Loading...
Docoh

Ready Capital (RC)

Participants
Andrew Ahlborn CFO & Secretary
Thomas Capasse Chairman & CEO
Adam Zausmer Head, Credit
Crispin Love Piper Sandler & Co.
Christopher Nolan Ladenburg Thalmann & Co.
Michael Smyth B. Riley Securities, Inc.
Jade Rahmani KBW
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Thank you for standing by. This is the conference operator. Welcome to the Ready Capital Corporation Third Quarter 2020 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Andrew Ahlborn, Chief Financial Officer. ahead. go Please

Andrew Ahlborn

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

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

earnings can Investor the third information. Capital financial we XXXX plan presentation. operating release in website financial materials results non-GAAP a directly the have which quarter quarter our a press A comparable in with GAAP our can our we in performance. our found we isolation substitute is these of should Yesterday for the accordance of XX-Q along in information supplemental believe release most in company's presentation reconciliation and useful to These be issued with supplemental our file third filed not been the These evening, or of Relations results XXXX section discuss this During the to be our measures available measures call, as with considered our GAAP. with We and measures, be prepared the will measure evaluating Ready the evening. SEC.

call. to Capasse, Head Zausmer, also are turn our CEO. joined it of over to Adam Tom addition In we now myself, Credit, today's on will and our I Tom by

Thomas Capasse

your joined and ones those Thanks, loved healthy. hope thank our continue and you you then to Andrew. this be to and morning. Good safe We call have who morning,

benefiting is strength business upon underscored performance, Ready Capital's quarter third builds and outperformance diversified secondary the relative in which government resiliency markets. earnings our access of model. our core of exemplifies companies, differentiated to of generation the from by many QX, the Our benefits operating

shutdowns, the our businesses experienced businesses reopenings months particularly for as SBA balance small have to balance comprising in essential capital-intensive efforts gain interest originated SBA X Over heels a bridge fixed principal loans, banks Both small small mortgage prior post-COVID small the a was Freddie the XX. demand we same such were and resurgence X(a) on the Act, subsidiary, time, Demand segments. acquisitions Mac's SBC including million relaunched In waived which alongside the banks. by the commercial, from lending driven SBC and and delinquencies on quarter, we credit September X(a) the and or on we funded by small groups. management. banking for of At to increase SBA, our supplemented quarters, liabilities, boosted programs, decrease through In for X direct last asset and multifamily record our proactive residential $XX FedEx loans. X(a) mark-to-market origination CARES sale in mitigate executed business liquidity PPP, tightening in capital-light we portfolio successfully first businesses, X loans volumes

program. due reached the averaging market of in Additionally, sales in net to securities XX% a the TALF secondary XX% X(a) premiums record on quarter SBA while inclusion

an in post-election guarantee Act. X(a) likely programs stimulus around the increase SBA the positive a in additional expect the X for volume, X(a) and from Although embedded X CARES These a earnings the XX% loans, which origination from are PPP XX X testing, beta for our And SBA. from of to SBA lower to leveraging loan, of is factors: first, we include small over and relatively second enhanced XX% SBA trajectory including of resurrection program, of for in quarter volume a SBA post-COVID our full subsidiary Historically, elevated our our the finally, fintech for fourth rollout contribution guarantee the only fee the months. second, originations. an loans XX% XX% by recovery; last following GFC, demand we expect waivers total so-called investment in quarter low from small our compared Express

XX%, As all all a evidence residential position SBA volume historic business amongst leadership purchase nonbank mortgage and nonbank position XX and segment, active the share only XX% our SBA with year-to-date top respectively. refi rates our one of X(a) #X among nonbank few banking market X(a) growing XX In to and and low year-to-date lenders, mortgage lenders industry continues lenders. market boosted a

basis a XX% quarter, margins and at points purchase in with in XX% volume averaging originated the result, XXX over similar a increases billion year-over-year. refi GMFS As and $X.X

rate mortgage our Additionally, our averages. XX% quarter retention rights industry in the exceed continue on servicing to

$XXX last expect in million demand. elevated originations year-to-date, stand strong representing of total the XXX% originates for to strategic X rates $XXX current Freddie as XXXX production. reached we company's was a demand key forward, has million. stabilized our stated on the Mac objective. our quarters. low XXXX, Going presence in million throughout In the highest at and continued With collateral originations Freddie agency October In multifamily remained business, expanding as production X.X%, represented single $XXX loans with multifamily commitments history, month

agreements the in correspondence suite of X completed quarter agency to full our customers. was commercial to with step products the allow us that a inking of first The offer

in expect to infrastructure segment. add next further quarters, existing few the Over to the our agency we

addition on business, the money up in origination SBC in to gain our acquisition lending and September, and along in current our grown the businesses, has $XX In businesses. bridge million normalize in business to operations $XX closing core relaunched our we sale to quarter, are pipeline origination million. well Finally, the our path

sits our and at Additionally, up now $XX rate million. pipeline fixed money

of actively cash-outs and in unrealistic sectors Our efforts exposure and bridge-to-bridge financial with success history business on on downturns. strong extended an including plans. a multifamily focusing We're origination industrial to low and with pandemic, focused are prior and sponsors health avoiding

$XX continue purchase current we deals. deals front, relationships our CMBS to of have a acquisition $XXX purchased we the million mid-teens and the performing leverage to in from seasoned quarter, loans collapsing million. On excess In pipeline at

We come continues in due outperform expect commercial balance as estate due products to spreads Capital credit market bid-ask factors. of lenders half X tightened. XXXX to Ready the CECL repositioned terms of to banks large the in more to versus first and metrics post-pandemic real to

First, large with more SBC estate. commercial balance than correlated is real housing

property property is in a index. Moody's As NCREIF X% prices, Case-Shiller increase projection residential against the a X% in our in of XXXX X% terms index SBC balance X% decline one XX% metric for to consensus to versus a the decline Street of large prices in

special Second, underwriting risk mitigation record to competitive servicing strategies. track portfolio a management part nonperforming a XX-year more And globally, and with capabilities our less loss niche. associated conservative lower providing loans asset in mix SBC buying finally, pre-recession COVID-ready enterprise-wide due

stable SBC SBC to underwriting, collateral, many first In nonperforming months. our consists of are of X,XXX segment, highly superior our avoidance at SBA which from delinquencies originated performance on stable across model Within XX. our compares sectors underperforming of assets, to last throughout has and large Our are focus SBC type of lien is portfolio a the markets XX-day X.X% includes from which remains a proprietary favorably few diversified X.X%, date, at SBC the delinquent, GEOtier acquired portfolio, QX the Mac led payment conservative X%. of collateral which Through loans, recent XX Freddie delinquencies inclusive balance favoring June plus days plus down most loans, and both CMBS X.X% geographies. loans our and and

forbearance, Additionally, XX% forbearance is high status. down to loans from migrated the rolled have current to Of X.X%. have X% COVID off point that

it's to by in of balance X% and have with exposed is the Now hospitality hospitality better luxury sectors to retail, its a most affected million SBC versus respectively. hotels. in a to XX% limited declines COVID hotels low experienced the terms factors Moreover, with RevPAR we're $X.X exposure important highlights few average performing in XX% XX% current that reiterate the subsectors the portfolio, nationally In to and strengths. over that service in portfolio, key

and size collateralized with $X.X million by of communities. retail that multi-tenanted is average is serve small Our also exposure centers local granular loan an

at less as SBA equity, with finally, declines through September total June the SBA of Second, we than we through provides X.X% of X%. of to end or month is Within which compared exposure XX%, to our in the slight have comprises support loan single only of balance property single-tenant our represents stockholders' And XX% to CARES and when segment, increases in XX% loan-to-value our exposure small Act estimated concludes. while Delinquencies our expect hotel delinquencies average do total from X% payment largest X.X% headroom minimal declined portfolio. approximately our significant which portfolio. asset restaurants the SBA representing prices

normalized by allowed and longer necessary as provide deferment businesses to SBA offer to conditions. a runway small expect We the to economic

to in expected for focus is additional small aid businesses, of SBA portfolio. the stimulus performance government the on which support future will Additionally, directly

So that, now I'll results. to to turn it Andrew discuss over financial with

Andrew Ahlborn

Thanks, Tom.

upon The third of quarter and results, GAAP with per earnings of strong share. $X.XX quarter's per second core $X.XX the earnings share expands

volumes showcase Our the basis joint business our a million average interest acquisition continue the be diversified volumes in WACC. was for XX% gain and operations from the SBA results due Mac sale to by the from expected XX.X% XX $X.X model our to runoff, on to $XXX of company's the of results XX% partially core Gain strong basis income and which on million. Strong margins in driven earnings program. increase representing new of a offset rate net at was and XXX assumption, deferred elevated and into and fourth CMBS origination Stable coming of results results, in the how record to peer of the equates are quarter, equity, basis $XX.X to equity CPR of contributed slightly year-to-date from points. volumes elevated X% activities elevated, differentiated on group. quarter. rate which return our and normalized remained believe Net in and exceeding venture $XX.X commitments flat reached sale benchmark million average Current on valuation our The high and point benefits increased $X.X million sale servicing, retention revert and mortgage financial XX%. points million were financial reduction from levels. on recognition servicing we from Multiple revenue MSR These premiums net a business a banking remained quarter-over-quarter to equals XX% company. a to inclusion million average and Freddie business sale the million, Origination revenue, mortgage by income return fixed XX interest highlight to annualized remain the decline despite and banking PPP portfolio lines our revenue is XX% gain as net XX.X%. Elevated with from new originate is recaptured revenue. $XX.X $XX.X revenue

rate June the highly PPP dependent to amount of at about deferred are PPP program the revenue will the Of on retaining fixed $X.X given speed as quicker, loans allow million in gains as the We upfront of attractive recognized excited that remain bring us product be any XX, recognized in reflective quarter. of realize revenue at processed The which and market in quarter $XX.X market for to pricing this interest of bonds forgiveness. it will will are levels. we subordinated million and our volatile

stimulus stimulus, out gain be records, lower in than remaining as will upcoming additional of reduction venture we come a the QX the to the due programs our company anticipated well government positioned and activities lower Absent QX recognized slightly over of passing and the CMBS to to margins addition In few on segment. quarters, participate the results events mortgage banking in additional that in that the weeks months. expect may such unforeseen SBA Washington to sale from QX next of revenue the volumes is be residential absence from revenue in earnings PPP joint

balance sheet. Turning to the

We focus us. and manage continue of stress opportunities on to acquisition origination in balancing front scenarios with to liquidity needs

October have cash we million. $XXX liquidity of available As and of XX,

this in recourse balance, debt ratio within leverage at remained continues forbearance agency delinquencies reserve recourse absent Changes ratio this collateral, $XXX to a well of inclusive supporting perform The fair loan of Freddie day million portfolio to of at low originations. CECL And improved $X.X X.X%, stable at Mac CRE amount XX-plus and X.Xx. is Our Included leverage is portfolio, despite Xx. of not economic uncertainty. in X.X%. $XX levels the Total of shares our remained the primarily assumptions changes included were earnings and of nonperforming $X.XX. we core reserves retained Book in our driven our in are repurchased million assets. to due earnings price In at recoveries of $X.X an earnings. current by model, include offset quarter by in in in share million quarter, per excess on which $X.XX GAAP increased value increases CECL average XXX,XXX macroeconomic repurchase the dividend million, share of activities. our specific

repurchase to for will the continue generate value program utilize We as to share our appropriate shareholders.

As information on of supplemental is we reemergence we a have be remarks X the continued your Slide key questions. deck, well. over now segments activities operating turn XX. to earnings the before profile, the on various investment continued hope company's Of includes you profile earnings will for of strength earnings note closing we provided loved previously, have and delevering I to on I Slide it the Tom done X, summary ones and take metrics. which on financial and Slide the continue

Thomas Capasse

Andrew. Thanks,

and itself resilient peer group. stronger value that preservation core liquidity compares diversified business favorably proven stable model with Our differentiated earnings, to far thus the book has and

remain we prospects about that our remains we company. are uncertainty the growth due cautious the the pandemic, Although to about for optimistic

will volumes in originations redeploy increase to excess we and SBC and Specifically, our acquisitions. continue government-sponsored into origination X liquidity businesses

sale run to available returns at the distinct are book confident Capital's operating value sale the segment. competitors To book COVID a there in market. the government core Our open the continue in support to companies. public healthy ROEs companies value our in corollary embedded government on the direct that, Ready Current interest greater our earnings is of higher of fully operating is premium will resulting is current target has post-COVID the while quarters strength appreciated businesses value we'll stimulus target of environment now remain We our we investment yet be With or the our indicate you valuations we to included businesses A SBC businesses, valuation from operator, margin in the contribution earnings pre-pandemic the up from significant believe market hope this questions. net on reiterate, each and from balance than safe rates. healthy. sheet. did gain our gain We private impact mix on a discrete last X by of that and benefit all to of to premium and to our it

Operator

[Operator first comes Instructions]. with the of Piper Sandler. from And line our question Crispin Love

Crispin Love

noticed presentation, in to to in of of there X on credit couple a questions from kind a quality. just First, I bucket ratings X. bucket migration risk looks the your be small

of curious credit having businesses I'm that any also SBA worries following feel there period. what's following that? So that just driving grace of Are on P&I then advantage to X And segment taking on following then and in months quality you months? the in start the X P&I that SBA,

Adam Zausmer

Adam is on This Zausmer the side. credit Sure.

periods and was from provide relief. the or So majority delinquent, working we're rolled the forbearance sponsors X bucket to became migration with bucket X, other the either is have from that And closely of forbearances off. there to extend handful that the that a some

first the that's piece. So

to Additionally, added of risk assets. few some the bucket. or a the there's X also We've hospitality

As Tom elevated alert is the risk those side less from hospitality team. X%. We that but assets our series asset are feel that scores mentioned, management than we've the heightened just strong, our on

On the the months SBA has correct, P&I side, off. rolled of X

now businesses, is be these So progress made. of sponsors been going some the process evaluating through with make to individuals, a the to payments. are really going the first We're required that October that's closely month their working of

Specific is deferments restaurant right give then walk and time. hardships focus to. that additional currently for now, So making review as And hospitality About businesses see is these paying X%, needed these I are that you sector we're some sector on of under deferments. also believe, reopened, the particular who's through the we're to folks experiencing. the strategic some attention

Crispin Love

very helpful. one just for And then more That's me.

million view additional quarters, quarters, any coming fees over there of next additional and I -- be So about fees. great. would I you've be to cadence $XX any over the I X any of should assume last be but X over kind quarters, about $XX quarters? the X X million volatile an is color PPP it's million do next you have of to there $XX quarters, the Should on And in know the think going few in? Am it's recognized Just fees? right it be of coming those or there

Andrew Ahlborn

Yes.

So slower, we've something but the not remaining I process little a lower revenue are $XX.X PPP bit the rate that internally, deferred done than forgiveness today we because just would -- forgiveness million. we been sits expected. around has requesting which is say borrowers for at the

pick the is up So in our will internal that forgiveness process projections current XXXX.

of the allocated Year. So probably in the revenue I'd majority say be deferred PPP will that New

Operator

[Operator Instructions].

question Thalmann. Our is with Nolan from the Christopher next line of Ladenburg

Christopher Nolan

Nolan, strategic little about in It's you real sort Or commercial Ladenburg you intend Do focus that? to on collapsed a can estate. all? buying color make mentioned comments, Chris Thalmann. that Tom, give you your a of at

Thomas Capasse

Yes.

collapsing Just involves to one company, small call GFC since them to similar commercial what legacy new then NRZ trust securitizations inception accrued the subprime the deals. getting with buying of our from that's rights and does for legacy par interest strategies into repackaging and a then that on Very -- buying the balance mostly those example, side securitization. of and residential the core clarify, been the and that legacy, to, at plus

Christopher Nolan

at Got everything to given question intend scale on? you. all going My you that real is, up do

Thomas Capasse

there's we're starting would buyers We're most you're that -- of yes, active and be going flow in definitely what in market, that So either they're the to, that the at I'll CECL on steady one sales the spring to of kind of -- seeing no. it, up were but to our I sales limited or acquisition year-end quarter. by call acquisitions probably going the business, say due contemplating first there's in compliance -- more that addition yes in is collateral. to to team that banks

going say to the which is that So more will, than of you just see I'd GFC book, you're naturally shrinking. legacy

Christopher Nolan

Okay. in or your earnings we increase income And I accretion at should that, in guess, see an factor discount related becoming a all? to

Andrew Ahlborn

I Mostly been... think that's

Thomas Capasse

that. on [Indiscernible] Yes. Andrew. ahead, Go

Andrew Ahlborn

Yes.

quantify think increase. accretion that's income buying think product, will look to there's what the highly certainly ways purchases acquired see like. upon the dependent what and to be you're dependent extent future the -- be and go like. an going look a before To we I we're what upon can I additional But highly pools will be going to distressed

Christopher Nolan

Great. a And then just follow-up question.

mentioned impacted mortgage was What Andrew, you you are For seeing? banking that the of REITs. sort higher by prepayment CPRs

Andrew Ahlborn

So right obviously, is where, now, up last just a we're under which from were from quite modeling where we CPRs bit XX%, year.

Operator

question with next the Mike Smyth is Securities. from Riley B. Our line of

Michael Smyth

to follow-up business. how I'm for a things month the Just November. on normalize start for what's will the margin our of wondering your there? is looking just And expectation of resi kind when

Thomas Capasse

a quarter, comment this kind dialed actual -- Well, made just I starting to say expecting we ahead. just early that first of would But in P&L. you're backdrop as the in more late -- your were the in a the we yes, market a normalization I rally terms has seeing what definitely I in -- of of quarter. was recent go XX-year -- -- back. But

been I -- secondary the to XXX XXX. that's points. So think And you'll spreads, the typically which a basis probably running are XXX versus to best way see it measure is between primary continued

the or I may in what industry. But mean, you terms -- Andrew, rally I that seeing of two buy backdrop, the in in another quarter given think this us profitability? are actual the on XX-year

Andrew Ahlborn

Yes.

end out, the the of you shakes see we'll but think declines from margins how did in QX. slight see beginning of I to QX November

the maybe over come it, down And XXX expect call the XXX from points, XX, do XX, so QX, XX, from down time. we basis another to September to margins

Michael Smyth

helpful. That's then me. question more one from just And

a So initiatives. last at quarter, you mentioned you few were looking new

I then M&A seeing think financing. and you flip mentioned were distressed And you mentioned single-family fix some and also opportunities. rental you

could about thinking you how provide any just if transactions. on you're wondering was updates any I strategic potential So

Thomas Capasse

Yes.

in bridge continued we that on committed and Europe to opportunities -- agency restarted business We're CRE have we we said as but new had to side. had -- licenses Irish example, before, sorry, we during we've via pandemic -- XXXX, the through now Ireland On product we stops correspondent, the front, the for the last to the other seeing correspondent thinking relaunched did the agreements. that. in on We expand, origination

I seeing think as front, a not SFR -- space. we're in the we're there returns are the robust bit on think little less I the as CRE

estate, at estate So CPACE if I of I continuing think the to on to program don't other the you some clean the assessed side. Andrew, real we're commercial the for other -- know, look in example, products areas and real energy would add that. of

Andrew Ahlborn

middle as in very SBA commercial license Yes. as on We're which will the USDA the product help in both exploring the as of a is the side. also well business similar

the So to that we're license. well along path obtaining

Michael Smyth

helpful. That's

Sorry.

Thomas Capasse

I it. was of the question. going not I'm say what second part answered was sure to your we

Michael Smyth

I also you opportunities. M&A last mentioned some quarter, stressed think you were seeing

So that well. front just anything on as

Thomas Capasse

opportunities specific but to definitely potential we're there's updates, No Yes. explore. that continuing

Operator

Our comes the with Jade from of next KBW. question Rahmani line

Jade Rahmani

and continuing valuation wondering I are market mortgage your residential within comments, segment, robust through intro spin-offs value to unlock the combinations, you strategies considering perhaps that in or strategy. noted you any the discrepancies other was some that With if in

Thomas Capasse

because the significant with -- recent The that Obviously, IPO GMFS the of origination in particular, space. and -- course, activity are very -- margin -- And businesses. in has SBA expansions currently. of gapping of and specific underscores the license Freddie seen the most some business the X in of premium that heightened some the multiple the Nothing in for book those value again, the increases all out we've valuations Freddie. these resulted the to in pandemic all

book, businesses, share is, we in value would to both up be which this scale point, as the reflected consider undertake don't that's not but at would our to something businesses. both we terms those grow really even -- held of -- acquisitions exploring approach a that's price. spin-offs. reflected is significant book And But So that those to are spin-off not acquisitions is think not in of currently or value. our of I are in potential there's the premium one at

Jade Rahmani

diversified management In over that to does discount those any structurally time become Right. of that diversified lines business has experience Is REITs, some difficult to advised, a especially my company that value you part horizon it when actions? value changing? of unlock these within an discrete taking covering contract. it's are a which external fair exists you there would anything there is consider would consider additional Or that externally

Thomas Capasse

have being Nothing specific it's on businesses -- the bulk on contemplated, value structures, acquisitions. been evaluating to flip unlock various to spin-offs through up including but Or currently in we as and what appropriate. you have subsidiaries those side, the additional

Jade Rahmani

various I estate the know in your around good the Tom, through Waterfall particularly that I you've views been curious was track a distressed across outlook cycles sector, for and in very types. record acquiring markets. dense office or urban assets to property multiple has real hear,

Thomas Capasse

really on we -- would lens we a I Yes. from buildings because in in broadly in office just We're leading global platform where not it's credit But very very a obviously more have Avenue. Sixth investor in the there's million are Ready definition, exposure CRE. few to not CBD office looking from have -- because -- in by our the -- major limited we credit $X Capital, just say,

planning the in the occupancy corporate the XXXX terms rates some on for the that you think believe forward -- rate in this of there's office I work-from-home additional still based will, because that's not we going recession, vacancy terms if K repricing do paying perspective. of the valuations on a from of reflect in vacancy

office speaking, generally underweight that So for sector reason. we're CBD

Jade Rahmani

you And down XX%. have expect? are what spreads out Some brokers valuation magnitude about decline statistics of would that put re-lease

XX%. like people York or a of Ready valuation do that interested in would that at Cap it's Waterfall you become New think would magnitude other postulated point, be decline down rents Some And office in? market have could something expect? you What

Thomas Capasse

think We stick which NPL Again, banks, on last in definitely to niche, seeing crisis. space the our balance the we did as is we are I Capital, the credit. Ready some with opportunities small

in to for Ready answer more affected of K to broadly, this from away your the view -- relates classes. our kind obvious recession divergence it As question, asset of again, Capital, this

the XXXX for be that up So office, within year-end to to NCREIF, in expect be the XX% range, by might whereas -- we subsector Moody's the X%. decline price multifamily somewhere

I the of forward -- in in -- think implied pricing decline not in year. reflect the next that of distressed also recur the that -- quarter rents and does yes, will the So first there's sales terms some fully

we're, that in sector So CBD cautious for we're very office, again, reason, underweight office.

Jade Rahmani

just lastly, XX-day delinquency rate what X.X%, or last And the that XX-day delinquency was rate, quarter? plus

Thomas Capasse

Adam, on want did to in you it? weigh

Adam Zausmer

Yes. X%. about Yes, flat it was at

Jade Rahmani

it quarter was last quarter? and X.X% this So X%

Adam Zausmer

Correct.

Jade Rahmani

Okay.

basis increased points? XX it So

Adam Zausmer

right. That's

Operator

from And our re-question Ladenburg Instructions]. [Operator Thalmann. -- line comes final a question Christopher the it's from Nolan with

Christopher Nolan

the what cetera? ROE target guys are et the given that in Tom, is interest environment, the you core thinking rate about change

Thomas Capasse

Obviously, book. ROE, we targeting a the pre-pandemic, were XX% core ROE on

as XX a the gain quarter. where were Our residential and nonbank, the strength continued some last businesses But decline -- we we expect view maybe number world nonbanks last mortgage in is with in these on the the banking, normalizes, to the -- obviously, we've had stimulus. due very SBA strong in sale some one quarters of

of on sale be revenues, business, in the but origination will and along that, business. the strong will provide liquidity agency redeployment gain the increase real the acquisition excess SBC core to with continue So multifamily into

So normalization XXX early levels basis transitional in XXXX, reinvestment the with the pre-pandemic that, bridge in a XXX to points or on we of expect where like XXXX. ROE of because were slightly -- opportunities they just quarter are lending the reinvestment fourth the above XXXX probably at ROE above

Christopher Nolan

no there that I'm finally, And securitizations right? quarter, then correct the in Great. were

Thomas Capasse

Andrew?

Andrew Ahlborn

only introduction The new was no JV of the securitizations, securitization CMBS that's the that right. we internal described. But

Operator

from of the line follow-up a Rahmani have with do Jade we And question KBW.

Jade Rahmani

volumes -- you said there quarter-over-quarter miss be expect contribution the various I XQ volumes not side, businesses, across down investment Overall, up? if in momentum but some quarter be of there's it. you do believe consistent higher I the higher origination the across would business earnings margins. sure be to the Just SBA lines didn't to but volumes make be originations. to in be you to would sounds quarter-over-quarter sure on positive a there that sequentially, expect fourth on the like It

Thomas Capasse

Andrew, I'll...

Andrew Ahlborn

Yes.

our... I think

Thomas Capasse

ahead. Go ahead, Andrew. Go

Andrew Ahlborn

all pulled QX decline forgiveness we general, inclusion segment, between of we way Act. acquisitions in expecting the In in a quarter. third pipeline our portion the terms of QX P&I acquisitions exceeded CARES somewhere the Jade, Yes. some just SBA October across up in products. -- was due of total because But records, the $XX the are I is have $XX do of from million and believe forward our to the for production, pipeline million

which rate been And well, business on some a time. pipeline grown We for as fixed has the are dormant quite had bit. quite reemerging the really transitional

all channels given the up those, with the think all be quarter-over-quarter. should of SBA So exception I

Operator

there are to Mr. time. remarks. any I'll the on further no back questions turn Capasse And for closing at call the this line

Thomas Capasse

everybody's during look continued everybody support our forward to tough And fourth appreciate quarter times, call. and these hope stays We safe.

Operator

for thank lines. That and call your for does participation please you your We today. ask conference disconnect you that conclude the