Q1 2024 Chimera Investment Corp Earnings Call

[music].

Operator: Greetings and welcome to the Chimera Investments 2024 Earnings Conference.

Greetings and welcome to the kind of mirror investments.

2024 earnings conference.

Operator: I have here with me today, Victor Falvo, and all participants are in a listen-only mode at this time. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Victor Falvo. You may begin.

I have here with me today are Victor Suazo, and all participants are in a listen only mode. At this time a brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad and as a reminder, this conference is being.

It is now my pleasure to introduce your host Victor Falvo you may begin.

Okay.

Okay.

Victor Falvo: Thank you, operator. And thank you, everyone, for participating in Chimera's first quarter 2024 earnings conference call. Before we begin, I'd like to review the Safe Harbor Statement. During this call, we will be making forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based upon current expectations and assumptions that are subject to risks and uncertainties, which are outlined in the risk factors section of our most recent annual and quarterly SEC filings.

Victor Falvo: You operator, and thank you everyone for participating in <unk> first quarter 2024 earnings conference call.

Victor Falvo: Actual events and results may differ materially from these forward-looking statements. We encourage you to read the forward-looking statement disclaimers in our earnings release and our quarterly and annual reports. During the call today, we may also discuss non-GAAP financial measures. Please refer to our SEC filings and earnings supplement for reconciliation to the most comparable GAAP measure. Additionally, the content of this conference call may contain time-sensitive information that is accurate only as of the date of this earnings call. We do not undertake and specifically disclaim any obligation to update or revise this information. I will now turn the conference over to our President and Chief Executive Officer, Phil Kardis.

Victor Falvo: Before we begin I'd like to review the Safe Harbor statements.

Victor Falvo: During this call we will be making forward looking statements, which are predictions projections or other statements about future events.

Victor Falvo: These statements are based upon current expectations and assumptions that are subject to risks and uncertainties, which are outlined in the risk factors section in our most recent annual and quarterly SEC filings.

Victor Falvo: Actual events and results may differ materially from these forward looking statements we.

Victor Falvo: We encourage you to read the forward looking statement disclaimers in our earnings release, and our quarterly and annual filings.

Victor Falvo: During the call today, we may also discuss non-GAAP financial measures.

Victor Falvo: Please refer to our SEC filings and earnings supplement for reconciliation to the most comparable GAAP measures.

Victor Falvo: Additionally, the content of this conference call May contain time sensitive information is accurate only as of the date of this earnings call.

Victor Falvo: We do not undertake and specifically disclaim any obligation to update or revise this information.

Victor Falvo: I will now turn the conference over to our President and Chief Executive Officer, Phil Cordis.

Phillip John Kardis: Good morning, and welcome to Chimera Investment Corporation's first quarter 2024 earnings call. Joining me on the call are Subra Viswanathan, our Chief Financial Officer, Dan Thakkar, our Chief Investment Officer, and Vic Falvo, our Head of Capital Markets and Investor Relations. After my remarks, Subra will review the financial results, and then we'll open the call for questions. The capital markets closed 2023 on a strong note, driven by investor expectations that the Federal Reserve would cut interest rates seven times or 175 basis points, which was more than twice the number of the Federal Reserve. Throughout the quarter and during April, economic data reflecting strong employment and an increasing inflation rate caused the market to react on several occasions, triggering increased rate volatility and The four main themes that have emerged as we begin the second quarter are inflation is still higher than the Federal Reserve's desired target, and economic data continues to indicate a strong economy.

Phillip John Kardis: Good morning, and welcome to Chimera investment Corporation's first quarter 2024 earnings call.

Phillip John Kardis: Long-term interest rates may not have peaked, and interest rates will experience increased volatility. Despite the return of volatility, higher interest rates, and reduced rate cut expectations, since the beginning of the year, we've acquired approximately $50 million in subordinated tranches of new issue mortgage securitizations backed by collateral that included re-performing residential mortgage loans and small balance commercial loans. These investments have a weighted average coupon of 10.5%, and inclusive of the purchase discount, we anticipate earning a low teen unlevered return. In addition, we also settled on 78 million in residential transition loans.

Phillip John Kardis: Joining me on the call are supra. This one often our chief financial Officer, Dan Tucker, Our Chief investment Officer, and Vic Falvo <unk> head of capital markets and Investor Relations.

Phillip John Kardis: After my remarks Super will review the financial results and then we'll open the call for questions.

Phillip John Kardis: The capital markets closed 2023 on a strong note driven by investor expectations at the Federal Reserve would cut interest rates seven times or 175 basis points during 2024, which was more than twice the number of the federal reserve indicated through their quarterly dot plots.

Phillip John Kardis: Throughout the quarter and during April economic data, reflecting strong employment and increasing inflation rate caused the market on several occasions to reduce its expectations of interest rate cuts.

Phillip John Kardis: Triggering increased rate volatility and the backup and long term interest rates.

Phillip John Kardis: Today market expectations are for one to two cuts before year end.

Phillip John Kardis: The four main themes that have emerged as we begin the second quarter are in place and it's still higher than the federal reserve's desired rate.

Phillip John Kardis: <unk> data continues to indicate a strong economy.

Phillip John Kardis: Long term interest rates may not have peaked and interest rate.

Phillip John Kardis: Will experience increased volatility.

Phillip John Kardis: Despite the return of volatility higher interest rates and reduced rate cut expectations. Since the beginning of the year, we have acquired approximately $50 million in subordinated tranches of new issue mortgage securitization.

Phillip John Kardis: By collateral that included re performing residential mortgage loans and small balance commercial loans.

Phillip John Kardis: These investments had a weighted average coupon of 10, 5% and inclusive of the purchase discount we anticipate earning low teen Unlevered returns.

Phillip John Kardis: In addition, we also settled on $78 million of residential transition loans.

Phillip John Kardis: These loans have a weighted average coupon of 10.6%, and we expect to receive mid-teen levered returns. The unleveraged securities will enable us to increase leverage over time, and the residential transition loans generate superior returns as compared to other short-duration investments, while providing a significant amount of free cash flow for reinvestors. We believe these investments will provide accretive returns to the portfolio while preserving liquidity for future deployment. On the liability side of the balance sheet, we continue to reduce some of our higher-cost repo borrowings.

Phillip John Kardis: These loans have a weighted average coupon of 10, 6% and we expect to receive mid teen Levered returns.

Phillip John Kardis: The Unlevered securities will enable us to increase leverage overtime.

Phillip John Kardis: In the residential transition loans generate superior returns as compared to other short duration investments, while providing a significant amount of free cash flow for reinvestment.

Phillip John Kardis: We believe these investments will provide accretive returns to the portfolio, while preserving liquidity for future deployment.

Phillip John Kardis: On the liability side of the balance sheet, we continue to reduce some of our higher cost repo borrowings. We believe the actions taken this quarter on both sides of the balance sheet will benefit our interest net interest income.

Phillip John Kardis: We believe the actions taken this quarter on both sides of the balance sheet will benefit our... Net Interest Income. And to further protect our liability cost against higher interest rates, this quarter we added an additional $500 million in one-by-one pay fixed swaps at a rate of 3.45% to help protect the borrowing cost of the portfolio on a go-forward basis. We continue to seek opportunities to finance our retained notes from securitizations with long-term, limited, or non-mark-to-market financing facilities.

Phillip John Kardis: To further protect our liability cost against higher interest rates. This quarter, we added an additional $500 million and one by one pay fixed swaps at a rate of 345% to help protect the borrowing costs of the portfolio on a go forward basis.

Phillip John Kardis: We continue to seek opportunities to finance our retained notes from Securitizations with long term limited or non mark to market financing facilities.

Phillip John Kardis: We currently have about 60% of our recourse financings with these facilities. To further manage our interest rate risk, we intend to continue to use financial derivatives, such as interest rate swaps and swaptions, to hedge against net interest margin compression. Cash management is critical to our business.

Phillip John Kardis: We currently have about 60% of our recourse financings with these facilities.

Phillip John Kardis: To further manage our interest rate risk, we intend to continue to use financial derivatives, such as interest rate swaps and swaption the hedge against net interest margin compression.

Phillip John Kardis: We monitor our ongoing needs for margin requirements, repo maturities, daily liquidity, and new investments. Over time, we expect to continue to acquire and securitize mortgage loans, as well as further implement the company's call optimization strategy on our securitizations. With available funds, we plan to evaluate the merits of any new investments and compare them with the merits of reducing higher cost liability. In the near term, we are beginning to see some green shoots.

Phillip John Kardis: Cash management is critical to our business, we monitor our ongoing needs for margin requirements repo maturities daily liquidity into investments.

Phillip John Kardis: Over time, we continue to overtime, we expect to continue to acquire and securitized mortgage loans as well as further implement the implement the companies call optimization strategy.

Phillip John Kardis: On our securitization.

Phillip John Kardis: With available funds, we plan to evaluate the merits of any new investments and compare them with the merits of reducing higher cost liabilities as they mature.

Phillip John Kardis: Timing of these re securitization is impacted by many factors, including credit performance prepayment speeds and interest rates.

Phillip John Kardis: In the near term, we are beginning to see some green shoots as I mentioned on our last call. We are closely monitoring several of our outstanding N or non remic eligible securitizations preferred where potential re securitization.

Phillip John Kardis: As I mentioned on our last call, we are closely monitoring several of our outstanding NR or non-REMIC-eligible securitizations for potential re-securitization. With the spread tightening we have experienced this year, we believe our ability to re-securitize these loans in the second or third quarter has improved. Our ability to execute this strategy will free up additional cash to invest in new opportunities that we expect will be accretive to future earnings. As we navigate current market conditions, we're focused on maintaining low recourse leverage and managing our liquidity with a proper balance of both cash and unencumbered assets.

Phillip John Kardis: With the spread tightening.

Phillip John Kardis: We have experienced this year, we believe our ability to re securitize. These loans in the second or third quarter has improved.

Phillip John Kardis: Our ability to execute this strategy will free up additional cash to invest in new opportunities that will we expect will be accretive to future earnings.

Phillip John Kardis: As we navigate current market conditions, we are focused on maintaining low recourse leverage and managing our liquidity with a proper balance of both cash and unencumbered assets.

Phillip John Kardis: Credit performance of our portfolio continues to be within or better than our original investment expectations on mortgage delinquencies, default rates, and recovery from our capital raised last year, and we continue to look to purchase new loan packages. We were successful in accomplishing our investment objectives this quarter, and we believe the increased rate volatility will enable us to continue to add accretive investments for the remainder of the year. I'd like to now turn to Subra to give a more detailed overview of our financial results.

Phillip John Kardis: Credit performance of our portfolio continues to be within or better than our original investment expectations on mortgage delinquencies default rates and recoveries.

Phillip John Kardis: Fully deploy the proceeds from our capital raised last year, and we continue to look to purchase new loan packages.

Phillip John Kardis: We were successful in accomplishing our investment objectives. This quarter and we believe the increased rate volatility will enable us to continue to add accretive investments for the remainder of the year.

Phillip John Kardis: I'd like to now turn to Subaru to give a more detailed overview of our financial results.

Subramaniam Viswanathan: Thank you, Phil. I will review Chimera's financial highlights for the first quarter. Gap net income for the first quarter was $111 million, or $0.45 per share. Gap book value at the end of the first quarter was $7.11 per share. The appreciation in value this quarter was mostly driven by a tightening of spreads on our re-performance.

Subaru: Thank you Phil I will review <unk> financial highlights for the first quarter of 2020 full GAAP net income for the first quarter was $111 million or 45 per share gap.

Subaru: GAAP book value at the end of first quarter was $7 11 per share the appreciation in value. This quarter was mostly driven by a tightening of spreads on a re performing loans.

Subramaniam Viswanathan: For the first quarter, our economic return on gap book value was 7% based on the quarterly change in book value and the first quarter dividend per common share. On an earnings available for distribution basis, net income for the fourth quarter was $31 million, or $0.12 per share. Our economic net interest income for the fourth quarter was $68 million.

Phillip John Kardis: For the first quarter, our economic return on GAAP book value was 7% based on the quarterly change in book value in the first quarter dividend per common share.

Phillip John Kardis: On an earnings available for distribution basis net income for the fourth quarter was $31 million or 12 cents per share.

Phillip John Kardis: Our economic net interest income for the fourth quarter was $68 million for the first quarter. The yield on average interest, earning assets was five 8% on average cost of funds was four 4% and our net interest spread was one 4%.

Subramaniam Viswanathan: For the first quarter, the yield on average interest-earning assets was 5.8%. Our average cost of funds was 4.4%, and our net interest spread was 1.4%. Total leverage for the first quarter was 3.7 to 1, while Ricoh's leverage ended the quarter at 0.9 to 1. For financing and liquidity, the company ended the quarter with $587 million in total cash and unencumbered assets.

Phillip John Kardis: Total leverage for the first quarter was $3 seven to one while recourse leverage ended the quarter at one nine to one.

Phillip John Kardis: For our financing and liquidity the company ended the quarter with $587 million in total cash and unencumbered assets.

Subramaniam Viswanathan: For hedging, during the first quarter, the company exercised its two swaption contracts for $1 billion notional and entered into two separate one-year swaps for a total of $1 billion notional at a weighted average 3.46% fixed pay rate. We added a new swaption contract with 500 million notional for the option to pay fixed at 3.45% for one year beginning in January 2025. We had 1.7 billion floating rate exposure on our outstanding rep

Phillip John Kardis: Our hedging during first quarter the company exercised its two swaption contracts for 1 billion notional and entered into two separate one year swaps for a total of 1 billion notional at a weighted average $3, 46% fixed pay rate.

Phillip John Kardis: We added a new swaption contract with 500 million notional for the option to pay fixed at 345% or one year beginning in January 2025.

Phillip John Kardis: We had $1 7 billion floating rate exposure on our outstanding equaled liabilities.

Subramaniam Viswanathan: We had 2 billion pay fixed interest rate swaps at a weighted average fixed pay rate of 3.36% as a hedge position for our floating rate liability. 1 billion of these swaps matured in May, and 1 billion pay fixed swaps remained with a 3.46% weighted average fixed pay rate. We had 1.4 billion of either non or limited mark to market features on our outstanding repo agreements, representing 60% of our total recourse. For the first quarter of 2024, our economic net interest income return on equity was 10.5%.

Phillip John Kardis: 2 billion pay fixed interest rate swaps at a weighted average fixed pay rate of 336% as our hedge position for our floating rate liabilities.

Phillip John Kardis: 1 billion of these swaps matured in May and 1 billion pay fixed swaps remains at $3 four 6% weighted average fixed pay rate.

Phillip John Kardis: We had $1 4 billion of either non are limited mark to market features on our outstanding repo agreements, representing 60% of our total recourse funding.

Phillip John Kardis: For the first quarter of 2020 for our economic net interest income return on equity was 10, 5% on a GAAP return on average equity was 19, 9% and return on average equity was seven 3%.

Phillip John Kardis: And lastly for the first quarter of 2024 expenses, excluding servicing fees and transaction expenses of about $15 million down $1 3 million from sharp.

Phillip John Kardis: From the same period last year, a reduction of 8%.

Subramaniam Viswanathan: Our gap return on average equity was 19.9%, and our EAD return on average equity was 7.3%. And lastly, for the first quarter 2024, expenses, excluding servicing fees and transaction expenses, were $15 million, down $1.3 million from the same period last year, a reduction of 8%. That concludes our remarks. We will now open the call for

Speaker Change: That concludes our remarks, we will now open the call for questions.

Speaker Change: Thank you we will now be conducting a question and answer session.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your blindness in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for questions. Our first question comes from Doug Harter with UBS. Please proceed.

Phillip John Kardis: If you would like to ask a question. Please press star one on your telephone keypad.

Phillip John Kardis: Tom will indicate your line is in the question queue.

Phillip John Kardis: You May press Star two.

Phillip John Kardis: If he would like to remove your question from the queue.

Phillip John Kardis: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Phillip John Kardis: Our first question comes from Doug Harter with UBS. Please proceed.

Phillip John Kardis: Okay.

Douglas Michael Harter: Good morning.

Phillip John Kardis: You mentioned, you know, that you're getting closer to calling some of your deals. Can you just talk about how you, what type of capital you think you might be able to free up in the coming quarters and, you know, how you would view the relative return on, you know, redeploying that capital versus, you know, kind of what

Douglas Michael Harter: You mentioned that Youre getting closer on the I'm, calling some of your deals can you just talk about how you what type of capital you think you might be able to free up in the coming quarters and you know how you would view the the you know the relative.

Phillip John Kardis: Return on a you know on redeploying that capital versus kind of what are what you're calling.

Phillip John Kardis: Doug, this is Phil. So yes, I mean, I think we believe we're getting closer. We're not there yet. We were looking at, you know, a variety of factors, partly that comes down to issues like how much are we actually going to get. We think it's significant enough that we're willing to, you know, really look at this seriously. But the actual amount will, again, depend on factors. And we look at kind of what the hurdle rates are and, you know, and the like.

Phillip John Kardis: Doug This is Phil so yeah. So I mean, I think we believe we're getting closer we're not there yet we are looking at a variety of factors, partly that comes down to issues like how much are we actually going to get we think its cigna.

Phillip John Kardis: Significant enough that we're willing to really look at this seriously, but the actual amount will be again will depend on factors and we look at kind of what the hurdle rates are.

Phillip John Kardis: <unk>.

Phillip John Kardis: And the like and so I think we can say that there's a fair amount of opportunities out there for kind of low to mid teen returns and it currently looks like we can beat the hurdle for reinvestment.

Phillip John Kardis: And so I think we can say that there are a fair amount of opportunities out there for, you know, kind of low to mid-team returns, and it currently looks like we can beat the hurdle for reinvestment. That's why I mentioned it, I mentioned on the prior call that we thought that was possible. We think it's now, given where the spreads have gone, that it's more possible. We need some further improvement before we're there. But you know, we are hopeful that we can get something done in the next period.

Phillip John Kardis: That's why I mentioned it I mentioned on the prior call that we thought that was possible. We think it's now given where the spreads have gone that it's more possible we need some further improvement before we're there but we.

Phillip John Kardis: We are hopeful that we get something done in the next period or so.

Phillip John Kardis: Great.

Dan Thakkar: Great. And I was hoping you could give us an update as to, you know, how book value has trended so far in the second half.

Speaker Change: I was hoping you could give us an update as to how book value has trended.

Phillip John Kardis: So far in the second quarter.

Dan Thakkar: So far on the tech course, so I'm going to turn this over to Dan Thakkar, our Chief Investment Officer. Yeah, yeah, Doug, so this quarter we've had a sell-off in rates in the range of 25 to 30 basis points. Spreads have tightened a bit more, especially both the FOMC and the soft payroll last week. Our estimate at this point is that we are lower by close to 1.5 to 2%.

Speaker Change: Yeah. So.

Phillip John Kardis: So so far in the second quarter, so I'm going to turn this over to Dan Tucker, our chief investment Yeah, Yeah. So Doug. So this quarter, we would have had a sell off in rates in the range of 25 to 30 basis points.

Dan Thakkar: <unk> have tightened a bit more especially post the athlon XE and the soft paywall last week. Our estimate at this point is that we are lower by close to 1.5% to 2%.

Phillip John Kardis: Great, I appreciate that. Thank you, guys.

Dan Thakkar: Great I appreciate that thank you guys.

Dan Thakkar: Okay.

Dan Thakkar: Our next question comes from Bose George from K P. W. Please proceed.

Bose Thomas George: Our next question comes from Bose George from KBW. Please proceed; you guys be more

Phillip John Kardis: Hey guys, good morning. Just to follow up on the book value question, just in terms of the improvement this quarter, can you just walk through the drivers?

Bose Thomas George: Guys. Good morning, just a follow up to the book value question.

Bose Thomas George: Just in terms of the improvement this quarter can you just walk through the drivers.

Bose Thomas George: Yes.

Phillip John Kardis: Yeah, so look, I think, as Subra said, we had positive mark to market changes in the investment portfolio, which was primarily driven by the tightening in the loan portfolio. Look, spreads tightened a fair bit, commensurate with the tightening in the non-agency subs in the last quarter.

Bose Thomas George: Look I think it's two risks that we had positive mark to market changes in the investment portfolio, which was primarily driven by the tightening in the loan portfolio.

Bose Thomas George: Spreads tightened up their bed commensurate with the tightening in the non agency subs in the last quarter.

Phillip John Kardis: You know, we saw roughly 3 to 4 billion trading in loans. Fannie Mae sold 500 million in early Feb, and that traded pretty well. There's another list out today that is expected to trade even better than that. So in addition, you know, there was, you know, a fair amount of issuance in the securitization market close to 5 billion. So we saw that spread tightening, you know, as far as trading is concerned in the markets and what we saw in the supply. So that's how we tightened our loan portfolio.

Bose Thomas George: We saw roughly three to 4 billion trading in loans.

Bose Thomas George: Fannie Mae sold 500 million early in early if that played a pretty low.

Bose Thomas George: Another list out today is that expected to trade.

Bose Thomas George: Even better than that so in addition, there was a fad.

Bose Thomas George: That amount of issuance in the securitization market close to $5 billion. So we saw that spread tightening.

Bose Thomas George: As far as the trading is concerned in the markets in which we signed the supply. So that's all we tightened our loan portfolio.

Subramaniam Viswanathan: Okay, it makes sense. Thanks. And then if the forward curve is right and we're in a higher for longer, can you just talk about the outlook for EAD and just talk about the path to a double-digit ROE if we remain in a higher for longer?

Speaker Change: Okay makes sense, thanks, and then.

Bose Thomas George: The forward curve is right and we're in a higher for longer can you just talk about the outlook for AAD.

Bose Thomas George: And just talk about the path to a double digit Roe if.

Bose Thomas George: We remain in a higher for longer.

Subramaniam Viswanathan: Hi, this is Subra. EAD At this point, based on the hedges we have and the forward rate projections, we are expecting EAD to be consistent with where we have reported. If you actually look at our EAD trend for the last three or four quarters, we have remained very stable, and we expect that to continue. Obviously, if you add more assets, and you know, if you raise more capital and add more assets, that could change the scenario a little bit. But the trend so far is that, you know, we're maintaining consistent EAD.

Sabra: Yes, Hi, Bose this is sabra.

Sabra: At this point based on the hedges we have in the forward projections, we are expecting <unk> to be consistent alone where we are.

Sabra: If you actually look at our Ria the trend the last three or four quarters.

Sabra: Remained very stable and we expect that to continue obviously, if you add more assets and if we raise more capital and add more assets that could change the scenario a little bit but the trend. So far is that we will.

Bose Thomas George: Any inconsistent E D.

Subramaniam Viswanathan: Yes, and the second part, yeah, the...

Speaker Change: Yes, and the second part.

Bose Thomas George: Yeah.

Subramaniam Viswanathan: So you say that again, your second point.

Bose Thomas George: So you will see that again to your second part was really if we remain in a higher for longer.

Subramaniam Viswanathan: And the most important part was really, you know, if you remain in a hire for longer, what's the path to a double-digit ROI? So the answer is

Bose Thomas George: What's the path to a double digit.

Subramaniam Viswanathan: So if you think about the ROE today, you know, in my prepared statements, I said that the average return on equity was 10.9%. Now that's before expenses. So we are generating, you know, double-digit ROEs today. And obviously, how we manage our hedges and, you know, additional investments that we make on capital rates would contribute further on top. Okay.

Bose Thomas George: Okay. So the if you think about the auto E. Today.

Bose Thomas George: In my prepared statements I said that average return on equity was 10, 9% now that's before the expenses. So we are generating double digit ROE is today and obviously you know how we manage our hedges and you know additional.

Bose Thomas George: Additional investments that we make on capital rates would contribute further on top of that.

Subramaniam Viswanathan: Okay, great. Thanks.

Speaker Change: Okay, great. Thanks.

Bose Thomas George: Okay.

Trevor John Cranston: Our next question comes from Trevor Cranston with Citizens JMP. Please proceed.

Bose Thomas George: Our next question comes from Trevor Cranston with JMP.

Trevor John Cranston: Please proceed.

Trevor John Cranston: Hi, Thanks, good morning.

Trevor John Cranston: Hey, thanks. Good morning. Can you talk about how you guys are, you know, evaluating the potential to buy back shares versus making, you know, other new types of loan investments, given, you know, where the stock is trading relative to book value? I mean, I think, as we've said in the past, we look at all those.

Trevor John Cranston:

Trevor John Cranston: Can you talk about how you guys are evaluating the potential to buy back shares versus making other other new types of loan investments.

Trevor John Cranston: Okay.

Trevor John Cranston: Where the stock is trading relative to book value.

Trevor John Cranston: Sure I mean, I think as we said in the past we look at all those factors right now I think we view.

Phillip John Kardis: Well, I mean, I think, as we said in the past, we look at all those factors right now. I think we view acquiring assets in this environment as a better long-term investment for our shareholders.

Trevor John Cranston: Acquiring assets in this environment is.

Trevor John Cranston: Better long term investment for our shareholders.

Speaker Change: Okay. Thank you.

Trevor John Cranston: This concludes our question and answer session I would like to turn the floor back over to Curtis for closing comments.

Phillip John Kardis: This concludes our question and answer session. I would like to turn the floor back over to Phillip Kardis for closing comments. I'd like to thank you.

Curtis: I would like to thank everyone for participating in our first quarter earnings call and we look forward to speaking to you at the end of next quarter.

Phillip John Kardis: I'd like to thank everyone for participating in our first quarter earnings call, and we look forward to speaking to you at the end of next quarter. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Trevor John Cranston: Yeah.

Trevor John Cranston: Okay.

Trevor John Cranston: Okay.

Trevor John Cranston: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Trevor John Cranston: Yeah.

Trevor John Cranston: [music].

Operator: Copyright 2021 Mooji Media Ltd. All Rights Reserved. No part of this recording may be reproduced without Mooji Media Ltd.'s express consent.