Q1 2024 AG Mortgage Investment Trust Inc Earnings Call
Operator: BF-WATCH TV 2021
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Operator: Good day, and thank you for standing by. Welcome to the AG Mortgage Investment Trust first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After management's remarks, there will be a question and answer session. In order to ask a question, please press the star key followed by the number one on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I'd now like to turn the call over to Jenny Neslin, General Counsel for the company. Please go ahead.
Speaker Change: Welcome to the AG mortgage investment Trust first quarter 2024 earnings conference call.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: After management's remarks, there will be a question and answer session.
Speaker Change: In order to ask a question. Please press the star key followed by the number one on your telephone keypad.
Speaker Change: Please be advised that today's conference is being recorded.
If you require any further assistance please press star zero.
I'd now like to turn the call over to Ginny, Netherlands General Counsel for the company. Please go ahead.
Jenny B. Neslin: Thank you. Good morning, everyone. And welcome to the first quarter 2024 earnings call for AG Mortgage Investment Trust. With me on the call today are TJ Durkin, our CEO and President, Nick Smith, our Chief Investment Officer, and Anthony Rossiello, our Chief Financial Officer. Before we begin, please note that the information discussed in today's call may contain forward-looking statements. Any forward-looking statements made during today's call are subject to certain risks and uncertainties, which are outlined in our SEC filings, including under the headings Cautionary Statement Regarding Forward-Looking Statements, Risk Factors, and Management Discussion and Analysis.
Ginny: Thank you good morning, everyone and welcome to the first quarter in 2024 earnings call for AG mortgage investment Trust.
Ginny: On the call today are T J, Jordan, our CEO and President Nick Smith, our Chief investment Officer, and Anthony <unk>, CLO, our Chief Financial Officer.
Jenny B. Neslin: The company's actual results may differ materially from these statements. We encourage you to read the disclosure regarding forward-looking statements contained in our SEC filings, including our most recently filed Form 10-K for the year ended December 31, 2023, and our subsequent reports filed from time to time with the SEC. Except as required by law, we are not obligated and do not intend to update or to review or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Ginny: <unk>. We begin please note that the information discussed on today's call may contain forward looking statements any forward looking statements made during today's call are subject to certain risks and uncertainties, which are outlined in our SEC filings, including under the headings cautionary statements regarding forward looking statements risk factors and management's discussion and then.
Ginny: Alison.
Ginny: The Companys actual results may differ materially from these statements.
Ginny: Courage you to read the disclosure regarding forward looking statements contained in our SEC filings, including our most recently filed Form 10-K for the year ended December 31, 2023, and our subsequent reports filed from time to time with the SEC.
Ginny: Except as required by law, we are not obligated and do not intend to update or to review or revise any forward looking statements, whether as a result of new information future events or otherwise.
Jenny B. Neslin: During the call today, we will refer to certain non-GAAP financial measures. Please refer to our SEC filing for reconciliations to the most comparable gap measures. We will also reference the earnings presentation that was posted to our website this morning. To view this live presentation, go to our website, www.agmit.com, and click on the link for the Q1 2024 earnings presentation on the home page. Again, welcome to the call, and thank you all for joining us today. With that, I'd like to turn the call over to TJ.
Ginny: During the call today, we will refer to certain non-GAAP financial measures. Please refer to our SEC filings for reconciliations to the most comparable GAAP measures. We will also reference the earnings presentation that was posted to our website. This morning.
View, the slide presentation turn to our website Www Dot AG.
<unk> dot com and click on the link for the Q1 2024 earnings presentation on the homepage.
T. J.: Welcome to the call and thank you all for joining us today with that I'd like to turn the call over to T. J.
Thomas J. Durkin: Thank you, Jenny. Good morning, everyone. Last quarter, we were able to walk you through the merits of the WMC transaction, but with only less than a month of true financial impact. I'm excited to report our first full quarter post-merger, which we believe gives a clear picture of a compelling benefit. Walking through a mixed financial position as of March 31st, we grew adjusted book value from $10.20 to $10.58 while paying our $0.18 dividend, producing a 5.5% economic return on equity. While still preliminary, we see estimated book value for the end of April to be roughly flat from quarter end.
T. J.: Thank you Jenny and good morning, everyone.
T. J.: Last quarter, we are able to walk you through the merits of the WMC transaction.
T. J.: Only less than a month of true financial impact on <unk>.
T. J.: Cited to report our first full quarter post merger, which we believe gives a clear picture of the compelling benefits.
T. J.: Welcome to <unk> financial position as of March 31, we grew adjusted book value from $10 20 to $10 58.
T. J.: While paying our 18th dividend producing a five 5% economic return on equity for the quarter.
T. J.: While still preliminary we see estimated book value for months to the end of March April to be roughly flat from quarter end.
Thomas J. Durkin: The company now has an equity base of $540 million and $140 million of liquidity with only 1.4 turns of economic leverage to M&A. With market expectations for rate cuts in the near-term tempered, our first quarter results demonstrate our ability to grow earnings power in this higher-for-longer interest rate environment while protecting book value. During the quarter, we earned $18.2 million of net interest income, $0.55 of earnings per share, and $0.21 of EAD per share, covering our dividend by $0.03.
T. J.: The company now has an equity raise of $540 million and $140 million of liquidity with only one four turns of economic leverage to end the quarter.
With market expectation for rate cuts in the near term tempered our first quarter results demonstrated our ability to grow earnings power in this higher for longer interest rate environment, while protecting book value.
T. J.: During the quarter, we earned $18 2 million of net interest income 55 of earnings per share and 21 cents per share covering our dividend by more than 500.
T. J.: <unk>.
Thomas J. Durkin: Since closing the WMC transaction on December 6th and through quarter end, approximately 50 million of assets have already been monetized to be rotated into our core strategy of newly originated residential mortgages. In terms of capital markets activity, we completed one GSE-eligible securization and, more notably, issued approximately $35 million of investment-grade unsecured bonds, addressing a sizable portion of the legacy WMC convertible notes, which are due this coming And like I said last quarter, the team and I are very excited to be able to finally discuss with the market the successful acquisition of WMC this past December and the future prospects for MIT going forward.
T. J.: In closing WMC transaction on December 6th through quarter end, approximately $50 million of assets have already been monetize to be rotated into our core strategy of newly originated residential mortgage loans.
T. J.: In terms of capital markets activity, we completed one GSE eligible securitization and more notably issued approximately $35 million of investment grade unsecured bonds addressing a sizable portion of the legacy WMC convertible notes, which are due this coming September.
T. J.: And like I said last quarter the team and I are very excited to be able to finally discussed with the market a successful acquisition of WMC. This past December and the future prospects for <unk> going forward.
Thomas J. Durkin: We believe the WMC acquisition was another substantial step in further positioning MIT as a premier pure play residential mortgage lender, and we have confidence in our ability to continue to deliver on strong earnings on the investment portfolio while seeking ways to continue enhancing scale and G&A efficiency. Demonstrating my confidence, I was pleased to personally purchase another 50,000 shares of NIT following last quarter's earnings release, strengthening the line of interest with our shareholders as we continue to execute on our mission. I'm now turning the call over to...
T. J.: We believe the WMC acquisition was another substantial step further positioning net.
T. J.: As a premier pure play residential mortgage REIT.
T. J.: And we have confidence in our ability to continue to deliver a strong earnings off the investment portfolio, while seeking ways to continue enhancing scale and G&A efficiencies.
T. J.: Demonstrating my confidence I was pleased to personally purchased another 50000 shares in net following last quarter's earnings earnings release strengthening alignment of interest with our shareholders. As we continue to execute on our mission I'll now turn the call over to Nick.
Nicholas Smith: Thanks, TJ. In the first quarter, the company grew its investment portfolio by 4.8%, delivered an economic return of 5.5%, and reduced economic leverage. The 3.7% book value increase was driven by continued flattening of the credit curve underpinned by strong performance in risk assets, continued strength in housing fundamentals, and limited supply of residential credit. The company securitized $377 million of residential home ownership, acquired another $285 million of home loans, and built a current pipeline of additional $284 million from ARK Home and other third-party overachievers.
Nicholas Smith: Thanks T J in the first quarter as the company grew the investment portfolio by four 8%.
Nicholas Smith: Delivered an economic return of five 5% and reduced economic leverage the.
Nicholas Smith: The three 7% book value increase was driven by continued flattening of the credit curve underpinned by strong performance in risk assets continued strength in housing fundamentals and limited supply of residential credit.
Nicholas Smith: The company securitized $377 million of residential whole loans acquired another $285 million of home loans and built a current pipeline of additional $284 million from arc home and other third party originators.
Nicholas Smith: In addition to that activity in loans, we properly rotated additional assets acquired from WMC, bringing the aggregate equity return to approximately $36 million. We anticipate being in the market with our second securitization of this year in the coming weeks. While credit spreads have tightened into the end of last year and throughout this past quarter, equity returns in the mid-to-high teens post-securitization remain.
Nicholas Smith: In addition to the activity in loans, we properly rotated additional assets acquired from WMC, bringing the aggregate equity return to approximately approximately $36 million.
Nicholas Smith: We anticipate being in the market with our second securitization of this year and the coming weeks while.
While credit spreads have tightened into the end of last year and throughout this past quarter equity returns in the mid to high teens post securitization remains.
Nicholas Smith: While the origination landscape continues to be challenging, Ark Home's Q1 lock volumes were $687 million, with continued strength in April of approximately $300 million. Notably, funding volumes increased over 40% from the first quarter of the previous year. This increase is over two and a half times the increase in originations seen for the industry over the same period. We expect these increases to keep pace with or increase over the next year as we continue growing our footprint in both wholesale and correspondent channels. Now, I'd like to turn the call over to Anthony. Thank you, Nick. And good morning.
Nicholas Smith: While the origination landscape continues to be challenging arc homes Q1 lock volumes were $687 million with can get continued strength in April of approximately 300 million.
Notably funding volumes increase of 40% from the first quarter of the previous year.
Nicholas Smith: This increase is over two five times the industry to increase in origination has seen for the industry over the same period.
We expect these increases to keep pace, where increase over the next year as we continue growing our footprint in both wholesale and correspondent channels.
Nicholas Smith: Now I'd like to turn the call over to Anthony.
Nicholas Smith: Yes.
Anthony W. Rossiello: In December, we closed the WMC acquisition, helping to grow Mint's investment portfolio and equity base while improving scale for the company. Further, MIT immediately began to benefit from the substantial synergies we previously highlighted in our announcement of the transaction, which is evident through our performance this quarter. During the quarter, we recorded a gap net income available to common shareholders of $16.3 million, or $0.55 per share. Our book value of $10.84 per share and adjusted book value of $10.58 per share increased by approximately 3.7% from December.
Anthony: Thank you Nick and good morning.
Anthony: In December we closed the WMC acquisition, helping to grow <unk> investment portfolio and equity base, while improving scale for the company.
Further many immediately began to benefit from the substantial synergies. We previously highlighted in our announcement of the transaction, which is evident through our performance this quarter.
During the quarter, we recorded GAAP net income available to common shareholders of $16 3 million or <unk> 55 per share.
Anthony: Our book value of $10 84 per share and adjusted book value of $10 58 per share increased by approximately three 7% from December.
Anthony W. Rossiello: The book value increase was driven by mark-to-market gains on our investment portfolio and credit spread tightening, gains on our hedge portfolio from rising rates, and an improvement in our Earnings Available for Distribution, or EAD. ARK Home had a neutral impact on book value this quarter as market gains on its MSR portfolio driven by rising interest rates offset losses from EAD.
Anthony: The book value increase was driven by mark to market gains on our investment portfolio and credit spread tightening.
Anthony: Gains on our hedge portfolio from rising rates.
Anthony: An improvement in our earnings available for distribution oriented.
Anthony: Arc home had a neutral impact on book value this quarter as mark to market gains on our MSR portfolio, driven by rising interest rates offset losses from year to date.
Anthony W. Rossiello: Regenerated an EAD of 21 cents per share for the first quarter. Net interest income, inclusive of interest earned on our hedge portfolio, was $0.69 per share, which exceeded our operating expenses and preferred dividends of $0.44, generating earnings of $0.25 per share. This was offset by a loss of $0.04 contributed from our company. During the quarter, net interest income, including swaps, increased by $4.1 million, resulting from a full quarter of earnings from the acquired WMC portfolio, while operating expenses only increased by $1.4 million.
Anthony: We generated a.
21 per share for the first quarter.
Anthony: Net interest income inclusive of interest earned on our hedge portfolio was <unk> 69 per share, which exceeded our operating expenses and preferred dividends of 44.
Anthony: Generating earnings of 25 per share.
Anthony: This was offset by a loss of <unk> contributor from arc home.
Anthony: During the quarter net interest income, including swaps increased by $4 1 million, resulting from a full quarter of earnings from the acquired WMC portfolio.
Anthony: While operating expenses only increased by $1 4 million.
Anthony W. Rossiello: As discussed on our previous earnings call, we estimated that approximately $5 to $7 million of operating expenses would be removed on an annual basis upon combining MIT and WMG. These synergies are now being realized, with annual operating expense savings trending toward the higher end of our estimated range. Lastly, we ended the quarter with total liquidity of approximately $140 million. This concludes our prepared remarks, and we would now like to open the call for questions.
Anthony: As discussed on our previous earnings call, we estimated that approximately $5 million to $7 million of operating expenses would be removed on an annual basis upon combining in WMC.
Anthony: These synergies are now being realized with annual operating expense savings trending towards the higher end of our estimated range.
Anthony: Lastly, we ended the quarter with total liquidity of approximately $140 million.
Speaker Change: This concludes our prepared remarks, and we'd now like to open the call for questions operator.
Speaker Change: Thank you.
Operator: If you would like to ask a question at this time, please press star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. Once again, if you would like to ask a question, please press star 1.
Speaker Change: If you would like to ask a question at this time. Please press star one on your telephone keypad.
Speaker Change: May remove yourself from the queue at any time by pressing star two.
Speaker Change: Once again, if you would like to ask a question. Please press star one.
Speaker Change: Our first question comes from Doug Harter with UBS. Please go ahead.
Douglas Michael Harter: Thanks, good morning. Hoping you could talk about your outlook for, for incremental new investments, you know, how we should think about the pacing of that, and your plans to fund that either through recycling of, through recycling of capital? Or do you have any plans to kind of raise new debt? This is Nick.
Douglas Michael Harter: Good morning.
Douglas Michael Harter: Can you could talk about.
Douglas Michael Harter: Your outlook for.
Douglas Michael Harter: Incremental new investments.
Douglas Michael Harter: How we should think about the pacing of that.
Douglas Michael Harter: Kind of your plans to fund that either through recycling.
Douglas Michael Harter: Through recycling of capital or do you have any plans to kind of raise new capital.
Nicholas Smith: Thanks, Doug. This is Nick. So we, for the most part, can recycle capital that we have, particularly given the, Douglas Hagen, Trevor Cranston, Michael Smyth, Anthony Rossiello, Douglas Hagen, Michael Smyth.
Douglas Michael Harter: Thanks, Doug This is Nick.
Douglas Michael Harter: <unk>.
Nicholas Smith: We for the most part can recycle capital that we have particularly given the.
Nicholas Smith: Flattening of the credit curve, and we mentioned I think that builds an opportunity to sell down positions that have done well.
Nicholas Smith: And reinvest pace wise.
Nicholas Smith: There is still plenty of opportunity in the market I mentioned growth in the E check both channels at our call.
Nicholas Smith: Certainly the sort of availability of credits in the market and where you can buy them.
Nicholas Smith: We will not be the constraint.
Nicholas Smith: Great.
Nicholas Smith: And, you know, I guess how are you thinking about what the return differential is between, you know, call it the legacy WMC assets that you have on, you know, that you're selling and where you think you can put that money to work today in our column production? Yeah, so a lot of
Nicholas Smith: Hum.
Nicholas Smith: Yes.
Nicholas Smith: How are you thinking about what is the return differential between.
The legacy WMC assets that you have on.
Nicholas Smith: That you are selling and where you think you can put that money to work today and arc home production.
Nicholas Smith: Yeah, so a lot of that paper has seasoned out, and as the credit curve flattened, you know, some of the people we were selling to were, you know, high 100s, low 200s type spreads. I think we can, you know, double those sort of spreads or more via recycling. And then, obviously, with the modest deployment of back-ended leverage, get you to the mid to high teens returns.
Speaker Change: Yes, so a lot of that paper is seasoned out and as the credit curve flattened we're talking some of the people who were selling was.
Speaker Change: High one hundreds low two hundreds type spread I think we can double those sort of spreads or more via recycling and then obviously with the modest deployment of back ended.
Speaker Change: Average get you to that mid to high teens returns.
Speaker Change: Great. Thank you Nick.
Operator: Thank you. The next question will come from Jason Weaver with Jones Trading.
Speaker Change: Thank you. Our next question will come from Jason Weaver with Jones trading. Please go ahead.
Jason Weaver: Please go ahead. Hi, good morning. I was wondering if you could talk a bit about the
Hi, Good morning, I was wondering can you talk a bit about where you see the origination capacity that is personnel wise at arc home looking out further into the year are you preparing for more volume.
Operator: Douglas Hagen, Trevor Cranston, Michael Smyth, Anthony Rossiello, Jenny Neslin,
Operator: Do you see a decline in rates in the back half?
Jason Weaver: We do see a decline in rates in the back half.
Jason Weaver: I think.
Operator: Larcom is well positioned for the current environment. When we think about rallies and rates, we think a lot more about seasonality than what a 100 basis point, 200 basis point rally and rates will do to volumes. And sort of given that outlook, we think the staffing is well positioned, and we put a lot of work into making the company more and more efficient so that if we see increases, those can be readily handled. Thank you.
Jason Weaver: Arc home is well positioned for the current environment.
Jason Weaver: When we think about rallies in rates.
Jason Weaver: We think a lot more about seasonality than 100 basis points 200 basis point rally in rates will do to volumes.
Jason Weaver: And sort of given that outlook, we think the staffing is well positioned.
Jason Weaver: And we put a lot of work into.
Jason Weaver: Making the company more and more efficient.
Jason Weaver: So so that.
Jason Weaver: If we see increases that those can be readily handled.
Operator: And then more of a clarification, just given the volatility we saw starting in April, would you say that the bid for securitization really hasn't been materially affected? Yeah, I don't think it's been materially affected. In fact, if you look at a lot of the inflows across bond funds, those supply-demand technicals are well supported for continued issuance. However, there still tends to be less supply than demand. Great, thank you very much.
Speaker Change: Thank you and then more of a clarification just given the volatility we saw starting in April would you say that the bid for securitization really hasnt been materially affected.
Speaker Change: Yes, I don't think its been materially affected in fact, if you look at a lot of the inflows across bond funds.
Speaker Change: Those those supply demand technicals are well supported continued issuance.
Speaker Change: Theres still tends to be less supply than demand.
Speaker Change: Great. Thank you very much.
Speaker Change: Yes.
Operator: Thank you. As a reminder, if you would like to ask a question, please press star 1 at this time. We'll take our next question from Bose George with KBW. Please go ahead.
Thank you as a reminder, if you would like to ask a question. Please press star one at this time.
Speaker Change: We'll take our next question from Bose George with <unk>. Please go ahead.
Bose Thomas George: Hey guys, good morning. Can you talk about the sustainability of the current level of the EAD you reported this quarter? And then, just on a related note, I guess you had a little over $100 million in cash. Can you remind us how much of that is cash you want to keep and how much of that we think of as kind of deployable?
Bose Thomas George: Guys good morning.
Bose Thomas George: Can you talk about the sustainability of the current level at the AAD you reported this quarter and then just on a related note.
Bose Thomas George: I guess, you had a little over $100 million of cash can you remind us how much of that is yes.
Bose Thomas George: Cash you want to keep and how much of that we think of that as kind of deployable.
Anthony W. Rossiello: So in terms of the cash question, I mean, we've got 140 million listed on page five. I think when we think about where we've been running leverage over the recent quarters or so, I think we have an ability to probably deploy 40 to 50 million of that. We obviously have the maturity coming up in September on a convertible note. It's payable starting in June, so we're obviously managing cash into that maturity.
Bose Thomas George: So in terms of the cash question I mean, we've got.
Bose Thomas George: $140 million listed on page five I think when we think about.
Where we've been running.
Bose Thomas George: Leverage.
Bose Thomas George: Okay.
Bose Thomas George: Recent quarters or so.
Bose Thomas George: Have an ability to properly deploy.
Bose Thomas George: $40 million to $50 million of that we obviously have the maturity coming up.
Bose Thomas George: In September on a convertible note.
Bose Thomas George: Payable starting in June so, we're obviously managing cash into that maturity in terms of <unk> I think the way.
Nicholas Smith: In terms of EAD, I think the way we think about things is, if you were to go back to when rates really started moving in 2022, I think we've done a really good job of protecting book value on the investment portfolio. And the ROEs that we've been putting up there, I think, have been able to capture these higher rates. And so I think that's sort of a tailwind. I think our headwind has been twofold.
Bose Thomas George: We think about things is if you were to go back to when rates really started moving in 2022, I think we've done a really good job of protecting book value.
Bose Thomas George: On the investment portfolio and the row that we've been putting up there I think have been able to capture these higher rates and so I think thats sort of a.
A tailwind I think our headwind has been twofold one has been.
Nicholas Smith: One has been just the core earnings at Ark Home contributing to and offsetting the kind of higher ROEs we're producing on the investment side, and then obviously just scale and G&A. And so I think as we look forward now with one quarter behind us, I think you're clearly seeing the G&A synergies, which Anthony mentioned, and we'll have to go into more detail there in terms of how that's penciling out. Nine of those.
Bose Thomas George: Just the kind of core earnings at arc home contributing.
Bose Thomas George: And offsetting the kind of higher ROE, we're producing on the investment side and then obviously to scale in G&A and so I think as we look forward now with one quarter behind US I think you are clearly seeing the G&A synergies.
Bose Thomas George: Which Anthony mentioned and we're happy to go into more detail there in terms of how that's playing out.
Bose Thomas George: And then I think we show on.
Bose Thomas George: Page.
Nicholas Smith: I think, you know, the arc home sort of negative contribution to EAD has gradually been kind of working towards breakeven and obviously with the goal of, towards the back half of this year, kind of crossing into a positive. So I think when you put all that together, I think we feel pretty good about EAD and this higher range on a more sustainable basis. We don't view this as a one-time thing.
Bose Thomas George: Nine.
Bose Thomas George: So I think.
Bose Thomas George: Our accounts are negative contribution AAD.
Has gradually and kind of working towards breakeven and obviously with the goal of towards the back half of this year kind of crossing into a positive. So I think when you put all that together I think we feel pretty good about sort of the AAD and this higher range on a more sustainable basis, we don't view this as one time.
Speaker Change: Okay, great. Thanks, and then actually just on acquisitions, obviously, I mean, this exclusive and we see it as a very positive transaction.
Nicholas Smith: Great. Thanks. And then actually just on acquisitions, obviously, I mean, this was a very positive transaction. How do you sort of think about potential, you know, future transactions? Obviously, where you're trading makes it somewhat challenging, but, you know, how much sort of energy is focused on that as potential?
Speaker Change: How do you sort of.
Speaker Change: Think about potential future transactions, obviously, where you're trading makes it somewhat challenging but.
Speaker Change: Yes, how much sort of energy is focused on that as a potential.
Nicholas Smith: Yeah, listen, I think we're still very open to other acquisitions, other ways to, I would say, enhance the scale of the company. I think the management has shown to be very supportive of continuing to grow MIT. So we're definitely open for business and, you know, fielding calls about opportunities. And we don't view WMC as sort of one and done. I think it was a building block for, hopefully, future growth.
Yes, listen I think I think we're still very open to.
Speaker Change: Other.
Speaker Change: Acquisitions other ways too I would say enhance the scale of the company I think the manager has shown to be very supportive and continuing to grow net so.
Speaker Change: We are definitely open for business and fielding calls about opportunity than we do.
Speaker Change: Don't view WMC is sort of one and done I think it was a building block for hopefully future growth.
Operator: Okay, great. Thanks.
Speaker Change: Okay, great. Thanks.
Operator: Thank you. Our next question comes from Eric Hagen with BTIG. Please go ahead.
Thank you. Our next question comes from Eric Hagen with <unk>. Please go ahead.
Eric J. Hagen: Hey, thanks, good morning. Any thoughts on the support for agency and non-agency MBS spreads following the Fed meeting this week? Any catalysts you see for MBS spreads to tighten from here? What do you guys feel is like the upper bound for MBS spreads? Just you know, given some of the news that we've received recently. Thank you.
Eric J. Hagen: Hey, Thanks, Good morning, Hey, any perspectives on our support for agency and non agency MBS spreads saw an aside meeting this week any catalysts you see for MBS spreads to tighten from here what do you guys feel like as like the upper bound for MBS spreads.
Given some of the.
Some of the news that we've received recently thank you.
Operator: Look, we pay close attention to the agency basis and on agency basis. Obviously, we're not in the agency market as sort of the core business. That being said, you know, we look at agencies as being, you know, generally fairly valued here. You know, if all comes off, agency spread should do better. But I do think that our book is largely insulated from what goes on in that market. I think you can look at even this past Quarter's performance, and you can see that sort of credit, you know, outperformed a lot of the parts of the capital stack that are more impacted by, you know, IT spreads and interest rate volatility.
Speaker Change: Look we pay close attention to the agency basis, and non agency basis, obviously, we're not in the agency market and sort of the core business that being said.
Speaker Change: We look at agencies have been generally fairly valued in here.
Speaker Change: With <unk> comes off agency spreads should do better.
But I do think that our book is largely insulated from what goes on in that market. I think you can look at even this past.
The quarter's performance and you can see that sort of credit outperform.
Speaker Change: A lot of the.
A lot of the parts of the capital stack that are more impacted by it.
Spreads and interest rate volatility.
Operator: Okay. Well, helpful. Hey, you know, lots of capabilities around distressed credit at Angelo Gordon and TPG. I mean, are there any opportunities you guys are seeing out there yet that could speak to that opportunity?
Okay. So.
Speaker Change: That's helpful lots of capabilities around distressed credit at Angelo Gordon and TPG I mean are there any opportunities you guys are seeing out there yet that could.
Speaker Change: Yes speak to that representative.
Operator: I mean, certainly not on any sort of scale on the residential side at this point. I mean, I think there's way more opportunity for sort of focusing on new origination. I probably don't see that changing, honestly, in the short to medium term either.
I mean, certainly not and as our scale on the residential side at this point I mean, I think there's way more opportunity sort of focusing on new origination.
Speaker Change: Probably don't see that changing honestly in the short to medium term either.
Operator: Thank you, guys.
Okay. Thank you guys.
Operator: Thank you. At this time, we have no further questions in queue. This will conclude today's AG Mortgage Investment Trust first quarter 24 earnings conference call. You may disconnect your line at this time and have a wonderful day.
Speaker Change: Thank you at this time, we have no further questions in queue.
Speaker Change: This will conclude today's AG mortgage investment trust first quarter.
24 earnings conference call.
Speaker Change: You may disconnect your lines at this time.
Speaker Change: Have a wonderful day.
Speaker Change: Great.
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