Broadmark Realty Capital Inc.

If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. I'll now turn the conference over to Andrew Alborn, Chief Financial Officer. Mr. Alborn, you may begin your presentation.

Thank you, operator, and good morning to those of you on the call. Some of our comments today will be forward-looking statements within the meaning of the federal securities laws. Such statements are subject to numerous risks and uncertainties, that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our first quarter 2025 earnings release and our supplemental information, which can be found in the investor section of the Ready Capital website. In addition to Tom and myself on today's call, we are also joined by Adam Zasmer, Ready Capital's Chief Credit Officer. I will now turn it over to Chief Executive Officer Tom Capassi.

Thanks, Andrew. Good morning, everyone, and thank you for joining the call today. In terms of the first quarter macro backdrop, while the recovery in the CRE market has been affected by tariffs and increased recession risks, the impact on our core multifamily sector has been muted. Deliveries appear to have peaked in 24 with excess demand resulting in a 1% increase in rents in 1Q25. With this context, in the fourth quarter, we initiated a defensive late cycle posture and reset the balance sheet. In the first quarter, we made progress on several fronts, including stabilizing book value per share, completing targeted liquidations, closing the UDF merger at accretive economics, and successfully raise liquidity through capital markets execution, including debt issuance and collapsing existing CLOs. To start, book value per share quarter over quarter was flat at $10.61 per share. We benefited this quarter from an 11 cents per share increase in the repurchase of 3.4 million shares and 14 cents per share from the closing of the UDF merger. When accounting for the UDF merger, the dividend shortfall was primarily due to a reduction in net interest income as assets in a non-core portfolio transitioned to non-accrual status. We have provided additional transparency to aid in evaluating the recovery in our net interest margin, or NIM. To this point, we have bifurcated our $7.1 billion total CRE loan portfolio into a $5.9 billion core higher-yield better credit bridge loans and $1.2 billion non-core comprising two segments, $740 million of low-yield distressed credit bridge loans and our $430 million Portland, Oregon mixed-use assets. segments. Payoffs from bridge loans resulted in a 5% decline in the core portfolio to $5.9 billion at quarter end, comprising 1,400 loans with 78% concentration in multifamily. Credit rent metrics remained healthy with little negative migration. 60-day-plus delinquencies remained relatively low at 4%, a $117 million increase quarter over quarter. Our expectation is that 52% of the quarter one additions are resolved in the second quarter. Risk-rated 4 and 5 loans increased to 7.5% of the total, and underlying property fundamentals remained strong, with a rated average debt yield of 7%. In the core portfolio, we modified five loans totaling $312 million, increasing the percentage of modified loans to 18%. The five mods comprise three short-term forbearances, providing borrowers a bridge to a longer-term modification, and two with current pay reductions. We believe The core portfolio earnings profile provides a foundation for starting to rebuild NIM in the coming quarters. A lover yield of 10.2% generated $43.4 million of net interest income, or $0.26 per share, 80% of which is current pay. In our non-core bridge loan portfolio, largely comprised of assets where the net present value of sale exceeds on-balance sheet management strategies, we surpassed first quarter liquidation targets by close to 2x. We liquidated $51 million at a 102% premium to our mark, generating $28 million of liquidity and reducing the non-core portfolio by 6% to $740 million. In the second quarter, we expect to additionally reduce the non-core portfolio to approximately $270 million via an additional $470 million of liquidations. The target for year-end 2025 is a further reduction to $210 million through in-place asset management strategies. The cumulative go-forward earnings impact from these sales will be $0.24 per share, 70% from a reduction in negative carry, and 30% from the reinvestment of sale proceeds. Our non-corp portfolio includes the Portland mixed-use asset. A construction project completed in October 2023, Ready Capital held a $516 million senior loan. The property features premier hospitality, retail, office, and residential offerings in Portland, with each component now moving to stabilization. In the fourth quarter, the position was marked down to $426 million, and we are currently working to obtain title, after which we intend to move aggressively to stabilize the asset and generate upside from our current mark. In the quarter, RevPAR and the hotel improved 11% to $209, leasing of the combined office and retail remain at 28%, and additional two condos were sold. The financial effect of the asset moving from performing construction loan to non-accrual was a quarter over quarter $0.13 per share reduction in earnings with a current carry expense in the quarter of $0.05 per share. We expect to sequentially exit the three components as they stabilize and remain fully committed to support the project both financially and operationally. In our SBA business, forks quarter volumes remained high at $343 million. While we anticipate moderation in volume ahead, We view recent policy updates from the SBA as constructive towards reinforcing the program's long-term strength and integrity. Ready Capital continues to deliver performance above industry benchmarks. Our 12-month default rate was 3.2% versus the industry average of 3.4%, and our five-year charge-off rate has now declined for the fourth consecutive quarter, reflecting the strength of our credit and servicing practices. Additionally, our 12-month repair and denial rate reached a historic low. As the most established and active non-bank SBA lender, we remain confident in our ability to navigate a shifting policy landscape. Our current platform origination capacity is between $1.5 to $2 billion. Given current capital constraints, which include $175 million of additional warehouse capacity currently awaiting SBA approval, we expect 2025 volume to come under that $1.5 billion mark. However, adoption by Ready Capital to the new SBA underwriting guidelines and the proposed Made in America Finance Act legislation, which would increase the SBA loan cap from $5 to $10 million for manufacturing facilities, provides the path to higher origination volume. In terms of the outlook, as we mentioned earlier, we put in place a balance sheet repositioning plan in the fourth quarter, wherein liquidation of the non-core book would provide liquidity for reinvestment in the core portfolio to reinstate NIM to peer group levels. We believe the plan will be executed in 2025 with accretion in 2026. This assumes the continuation of the high current rate stressed economic environment, offset by the strong bid for our multifamily non-core assets benefiting from the influx of opportunistic capital to the sector. In addition, upside exists from lower short or long rates, quicker stabilization of the Portland asset, and faster implementation of the SBA changes. As such, absent further material deterioration in the macro environment, we expect our dividend to remain at its current level until the earnings profile warrants an increase. With that, I'll turn it over to Andrew to go through the quarterly results.