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| Statement |
|---|
| We believe our portfolio performed well during the volatile environment, as evidenced by interest income for 2023, essentially unchanged from 2022 at $773 million and our credit metrics continued to be in line or better than originally expected at acquisition |
| The returns would be boosted further |
| Despite these adverse market conditions, we achieved some significant accomplishments throughout the year |
| Obviously and Phil mentioned in his comments too, as securitization markets become more stable, which we saw like how deals priced in January and yesterday we kind of got a hiccup, to the extent they become stable and we are able to accumulate loans and securitize them at a -- in a stable macro environment, that's the sector that would be benefiting from the long end of the curve |
| With rate cuts in the not too distant future, I'm optimistic about our future |
| Additionally, with expected rate cuts by the end of the year, we may acquire loans now and hold them on warehouse facilities until securitization economics are more stable and provide better long term returns for our portfolio |
| We -- these assets on a current basis more than cover the dividend associated with that stock and have potential for upside as rates begin coming down |
| We reduced our total recourse financing by approximately $1 billion and we refinanced $250 million of high cost debt with a new facility providing considerable savings |
| We have a talented team and outstanding assets and a clear business |
| While we're saddened by his departure, we are happy for him as he begins the next stage of his journey, and we wish CY nothing but the best |
| What do we see in 2024? We continue to follow the Fed mantra of higher for longer, especially as evidenced by recent statements by Chairman Powell, the recent blowout of January employment numbers, and yesterday's core CPI of 3.9%, all of which support our view of higher for longer |
| We feel now is the opportunity to begin to scale in and acquire high yielding assets in front of the expected Fed cuts |
| These are some big shoes to fill, and I'm confident with CY's assistance, our transition will be seamless |
| So we are looking for the front-end rates and general market to be -- like the rates to come down, so we can get better funding rates for a longer term |
| No, the portfolio overall experienced a mark-to-market benefit during the quarter |
| So we thought this was a good time to go ahead and acquire these kinds of assets |
| For financing and liquidity, this quarter we refinanced $250 million high cost debt into a new facility which will reduce the interest expense by more than 600 basis points |
| But overall the portfolio, the residential credit portfolio experienced a significant mark-to-market gain |
| Great, thank you |
| So the potential upside would be tied to declining short end as far as the new investments go |
| Good morning |
| Good morning |
| Good morning |
| We want to make sure that we cover the dividend yield and we need to have upside from there |
| So to the extent, the funding costs go down and we are able to finance them |
| So while the most recent Fannie RPL sale traded pretty well with the sell-off in rates since quarter end, and especially yesterday, which accelerated, I would say, like, we are down roughly a point or so |
| For instance, generally, as the percentage of REMIC eligible loans increases in those securitizations, the economics of exercising the call improves |
| Thanks |
| Thanks |
| Thank you |
| Statement |
|---|
| And for the full year, our economic return was negative 53 basis points, which included $0.70 of dividends declared in 2023 |
| So the sec debt, from the time it became sec debt and where we sold it to the end of the period mark, it experienced further increase in value which reduced our book value |
| Silicon Valley Bank and several other large regional banks failed and nearly sparked a full-fledged banking crisis |
| And lastly, for the full year 2023, expenses, excluding servicing fees and transaction expenses, were $55.7 million, down $16.3 million from full year 2022, a year-over-year reduction of 23% |
| For the fourth quarter, our economic return on GAAP book value was negative 58 basis points based on the quarterly change in book value and the fourth quarter dividend or common share |
| During the year, we saw the 10-year treasury yield drop to 3.3% in early April, and reach as high as nearly 5% in October before finishing the year at 3.88% |
| Geopolitically, we saw the war in Ukraine continue on its Sisyphean path and a new conflict develop in the Middle East |
| The reduction in value this quarter was mostly driven by a small realized loss on asset sales during the quarter, higher marks on two separate liability facilities, and dilution from ATM issuance |
| Subramaniam Viswanathan Well, there's a realized loss and there's like two liability facilities |
| What I highlighted those, there were actually the reasons where some of the -- some of the items that actually cost the book value to go down |
| But because it was a higher mark on a liability, it was a lower book value for us |
| But as we got right back to where we started from, we took a very volatile, circuitous route |
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