detailed the REO disposition plan, expecting the Walgreens assets to be sold by Q1 2025 and two multifamily properties by the end of Q1, with the rest sold throughout 2025. CFO Jerome Baglien attributed the NII pressure more to the drag from non-productive REO assets rather than the timing mismatch of loan repayments and originations. He also clarified that a loss on the Denver office asset would likely run through DE upon transfer to REO if the loss is deemed crystallized at that time.

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CEO Katharine Keenan explained that the earnings trough is likely current, with the full positive impact of recent loan resolutions and new investments expected to materialize in the second quarter. She clarified that the $400 million in near-term resolutions have high visibility for Q1 closing, with the team actively working on the remainder of the impaired loan balance.

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CEO Katie Keenan stated the dividend is based on long-term sustainable earnings, not single quarters, balancing income with growth investment. She noted that credit issues are concentrated in the U.S. office portfolio, where 55% of loans are already watchlisted or impaired with significant reserves, while other asset classes are improving.

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CEO Matt Salem stated that the path for the Minneapolis office loan is not yet determined, noting that its stable leasing and cash flow provide multiple options, including extending the loan to buy more time. On capital allocation, Salem emphasized a balanced approach between stock buybacks and deploying capital into new loans. President & COO Patrick Mattson explained that the CECL reserve would likely increase marginally with new, longer-duration loans, both in absolute dollars and as a percentage of 3-rated assets.

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Executive Stuart Rothstein broke down the hospital loan's resolution, starting with a $342 million basis, reduced by ~$55 million in payments/reserves, with ~$61 million in assets retained and ~$100 million in sales proceeds, resulting in the $128 million loss. He described the eminent domain challenge as a two-step legal process that could take 2-3 years if it proceeds to a valuation battle. He expects leverage and portfolio size to remain stable, with potential growth coming from redeploying equity from resolved focus assets.

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President and CEO Mark Fogel indicated that in addition to the FSU student housing asset, three other properties are expected to be monetized over the next two quarters. He stated that the company's broader platform is actively originating loans, and deal flow will be allocated to the REIT as liquidity becomes available from asset sales. Regarding financing, he noted that while new CLO terms may not be as attractive as past deals, the focus is on achieving mid-to-high teens ROE, and plans for a new issuance are being developed.

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CEO Michael Mazzei confirmed that BrightSpire expects leverage to grow, potentially to 2.5% or higher, as it redeploys capital into new loans. Regarding capital allocation, Mazzei stated that while the company has the capacity for both new investments and share buybacks, the stock was repurchased because its valuation was compelling. He emphasized the preference for making loans but noted the market is still "thawing out," making buybacks attractive at current levels.

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Chief Investment Officer Timothy Doherty stated that the market is opening up, but rate stability is needed to drive more transactions. Chairman and CEO Jay Sugarman added that while larger deals are challenging to close, they are actively working on some with their JV partner for 2025. Chief Financial Officer Brett Asnas addressed leverage, noting their target is approximately 2x debt-to-equity, which is not a hard cap, and that the company has sufficient runway before needing to raise equity.

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Newrez President Baron Silverstein attributed the Q3 refinance volume increase to a market rally but expects it to normalize. Rithm CEO Michael Nierenberg declined to provide forward-looking guidance on Sculptor's performance fees but confirmed they are expected in Q4 and noted the acquisition's attractive valuation based on 2024 performance.

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Newrez President Baron Silverstein attributed the Q3 refinance volume increase to a market rally but emphasized that momentum from recapture investments will continue to drive improvement. Rithm CEO Michael Nierenberg declined to provide forward-looking guidance on Sculptor's Q4 performance fees but noted they should be expected and that the acquisition is performing well, trading at a high-single-digit multiple based on 2024 earnings.

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President Pamela McCormack stated Ladder is focusing on its core products, which do not include construction loans, targeting multifamily, industrial, and retail for new acquisitions and recapitalizations. CEO Brian Harris explained that repayments were driven by a mix of factors, including refinancings of smaller apartment loans and a large $119 million payoff on an industrial deal, which skewed the quarterly total higher. He noted that while refinancings are happening, they often require extensions.

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