Q3 2023 Invesco Mortgage Capital Inc Earnings Call
Speaker 1: Welcome to
Welcome to Invesco mortgage capital, Inc. 's third quarter 2023, Investor Conference call.
All participants will be on a listen only mode until the question answer session at that time to ask a question press the star followed by the one on your telephone.
As a reminder, this call is being recorded now I'd like to turn the call over to Greg Seals, and Investor Relations. Mr. <unk> you may begin the call.
Speaker 2: Thanks operator and to all of you joining us on InvestCoV Mortgage Capital's quarterly earnings call. In addition to today's press release, we have provided a presentation that covers the topics we plan to address today. The press release and presentation are available on our website, investcovmortgagecapital.com. This information can be found by going to the investor relations section of the website.
Thanks, operator and to all of you joining us on Invesco mortgage capitals quarterly earnings call. In addition to today's press release, we have provided a presentation that covers the topics. We plan to address today. The press release and presentation are available on our website at Invesco mortgage capital Dot Com. This information can be found by going to the <unk>.
Investor Relations section of the website presentation. Today will include forward looking statements and certain non-GAAP financial measures. Please review the disclosure on slide two of the presentation regarding the statements and measures as well as the appendix for the appropriate reconciliations to GAAP.
Speaker 2: A presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on slide two of the presentation regarding these statements and measures as well as the appendix for the appropriate reconciliations to GAAP.
Speaker 2: Finally, Invesco Mortgage Capital is not responsible for, and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized webcasts are located on our website.
Finally in Invesco mortgage capital is not responsible for and has not added or guarantee the accuracy of our earnings teleconference. Transcripts provided by third parties. The only authorized webcasts are located on our website again welcome and thank you for joining US today I'll now turn the call over to John Anzalone John Good.
Speaker 2: Again, welcome and thank you for joining us today. I'll now turn the call over to John Anzolin. John ? Good morning and welcome to Investo Morgan Capital's third quarter earnings call.
And welcome to Invesco mortgage capital's third quarter earnings call.
Speaker 2: I'll give some brief comments before turning the call over to our Chief Investment Officer Brian Norris to discuss the current portfolio in more detail.
I will give some brief comments before turning the call moving our Chief investment Officer, Brian Norris.
Only in more detail.
Speaker 2: Also joining us on the call are President Kevin Collins, our CFO , Lee Fedley, and our CFO , Dave Elow.
Joining us.
On the call are president, Kevin Collins, our CFO Lee Phegley, our CFO.
Okay.
Speaker 2: The market environment was extremely challenging in the third quarter, given shifting expectations for fiscal and monetary policy. Interest rate volatility remained elevated while Treasury yields increased to their highest levels since 2007. This backdrop was particularly difficult for agency mortgages, as spreads reached multi-year wides across the coupon stack and specified pool pay-ups decline. These conditions contributed to a 17% decline in our book value per share for the quarter.
The market environment was extremely challenging during the third quarter, given shifting expectations for fiscal and monetary policy.
Interest rate volatility remains elevated while treasury yields increased to their highest levels since 2007.
This backdrop was particularly difficult for agency mortgages as spreads reached multiyear wides across the coupon stack in specified pool pay ups declined.
Conditions contributed to a 17% decline in our book value per share every quarter.
Speaker 2: Elevated volatility and rising interest rates continued into the first few weeks of the fourth quarter, accelerating agency mortgage underperformance.
Elevated volatility and rising interest rates continued into the first few weeks of the fourth quarter.
Salary agency mortgage under performance.
Speaker 2: Denimit turned more positive last week, fueled by investors growing confidence that the FOMC's tightening cycle has ended.
Gentlemen turned more positive last week fueled by investors growing confidence.
She is tightening cycle has ended.
Speaker 2: Positively, investors seeking to capitalize on historically cheap agency mortgage valuations have recently allowed the sector to recover a portion of its early fourth quarter loss.
Positively investors seeking to capitalize on historically achieved agency mortgage valuations and recently allowed this segment to recover a portion of this early fourth quarter losses.
Speaker 2: We estimate that as of November 3rd, our book value has declined to a range of $9.07 to $9.45 per share.
We estimate that as of November 3rd our book value has declined to a range of $9 seven.
$9 45 per share.
Speaker 2: Despite the extreme volatility, earnings available for distribution remain strong during the quarter coming in at $1.51 per share, as we continue to benefit from our low-cost hedges as well as very attractive ROEs on new investments.
Despite the extreme volatility earnings available for distribution remains strong during the quarter coming in at a $1 51 per share as we continue to benefit from our low cost hedges as well as very attractive Roes on new investments.
Speaker 2: Our debt-to-equity ratio entered the quarter at 6.4 times, which is substantially all of our $5.4 billion investment portfolio invested in agency mortgages. And we maintained a sizable balance of unrestricted cash on the convert investments totaling $392 million.
The equity ratio ended the quarter at six four times with substantially all of our $5 4 billion investment portfolio invested in agency mortgages.
And we maintained a sizable balance of unrestricted cash and unencumbered investments totaling $392 million.
Speaker 2: Post quarter end, we responded to elevated interest rate volatility and further pressure on agency mortgage valuations by actively reducing the size of our portfolio, bringing our debt-to-equity ratio down to approximately 4.3 times at the end of October . This reduction in risk will impact our earnings power commensurate with our reduction in asset.
Post quarter end, we responded to elevated interest rate volatility and further pressure on agency mortgage valuations by actively reducing the size of our portfolio, bringing our debt to equity ratio down to approximately four three times at the end of October.
Yes, we got you on risk will impact our earnings are commensurate with the reduction in assets.
Speaker 2: We remain cautious on the near-term outlook for the sector, giving the uncertain path of fiscal and monetary policy and heightening geopolitical risk.
We remain cautious in the year on the near term outlook for the sector, given the uncertain path of fiscal and monetary policy and heightened geopolitical risks.
Speaker 2: However, the potential reduction in interest rate volatility associated with the eventual normalization of monetary policy should be supportive of our target asset.
However, the potential reduction in interest rate volatility associated with the eventual normalization of monetary policy should be supportive of our target assets.
Speaker 2: Agency mortgage supply and demand dynamics are expected to improve in the coming quarters as one originations remain low in the face of elevated interest rates and seasonal factors.
Agency mortgage supply and demand dynamics are expected to improve in the coming quarters as the lender originations remained low in the face of elevated interest rates and seasonal factors.
Speaker 2: Commercial banks should also soon receive greater clarity on the regulatory requirements, which could encourage further deployment of capital away from loans and into lower risk-weighted assets such as agency mortgages.
Commercial banks should also.
Receive greater clarity on the regulatory requirements, which should encourage further deployment of capital away from loans and into lower risk weighted assets such as agency mortgages.
Speaker 2: Finally, valuations and production coupon agency mortgages remain historically attractive, and funding capacity is robust. While we remain cautious in the near term due to elevated volatility, we believe over time the decline in interest rate volatility in a supportive technical environment combined with compelling valuations and favorable funding conditions should create attractive agency mortgage investment opportunities for long-term investors. I'll stop here and Brian will go through the portfolio.
Finally valuations in production coupon agency mortgages remained historically attractive funding capacity is robust.
We remain cautious in the near term due to elevated volatility we believe over time the decline in interest rate volatility and a supportive technical environment combined with compelling valuations and favorable funding conditions should create attractive agency mortgage investment opportunities for long term investors.
Start here and Brian will go to Glenn.
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Speaker 3: Thanks, John . Good morning to everyone listening to the call. I'll begin on slide 4, which provides an overview of the interest rate and agency mortgage markets here today.
Thanks, John and good morning to everyone listening to the call.
I'll begin on slide four which provides an overview of the interest rate and agency mortgage markets year to date.
Speaker 3: As John mentioned and as shown on the chart in the upper left, yields on longer maturity U.S. treasuries rose sharply in the third quarter in a fair flattening move.
As John mentioned and as shown on the chart in the upper left yields a longer maturity U S. Treasuries rose sharply in the third quarter in a bare flattening moves.
Speaker 3: Short-term rates rose modestly as the slowdown in inflation data signaled an impending pause in monetary policy tightening, while yields on treasuries maturing between 5 and 30 years increased between 45 and 85 basis points.
Short term rates rose modestly as the slowdown in inflation data signaled an impending policy monetary policy tightening.
Yield on treasuries maturing between five and 30 years increase between 45, and 85 basis points as investors priced the risk that a resilient economy and substantial treasury issuance would impact a longer term path of rates.
Speaker 3: as investors price the risk that a resilient economy and substantial Treasury issuance would impact the longer term path of rates.
Speaker 3: By the end of the third quarter, pricing in the Fed Funds futures market reflected a higher for longer stance by the Federal Reserve, pushing expectations for cuts into the second half of 2024. These trends intensified into October , as interest rates and interest rate volatility moved higher post quarter end.
By the end of the third quarter pricing in the fed funds futures market reflected a higher for longer stance by the federal reserve pushing expectations for cuts into the second half of 2024.
These trends intensified in October as interest rates and interest rate volatility was higher post quarter end.
Speaker 3: As shown in the lower right chart, U.S. commercial banks further reduced their holdings of agency RMBS during the quarter, concurrent with runoff of the Federal Reserve's ballot sheet, resulting in increased reliance on money manager and overseas investment to support agency RMBS valuation.
As shown in the lower right chart U S. Commercial banks further reduced their holdings of agency MBS during the quarter concurrent with runoff of the federal reserve's balance sheet, resulting in an increased reliance on money manager and overseas investment to support agency MBS valuations.
Speaker 3: While overseas investment in the asset class has been robust in recent months, mutual fund outflows dampen demand from a money manager community that would already overweight the sector with little room to add exposure.
Overseas investment in the asset class has been robust in recent months mutual fund outflows dampened demand from a money manager community that was already overweight the sector with little room to add exposure.
Speaker 3: In addition, organic net supply of agency mortgages to the market increased during the quarter as housing seasonal strengthened, while the remaining specified pools held by the FDIC were liquidated by the end of the quarter. Taken together, supply and demand technicals work during the quarter, providing a tenuous environment as interest rate volatility increases.
In addition, organic net supply of agency mortgages to the market increased during the quarter as housing seasonal strengthened while the remaining specified pools held by the FDIC were liquidated by the end of the quarter.
Taken together supply and demand technicals worsened during the quarter, providing a tenuous environment as interest rate volatility increased.
Speaker 3: Slide 5 provides more detail on the agency RMBS market.
Slide five provides more detail on the agency MBS market.
Speaker 3: In the upper left chart, we show 30-year current coupon agency RMBS performance versus U.S. Treasury since year end, highlighting the third quarter in gray.
In the Upper left chart, we show 30 year current coupon agency MBS performance versus U S treasuries, CRM, highlighting the third quarter and Greg.
Speaker 3: Production coupon agency RMBs performed poorly during the quarter as investor expectations for monetary and fiscal policy fluctuated, leading to sharply higher interest rate volatility.
Production coupon agency MBS performed poorly during the quarter as investor expectations for monetary and fiscal policy fluctuated, leading to sharply higher interest rate volatility.
Speaker 3: Current coupon valuations ended the quarter significantly lower versus treasuries. And agency RMS spreads widened approximately 20 to 25 basis points across the coupon stack.
Current coupon valuations ended the quarter significantly lower versus treasuries and agency MBS spreads widened approximately 20 to 25 basis points across the coupon stack in.
Speaker 3: In addition, Best Buy pool pay-ups continue to decline as interest rates increase, as indicated in the chart on the top right.
In addition specified pool pay ups continue to decline as interest rates increase as indicated in the chart on the top right.
Speaker 3: As shown in the lower right chart, the dollar roll market for TVA securities remained unattractive, as more recent issuance with higher loan balance have a less attractive prepayment profile, and the lack of consistent bank demand negatively impacted technology.
As shown in the lower right chart. The dollar roll market for TBA Securities remained unattractive as more recent issuance with higher loan balances have a less attractive prepayment profile and the lack of consistent bank demand negatively impacted technicals.
Speaker 3: Although agency RBS underperformed in October , the market did stabilize in the latter part of the month as investor selling dissipated and volatility subsided modestly.
So agency MBS underperformed in October the market did stabilize in the latter part of the month as investor selling dissipated and volatility subsided modestly.
Speaker 3: Slide six provides detail on our HCRMVS investments and portfolio changes during the quarter. Our portfolio of agency RMS decreased marginally over the quarter as the combination of higher interest rates and wider spreads led to lower prices on our asset.
Slide six provides detail on our ACR MBS investments and portfolio changes during the quarter.
Our portfolio of agency MBS decreased marginally over the quarter and the combination of higher interest rates and wider spreads led to lower prices on our assets we remained.
Speaker 3: We remain focused on more attractively priced higher coupons, which are largely insulated from direct exposure to assets held by the FDIC and on the Federal Resorts balance sheet. In addition, we remain exclusively invested in specified pools with no exposure to the deterioration in the dollar roll market for TBA securities.
<unk> focused a more attractively priced higher coupons, which are largely insulated from direct exposure direct exposure to assets held by the FDIC and on the federal reserve balance sheet.
In addition, we remain exclusively invested in specified pools with no exposure to the deterioration in the dollar roll market for TBA Securities.
Speaker 3: We continue to modestly improve the quality of our specified pool holdings by increasing our allocation to lower loan balance stories given more attractive valuations during a quarter.
We continue to modestly improve the quality of our specified pool holdings by increasing our allocation to lower loan balance stories, given more attractive valuations during the quarter.
Speaker 3: Although we anticipate elevated interest rate volatility to persist near term, we believe current valuations on production coupon agency RMBS largely price in this risk and represent attractive investment opportunities with current gross ROEs in the mid to high teens.
Although we anticipate elevated interest rate volatility to persist near term. We believe current valuations on production coupon agency MBS largely price isn't this risk and represent attractive investment opportunities with current gross ROE in the mid to high teens.
Speaker 3: Our remaining credit investments are detailed alongside our agency CMO allocation on slide 7. Our credit allocation declined during the quarter to $34 million due to paydowns. Our credit allocation remains high quality with 83% rated AA or higher.
Our remaining credit investments our detailed alongside our agency CMO allocation on slide seven our credit allocation declined during the quarter to $34 million due to Paydowns, our credit allocation remains high quality with 83% rated double a or higher.
Speaker 3: Our allocation to agency interest only securities detailed on the right side of slide seven remains unchanged, totaling 78 million in quarter end. Although we anticipate limited near term price appreciation in our credit and agency I.O. investments, we believe these assets are attractive, unlobert holdings that provide favorable yields. So.
Our allocation to agency interest only securities detailed on the right side of slide seven remains.
And unchanged totaling $78 million a quarter end.
Although we anticipate limited near term price appreciation in our credit and agency Io investments. We believe these assets are attractive Unlevered holdings that provide favorable yields.
Slide eight details our funding and hedge book at quarter end.
Speaker 3: Repurchase agreements collateralized by agency RMBs remained at $5 billion, and our weighted average repo costs increased to 5.4%, consistent with changes in short-term funding rates due to tightening monetary policy.
Repurchase agreements collateralized by agency MBS remained at $5 billion and our weighted average repo cost increased to five 4% consistent with changes in short term funding rates due to tightening monetary policy.
Speaker 3: Repost spreads will relatively steady during the quarter, and counterparty appetite remains strong.
Repo spreads were relatively steady during the quarter and counterparty appetite remains strong.
Speaker 3: Positively, we increase the hedges associated with those borrowings to $5 billion net notional of current pay fixed received floating interest rate swaps, increasing our hedge notional to 99% of borrowings and mitigating the impact of higher borrowing rates on the earnings power of the company during a quarter.
Positively we we increased the hedges associated with those borrowings to 5 billion net notional of current pay fixed receive floating interest rate swaps hedging or increasing our hedge notional to 99% of borrowings and mitigating the impact of higher borrowing rates on the earnings power of the company during the quarter.
Speaker 3: Our economic leverage ended the quarter modestly higher at 6.4 times death to equity versus 5.9 times at the end of June , mostly reflecting the decline in book value over the quarter.
Our economic leverage ended the quarter modestly higher at six four times debt to equity versus five nine times at the end of June mostly reflecting the decline in book value over the quarter.
Speaker 3: Positively, our liquidity position at Quarter End remained robust, with $392 million of cash and uncovered investments representing approximately 7% of our investment portfolio.
Positively our liquidity position at quarter end remained robust with 392 million followers of cash and unencumbered investments representing approximately 7% of our investment portfolio.
Slide nine provides further detail on our interest rate swap portfolio.
Speaker 3: Slide 9 provides further detail on our interest rate swap portfolio. At the end of the third quarter, we held $5.9 billion notional of low-cost, pay-fix swaps and $950 million notional of receipt-fix swaps.
At the end of the third quarter, we held $5 9 billion notional of low cost pay fix swaps and 950 million notional of receive fixed swaps given the significant challenges presented during the quarter.
Speaker 3: Given the significant challenges presented during the quarter, we modestly repositioned the hedge book to extend the weighted average maturity of our pay-thick swaps and reduce the maturity of our received big slots.
Modestly reposition the hedge book to extend the weighted average maturity of our pay fixed swaps and reduce the majority of our receive fixed swaps.
Speaker 3: Because the tenor of our low-cost pay fix loss was over seven and a half years, we were largely able to avoid adding new pay fix loss at higher rates as the durations on our agency RMBF extended into the most recent fill-off. With our average pay fix rate increasing from...
Because the tenure of our low cost paychex swaps was over 75 years, we were largely able to avoid adding new pace X lots at higher rates as the durations on our agency MBS extended into the most recent selloff with our average pay fixed rate increasing from <unk>.
Speaker 3: 0.45% to 0.79%, quarter over quarter.
0.45% to zero point, 79% quarter over quarter.
Speaker 3: By 10 provides an update on our asset and hedge portfolios as of October 31st, which should offer a helpful picture of the changes we made close quarter in.
Slide 10 provides an update on our asset and hedge portfolios as of October 31, which should offer a helpful picture of the changes we made post quarter end.
Speaker 3: Since the end of the third quarter, we aggressively reduced leverage as elevated interest rate volatility went to sharp declines in our agency RMBF valuation.
Since the end of the third quarter, we aggressively reduced leverage as elevated interest rate volatility led to sharp declines in our agency MBS valuations.
Speaker 3: As a result, our debt to equity leverage declined from 6.4 times to 4.3 times in October .
As a result, our debt to equity leverage declined from six four times to four three times in October <unk>.
Speaker 3: But could any remain robust as our cash and unencumbered investments increased at 444 million?
Liquidity remained robust as our cash and unencumbered investments increased to $444 million.
Speaker 3: As you can see in the top left chart, we remain allocated to higher coupon agency RBS, and our specified pool allocation is now of higher quality, with nearly 50% of our holdings in loan balance collateral.
As you can see in the top left chart, we remain allocated to higher coupon agency MBS and our specified pool allocation is now a higher quality with nearly 50% of our holdings in loan balance collateral.
Speaker 3: In addition, we also reduced the size of our hedge book commensurate with the reduction in our assets, with our pay fixed swap hedges declining from $5.9 billion at quarter end to $3.9 billion at the end of October . Positively, our average pay fixed rate declined marginally from 0.79% to 0.76%, and the weighted average maturity of our hedges is now 8.6 years. Providing support for the...
In addition, we also reduced the size of our hedge book commensurate with the reduction in our assets with our pay fixed swap hedges declining from $5 9 billion at quarter end to $3 9 billion at the end of October.
Positively our average pay fixed rate declined marginally from 0.79% to zero point, 76% and a weighted average maturity of our hedges is now eight six years.
Providing support for the earnings power of the company.
Speaker 3: To conclude our prepared remarks, the third quarter of 2023 was yet another very challenging quarter for agency R&BS investors, as interest rate volatility increased sharply once again.
To conclude our prepared remarks, the third quarter of 2023 was yet another very challenging quarter for agency RMB us investors as interest rate volatility increased sharply once again.
Speaker 3: We believe our bias for more attractively priced higher coupon specified pools leaves us well positioned in the near term, given the potential for a further decline in interest rate volatility as the Federal Reserve seeks to conclude monetary policy tighten.
We believe our bias for more attractively priced higher coupon specified pools leaves us well positioned in the near term given the potential for a further decline in interest rate volatility as the federal reserve seats to conclude monetary policy tightening.
Speaker 3: Further, our liquidity position is robust, as leverage remains well below the historical averages for an HCR and BS focus strategy. As a result, IVR is well positioned to navigate future mortgage market volatility and selectively capitalize on historically wide HCR and BS spreads. While we anticipate potential near-term volatility as monetary policy tightening concludes, we believe current violations provide a support of the factor out from a long-term investment.
Further our liquidity position is robust as leverage remains well below historical averages for at HCR MBS focused strategy.
As a result, <unk> is well positioned to navigate future mortgage market volatility and selectively capitalize on historically wide agency MBS spreads.
While we anticipate potential near term volatility as monetary policy tightening concludes we believe current valuations provided supportive backdrop for the long term investment.
Speaker 3: Thank you for your continued support for Invesco Mortgage Capital, and now we will open the line for Q&A.
Thank you for your continued support for Invesco mortgage capital and now we will open the line for Q&A.
Speaker 4: If the phone lines are now open for questions, if you would like to ask a question over the phone, please press star one and record your name.
The phone lines are now open for questions. If you would like to ask a question over the phone. Please press star one and record your name to withdraw your question Press Star to.
Speaker 4: The key is from Trevor Cranston with JMP Securities. Your line is open.
The first question in the queue is from Trevor Cranston with JMP Securities. Your line is open.
Okay. Thanks, good morning.
Speaker 5: I think you guys took leverage down to a, I guess, pretty conservative level as of the end of October . Okay.
Okay, you guys took leverage down too.
So pretty conservative level as of the end of October.
Speaker 5: Can you talk about if that level is when you're comfortable staying out for the near term? And given the negative earnings impact of the asset sales you mentioned, can you maybe talk a little bit about how you're thinking about the dividend in that context?
Can you talk about it.
At that level as one year comfortable staying after the near term.
And.
Given the negative earnings impact of the asset sales you mentioned can you maybe talk a little bit about how you're thinking about the dividend in that context. Thanks.
Speaker 3: Yeah, hey Trevor, it's Brian . I'll have a good morning and then I'll start with the leverage comment for turning it over to John for the dividend. You know, leverage, yes, is certainly well below, but kind of our longer term average here as an agency mortgage only read.
Yes, Hey driver its Brian all the good morning, I'll start with the leverage comment or turning it over to John for further.
Dividends.
Leverage, yes, it's certainly well below.
Kind of our longer term average here as an as an agency mortgage only REIT.
Speaker 3: You know, we do think that, you know, given the level of volatility currently in the market that a conservative approach is warranted. And so, you know, while...
We do think that.
Given the level of volatility currently in the market that a.
Our conservative approach is warranted.
So.
Wow.
Speaker 3: you know, probably, you know, if we were to be in a, you know, mostly lower interest rate vol environment, leverage would probably look a little closer to where we were at the end of June . Given where we are right now, you know, we think a more conservative approach is more.
Probably if we were to be in a.
Modestly lower.
Interest rate vol environment.
Leverage would probably look a little closer to where we were at the end of June given where we are right now we think a more conservative approach is warranted.
Speaker 2: Yeah, and I mentioned the dividend. Yeah, so I mean, first of all, the dividend is determined by our board. And, you know, I can't comment directly on future action will be determined late next month. But I can say, you know, the earnings power has declined along with our leverage. But, you know, keep in mind that EAD has been covering a dividend by a fairly significant margin in recent quarters.
Yes.
Hi, Jeffrey as John mentioned and dividend yes.
Yes, so I mean first of all the dividend is determined by our board and I can't comment directly on future action.
This will be determined late next month, but I can't say the earnings power has declined along with our leverage but keep in mind that <unk> had been covering the dividend by a fairly significant margin in recent quarters.
Speaker 6: And then there are several factors that we consider when setting dividend among them, you know, EAD obviously one of them, along with historical and prospective, return profile of our target assets and then dividend yields available in the sector. So, I mean, there's a bunch to go sit to it. It's like, you know, but that will be determined that a later buyer board. Okay, let's first. Thank you.
And then.
Several factors that we consider when setting the dividend among them.
Obviously one of them.
Along with historical and prospective return profile of our target assets and then dividend yields available in the sector. So I mean, there's a bunch that goes into it.
Yes.
But that will be determined.
Our board.
Okay.
Thank you.
And the next question in queue is from Matthew <unk> with Jones trading your line is open.
Hey, good morning, guys. Thanks for taking the question. So you mentioned part of the portfolio kind of going to the lower loan balance production coupon I believe at the end of the quarter the distribution amongst coupons was pretty balanced.
Speaker 7: Part of the portfolio, kind of going to the lower loan balance production coupon. Believe it, the end of the quarter, the distribution amongst coupons is pretty balanced. So going forward, we expect a higher percentage.
Going forward should we expect a higher percentage.
Speaker 7: of the portfolio to be concentrated in those new production and higher coupons.
<unk> of the portfolio to be concentrated in those new production and higher coupons.
Okay.
Speaker 3: Yes, Matt, hey, it's Brian . Good morning. Yes. You know, it's likely that as we move forward here, we would look to add in higher coupons. You'll notice on the October 31 slide that we did add my sum out of 6% coupon, which was an addition relative to where we had been on the coupon sac. So I think that's a pretty good estimate of where new purchases would occur going forward. Got it. Thanks.
Yes, Matt Hey, it's Brian Good morning, Yes.
It's likely that as we move forward here, we'll we would look to add in higher coupons Youll notice on the October 31, slide that we did add a modest amount of 6% coupon.
Which was in addition relative to where we had been on the coupon side. So I think that that's a pretty good estimate of where new purchases will occur going forward.
Got it thank you.
And I'm showing no further questions at this time.
Speaker 6: OK, well, I'd like to thank everybody for joining us on the call and we look forward to speaking, I guess, in February . Thanks. Thank you.
Okay, well I'd like to thank everybody for joining us on the call and we look forward to speaking I guess in February. Thanks.
Thank you.
This concludes today's call. Thank you for your participation you may disconnect at this time.