Rithm Capital Corp.

Good day and welcome to the Rhythm Capital first quarter 2026 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Emma Holke, Deputy General Counsel. Please go ahead.

Thank you and good morning, everyone. I'd like to thank you for joining us today for Rhythm Capital's first quarter 2026 earnings call. Joining me today are Michael Nirenberg, Chairman, CEO, and President of Rhythm Capital, Nick Santoro, Chief Financial Officer of Rhythm Capital, and Barron Silverstein, President of NURES. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rhythm Capital website, www.rhythmcap.com. If you've not already done so, I'd encourage you to download the presentation now. I would like to point out that certain statements made today will be forward-looking statements. These statements by their nature are uncertain and may differ materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplement regarding forward-looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non-GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement. With that, I'll turn the call over to Michael.

Thanks, Emma. Good morning, everyone, and thanks for joining us. I'm going to open my remarks and go a little bit into the credit markets for a minute, and then we'll get into the supplement, which has been posted online. Barron Silverstein will cover the mortgage company. Peter Brindley will cover Elacor, which was formerly known as Paramount. We rebranded the real estate company last night, and we're excited about that, and Peter has a lot of great stuff to discuss. So for the company, another solid quarter for a company demonstrating the power of the franchise. Activity levels across the board were robust. The firm, as we stand today, is extremely well positioned to take advantage of market dislocations as the combination of geopolitical risks and private credit headlines give us the opportunity to deploy more capital across the firm in both the ABF and credit space. As market participants pull back, this will play to our advantage. the majority of our capital in our asset management businesses with institutional partners. As a firm, the exposure we have to software remains low. It is important to note we have not seen any notable DQs in our credit exposure across the firm. We do not see systemic risk in private credit. From our seat, this is a sentiment-driven dislocation that will play into our ability to look for opportunities in the credit space. When you look at direct lending, 80% of direct lending sits in institutional drawdown funds. Systemic risk here will be contained. Large BDC portfolios have concentrations of approximately 20% in software. While saying that, defaults in the largest BDC and sponsors sit below the five-year historical average of 1.1%. So while saying all this, what's the opportunity for Sculptor and Crestline? We're structured to take advantage of dislocations. It's that simple. While saying all of this, when we think about dislocations, markets have rebounded. S&P is at all-time highs. Securitization markets remain robust. And there's lots of demand everywhere for ABF products. During the quarter, we did $2 billion of securitization. And we see a consumer that remains healthy, particularly in our mortgage company, as we look at the 4 million customers that we service. In our Paramount portfolio, which is, again, now called Delacour, Leasing activities are excellent, and Peter will speak to that. New York City is now roughly 93% leased, and San Francisco is on fire as a result of the AI boom and the need for office. San Francisco saw the strongest quarter of activity since 2019 and before. Availability declined by 600 basis points year over year. On the Paramount portfolio, the team did a great job in 25. They leased approximately 1.75 million square feet. 76% or 75% of the activity was in New York City, with the rest in San Fran. So before I go into the supplement, I want to lay out rhythm, our companies, and how to think about us. As everybody knows, we started the company in the spring of 2013 at Fortress. We started with $1 billion of permanent capital. And since then, we've created the following. $8 billion of permanent capital, all raised in the public market. $110 billion plus of assets. $60 billion managed for third parties. That's our asset management business. We have a $50 billion balance sheet that not only supports our operating companies, also supports our asset management business. We have one of the top five mortgage companies in the United States. We started that from scratch in 2018. We have 4 million customers, as I pointed out before. We own one of the top construction slash residential transition lenders in the US, known as Genesis Capital. We're the fourth largest owner of office in New York City. And again, that's through the acquired Paramount Group, which once again was rebranded to Alicor. And we paid north of $6.5 billion in dividends. So what does all this mean and where are we going? We'll continue to lead with performance, grow relationships with our LPs, perform as expected, and do all we can to increase our value prop for our public equity holders. You heard it before. And you'll hear it again. The sum of the parts in our view is much greater than the whole. Now I'll refer to the supplement, which has been posted online. I'm going to start on page three. So when you look at the firm, we have really what I would say five core operating businesses, or really six. Sculptor and Crestline are two asset management divisions. Couldn't be more proud. Couldn't be more excited where we sit today with both of those. Very complementary strategies, different. One is based in Fort Worth. One is based in New York City, as you know, with global offices everywhere. Assets managed approximately $60 billion, with more funds being raised daily. Elecor, formerly known as Paramount, Class A owner-operator of offices in New York and San Francisco. Peter will talk to that. Business is doing great. New Res, our mortgage company, again, number three. in total unit service in the United States, including the large money center banks, and a top five US mortgage lender. Barron will speak to that. And then Genesis Capital, which is our residential transitional lender. It's also a large multi-family originator. And I'll speak to that in a little bit. And then you have Rhythm, which sits, obviously, in the investment portfolio and at the REIT level. Page four for the quarter. What I would say is, as expected, $0.51 per diluted share. When you look at our EAD, $289.6 million in earnings, 17% return on equity. Gap net income is always going to be noisy due to hedges moving in and out as we hedge up our MSR portfolios. $67.8 million of gap net income, $0.12 per diluted share, and a 4% return on equity. Book value, we ended the quarter at $7 billion, or $12.51. When you think about it, we pay $0.25 in dividends. Effectively, we've grown book value quarter over quarter, net-net. And that's truly a testament to our team as we think about the macro strategy and the markets in general. Dividend yield, 10.5%, $0.25 per common share. In cash and liquidity, we ended the quarter at approximately $1.4 billion. When you look at the quarter in review, and we think about rhythm asset management, which is the so-called parent We deployed over $2 billion in corporate credit and in ABF investments. In the Sculptor Real Estate Fund 5, they've committed $1 billion in the first quarter loan in 2026. Keep in mind, coming off a great successful fundraise of $4.6 billion on their latest fund. Great brand, great track record, and a great business for us. Sculptor had gross inflows of $600 million, ending ending the quarter with $37 billion of AUM. When you look at Crestline, overall performance terrific, outperforming our initial underwriting, grew management fee revenue by 16% year-over-year in the first quarter of 26, and we'll continue to grow that business as we see the opportunities in the credit space. Genesis Capital, when you look to the bottom left, best quarter in history. Keep in mind on this business, we bought from Goldman in 22. At the time we bought this business, they were doing 1.7 billion of total loans for the entire year. So we did 1.6 billion in the first quarter. We added 118 new sponsors. P&L looks great and credit performance remains strong. We will not sacrifice production for credit. Just so we're on the same page. New Res Mortgage, you know, our mortgage company servicing portfolio is Ended the quarter approximately at $850 billion. That includes third-party. Funded volume $15.5 billion. Generated $274 million of pre-tax income with a 19% annualized operating ROE in the first quarter. And then on the investment portfolio, robust around a non-QM business. We originate quite a bit there in the mortgage company. We did $2 billion of securitizations. During the quarter, we invested $3 billion in different mortgage assets. That includes non-QM and residential transition loans. And we also purchased $140 million of home improvement loans under our flow agreement with upgrades, bringing the total purchase since Q3 to $667 million. When you look at the power of the platform, again, across the board, what I would say is we have pretty much everything we need from an asset management business. We'll grow in areas where we have core competencies. So what that will likely mean is we'll add teams, not businesses, because we're extremely happy where we sit between Sculptor, Crestline, and now known as Alicor as we grow our real estate presence. So when you look across the board, we're everything in credit. We're everything in the multi-strat business. On the real estate side, there's roughly $11 billion of AUM in the house. And in asset-based finance, I would expect us to grow that significantly with our third-party partners globally. When you look at the sculptor business on page eight, again, we couldn't be more happy where we sit today. We're two and a half years in. Total AUM, $37 billion. Most importantly, performance. We are going to lead with performance. We're not going to lead with AUM. We have a a fundamental belief that you could only deploy so much capital into the markets when the markets give you the ability to create what I would call alpha or slash outsized returns. That's how we view the business. So while all of us want to grow AUM, we need to lead with performance first. Could it be more proud of the team? Could it be more proud of the business and really excited where that business is going to go? Crestline, a red asset management business, which we closed on in December of 25. Total AUM, a little under $20 billion. A ton of investors across the platform. I was just in Tokyo a week and a half ago meeting with both Crestline and Sculptor investors at a conference. In Asia or in Tokyo, we have 15 different LPs invested in both the Crestline platform and the Sculptor platform. So real global brands. The teams do a great job when you look at this business. We are well positioned to take advantage of any dislocations in the markets today. Investment performance, if you look to the bottom left side of the page, capital solutions, 13.5 net since 22, direct lending, 12 and change net since 23. So overall performance, very good. I mentioned earlier about software, only 7% of invested assets are classified in software. As we look to Elicor, I'm going to turn it over to Peter. He'll give you some color on the real estate business. And then after that, I'll talk about Genesis, and then Barron will take the new risk portion. Peter?