Q3 2023 Summit Therapeutics Inc Earnings Call
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Speaker 1: Good morning and welcome to the Angel Oak Mortgage Third Quarter 2023 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions.
Good morning, and welcome to the Angel Oak mortgage third quarter 2023 earnings call all participants it could be in listen only mode should you need assistance. Please signal a conference specialist by press.
Star then zero on your telephone keypad.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad.
Speaker 1: To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, press star, then two. Please note that this event is being recorded.
To withdraw your question Press Star then two please.
Please note that this event is being recorded.
Speaker 1: I would now like to turn the conference over to Randy Christman. Please go ahead.
I'd now like to turn the conference over to Randy Christmas.
Please go ahead.
Speaker 2: Good morning. Thank you for joining us today for Angelic Mortgage Reads third quarter 2023 earnings conference call.
Good morning, Thank you for joining us today for Angel mortgage REIT third quarter 2023 earnings conference call.
Speaker 2: This morning, we follow a press release detailing these results, which is available in the investors section on our website at www.angelogreet.com.
This morning, we filed a press release detailing these results which is available in the investors section on our website at Www Dot Angels.
<unk> com.
Speaker 2: As a reminder, remarks made on today's conference call may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today.
As a reminder remarks made on today's conference call May include forward looking statements.
We're looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today.
Speaker 2: We do not undertake any obligation to update our forward-looking statements in light of new information or future events.
We do not undertake any obligation to update our forward looking statements in light of new information or future events.
Speaker 2: For a more detailed discussion of the factors that may affect the company's results, please refer to our earnings release for this quarter and to our most recent SEC filing.
For a more detailed discussion of the factors that may affect the company's results. Please refer to our earnings release for this quarter and to our most recent SEC filings.
Speaker 2: During this call, we will be discussing certain non-GAAP financial measures. More information about these non-GAAP financial measures and reconciliation to the most directly comparable GAAP financial measures are contained in our earnings release and SEC filings.
During this call we will be discussing certain non-GAAP financial measures.
More information about these non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures are contained in our earnings release and SEC filings.
Speaker 2: This morning's conference call is hosted by Angel Oak Mortgage REITs Chief Executive Officer Srini Prabhu, Chief Financial Officer Brandon Filson, and Angel Oak Capital's Co-CIO, Named Singh
This mornings conference call is hosted by HOS mortgage Reits, Chief Executive Officer, trainee Providence, Chief Financial Officer, Brandon Johnson, and Angel Capitals co CIO knowledge.
Speaker 2: Management will first lead off the call by making some prepared comments, after which we will open up the call to your questions.
Management will first lead off the call by making some prepared comments after which we will open up the call to your questions.
Speaker 2: Additionally, we recommend reviewing our earnings supplement posted on our website at www.angeloakweed.com. Now I will turn the call over to Srinivas.
Recently, we recommend reviewing our earnings supplement posted on our website at Www Dot and Angel locally Dot Com now I will turn the call over to screening.
Speaker 3: Thank you, Randy, and thank you everyone for joining us today.
Thank you Randy and thank you everyone for joining us today.
Speaker 3: Angel of starter of the second half of the year very strong with the results demonstrating the positive growth and the momentum We have built throughout the first half of the year
Ancient look starting with the second half of the year very strong.
As a result, demonstrating the positive growth and the momentum we have been throughout the first half of the year.
Speaker 3: late last year and at the beginning of this year, we set out to reposition our portfolio to reduce risk and increase the credit.
Late last year and at the beginning of this year.
We set out to reposition our portfolio to reduce risk and increase the crazy.
Speaker 3: We accomplished that and our emphasis then shifted to growth.
We accomplished that.
And shifting to growth.
Speaker 3: You can see in this quarter's results that we are on our way to accomplishing this goal as well. Our focus is on optimizing the earnings levers that we can control, such as growing net interest margin and reducing operating expenses, while managing risk and maintaining liquidity.
You can see in this quarter's results and we are on our way to accomplishing this goal.
Our focus is on optimizing the earnings numbers and we can control.
It's just doing net interest margin and reducing operating expenses, while managing risk and maintaining liquidity.
Speaker 3: To that end, during the third quarter, we continued to pursue selective loan purchases at attractive rates and made further progress on reducing interest and operating expenses as we continue to grow the overall earnings power of our portfolio.
To that end during the third quarter, we continued to pursue selective loan purchases at attractive rates and made further progress on reducing interest and operating expenses as we continue to grow the overall earnings power offered for short here.
Speaker 3: In the third quarter, we drove a step change improvement in net interest margin due to our strategic securitization activity and purchases of newly originated current coupon, known as wwet tobeat
In the third quarter.
We drove a step change improvement in net interest margin due to our strategic securitization activity and purchases of newly originated current coupons.
Speaker 3: As we stated in our second quarter earnings call, the reduction in interest expense driven by the AOMT 2023-4 securization was demonstrated in our third quarter results.
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As we stated in our second quarter earnings call.
And interest expense.
Given by the.
<unk> 2023 dashboard securitization was demonstrated in our third quarter results.
Speaker 3: We have remained nimble in our securitization activity, completing two commingled deals alongside other Angelok entities in addition to a stand-alone AOMRD.
We have remained nimble no securitization activity competing to commingle DS alongside other Angel.
In addition to a Standalone E O M D.
Speaker 4: the Angelok ecosystem affords us the ability to pursue securitization structures that provide the best strategic fit for the REIT.
The angels ecosystem for Cisco ability to pursue securitization structures that provide the best strategic fit.
The REIT.
Third coupon loans purchased during the quarter.
Speaker 3: buoyed net interest income despite lower unsecurized loan balance.
Net interest income.
Right.
Unsecured loan balance.
Speaker 3: The weighted average coupon of our whole loan portfolio grew 99 basis points in the third quarter, and including purchases and commitments to purchase since quarter end, currently sits at approximately 6.37%, a further increase of 54 basis points since quarter end.
The weighted average coupon on the whole loan.
The portfolio grew 99 basis points in the third quarter.
And including purchases and commitments to purchase since Congregating.
Currently sits at approximately 6.37% is suppose there increased 54 basis points since part of it.
Speaker 3: for context. These average coupons compared to 4.63 percent as of the end of Q1 2023.
For context.
These average coupons compared with $4 six 3%.
As of the end of Q1 'twenty two 'twenty three.
Speaker 3: We are proud of the strategic progress we have made, and we feel we can maintain the momentum and drive further NIM growth in the following quarters as we redeploy capital into assets with significantly higher yields.
We are proud of the strategic progress we have made and we feel we can maintain the momentum and drive further NIM growth in the following quarters as we can.
Employed capital into assets with significantly high gear.
Speaker 3: This effort will be supported by our ability to evaluate opportunities within our desired risk and return characteristics and actively acquire high quality loans at attractive coupon rates.
This effort will be supported by our ability to evaluate opportunities within our desired risk and return characteristics.
And actually the acquired high quality loans at attractive coupon rates.
Speaker 3: As for the recent partners, we have remained focused on managing our expenses to maximize the operating effectiveness of AOLR.
After the reason causes we have remain focused on managing our expenses to maximize the operating effectiveness of the ear market.
Speaker 3: Throughout the first half of the year, we made significant progress, reducing our operating friction.
Throughout the first half of the year, we made significant progress reducing our operating expenses.
Speaker 3: In the third quarter, we captured additional savings, reducing operating expenses, excluding securitization by 12.5% versus the second quarter.
In the fourth quarter, we captured additional savings, reducing operating expenses, excluding securitization by 12, 5% versus the second quarter.
Speaker 3: We have also made efforts to optimize our financing in order to decrease our weighted average rate on our funding costs.
We have also made efforts to optimize that financing in order to decrease our weighted average rate on our funding cost.
Speaker 3: While there are signs that the Fed is near the end of the interest rate hike,
While there are signs that the fed is near the end of the interest rate hike.
Speaker 4: Mortgage applications and originations continue to be muted, with rates remaining elevated relative to recent years.
Mortgage applications and originations continued to be muted.
With rates remained elevated relative to recent years.
Speaker 4: Our non-QM loan origination volumes have been a bit more resilient than the GSE loans, but given general market uncertainty, we'll continue to manage our whole loan position and expect that our nominal value in whole loans will not exceed more than one and a half to two times the average nominal size of a securitization transaction expectation.
Our non QM loan origination volumes have been a bit more resilient than the GSE loans, but given general market uncertainty.
We'll continue to manage a whole long position and expect that our nominal value in whole loans.
Not exceed more than one and a half to two times.
Average nominal size up a securitization transaction expectations.
Speaker 3: We are proud to have reduced our overall warehouse debt by 69% this year and 82% since the high point of June 2022.
We are proud to have reduced our overall greenhouse debt.
69% this year and 82% since the high point of June 2022.
Speaker 4: We are committed to maintaining liquidity while redeploying capital into high quality, high yield assets.
We're committed to maintaining our liquidity, while redeploying capital into high quality high yielding assets.
Speaker 4: We are proud of our earnings growth. We have achieved this quarter. And though we are still dealing with elevated levels of market uncertainty, we believe that we have direct comparative advantage in our ability to assess and select where to allocate risk.
We are proud of our earnings growth.
We have achieved this.
Carter.
And though we are still dealing with elevated levels of market uncertainty.
We believe that we have direct comparative advantage in our ability to assess and select where to allocate risk.
Speaker 4: We feel we are in a great position to continue to grow earnings while keeping our focus on adequate liquidity and a low expense profile, establishing a very powerful earnings engine based on stable, resilient portfolios. I will now turn the call over to Greg.
We feel we are in great position to continue to grow earnings while keeping our focus on adequate liquidity and a lower expense profile, establishing a very powerful earnings engine based on stable resilient. Unfortunately.
I will now turn the call over to Brad.
Right.
Thank you Sri.
Speaker 5: In the third quarter, we were able to showcase our ability to grow the earnings power of our portfolio as seen through the strong NIM and net income results.
In the third quarter, we were able to showcase our ability to grow the earnings power of our portfolio.
Through the strong NIM and net income results.
Speaker 5: We feel there is more room for growth, and we are happy with how our portfolio is positioned from a risk and liquidity standpoint, especially given the current market environment.
We feel there is more room for growth and we are happy with how our portfolio is positioned from a risk and liquidity standpoint, especially given the current market environment.
Speaker 5: For the third quarter of 2023, we had gap net income of $8.3 million or 33 cents per diluted common share. Distributable earnings were negative $8.6 million or loss of 35 cents per share. The key difference between net income and distributable earnings is that distributable earnings do not include the offsetting unrealized gains.
For the third quarter of 2023, we had GAAP net income of $8 3 million or 33 cents per diluted common share distributable earnings were negative $8 $6 million or loss of 35 per share. The key difference between net income and distributable earnings is that true earnings do not include the offsetting unrealized gain.
Speaker 5: on the AONT 2023-5 Securitization, excluding the accounting impact.
On the <unk> 2023 dash five securitization, excluding the accounting impact.
Speaker 5: of the 2023-5 securitization, distributable earnings would have been $4.3 million.
The 2023 Dash five securitization distributable earnings would have been $4 $3 million.
Speaker 5: Interest income for the quarter was $23.9 million and net interest margin was $7.4 million, reflecting a $1 million expansion versus the second quarter of 2023. As Shrini mentioned, net interest margin should continue to expand in the coming quarters as we grow our current coupon loan book with consistent purchases and future securitizations reduce our warehouse debt.
Interest income for the quarter was $23 $9 million and net interest margin was $7 $4 million.
Reflecting a $1 million expansion versus the second quarter of 2023.
Screening mentioned net interest margin should continue to expand in the coming quarters.
Grow our current coupon loan book consistent purchases and future Securitizations reduce our warehouse staff.
Speaker 5: Total operating expenses were $4.4 million, or $3.5 million, excluding securitization costs and non-cash stock competition.
Total operating expenses were $4 4 million, a $3 $5 million, excluding securitization costs and noncash stock compensation.
Speaker 5: This represents a savings of $3.5 million versus 2, 3, 2022, and $800,000 versus the prior quarter. Year to date, we have achieved operating expense, excluding securitization costs and stock compensation savings of $8.6 million versus the first nine months of 2022. The largest factor driving our operating expense reduction efforts in the third quarter was lower DNO insurance premiums and other vendor and resource management.
This represents a savings of $3 $5 million versus Q3, 2022 and $800000 versus the prior quarter.
Year to date, we have achieved operating expense, excluding securitization costs and stock compensation savings of $8 6 million versus the first nine months of 2022.
The largest factor driving our operating expense reduction efforts in the third quarter was lower D&O insurance premiums and other vendor and resource management.
Speaker 5: Turning to the balance sheet as of September 30th, 2023.
Turning to the balance sheet as of September 32023.
Speaker 5: We have $41.9 million in cash, or about 18% of our total equity base.
We had $41 $9 million in cash or about 18% of our total equity base.
Speaker 5: Our strong cash position in a trailing nine months showcases our focus on maintaining healthy liquidity levels and expanding cash flow from increasing yields, lower overall funding costs, and reduced expense.
Our strong cash position and a trailing nine months showcases our focus on maintaining healthy liquidity levels and expanding cash flow from increasing yields lower overall funding costs and reduced expenses.
Speaker 5: This additional liquidity provides us with a dry powder for sustained loan purchases that will grow net interest income, improve cash flows, and support securitization execution.
This additional liquidity provides us with the dry powder for sustained loan purchases that would grow net interest income.
Group cash flows.
Port securitization execution.
Speaker 5: Additionally, we have over $120 million in unlevered assets on the balance sheet, which we can prudently use to increase leverage to drive additional net interest margins.
Additionally, we have over $120 million in Unlevered assets on the balance sheet, we can prudently use increased leverage to drive additional net interest margin.
Speaker 5: Recourse death equity ratio as of September 30th was 1.7 times. As of today's date, our recourse death equity ratio is one time, which reflects the maturity of repurchase obligations and short-term retest trades that matured in early October . This is a decrease of 0.2 times versus the comparable 1.2 times recourse death equity ratio as of last quarter's earnings call and is down from 2.9 times at the end of 2022.
Of course debt to equity ratio as of September 30 was one seven times as of today's date, our recourse debt to equity ratio is one time, which reflects the maturity of repurchase obligations short term recast trades that matured in early October. This was a decrease of one two times versus the comparable one two times recourse debt to equity.
Ratio as of last quarter's earnings call and is down from two nine times at the end of 2022.
Speaker 5: As we purchase additional loans, we are expecting this leverage to begin to increase, but to remain below 2.5 times in future periods.
As we purchase additional loans, we are expecting this leverage to begin to increase but to remain below two five times in future periods.
Speaker 5: We have $307 million of UPB residential holdings that have a fair value of $284.4 million financed with $197.8 million of warehouse debt.
We have $370 million.
<unk> residential whole loans that have a fair value of $284 4 million financed with $197 $8 million of warehouse debt.
Speaker 5: $1.2 billion of residential mortgage loans and securitization trust and $75.3 million of RMBs from retained AOMT securities from off balance sheet securitization. 90 plus day delinquencies have remained low at 1.9% across these portfolios, with a weighted average LTB of 69.5%.
One $2 billion of residential mortgage loans in the securitization trust and $75 $3 million of RMB S from retained a O N E securities from off balance sheet securitization.
90, plus day delinquencies remained low at 1.9% across these portfolios with a weighted average LTV of 69, 5%.
Speaker 5: These rates are slightly more favorable than in Q2, and to date, we have not seen any material change in credit performance of our loan or underlying securities portfolio.
These rates are slightly more favorable than in Q2 and to date, we have not seen any material change in credit performance of our loan our underlying securities portfolio.
Speaker 5: We finished the quarter with undrawn warehouse financing capacity of approximately $661 million.
We finished the quarter with Undrawn warehouse financing capacity of approximately $661 million.
Speaker 5: In August , we participated in the 2023-5 securitization alongside other Angelic entities, contributing loans with an approximately $94 million unpaid principal balance and releasing $63.5 million of debt from our highest cost financing facility.
In August we participated in the 2023 dash five securitization alongside other Angel oak entities contributing loans within approximately $94 million unpaid principal balance and releasing $63 $5 million of debt from our highest cost financing facility.
Speaker 5: In total, AONT 2023-5 consists of 531
In total <unk> $2023 five consist of 530 loans, the scheduled unpaid principal balance of $266 million.
Speaker 5: The scheduled unpaid principal balance of $260.6 million.
Speaker 5: The securitization has an original credit score of 735, original average loan to value ratio of 71.9%, and a non-zero debt to income ratio of 32.9%.
Securitization has an average original credit score of 735.
Original average loan to value ratio of 71, 9% and a non zero debt to income ratio of 32, 9%.
Speaker 5: Gap book value per share was nearly flat at $9.29 as of September 30, 2023 compared to $9.34 as of June 30, 2023. New purchases supported the valuation for whole loan portfolios and decreases in the valuation of our secure Title I portfolio.
GAAP book value per share was nearly flat at $9 29.
September 32023 compared to $9 34.
As of June 32023, new purchases supported the valuations of our whole loan portfolio and decreases in the valuation of our securitized loan portfolio.
Speaker 5: were offset by decreases in the fair value of their corresponding viability.
Were offset by decreases in the fair value of their corresponding liability.
Speaker 5: Similarly, economic book value, which fair value, all the companies non-recourse securitization obligation.
Similarly, economic book value, which fair values, all the company's nonrecourse securitization obligations was $13 20 per share as of September 32023, compared to $13.16 per share as of June 32023, an increase of four cents.
Speaker 5: $13.20 per share as of September 30, 2023, compared to $13.16 per share as of June 30, 2023. It increased, of course.
Speaker 5: As with last quarter, we expect valuation changes resulting for interest rate and spread movement called GAP, an economic book value to fluctuate supplemented by growth in net interest margin.
As with last quarter, we expect valuation changes, resulting from interest rate and spread movement calls GAAP and economic book value to fluctuate supplemented by growth in net interest margin.
Speaker 5: The weighted average coupon of our whole loan portfolio increased 99 basis points to 5.83% as of the end of the third quarter.
The weighted average coupon of our whole loan portfolio increased 99 basis points to 583% as of the end of the third quarter.
Speaker 5: This is also up from a low point in our portfolio 4.63% as of the end of the first quarter this year. Including loan purchases and commitments since the end of the third quarter our whole loan portfolio weighted average coupon is approximately 6.37% representing an increase of over 150 basis points.
This is also up from a low point in our portfolio of $4 six 3% as of the end of the first quarter of this year include.
Including loan purchases and commitments since the end of the third quarter, our whole loan portfolio weighted average coupon is approximately $6 three 7% representing.
An increase of over 150 basis points.
Speaker 5: Our loan purchases this year carry a weighted average coupon of 8.31%, weighted average LTV of 70.2%, and a weighted average FICO score of 752. We expect this increases to continue as additional loan purchases occur over the coming quarter.
Our loan purchases this year carry a weighted average coupon of 831% weighted average LTV of 72% and a weighted average FICO score of 752, we expect this increases to continue as additional loan purchases.
Occur over the coming quarters.
Speaker 5: Finally, the company has declared a 32 cent per share common dividend payable on November 30, 2023 to shareholders of record as of November 22, 2023.
Finally, the company has declared a <unk> 32 cent per share common dividend payout.
Payable on November 32023 to shareholders of record as of November 22nd 2023.
Speaker 5: This implies an annualized dividend of $1.28 per share, or a yield of 14-15% as of the closing price on November 6, 2023.
This implies an annualized dividend of $1.
28 per share or a yield of 14% to 15% as of the closing price.
On November six 2023.
Speaker 5: For additional color on our financial results, please review the earnings supplement available on our website. I will now turn it back to Shrini for closing remarks.
For additional color on our financial results. Please review the earnings supplement available on our website I will now turn it back to screening for closing remarks.
Speaker 4: Thank you, Brandon. Before turning the call over to the operators for Q&A, I do like to conclude with some brief remarks.
Thank you Brandon before turning the call over to the operator for Q&A I do like to conclude with some brief remarks.
Speaker 4: We are pleased with our financial performance for the third quarter, as this is the first quarter that truly demonstrated the earnings impact of strategic actions that we have taken this past year. We have a strong balance sheet.
We are pleased with our financial performance for the third quarter.
This is the first quarter that truly demonstrated the earnings impact of <unk>.
Strategic actions, we have taken this past year.
We have a strong balance sheet liquidity position.
Speaker 4: and be a content in what the future holds for our portfolio and its burnings generating ability.
And we are confident in what the future holds for our portfolio and its Tony generating ability.
Speaker 4: Additionally, the credit performance of her assets remains strong. Our focus on creating a resilient portfolio that generates growing and reliable earnings is every day.
Additionally, the credit performance of our assets remains strong.
Our focus on creating a resilient portfolio that generates growing and reliable earnings is that.
Speaker 4: We are proud of what you have achieved, despite had been from muted mortgage activity and rate volatility.
We are proud of what he has achieved despite headwinds from muted mortgage activity and rate volatility.
Speaker 4: and we expect to continue to grow earnings while maintaining our liquidity positions and risk profiles.
And we expect to continue to grow earnings.
While maintaining our liquidity position and risk profile.
Speaker 1: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad.
We will now begin the question and answer session.
Can I ask a question.
Star one on your telephone keypad.
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Just on your question. Please press Star then two.
Speaker 1: Our first question comes from Don San Dehri Wells Fargo. Please go ahead.
Our first question comes from John <unk>.
With Wells Fargo. Please go ahead.
Speaker 5: Yes, you know, it seems like the core business is kind of moving back to modest growth phase. You can prove the funding profile significantly. I guess on credit, you know, it's continued to be very good. Do you have any thoughts on or concerns around the credit at what based on what you're seeing in the economy and what mortgage rates are high?
Yes, you know it seems like the core business is kind of moving back to modest growth phase.
Proof the funding profile significantly I guess on credit.
You know it's continued to be very good do you have any thoughts or concerns around the crowded out what based on what you're seeing in the economy with mortgage rates So high.
Speaker 6: Yeah, this is a number. So on the credit side side, as we mentioned, you know the credit performance looks very, very good.
Yeah, Hi, this is Amit so on the science side as we mentioned.
The credit performance looks very very good and we haven't seen any evidence of an.
Speaker 6: and we haven't seen any evidence of any deterioration there. Now obviously, you know, anecdotally there are certain sectors that we have heard about where there are increases in delinquency and losses of the tetra.
Any deterioration there.
Obviously you know.
Anecdotally that on.
Certain sectors that you heard.
Heard about where there are pieces in delinquency and losses on the tetra.
Speaker 6: But it is important to realize that the portfolio that we run is close to 740 average credit score.
But it is important to realize that the portfolio that could be done is close to 740 average credit score.
Speaker 6: and low 70s loan to value. That's not a credit profile that is the first to get impacted even in a slowdown or a recessionary environment. Like if we do go into a slowdown or a recession.
And low seventy's loan to value that is not a credit profile that is the first to get in fact that even in a slowdown not a recessionary environment like.
To go into a.
A slowdown or recession youre going to start seeing the impact more on the subprime as part of the portfolio mix of it.
Speaker 6: you're going to start seeing the impact more on the sub-prime-ish part of the portfolio mix, which we really do not do much of.
Vis vis vis you really do not do much off so our overall portfolio delinquencies are expected to be muted even under a more stressful environment, but given that what we have seen so far we have had a very very good credit backdrop of home prices have been very resilient and the economy has held up really really well so hard portfolio.
Speaker 6: So our overall portfolio delinquencies are expected to be muted even under a more stressful environment. But given that what we have seen so far, we have had a very, very good credit backdrop. Home prices have been very resilient. And the economy has held up generally really well. So our portfolio credit performance has been pretty much spot on.
Great performance has been pretty.
Pretty much spot on.
Speaker 5: Got it. In terms of future securitizations, do you plan on participating with other angel entities or more standalone, or does it just depend on how the market develops?
Got it and in terms of future Securitizations.
You plan on participating with other angel up entities are more standalone or does it just depend on kind of how the market develops.
Speaker 5: Yeah, hey Don. We use commingled versus standalone opportunistically in our thought process. Right now, I'd expect this to come out with about one more smaller commingled deal at some point in the future. And then after that, we'll probably be back to a standalone deal only once we.
Yeah, Hey, Hey, John.
We use a co mingled versus Standalone opportunistically.
And our thought process.
Now I would expect us to come out with about one more smaller co mingled deal at some point in the future and then after that we'll probably be back to a standalone deal only once we get that deal out.
Got it thanks.
Speaker 1: Our next question comes from Chris Katowski with Oppenheimer. Please go ahead.
Our next question comes from Chris Kotowski with Oppenheimer. Please go ahead.
Speaker 7: uh... yeah good morning and thank you uh... brand new you you mentioned a uh... another distributable earnings calculation of i think four point three million you said can you take us through a little bit detail exactly how what that was and how it was calculated and how it uh... differs from you know distributable earnings that you've always report
Yeah. Good morning, and thank you Brendan you you mentioned a.
Another distributable earnings calculation of I think $4 3 million you said.
Can you take us through a little bit in detail exactly what that was and how it was calculated and how it.
It differs from the you know distributable earnings that you've always reported.
Speaker 5: Yeah, no, what I was trying to do is I was just trying to add clarity of the bridge between the Gapnet income.
No what I was trying to do is I was just trying to add clarity of the bridge between the GAAP net income.
Speaker 5: and distributable earnings. And as you know, distributable earnings eliminates unrealized gains and losses, but keeps in any realized gain or loss. So this quarter when we did 2023-5 securitization, there was about a $13 million recovery of a previously recognized unrealized loss that's included in GAAP net income.
And distributable earnings and as you know distributable earnings eliminates unrealized gains and losses, but keeps in any realized.
Gain or loss. So this quarter when we did 2023 dash five securitization.
There was about a 13 million dollar recovery of a previously recognized unrealized loss. That's included in GAAP net income.
Speaker 5: But it's excluded from distributable learnings. And with that, that's the big driver and the delta between gap earnings and distributable earnings is that one particular thing. And that's just a one-off transactional base thing. So I wanted to highlight that because if you look at net interest margin, less cash expenses, the quarter, that widened out about $1.8 million.
But it's excluded from distributable earnings and with that you know that.
The big driver in the Delta between GAAP earnings and distributable earnings is that one particular thing and that's just a one off transactional base things I wanted to highlight that because if you look at.
Net interest margin less cash expenses the quarter.
That widened out about $1 $8 million.
Speaker 5: And then what we have in the bank so far from new loan purchases we mentioned to taking our coupon up to 6.4% is around another million dollars kind of in the bank as of today for this.
And then you know what we have in the bank so far from new loan purchases, we mentioned, taking our coupon up to six point almost six 4% is around another $1 billion kind of in the bank as of today for this coming quarter.
Speaker 7: When you say another million dollars in the bank, you mean like if you're thinking about your all in net interest income of like 7.4 million that the base level going into the fourth quarter is like 8.4? That's right. Okay.
When you say another million dollars in the bank you you mean like if you're thinking about your all in net interest income of like 754 million.
The base level going into the fourth quarter as like 8.4.
That's right okay.
Okay.
Speaker 5: And presumably it improves a bit if there's another securitization before you're in. Well, it could improve with a securitization and really additional loan purchases for the last two months of the year. Okay.
And Ed and presumably it impose a bit if theres another securitization that before year end it could improve with the securitization and really additional loan purchases for the last few months of the year Okay.
Alright, that's it for me thank you.
Speaker 1: Again, if you have a question, please press star then one.
Again, if you have a question. Please press Star then one.
Speaker 1: This concludes our question and answer session. I would like to turn the conference back over to Brandon Filson for any closing remarks.
This concludes our question answer session I would like to turn the conference back over to Brendan Nelson for any club.
Okay.
Speaker 5: Thank you everyone for your time and interest in Angelok Mortgage Read. We look forward to connecting with you again next quarter. In the meantime, if you have any additional questions, feel free to reach out to us. Have a great day.
Thank you everyone for your time and interest in Haynesville look mortgage REIT, we look forward to connecting with you again next quarter in the meantime, if you have any additional questions feel free to reach out to us have a great day.
Yeah.
Speaker 1: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.