Earnings Sentiment

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.

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Sentiment Distribution


Earnings Call Transcript Word Cloud


Bullish Statements during Earnings call

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

Bearish Statements during earnings call

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

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