Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
Please consider a small donation if you think this website provides you with relevant information
| Statement |
|---|
| We have several diverse and countercyclical income streams that allow us to produce strong earnings in all cycles |
| We were able to bring in another operator and within this short period of time, he's already transitioned this asset because he knows the market, knows the asset quality and has done a remarkable job |
| We think our results have been outstanding and above our peers, and we continue to grind forward, and we continue to have confidence in our ability to manage through the downturn |
| So that line resolved October 1, average cash flow was very strong in the fourth |
| The most significant of which is our agency platform, which is capital-light and generates very high ROEs through strong gain on sale margins, long-dated service and annuity income, increased escrow balances that are on significantly more income in today's higher interest rate environment |
| We're very pleased to report that we currently have approximately $1 billion in cash what gives us tremendous amount of flexibility to manage through this downturn and provides us with the unique ability to take advantage of the opportunities that will exist to generate superior returns on our capital |
| So a drop in rates will create great opportunities |
| And we're very pleased to have a tenured senior management team with a track record of managing through multiple cycles as well as what I consider to the best asset management team in the industry |
| Clearly, when our book was high, and we're able to raise capital and then increase the amount of lending we did on the SFR side, we thought that was a really good match to generate 16% and 18% returns |
| As we have said before, we feel we are very well positioned compared to our peers given our strong liquidity position, multifamily-centric portfolio, the depth and skill of our management team and the strength of our balance sheet and the versatility of franchise |
| We also believe we are uniquely positioned to step back into the lending market and done some very accretive opportunities to continue to grow our platform |
| While others in the space will be dealing with significant internal issues, we feel we are well positioned which allows us to reenter the lending market at a time when there was a great opportunity to put some of the high-quality loans with attractive returns while the competition is less active |
| In addition, we recently launched our first construction lending business, which is something we are very excited about, and we believe we can generate 10% to 12% unlevered returns on our capital and eventually leverage this business and produce mid- to high teens returns |
| Certainly buying back our stock at the right value is a great opportunity for us |
| That was a very, very good asset and a very good market that required a certain execution of business plan |
| So we think it's a great opportunity, a great market, a great way to play our capital and where the short-term rates are or unlevered returns are very, very good, and our levered returns are outstanding |
| We are extremely pleased with how quickly we're able to roll out this product and get ahead of the market and build an incredibly talented team to execute this strategy |
| The advance rates, which used to be in the 75%, 80% range are in the 50% to 65% range, and the guarantees on the deals are very good |
| And that business has been tremendously accretive for us |
| And we believe these features are unique to our platform, giving us confidence in our ability to continue to outperform our peers |
| We are also well capitalized with significant liquidity and have a best-in-class asset management and senior management team that have tremendous experience and expertise in operating through multiple cycles |
| We're also the only company in this space that has been able to consistently grow our dividend with approximately 40% growth over the last 3 years, all while maintaining the lowest dividend payout ratio in the industry |
| As you can see from this morning's press release, we had another outstanding quarter as our diverse business model continues to generate earnings that are well in excess of our dividend |
| And we believe our diverse business model uniquely positions us as one of the only companies in the space with the ability to preserve our book value and continue to provide a very stable protected dividend even in this extremely challenging environment |
| Lastly, we believe it's important to continue to emphasize some of the significant advantages of our business model, which gives us comfort in our ability to continue to generate high-quality, long-dated recurring earnings |
| We are very pleased with the margins we've been able to generate over the first 9 months of the year, which are well ahead of last year's pace |
| In our GSE/Agency Business, we had a strong third quarter of $1.1 billion in originations and $1.2 billion in loan sales |
| And again, we're excited about the opportunities |
| We think we'll be -- available to us over the next 3 to 6 months to reenter the market, grow our balance sheet loan book and generate very attractive returns on our capital while continuing to build up our pipeline for future Agency Business |
| In our GSE/Agency Business, we had another solid quarter, originated $1.1 billion of loss in the third quarter, and our pipeline remains strong |
| Statement |
|---|
| And I think, if anything, is what we see in the industry is the lack of execution, which creates an economic risk for the borrowers and not getting to their numbers |
| As Ivan mentioned, we do expect to continue to experience some level of stress as we manage through this very challenging environment |
| Clearly, given the current interest rate environment, we expect to experience additional stress |
| For us, the real concern is performance and making sure that the assets are being managed |
| I mean rates are clearly at a very elevated level, and it's put a lot of stress on people being able to exit into the fixed rate market when rates were in the 3s |
| And sometimes you get grouped in and sometimes just -- there were just headwinds, a lot of headwinds in the market |
| Operating our business with the expectation that the next 2 or 3 quarters will be the most challenging part of this cycle |
| As Ivan said earlier, we are in the most challenging part of the cycle and new issues arise each day |
| Rent growth has slowed, expenses are a little higher than everybody thought |
| I think in the quarter was negative $200 million, which doesn't usually occur |
| All we can speak is that the whole sector is down |
| The sector is down |
| But we're - we've been real cautious |
| I think assets are down about 6% |
| And it's a hard mentality that is a large concern in the sector |
| Ivan, I wanted to start, can we talk about -- you mentioned the next 2 to 3 quarters being most challenging |
| I think the biggest risks other than the rate cap which is a true risk, and that's just an economic issue because, of course, the new rate cap as a state dollar amount |
| Now it's getting close to 5 sort of opportunity to exit is much more difficult |
| Now the balance sheet has continued to shrink this year |
| Our overall net interest spreads in our core assets decreased to 1.88% this quarter compared to 2.08 last quarter, and our overall spot net interest spreads were 1.71% at September 30 and 1.82% at June 30 |
Please consider a small donation if you think this website provides you with relevant information