Rithm Capital Corp.

Good morning and welcome to the Rhythm Capital second quarter 2026 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, Please press star then 2. 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 would like to thank you for joining us today for Rhythm Capital's second quarter 2026 earnings call. Joining me today are Michael Nierenberg, Chairman, CEO, and President of Rhythm Capital, Nic Santoro, Chief Financial Officer of Rhythm Capital, Barron Silverstein, President of New Res, and Peter Brindley, Head of Real Estate at Alicor Properties. 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 will turn the call over to Michael.

Thanks, Emma. Good morning, everyone, and thanks for joining our Rhythm Q2 earnings call. The company had a terrific quarter, proving the power of the platform is working. All of our divisions, Nures, Genesis, Sculptor, Crestline, and Elecor, all delivering good results during the quarter. While the markets were extremely volatile, our results show the depth of our platform and the risk culture and experience of our investment teams. Today, we feel the markets are different. We have a new Fed chair. The likelihood of higher rates for longer which plays extremely well for our business when you think about an $850 billion MSR portfolio. The time is now for firms like ours to differentiate ourselves with performance. Our investment professionals have been in the markets for 20 plus years. We've seen the best and the worst of markets, and we will use that experience to do our best in providing alpha for our clients. Our ethos, risk management and performance first, is how we think of our fiduciary responsibility to our clients and shareholders. The growth of our third-party business is something that is essential to us. When we acquired our management contract from Fortress in 2022, our goal was to build a formidable third-party business. I'm very proud of where we stand today. Our teams at Rhythm, Sculptor, and Crestline manage north of 60 billion in third-party assets with over 200-plus different clients and LPs. Between our third-party client business and our balance sheet, we now manage more than $100 billion in investable assets. When we look at our origination businesses, they are second to none. Nures, which is one of the leading mortgage companies in the United States, Genesis, which is one of the leading non-bank construction lenders in the United States, are true market leaders. They both create product for not only our balance sheet, but also for our fund offerings. So now we take a step back and we ask ourselves, where do we go from here? It's simple. Create value for our LPs, add product offerings in areas where we have the expertise, fill in gaps and infer in real assets, and continue to perform for our clients, creating value for our shareholders and LPs. I'll now refer to the supplement, which has been posted online. I'm going to start on page three. and then I'll turn it over to my different partners as we go through the various sections. Page three up top, Rhythm today is north of $100 billion in investable assets. We also have $9 billion of permanent capital that's very different than a lot of firms out there. When we look to the left side of the page, our balance sheet, give or take $50 billion, a lot of the balance sheet is used to hedge out our mortgage company, our MSR portfolio. New Res is one of the top five, as I pointed out earlier, mortgage originators and servicers in the United States. This year, we project to originate about $65 billion in mortgage loans. We serve over 4 million different homeowners. Genesis, the number two U.S. residential transitional lender. This is a company, again, we bought from Goldman going back to 2022. At that time, we were doing roughly $1.7 billion a year in production. This year, we'll do a little bit south of $7 billion, and I'll get into those numbers shortly. Elecor, which was formerly known as Paramount, is a premier owner, operator, and manager of 10 core Class A office properties between New York and San Francisco, totaling a little under 10 million square feet. Peter Brinley will talk to that company here shortly. When you look to the right side of the page, our asset management business continues to grow. I feel like we're just hitting our stride right now and really excited about the future growth prospects there, not only in AUM, but actual performance. When we look at that business, we have three different divisions today. One is Sculptor, which, again, I'll get into some of the numbers here shortly, Crestline, and then Rhythm Capital, which manages funds on a couple of the different warehouse platforms. When you look at the overall performance of our asset management business, going back, Sculptor's been around for 30 plus years, and the folks at Crestline led by Keith Williams have done a great job building that business as well. One of the more important things when I look at our platform versus a number of others, we continue to invest our own capital alongside our partners in our funds. Not everybody does that. Page four, when we look at the quarter in review, 338.9 million in EAD or $0.60 per diluted share. Gap net income $20.2 million or $0.04 per diluted share. Some of the movement in the gap income has to do with our hedges around our MSR portfolio. Book value $6.9 billion, which correlates about $1,233. I think coming into the quarter we were $1,250. So essentially it's unchanged when you think about dividend and depreciation. Today, our book value is give or take about $1,250. Common stock dividend, 10.6% dividend yield. Quite frankly, from our vantage point, obviously too high. Our dividend paid is $0.25 per common share, and our cash and liquidity ending Q2 is $2.1 billion. When I look at Rhythm, the asset management platform, again, I feel like we're just hitting our stride. We have a number of different product offerings. I believe that we are true leaders in everything in real estate, credit, and our ABF business, which is something that, between all of our different partners here, is something that's near and dear to our hearts because that's how we grew up in the business. When you look at the multi-strat fund for year-to-date performance, closing out Q2, it's up roughly 8%. Great job by the team there. Across the platform, there's north of 200 different investment professionals, and we have 16 offices globally. Page seven. When you look at our asset management business, as I pointed out, the multi-strat fund net return for the first six months, approximately 8%, over three years, 12.3%, with a vol number of 4.7%. Conservator risk and liquidity positioning, are the core tenants of the platform. And where we stand today, the team has taken the risk down based on some of the volatility we've seen in the marketplace. When you look at scale, again, we started this business in 2023, or really the third-party business, with virtually zero in third-party AUM. Today, we're at 61 billion and growing. Our strategy is not just to grow AUM. We want to lead with performance, and that's going to lead to more AUM and make sure that we have a suite of product offerings for our clients where we can serve all of their needs. When you look at the fundraising side of our business, we continue to expand. One is we're expanding personnel there, but two is we continue to see more gross inflows coming into the business. Current fundraising activities are focused on ABF, direct lending, capital solutions, are multi-strat business, and then stabilized core real estate plus real estate credit. So across the board, leveraging the expertise we have in-house with our existing personnel, and like I pointed out in my opening remarks, we'll add areas once we make sure that we have the expertise internal. New product offerings in development include insurance solutions, infrastructure, and we continue to work with our bank partners on private wealth. From a deployment perspective, We target the most compelling investment opportunities. We don't need to deploy capital for the sake of deploying capital. We want to make sure that we deploy capital in areas where we feel like we have the best risk return for our clients. We want to make sure that we're nimble in allowing capital to be deployed when opportunities again arise, not just to deploy capital for the sake of doing it. Page eight, when we look at our AUM, strong organic and inorganic growth. When you look to the left side of the page, we acquired Crestline, the Crestline business at the end of Q4 last year. That continues to be a very, very good business. Great track record, great group of folks. Sculptor's doing great. And then when we look across the board, Arcager up 28% to now, again, give or take about $60-odd billion. Key note here, 71% of our AUM is longer-term AUM. Now I'll touch on the real estate side. I'll hit a couple slides, and then I'm going to turn over the Elicor section to Peter Brindley, who helps lead that organization for us. So when you look at Rhythm Real Estate, the way that we think about it today is we have Elicor, which is a, obviously it's a portfolio of buildings and a true operating company, that sits on balance sheet. Over the past couple years, we've put out about $200 million in equity across a number of different real estate strategies, some debt, some equity. So when you look at the bottom part of the page across some of the realizations that we saw in Q2 and some of the realizations we're expecting in Q3, the returns have been very, very good. One thing I'd like to point out here, if you look on the right side of the page, we bought an office building. and I've mentioned this on prior earnings calls, I think in 24, two years ago in Boston, Virginia, we paid give or take about $26 to $27 million, something in that range. We expect to realize a purchase price or a sale price on that of roughly $55 to $60 million. I bring that up because In real estate, in most cases, one is we have to be extremely good from an operating perspective. Peter and the team have done a great job. And Peter will talk to that in a minute. But the most important thing in some of the office stuff and in other real estate, you make money when you buy cheap assets. So when we think about the Elecor thesis, and I'll flip to page 11 on that, the entry point really matters. So when we buy buildings, in this case, we're buying Class A office at a 75% discount to replacement cost. When we look at geography, Class A office, and Peter will talk about Midtown South and just all the leasing trends we're seeing there, but being in the right geography on the main avenues really, really matters. Our low-cost basis allows us to deploy future capital to further enhance value. We have a lot of projects going on around the buildings, not only at the so-called Elecor level with some of our and many other larger strategic partners who own pieces of these assets alongside us. When we think about supply, there's limited new supply. And again, when we think about replacement costs, it costs multiples to build these buildings today versus our entry point. And when we look at San Francisco, for example, there's no new office construction in San Francisco. Flight to quality, tenants and institutional capital continue to pursue the best and Class A office products. We see that now. I pointed out in prior calls, you know, we as an organization have a need for, you know, give or take 75 to 100,000 of office coming up here and over the course of the next couple years as we think about our geography and the current buildings that we're in and where we're going. and then when I look at the operating team, we have a great operating team. We did the EloCorp deal which was again paramount at a time when the company was essentially forced into a sale. We like to be in those situations and when we look at that, we've cleaned up the G&A, we've appointed Peter to help lead the organization and the team has done a great job. With that, I'll turn it over to Peter. who will take us out for the rest of the ELICOR stuff. And then we'll turn it over to Barron who will talk about, or actually back to me on Genesis and then to Barron on New Res.