Eagle Point Income Company Inc.

Greetings and welcome to the Eagle Point Income Company first quarter 2025 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow a formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Darren Daugherty with ProSec Partners. Please go ahead.

Thank you, operator, and good morning. Welcome to Eagle Point Income Company's earnings conference call for the first quarter of 2025. Speaking on the call today are Thomas Bajewski, Chairman and Chief Executive Officer of the company, Dan Coe, Senior Principal and Portfolio Manager for the company's advisor, and Lina Umnova, Chief Accounting Officer for the advisor. Before we begin, I would like to remind everyone that the matters discussed on this call include forward-looking statements or projected financial information that involves risk and uncertainties that may cause the company's actual results to differ materially from such projections. For further information on factors that could impact the company and the statements and projections contained herein, please refer to the company's filings with the Securities and Exchange Commission. Each forward-looking statement or projection of financial information made during this call is based on the information available to us as of the date of this call. We disclaim any obligation to update our forward-looking statements unless required by law. Earlier today, we followed our first quarter 2025 financial statements and investor presentation with the Securities and Exchange Commission. These are also available in the investor relations section of the company's website, eaglepointincome.com. A replay of this call will also be made available later today. I will now turn the call over to Thomas Majewski, Chairman and Chief Executive Officer of Eagle Point Income Company. Tom?

Thank you, Darren, and welcome everyone to Eagle Point Income Company's first quarter earnings call. We appreciate your interest in Eagle Point Income Company, or EIC. During the first quarter, the company generated net investment income and realized gains of 44 cents per share. This was comprised of 40 cents of net investment income and 4 cents of realized capital gains. This measure is down from 54 cents per share in the fourth quarter. The fourth quarter's total was comprised of 46 cents of NII and 8 cents of realized gains. The quarter-over-quarter decline in NII was principally driven by two factors. First, over the past year, SOFR, which largely tracks short-term interest rates, fell significantly as the Fed cut rates multiple times last year. This principally impacts our CLO debt portfolio as the coupons on our CLO debt positions are directly linked to the SOFR rate. Second, the spreads on many syndicated loans have fallen, something the market refers to as spread compression. This adversely impacted the earnings on our CLO equity portfolio. As of March 31st, our NAV per share stood at $14.16. This compares to $14.99 as of December 31st. While our NAV may decline in volatile environments like these, it's important to remember that the prices of CLO securities will generally move more than the middle market loans held by many BDCs. We view the drawdown in our NAV as a short-term market price fluctuation and not indicative of concerns specific to our portfolio. During the first quarter of 2025, the company received recurring cash flows of $16.5 million, or 71 cents per share. This compares to cash flows of $16.1 million, or 82 cents per share, in the fourth quarter, and $10.7 million, or 88 cents per share, in the first quarter of 2024. Let me also highlight that a number of securities we purchased during the first quarter won't make payments until the second quarter. Earlier today, we declared three monthly distributions of 13 cents per share on our common stock for the third quarter. This is a decline from our previous distribution and we believe is more closely in line with the company's near-term earnings potential in today's lower interest rate environment. Of course, should SOFR increase in the future, that could lead to higher earnings for the company. At the same time, could SOFR fall further, that could reduce our earnings potential. The company's board considers numerous factors when setting the monthly distribution level, including cash flows generated from the company's investment portfolio, gap earnings, and the company's requirement to distribute substantially all of its taxable income, among other considerations. Turning to our investment activity, during the volatility in the latter part of the first quarter, we were able to opportunistically deploy capital into discounted BB CLO debt purchases. In many cases, we were buying at prices that we hadn't seen since the first half of 2024. When we can buy CLO debt at discounts, this gives the potential for what is called convexity, or pull to par, when markets eventually normalize. While the market-wide decline in most CLO security prices wasn't helpful for our NAV, our strong liquidity position allowed us to capitalize on the price volatility. Indeed, it was our previous purchases at discounts in 2023 and 2024 that gave rise to the $0.12 per share of gains that we realized over the last two quarters. The first quarter was a strong quarter for capital raising. And through our at-the-market program, or ATM, we raised approximately $64 million of common stock at a handsome premium to NAV. This generated NAV accretion of $0.08 per share. We also raised an additional $14 million from ATM issuance of preferred stock. Daily average trading volume for our common stock continues to increase. with volumes in the first quarter of 2025 more than double the volume of the first quarter of 2024. I'd now like to turn the call over to Senior Principal and Portfolio Manager, Dan Coe. Thank you, Tom.