Ready Capital (RC)

Tom Capasse Chairman and CEO
Rick Herbst CFO
Tim Hayes B. Riley
Ben Zucker BTIG
Crispin Love Sandler O'Neill
Jade Rahmani KBW
Steve Delaney JMP Securities
Call transcript
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Good day, and welcome to the Sutherland Asset Management Corporation First Quarter 2018 Earnings Conference Call. At this time, I would like to turn the conference over to Rick Herbst, Chief Financial Officer. Please go ahead.

Rick Herbst

Thank you, Julianne, and good morning, and thanks to those of you on the call for joining us this morning.

Some of our comments today will be forward-looking statements within the meaning of the federal securities laws. to to and we differ subject cause that expect. are results actual materially statements numerous uncertainties risks could Such from what them. Therefore, and caution exercise on you in should relying interpreting for refer more that We impact operating condition. future and our our to SEC could detailed of the you discussion risks financial results filings

our that or in found for discuss in our to. not operating to company's performance. directly release information. financial Sutherland measures should During Tom available Capasse, in first be will now, supplemental measures, I is Both XXXX in GAAP. Chief that, and we can the Officer. our the section Investors over our accordance and website. call, earnings turn the in substitute believe GAAP supplemental comparable these A quarter evaluating With which considered just first as in I'll results release prepared Executive reconciliation access isolation be referred measure non-GAAP information everyone most the of our quarter measures to we can the a be useful By should with the our to have These of it

Tom Capasse

to quarter Thanks, this financial pleased morning the first our Rick. for of We're results XXXX. discuss

my enhance Ready In and leverage raised lending technology focus to successfully rebranding our by results XXXX we As and was in and our our through efforts. as making presence to end are Cap our company is business our a this public increase reaping evident leverage we're million operating in the quarter, for review, To market our growing plan subsidiary. XXXX, from financial the newly the significant progress rewards of of focus is $XXX quarter. utilizing

favorable well and continue and businesses leverage. market additional to from core Our portfolio profitable acquisitions developments, benefiting we're perform

income from spread the derivative acquisitions. lending variable from from benefited provide Acquisitions business, with we as stream, returns a excellent returns supplementing rising stable as as result particular, of as quarter. gains of in this quarter, our sometimes outsized one interest rates a well This portfolio our occurred

to financial over some few it touch more turning our on through go detail, to of before in Now highlights. Rick I'd like a to results

Firstly, representing first was $X.XX quarter were row growth. over quarter fourth quarter, or in compared XX% quarter, of per the basis, XX%. the last quarter. ROE GAAP earnings XX.X% $X.XX $XX.X On ROE $X.XX per up the to sequential our a share, and core GAAP for share earnings were core a last the in was EPS million

our short- unlike discussed last our and REITs, benefit from or several was this ways. mortgage evident As in long-term rising call, rates. residential earnings in This many property quarter

consists lines. Firstly, all loans, adjustable our since small in X our increased our gross balance portfolio of yield rate commercial primarily of business

our The our of to increased the rates. to is million of rising residential in X/X quarter, servicing due $X mortgage repayment value value the primarily rights Secondly, rates. which slower increase of MSRs due was

residential exclude we rate the offset our lending in earnings, our the segment. fair a of While significantly value market environment, from servicing increases a changes volume production fact that it core rising helps rights simple which is in value

debt. swaps aggregation recourse of Thirdly, $XXX rate into we completed to the interest funded period debt fixed with hedge match our converting million March in rate production non-recourse loan XXXX, prior which we securitization, securitized during

this hedges the offset often rapidly With inventory. positive of periods loan decline higher the the in dramatic rise liquid $X.X which a swap in an liquid less than swaps quarter, in $XXX,XXX on rates quarter. in value and million by rates, of tightening our loan an register of volatility we after-tax partially assets, gain realized basis spreads, these rising was resulting In

X% changes, also property increase book value stable our note Only rising has relatively ROE on and Finally, residential beyond environment. valuation noted, the rates, quarter. to rising been impact subject which rate are REITs, value assets from in we a as is increase which, mark-to-market based we in mortgage with most our fair the unlike value on that in the the of of MSRs, accounting, X%

our balance small commercial it capacity turning Now robust. remains space, investment to in

originated assets $XXX quarter, from this SBC late acquired investment strong additional we SBC and $XX comprises up pipeline. quarter. far a and million the $XXX remain in $XXX so with new prior in first opportunity a fact, originations the an in million XX% In Acquisitions the second new X% acquisitions. and The XX% million quarter cycle quarter, with strong million

financings, demand We've In $XXX public was products. million November for capital -- since three priced In of our see and the $XX in of $XX debt debt on in terms our basis XXXX. ratio to issued strong January the notes in year target both point we the reduction last quarter-end, At of now year. note million securitized baby raised a we market, equity bonds X.X% of we XXX debt offering of X.X raised April, capital for continue end full within range. tap our million secured completed at recourse ratio went times, the to at

with it rates spreads reduced reasons: loan was offset rise due deposit rise the and partly rose than banks' banks rates, credit posted nominally rising demand. tighter market in deposit our to to market continue X less costs While rates, for

mortgage-backed quarter more close later asset's this rates with As over another have We since completed legacy $X now transaction such, Sutherland competitive to banks. a loan transitional XX and our commercial has security loan totaling billion securitizations, thereafter. XXXX. quoted CLO hope become

more in commercial prices small on large few the our rose Small comments which earlier to balance is compared owner-occupied market market, This rose highs highs, SBC XXXX, is now is fell a underscores housing, SBC that X% quarter which the this in $XXX underpins sales cycle Now, a senior commercial exceeding and precrisis commercial strategy. investor- totaled real large strength precrisis which volume property secured the property volume in SBC Investor XXX% sales year-over-year XX% X% of of XXXX. X%. and lending over X% balance loan premise continued commercial credit the the balance balance market. X% property property estate, loan correlated and in billion Further, and prices housing as SBC -- balance over. growth large are rose X%. our strong estate terms to while in below real -- price

represented loan as and than we underscores investor- billion in of share without credit X% criteria. strength goal need X/X of small This of build share $X market compete can with originations inherent less the offering XXXX, balance loosening model the X%. lender by market Our our non-bank our long-term commercial products, business both the owner-occupied only of to

leverage covenants and compressed approach highly companies spreads. development loosening to loans hand Our the market favorably results. And discuss competitive over face business to to middle risk-averse our where that, lending Rick financial I'll compares with for market it

Rick Herbst

with representative for pleased touch quarter last depicts which to of of slides financial the few highlights particular, night. our on Thank included on we the in two composition. you, that recently of as ability very raised. well results to $XXX a summary sheet loans the In the the current the is capital quarter, our in as to the of Slide deploy the supplemental I of our million press Tom. attached balance some was We're going the highlights that added some that release was XXXX. information I'm for deck quarter of new note first

per Slide from quarter business a increased on all to in provide our first earnings our GAAP up our moment. were which the quarter-over-quarter per of additional on leverage On book year-end. share, share dividend, four those and value I'll $XX.XX up that Given is $X.XX yields three, lines, colors exceeded

bottom we line anticipated the previous of in indicated our Slide line over summarizes an quarters, this our was we've quarters. that loan originations top certainly much ROE, As to increase five goes case previous the quarter. in the four, which

with variances coupons segment. comparisons increased last continue the due loans. this the among balance the slightly quarter's show total The increased gross of was this volume yields product growth. to segment, Year-over-year minor higher with Slide leverage small leverage quarter's quarter activities commercial on six, volume, This to above strong in together here covers lines.

percentage gross securitization to This Slide over rising in on quarter, of our that to from result volume premium important from during XX%. are sale over fueled a in increased in is XX% this segment. leverage seven rate segment, quarter XX% summarizes As fixed exposure by increase the quarter, the business rate interest last of rate leverage was closed loans the sold this The XX.X% these average yield in loans here match-funded the minimize the small environment of a XX% and this loans. an administration to increase an quarter.

excluding returned are the information due yield shows levels interest to acquired rates gains closer Slide the loans addition, that adjustable the for historical summary some rate eight, leverage on to reprised. portfolio. In higher

leverage of can We're we acquired mortgage The loans the our purchased our be yields quarter and assets we'll this The As due legacy of quarter. loans to nine portfolio pipeline margin that is we've the remains portfolio, portfolio the in discussed The to acquired de segment liquidity acquire outsized past, the new as back fourth those, here two about million returns Slide certainly the profile. and our the return is permits. remained over in due this more quarter. acquiring Absent yield quarters. residential SBC last we and acquisition on venture in and in returns loan risk-adjusted they assets increase nature minimis interest strong our this strong the net selectively have of summarizes excited business. leverage primarily these in lumpy very joint $XXX see of quarter-over-quarter. small large cost the consistent commercial over balance from

increase in a to retain which environment. Our has been servicing strategy value rights loans rising in on sold, rate the

market to new created quarter As March. the XX-year to rights value of an the this done we've mentioned And is in closed reflecting the Sutherland. rights update includes an in in fixed treasury. servicing earlier, million, increase over of securitization as we well the schedule both rise within rate the these summary as the the $X XX value in increased Slide securitizations due the of assets servicing the

The virtually portfolio, to product interest you on newly can no March. rising new out our margin, information to as completing over securitization due As reflect had nor as The previous on potential lower originations. and the reduction on the our And on Slide of loan and for a left-hand which the liquidity have of positions, valuation interest income. in The last back final numbers rates in this provides composition portfolio net actually presented the interest adjustments based is few our chart, see, quarter our originated interest see slides of those that, the servicing the net about are rising on delinquencies. from our quarter-end, next closed impacts not quarter rate impact does portfolio. and interest any of the And XX can we positive I'll upon pools the you in reflect the has sensitivity turn swap reduction diversity positive the here to rates primarily include on it sources. capital loan quarters and various our Tom broad similar structure of our some thoughts. rate with impact

Tom Capasse

Thanks, Rick.

year look first public a continue As to company, on success we of second as our business we and on year plan. build our our enter to execute

to capital With we accretive raised, increased capacity market. as loan the our additional both fund in the growth have recent we origination well franchise as our loan acquisition debt

shareholders ongoing that, to to questions. for in their Ready origination process we in continued our to we'd the provide efforts your loan with thank open Operator, for continue and on poised We focus growth. assumed Cap is to company. platform believe We our our technology team our up continued leveraging efficiencies confidence rebranded like our for for be and line


Tim [Operator ahead. from question take first from We will go Hayes Riley Instructions] Please B. FBR. our

Tim Hayes

of giving the just are and investment just on bit you give originations kind what a an so on year. mix asset so like update and far? far have can is color acquisitions just the you loan Appreciate this little of activity But us how been trending, what

Rick Herbst

For quarter, the Tim? second

Tim Hayes

correct. Yes,

Rick Herbst

far, be are strong. Freddie strong, We've skewness first maybe three Freddie little seen pretty Originations the where the higher. quarter, of, more in in were and Yes. a in all product, bridge. continue kind pipeline little But they towards the a to so line with

the the in really, originations with line above closes, what and On how story in depending SBA quarter, first numbers. should far the same quarter the originations on they at/or much side, were of so result in are first pipeline, the it

Tim Hayes

Got it.

that if a And realized in just of considered Okay. us gains outsized the give breakout just Rick, kind of can if is then, nonrecurring? quarter, the what you any or

Rick Herbst

us. XX side, obviously, I fluctuate and was, number. only the new I that by rates equal. else outsized net in year. quarter portfolio side, move due mentioned, compressed thing guess, impact The derivatives, against impact the being will it's to to was realized that would that unrealized going that, valuation. they ones. the interest time, if on on constantly with the that servicing of end on maybe big with And because $X.X I a to all what say, about say is the And that do rates. way towards go grow everything rights interest the that's the We was they we the a unusual that think, On the sometimes rise create a I go up for just would the the probably sharp spreads to or have positive million the mortgage And again, always Tom nonrecurring don't which mentioned, was as derivatives Tom want sometimes quarter, the us, is,

Tim Hayes

you an did securitization And it. so last at just and activity and how And cash you on can hand that back you issuance us idea give quarter-to-date you then, much today? much quarter? investment the liquidity Got have April from far, bond got then, that Okay. reflecting just how

Rick Herbst

-- questions -- okay a couple there. We of

close an advance million about We XX% financed On to closer to issuance, XX%. warehouse were lines got probably We that. on we on $XXX financing the bond about debt. of about, rate

So haircut, XX% $XX it million on call that. advance about rate

excess some will -- that as have market acquired we they of we We we some market, to do XX% pipeline because strong million are because so need but this do our There originations acquisition not leverage we contracted prearranged close, while as the terms In we've the pipeline of ones, quarter. for loan other some reserve in have liquidity. we pipeline equity the and terms liquidity the The that $XX are into about XX%. is commitment to also. of get on significant are is the dip acquisitions, far in those, strong, an

see we'll of rest the So we quarter. should in the a second see -- handful more


next from our take now will Ben We BTIG. Zucker question from

Ben Zucker

also Freddie having only offense? not value to? there little to where more been X% at you originations XX%. with this play function just an year-over-year so is just deliveries were hiring strength all? your or GSE originations same a a of Or SBA kind of your impressive originations your that expanding question grow capital The And Mac you with the What Have up you can do the continue up but quarter-over-quarter. volumes year-over-year were guys networks attribute

Tom Capasse

of couple a questions Just there.

do profit to highlight But selling aspect Both problems. the [indiscernible]. program, retain Mac little of government where Just Freddie secondary of take on our one leveraged XX% both interest both non-recourse be very are those at they and retained XX% can subordinate the program the SBA into obviously programs, retaining servicing. a we're with a we We we on utilize debt. bond But have market and capital. --

by it's penetration on So broker improved product. driven refocusing officers more our of Freddie -- liquidity community is loan the to more the that, just so affinity highlight it in and terms -- driven was really increase driven, the not with

Rick Herbst

follow-up Yes, to that. one Ben, just

that XX% XX% sell mentioned portion table quarter operations, of terms required. retained we Both and those required. this a of advance We the loan XX% require buying that commitment a require line we -- it fund at the And rate. over put rates of a so XX% a loan -- business, warehouse obviously XX% the very XXX% capital SBA of then or to generally and capital on required advance no You in originating premium. little the loans, guaranteed actually, with was capital doesn't Freddie with case of any in but basically there's capital for businesses

lot a So neither those capital. of require of products

the of tight, when constrict capital that those from not will products either originations. So continuing is

Ben Zucker

a guys also be for to at seems up perspective, capital very like from guys origination Fannie just on platform. a license fit very as open it commitments? protected ROE product have know, is And guys. But strategic Mae SBA extension you and and high looked Fannie that's natural the again, considered very so channel mentioned you servicing DUS you that or your that light acquiring and I could a is the another you would unique

Tom Capasse

looking, Yes, the some are on broadly planning at lending also include with just we actually Cap investor other looking into the which program. balance we more had Fannie staff may internal small we products. And the are Ready agency yes, our expanding DUS which products, products, has

Ben Zucker

an of your think, my And statement? caught guess, you eye mentioned remarks, down the tie Could items some unconsolidated I me that that JV, help Rick, Great. the I in in from was last income income The from you earlier your an that prepared one. acquisition. just

just some And a there? sale also in spike I that was successful So or resolution little expenses. of kind noticed servicing

let could that? So you of great. be would kind me if just highlight That

Rick Herbst


performing, of with joint own $XXX We a we that about loan pool venture, a the bought another like this loan some million, of we kind assets. $X.XX $X. up On it was at And about pool. nonperforming some partnered on XX% of party,

nominal and and reach this paid and happens In better bought loans the few of with of the couple nose. that January fund because up would in they they're the those that we at they with what really high assuming don't it's think proceeds we When and return in discount off those it's of because these you, large paid pretty to we lot going I full, out $X.XX doubles, mid on when the of saw off -- to are case, a run. full, it, such to this did our visibility February. because the are of that's sometimes when than past, we like acquisition you quarter. And a -- they prepayments certainly, talked of kind have and return comes types stepped off -- joint outsized what don't in these always not it singles outsized of twofold visibility do to pools acquisitions. from have a We going underwrite offering, paid which in had a we and it's and it of but than that open don't don't investments, $X, the give we worse, we've we returns a loans When fueled we've that, lot they have going for of generates about I the loans were kind returns those forward when for be capital which -- this venture experience opportunity So on teens in, the going specifically. and going offering prepayments. types borrowers to to the did Not over sometimes or caution the they had would greater and happen, opportunity that. years, prepare, to

that that that and that, in this For home stand here to out run. into and the to referred residential I'd was located And pool. at Sutherland. due point in the GMFS, was We it by diligence business quarter with perform pool the the a underwrite team that Southeast our down Waterfall primarily particular Louisiana economics look that and of area was loan that leverage the obviously, in help this was sourced also and the able area. a skills were

that good and kind good So effort of was obviously team a results.

but off. they or on. incentive we joint servicing more services some the fees, have loans that portfolio increases, overall just servicing other pay going type spoke pay acquires, the fees expenses pay there when are the incentive not we as sometimes of did volume off, pay get due terms those then, some and just loans venture In when And in fees, about the I down

require on -- thing, from time that for other to and also advances are to pay we thing. taxes whether of -- time it's there to insurance Just kind had for us one advance loans, that

-- little a see little in this quarter bit that. a seasonal spike we This of quarter, did bit


from next Sandler take O'Neill. now question Crispin from will Love We our

Crispin Love

question JV. following the on that last on up Just

that kind forward, and kind to the revenues also, you going of no then, the saying reason be of are should they're kind to we related going able just So any expenses nature that modeling be any there they're when because of lumpy whether to JV is of not from of kind see in be to quarter. coming? that, going those And during

Rick Herbst

in the built record on million you related in of taken get, body mean, status before earnings to or I over accretion coupon, a additional than we any X% loans I'm about them, loans so the not investment, coupon, No expect it's the nothing re-performing out performing we we kind is get and the that on as loans it from within be we so expenses saying any there. we at so are our some nonperforming into are payments other income those made of returns. what model expenses $XX statement. them the of shouldn't and discount, these loans paying earnings work will

some being there So losses are expect yes, else change. assets earnings. every generate absent do could we or expect But month everything income, to some that equal, something we bad on would

mid- As to kind of And this a saw underwrite I outperform. to for portfolios returns like they as this. quarter, mentioned, we could teens we high then, generally

Crispin Love

slightly I if basis, looking next And Or origination trajectory kind quarters? on GMFS of given be we year-on-year guess, your kind outlook of you rates, lower year? kind the like GMFS of of at than the the the couple over then, expect last the to look what's do rising just

Rick Herbst

year-over-year. I XX% we decline in think, of a is about year-over-year MBA while like decline saw projecting quarter, X% first kind the the originations,

bit a the So little done we've than MBA. better

to seems home-buying I That in market rates an school their has relocating less going to reason. of go year. a for and gone the seasonality, anytime for -- soon. could are Their not who are acceptance to down interest move whatever also real in up think, folks than to prior quarter. be kids be just or be There season there's it will last pipeline looking this kind

back when down. that. to think, rates There people, I some acceptance tick in going seems be So up go they're first they to think

the somewhat originations there. to But would little it in pickup year-over-year. expect hopefully, lower see be So we'll a I

Tom Capasse

is strong just to There that about that, a channel. purchase. would GMFS XX% production I retail has add

XX%, in the space, the yes, XX% So that decline industry obviously refinancing. with of about most XX% that's

bit So due the more in of purchase to high terms a the the market to if they little you of beta, their concentration. resilient decline will, are terms in

Crispin Love

what's the I anything then, outlook rate there Is think XX% driving? looks of And your rate it like couple during quarters? tax quarter. for next the first over about tax the

Rick Herbst

of companies. higher this because percentage all at re-subsidiaries, our occurred They're which operating the in of taxable was It income of all the quarter greater are down taxable re-subsidiaries.

For example, the But rise provision tax purposes, for in a the unrealized in MSRs, to not those taxable are even tax a put all though it's that a -- there's we tax have against item. it. provision

more, the of, will gains, XX% gains, percentage SBA those Mac the So including impact was Freddie of or P&L, be. That's why up this to greater which percentage the the it the higher the gains, our immediate income, have quarter. the gains, rate an tax of kind greater to

Crispin Love

been have good to getting that XX% Okay. target you've guys ROE And that targeting. then, job

be jumping do on guys Do XX% were sustainable Or XX% non-GAAP forward feel hurdle? actually of it going like -- you you at be that's to any range? can of kind over that that's basis. can around think that give you I think going or kind

Rick Herbst

past or true, two, we think, quarter and what we last think said quarter I I at were it in X%. the holds

up business absent if third get XX% certainly to venture model, year. the get is significant end north year. course to certainty sustainable How this gradually will from happen that this of to started But that. the of XX%, kind joint could our committed during But great to it of is us that, We basic haven't the quickly would goal the this jump quarter, I quarter? you get Obviously, be we second, the that Our XX% a think, year. goal over would performance by it our of it that bit. do

Crispin Love

was then, in I were $X.XX move of the in rate all to point And how $X.XX basis XXX positions? -- from of impact then, was quarter interest swap this the from quarter Okay. was last it that said goes reduction kind of And the in think, interest sensitivity, NII large LIBOR, uptake you rate full positions. because on those by

Rick Herbst

We in of it at million preparation on for notional closing securitization. all Yes, was had the over the swaps based $XXX swaps. about


We next from will now Jade question go take Please Rahmani from ahead. KBW. our

Jade Rahmani

JV Can earnings of tax affected million to you impact anything if it the needs the else? Just impact quantify income of or X.X the was? what net be

Rick Herbst

up It it's the at company. is not held parent tax affected,

for it's So dollar dollar.

Jade Rahmani

the view likely of What's your point, increases? And any would Okay. concerns in seeing from additional interest any performance? at in the you you rate Are anticipate market impact credit regarding what borrowers? change

Tom Capasse

Well segment-specific. the that answer is, to it's

of the in rates there benefiting we I business, get actually before, said as we're fixed terms benefit. terms as In rate rise because tightening nominal a with credit spreads,

local don't year, are locks it up banks So our then against markets. rates tighter addition rise, that in the XX deposit now in to community facing with and costs, especially banks, we compete

will improve space. terms in tend our balance program that So in our of product, conventional rate to the fixed all small commercial of

absolute more trading on multi-family some program, rate banks. could are margin. rise little but because have Freddie rates cap may a versus the program there that the Now basis at currently The you're competitive, impact projects Freddie that competing bit will the segment the with where the impact in a become the just

SBA, need really As far you in a as gap big the out LIBOR.

benefit kind it's normal monthly XX-year a a that amortizing a business payment, really is of versus because say small Let's current important X%, because is demand rate. loan, X%, than the And products bank more is XX% about for X% probably loan. it SBA which the range impacts a

transitional more there terms impact in increase our an need, loan than not X should while a yes, duration LIBOR, on service positive of transitional between demand for impact given the properties large also -- have of I again that products you will a it a that lot think, are only can balance that X loans debt and our the years have bear Obviously, volume. a are coverage X%, impact higher loans X% So repositioned. lastly, in program, ratio, these sheet. because very of And range

on impact our have balance So minor say we our impact but neutral volume, to a on would positive overall, very loan holdings. I sheet a

Jade Rahmani

impact on any volume just you Mac performance? you deterioration on side? program, anticipate the the the anticipate is Or in would credit Freddie And that

Tom Capasse

the where about are terms these the lower Yes, cap volume are could out, small would cap in because in versus large balance again, of impacted rates multi-family rates of XX simple points just point math acquisition balance. be cost. around And probably basis I the

very far issue yes, out, currently And just volume. of less we credit of small XX equity losses being capital. our to on of were our X% -- definitely point only as retain the modest X% in it's points. the But as recession this see exposure So -- did could that in talking total an XX-year, It's about during net for experience product. an net basis you're Freddie But risk, you cumulative X.X%, NAV then currently. will balance terms the the that said, that impact product roughly, our credit

So -- the more to standards, relation to the in underwriting to Freddie -- and we've conservative guidelines. been

with that exposure. So we're credit very comfortable

Jade Rahmani

Are increases make push lending in structural any all you're you or landers at concerned concessions? I by seeing competition the know space? leverage bridge

Tom Capasse

of only had roughly our banks. bridge sense track some XX -- that all last all went in we million average where bridge year loans lenders, we -- public or influx $XX is the that I of balance We involved the about large probably in much lenders. competition bridge target very, we is they in $X large million, not bifurcated market there's space, may maybe mortgage million, product, that, at $X you as market. but a would these mean, XX, a of few very and the our including lenders the recently but those fraction very, is commercial if we in definitely a yes, They're look hit sorry, say are that X, are within there's balance about very REITs our --

we modest some as yes, but is equity XX% definitely sector, but our $XX in of So large we we've is competition, increase what to the in have -- seen a about transitional some experienced and -- plus, of seen space. being stuff million go like you, balance cost with we've upstream what there that fraction kickers in

Jade Rahmani

streamline to technology. I G&A, processing? that Or mentioned overhead? is on Is think, designed reduce the you designed Just company to that company's the overall,

Rick Herbst

to mean, Both. the meant I I streamline origination guess. process. it's

we'd hire ramp can our cost had a hoping of in origination the using or couple up cost think some bit we grow the really people. up operating we're at which little technology, to platform maintain do that we least, would the different volume, so with same without it -- efficiencies. folks, the ramping to We is technology will trying with really the system, a result people, less having potentially lower which we're more leverage there haven't As across we hire

Jade Rahmani

all goes increase retain on Or lastly anticipation S, and just to increase is inclined that as able the to that board would business? Tier you and be the it if to execution that originations -- in dividend? prefer your capital the the planned, be dividend. And you'll it With use to do that reinvest

Rick Herbst

that a some the Probably little increasing of argument capital. bit is both. reinvest an value good there to Frankly, and that retaining book is

to core mantra attractive would competitive still to adhere this our have of yield tax dividending of the we purposes earnings. a shareholders. be north XX% to the do tax by REIT basic I regulations at to and have north point sense But our at mean, portion, core is of to is dividend what we Obviously, need be we status. earnings. significant XX% to maintain However, for My to that and of a we want


our from now will Steve We question Delaney go from Securities. take Please JMP ahead. next

Steven Delaney

covered. Most of my prepared been questions have

in you remarks Cap of frame that sense you and Tom, Could Ready Just a start project? some on us your used two I your time things phrase based if you, for mentioned the rebranding. could remarks, with give

Tom Capasse

investor firm. number on it We've and own-occupied. small being the what of is and year. various of looking had internal whole -- company, products. with business the industry-leading variety have the it representation in we're embarked a you. terms of retained commercial non-bank, October And to of we have branding unit a or simple a in meetings be that clear, really our settled it's balance But present across last across of logos on idea We've lender the products, Yes, heads leading

of brand launch, in in result that all probably will with So a sometime September.

Steven Delaney


to the That's far -- that a as items Would against get Rick, dividend. and good. obviously, consensus is helpful. against simply missed? Very up as caught that I at income something terms the And you huge that you, of not in you us else you would too us is there rate, JV is magnitude of looking a run that as then your caution to? would point for it $X.XX peak Okay. Or

Rick Herbst

that appreciate by kind item it everybody's We the the There That's there is that's nice all certainly jumps material. the interest page. company. in mean, in But way, you, every was analysts really the have the off yes, call. one Steve. on I of agree the the really major nothing And with you to not -- that I one, quarter, that. mean and I'm I are usual. higher and different. we got quarter derivatives modeling wouldn't that see JV no But We it, were a anticipate this would I wouldn't some million than little be don't positives If want the But $X model, of would is income. think negatives, I -- great. to

in that unusual of compressed rate was to think, way million, million. net Tom was a of circumstance $X.X spreads probably that an $X mentioned, I rise, the interest kind as

So do was large it's it's that minus. happen plus what of But this we or unusually quarter. part going and little to


It take telephone. appears stepped questions next We that away. have Instructions] on further participant no now will the our currently question. [Operator have We may

Tom Capasse

meeting that, second With the pleased participation And the today. Okay. to look we're in again forward have we quarter. to


participation. gentlemen, Ladies today's now conclude and may your for you disconnect. conference Thank That call. will you