TPG RE Finance Trust, Inc.

Q1 2024 Earnings Conference Call

5/1/2024

spk08: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the TPG Real Estate Finance Trust first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should you require operator assistance during the conference, please press star zero to signal an operator. Please note this conference is being recorded. It is now my pleasure to turn the call over to the company. Thank you. You may begin.
spk00: Good morning and welcome to TPGRE Finance Trust's conference call for the first quarter of 2024. We're joined today by Doug Bucard, Chief Executive Officer, and Bob Foley, Chief Financial Officer. Doug and Bob will share some comments about the quarter, and then we will open the floor for questions. Yesterday evening, the company filed its Form 10-Q and issued a press release in earnings supplemental with a presentation of operating results. all of which are available on the company's website in the investor relations section. As a reminder, today's call may include forward-looking statements which are uncertain and outside of the company's control. Actual results may differ materially. For discussion of risks that could affect results, please see the risk factor section of the company's Form 10-Q and Form 10-K. The company does not undertake any duty to update these statements. And today's call participants will refer to certain non-GAAP measures. And for reconciliations, you should refer to the press release and the Form 10-Q. At this time, I'll turn the call over to Doug Bouchard, Chief Executive Officer.
spk04: Doug? Thank you, Chris. Good morning, and thank you for joining the call.
spk06: Since the beginning of the year, the economy and labor markets continue to be remarkably resilient across the U.S., the market remains highly confident in a soft landing for the U.S. economy, and global demand for risk assets remains strong. More recently, however, inflation has proved challenging to tame, and the interest rate market has adjusted its expectations for rate cuts in 2024 over the past few weeks. Further, the 10-year Treasury yield has moved nearly 80 bps during the first four months of the year and is now approaching 4.7 percent. Within broad credit markets, corporate credit spreads are at multi-year tights, while real estate credit spreads have rallied in certain areas but do continue to underperform on a relative basis. Once again, this combination of factors provides mixed signals to real estate investors. On one hand, broad market demand for risk assets, a strong economy, and low unemployment should provide tailwinds for real estate valuation. And we do see these trends flowing through in our portfolio. On the other hand, a volatile and elevated interest rate environment tends to reduce transaction activity for pressure on values and increase the financial burden on borrowers. This uncertainty is compounded by the shifts we are seeing within the real estate credit landscape from a lending perspective. Banks continue to retreat from direct lending and pivot their attention to loan-on-loan financing, which does benefit TRTX by providing attractive funding sources for its loan portfolio and new originations. We continue to invest TRTX's balance sheet with these competing forces in mind, and our quarterly results reflect our strategic position. During the first quarter of the year, our approach to capital deployment and risk management remained consistent with prior quarters. Given the market backdrop, we continue to focus on, one, maintaining elevated levels of liquidity, two, proactively risk managing our investment portfolio, and then three, continuing to position our balance sheet to be able to take advantage of the dislocation of lending markets in 2024 and beyond. Over the past quarter, TRTX's performance reflects both the dedicated focus of our asset management team and the benefits of TPG's broad global investment platform. Our loan portfolio is 100% performing, and both our CECL reserve and risk ratings reflect very modest change over the past quarter. From a property type perspective, 50% of our loan portfolio is multifamily. Despite the pressures on values within the multifamily sector, we continue to see ample liquidity for both debt and equity transactions. While we acknowledge the Fed's signaling to slow rate cuts may put pressure on both near-term values and borrowing costs, we remain confident in the long-term underlying fundamentals of the housing sector broadly. In terms of new investments during the quarter, We originated three senior mortgage loans totaling $116 million, 100% of which these loans are secured by multifamily properties. We continue to prefer lending in this sector given the downside protections available in today's market environment. From a liquidity and leverage perspective, we ended the quarter with $370 million of liquidity across both cash and other available liquidity channels and a debt-to-equity ratio of 2.21%. While the discount to book value at our current share price has compressed since we last spoke, we continue to believe that this discount is significant and that our shares offer a compelling value proposition at today's price. To that end, on April 25th, our Board of Directors approved the share repurchase plan of up to $25 million, demonstrating the Board and management's confidence in the value of TRTX shares. In summary, the past quarter represented an important turning point for TRTX as we begin to deploy capital with a slightly more offensive bent. The resources and deep experience of TPG's real estate debt and equity investment platform grants us unique insights into valuation shifts and capital flows across the real estate landscape. While we acknowledge elevated borrowing costs may increase financial stress on our borrowers, we remain confident in our ability to navigate the ever-evolving real estate credit landscape and are pleased with how our company is positioned to create long-term shareholder value. With that, I will turn it over to Bob for a more detailed summary of this quarter's performance.
spk03: Thanks, Doug. Good morning, everyone, and thank you for joining us. Our first quarter results reflect the benefit of a 100% performing loan portfolio, a further reduction in interest expense due to continued optimization of our liability structure, including the reduction of interest expense quarter over quarter of $7.4 million, or $0.10 per share, and nearly full deployment of approximately $247.2 million of reinvestment cash in our FL5 CRE CLO. For the quarter, gap net income attributable to common shareholders was $13.1 million, as compared to $2.6 million for the preceding quarter. Net interest margin for our loan portfolio was $26.8 million versus $21.3 million in the prior quarter, an increase of $5.5 million, or $0.07 per common share, due to further optimization of our liability structure and the absence of higher-cost financing for non-performing loans, of which we have none. Our weighted average credit spread and borrowings declined quarter-over-quarter to 195 basis points from 204 basis points. Distributable earnings were 23.3 million, or 30 cents per share. Coverage in the quarter for the quarter of our 24-cent dividend was 1.25 times. Distributable earnings before realized credit losses was 23.3 million, or 30 cents per share, versus 24.4 million, or 31 cents per share in the prior quarter due to an improvement in net interest margin offset by a reduction in non-cash credit loss expense. Our CECL reserve increased slightly to $74.1 million from $69.8 million due primarily to worsening macroeconomic and generic loan default and loss data embedded in the TREP database and model we used to forecast our general CECL loan loss reserve. We had no five-rated loans, no specifically identified loans, thus no specific CECL loan loss reserve at quarter end. Our CECL reserve was 210 basis points versus 190 basis points on the prior quarter. Both value per share is $11.81 as compared to $11.86 last quarter due primarily to the slight increase in our CECL reserve. Multifamily now represents 50% of our loan portfolio, Office has declined 68% over the past nine quarters to 20.4%. Life Sciences is 11.4%. Hotel is 9.9%. And no other property type comprises more than 3.3% of our portfolio. Regarding REO, we have five REO properties. One multifamily property and four office properties with a total carrying value of $192.4 million. and a blended current annualized yield on cost of 6%. REL represents a mere 5% of our total assets. Using the substantial resources of TPG Real Estate, we made significant progress during the quarter in advancing value creation and realization strategies for each REL investment. Regarding our multifamily property in suburban Chicago, we've already improved lease occupancy by more than 10 points to 93%. Refer to footnote four of our financial statements for a snapshot of our REO portfolio. Regarding credit, our weighted average risk ratings were unchanged at 3.0. All of our loans were performing. We had a small number of changes in risk ratings during the first quarter. Refer to page 52 of our Form 10Q for more detail. Regarding liabilities in our capital base, we remain focused on maintaining high levels of non-mark-to-market, non-recourse term financing. quarter ends, such arrangements represented 77.1% of our borrowings as compared to 73.5% at December 31st. Our total leverage declined further to 2.2 to 1 from 2.5 to 1 at December 31st. We have $4.7 billion of total financing capacity across 12 discrete financing arrangements. During the quarter, we extended the investment period under our existing secured credit facility with Goldman Sachs, for two additional years through 2026, and tacked on a two-year term out provision through 2028. Our only scheduled debt maturity in 2024 is $1.8 million under a credit facility we expect to extend or repay and terminate during the second quarter. We were in compliance with all financial covenants at March 31st, 2024. At quarter end, we have $51 million of reinvestment capacity available, which we used in mid-April. We deployed into loans during the quarter roughly $196.2 million of reinvestment cash. The reinvestment windows are now closed for all three of our extant CRE CLOs, although we remain able to substitute and exchange loans under certain circumstances. Regarding liquidity, we maintain high levels of immediate and near-term liquidity, roughly 9.7% total assets. Cash and near-term liquidity was $370.7 million at quarter ends. comprised of $188.1 million of cash in excess of our covenant requirements, $51 million of CLO reinvestment cash since deployed, and $116.6 million of undrawn capacity under our secured credit agreements. As of last Friday, our cash position in excess of covenant requirements was actually higher, $235.5 million, due to loan repayments and receipt of a $26 million servicer receivable in connection with a loan sale that closed during the fourth quarter of 2023. During the quarter, we funded 10.7 million of commitments under existing loans. At quarter end, our deferred funding obligations under existing loan commitments totaled only 163.8 million, a mere 4.6% of our total loan commitments. In summary, a quarter characterized by strong operating performance, solid credit, further optimization of our liability structure in terms of cost, non-market-to-market borrowings, and extended tenor, and significant liquidity for a balanced stance versus the market. And with that, we'll open the floor to questions. Operator?
spk08: Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If at any time you wish to remove your question from the queue, please press star two. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Stephen Laws with Raymond James.
spk05: Hi, good morning. Congrats on a nice start to the year, Bob and Doug. Nice to see the stability here over the last couple of quarters. I wanted to touch on I think it was around 50 million of replenishment capacity at quarter end. Did that get filled with a loan that was funded on a bank line or were there some originations post-quarter end? Can you talk to that and maybe more generally kind of your origination pipeline and how you think about moving leverage from the current 2-2 over the course of this year?
spk03: Good morning, Stephen, and thanks for joining us. With respect to the 51 million of CLO cash that we deployed in April, after quarter end. In that particular instance, we actually took an existing loan that had been financed with the bank and deposited it into the CLO, which actually generated about $11 or $12 million of cash. We were, you know, we had borrowed less from our bank counterparty with respect to that loan. then there was cash in the CLO. So we ended up netting about $11 or $12 million on our balance sheet cash as a consequence of that redeployment. And the cost of funds was clearly lower in the CLO than it was on the bank financing. And the coupon on the loan didn't change. Its resonance is now different. It's the CLO, not a bank financing arrangement. And I'm going to ask Doug to address your question about investment activity.
spk06: Thanks, Stephen. So, on the investment side, you know, we're excited about the fact that we're, you know, kind of pivoting more offensive and have a very active pipeline currently. You know, if you look at our originations in the first quarter, which were 100 percent multifamily, you know, we do still favor that sector, particularly now being able to deploy capital at, you know, what is a lower LTV combined with, you know, obviously values are lower than where they were in 2021-22. So we still lean towards housing one. But two, you know, frankly, we're being selective. I think I mentioned, you know, earlier in my remarks about the sort of mixed signals that we're getting from both, you know, the sort of macro picture and then also locally within real estate. So we're being respectful of where we are within the market cycle, but we are definitely able to play offense and when we continue to pursue new investment opportunities to help drive earnings growth for the company.
spk05: Great. Appreciate the color on both of those topics. Bob, I wanted to touch base on the debt side. And you mentioned this at the end of your prepared remarks about the Morgan Stanley facility that matures, I think, at the end of this week. You really don't have anything drawn down on it, right? So curious to hear your thoughts on you know, the pros and cons of extending it versus letting it expire. You know, even without it, you still have excess of a billion dollars of capacity on your bank lines. You know, what are the commitment fees that you would have to pay if you extend it? And then, you know, larger picture, debt covenants, coverage ratios, I know it reverted back to 1.4 at quarter end, and you're in compliance with that. Can you maybe update us on where you stand with the ratio?
spk03: Sure. So first, with respect to Our particular arrangement with Morgan Stanley, Morgan Stanley has been an important financing partner of ours since we went public in 2017. We've got a great relationship with them and they with us. I think we don't have much borrow with them right now for two reasons. One is we haven't recently found a commonality between our credit box and theirs, and two, Our financing focus has, for a number of years now, shifted strongly in favor of non-mark-to-market, match-term, non-recourse financing. Hence, all the note-on-note and CLO financings that we've done since 2018. Bank financing has remained an important part of our financing strategy because it is very flexible and it moves quickly. But we have spent a considerable amount of time over the last several quarters evaluating each of our counterparty relationships and determining where it makes sense to continue and where it may not make sense for us to continue. So that's that. With respect to financial covenants, we were in compliance at quarter end, as we have been in each of the previous quarters. We had, as you pointed out, obtained from all of our lenders, because we have harmonized financial covenants across all of our borrowing arrangements, a waiver arrangement that allowed our debt service coverage ratio to temporarily fall below 1.4 times. We're above that. We're very low levered. at this point, and we would expect as we invest more and perhaps use more leverage that, you know, since we don't use a ton of leverage, the interest coverage, even at the high benchmark rates that we experience today, will continue to be satisfied. So I hope that answers that question. And with that, I'll ask Doug. He's got a comment about the financing markets more generally.
spk06: Yeah, and Stephen, I think you do bring up a, but a really important trend that we're seeing. And as I think about the first quarter, the, you know, demand from the banks for, you know, loan on loan business is definitely as strong as we've seen it, frankly, in a couple of quarters. And I think that's really measured by a few things. One is, you know, banks continue to pull back on direct lending. And if they are going to be doing direct lending, they're generally pivoting more towards CMBS execution rather than actually a long-term balance sheet investment. And then secondly, you know, capital rules continue to kind of push banks towards providing, you know, back leverage to platforms like TRTX. So I think on the positive side, as we think about our pipeline through 2024 and beyond, you know, that amount of demand I think is a really positive tailwind for our continue over the coming quarters.
spk03: I think Doug's earlier comment about mixed signals in the market, I think, sort of highlights this particular point, which is demand by banks to provide financing is quite strong. I mean, we have a ton of inbound inquiry from our existing counterparties about borrowing more from them. The nature of the financing that they're providing to the CRE world has clearly shifted, as Doug described. And honestly, spreads are coming in with respect to secured financing that can be obtained by lenders like us. The investment sales market for properties and the financing market for those transactions, that environment is changing. A little more opaque and a little less clear right now, which is really the point that Doug was making earlier. So there's an interesting technical thing going on right now where financing costs are coming in. But, you know, loan spreads are kind of all over the place.
spk04: Great. Really interesting comments and appreciate getting both your thoughts on that. Thank you. Thanks, Stephen.
spk08: Our next question is from Rick Shane with JP Morgan.
spk07: Hey, guys. Thanks for taking my questions. Steve actually covered a lot of the ground I was interested in on the facilities. One thing, looking at the extension of the Goldman facility, spread stays the same. I am curious if there are any changes to the terms that we should be aware of, any sort of refinement of the credit box going forward?
spk03: No, no material changes. We pay for financing on a pay-as-you-go basis. And Goldman has been another very important business partner of ours. They were actually our first credit counterparty when we were a private company. And your point about credit box, we've talked about this before. We view our liability are portfolio liability providers. And the construction of that portfolio is being as important as constructing our investment portfolio. And everybody's credit box is a little bit different. But when stitched together, what we want and what we have is a mosaic that works for our business. In the case of Goldman, we're pretty simpatico. I wouldn't say that there's been a change in credit profile at all. And those decisions are made, honestly, on a... on a deal-by-deal basis.
spk07: Got it. Okay. That makes sense. And yeah, obviously, given the history with Goldman, that's a significant renewal. Look, the other question is, as you sort of change your footing and start to move back into making more loans, I'm curious about what you're finding in the market and is the, is capital deployment going forward, going to be idiosyncratic every quarter. We're going to hear about some deployment and it's going to be very much a story. Hey, we found this opportunity. This is why we love it. Or is it going to be thematic there? There was something in the market that you're going to be targeting, whether it's a geo, a property type or work, like I said, a thematic approach to reemerging in the market.
spk06: Yeah, I mean, I would say for us at the top of the list, we do think about investing within the real estate space from a thematic lens, and that's really kind of born across both our debt and equity platform. One, as we think about themes, You know, we really, I would say, are very much drawn to a few things. One, you know, we've mentioned our sort of bias towards housing and actually do acknowledge that, again, multifamily values are down from the peak, but where we can make, you know, new loans today at, you know, 65 LTV, acknowledging that V is now potentially, you know, 15 to 20% lower is, I think, a really attractive entry point. So that's really one. I would say, two, from a team perspective, you know, when you kind of get a little more granular and you're really out there looking at new investments, I'd say, you know, there's kind of two areas that I think are particularly attractive to really focus on. One is, you know, new acquisition activity is obviously going to be a big draw. I think wherever we see, you know, fresh capital coming in reflecting today's market values, that's attractive. And then I would say, secondly, if there was a part of the market that's probably, you know, most interesting, it really continues to be, you know, trafficking within the area of where, you know, regional banks had been lending. I think that still is probably, you know, it's a story that's obviously out there very broadly about banks pulling back. But acknowledging that, you know, of all the outstanding commercial real estate debt held by banks, about 75% resides in the regional banks. And those regional banks continue to really, I'd say, not fill up. And we've seen that in Q1 as we're out there repeating on loans. So, again, really view it as a bias towards housing, one. Second, a bias towards new acquisitions. And then, you know, as we think about capital deployment going forward, you know, we've really positioned the balance sheet where we can we can navigate what I would describe as the sort of mixed signals that we're getting from the market problem. And that's exactly kind of how we think about liquidity and we think about new investments going forward.
spk07: Doug, that's really helpful. I am curious as you start to look at multifamily, if you would just give some sort of context where cap rates were previously, where you see deals getting done today. And that's it for me. Thank you, guys.
spk06: Yeah, sure. I mean, look, I think, you know, Multi-family, obviously, I'd say is a very, very heavily debated sector right now, just kind of given all the, you know, kind of right at the heart of the confluence of some of the macro trends with interest rates and inflation. I think that where we're seeing new transactions, you know, get done, generally speaking, have been in the sort of mid to high fives cap rate range. That's a bit of a sweet spot, it feels like. you know, from a liquidity perspective, as multifamily cap rates get into sixes, there is a lot of liquidity on the equity side. And I think as the cap rates get, let's call it inside of five and a quarter is where I would say that liquidity dries up. So again, viewed as the sort of midpoint is to pick a number of five and three quarters. And that's, you know, again, which allows us to be making loans from a risk perspective at, you know, stabilized debt yields, you know, in the, seven and a half to eight and a half percent range, again, depending on the property type and some of the specifics to that certain asset. Got it.
spk07: Thank you very much. Thank you.
spk08: Our next question is from Eric Dre with Bank of America.
spk02: Hey, guys. Good morning. Most of the line have been covered, but just wanted to ask about how, have conversations with borrowers changed all over the last month?
spk06: um you know it's kind of the the rate outlook has changed a bit um and kind of what you're hearing from from your portfolio uh borrowers yeah no i think it's a great question i think that you know broadly the narrative with you know obviously the the slowing of expected rate cuts uh combined with i would say the sort of what feels like you know over the past few weeks a little bit of a slowdown in terms of that uh transaction activity. I think that's been kind of more of the dialogue that we've been hearing about. You know, relative to our current portfolio, obviously, you know, bearing in mind it's 100%, you know, performing, I think that we generally kind of would characterize the borrowing universe as, you know, still looking through the long-term because effectively where, you know, where long-term rates will settle and still kind of leaning positive in terms of the best way to characterize the mindset. So as that evolves, of course, you know, I have to keep you updated, but that's really kind of where the market is right now. And again, we're definitely at a pretty interesting point narrative-wise, just kind of what's going on within macro. And I would say that, you know, despite our intimate knowledge of what's going on on the ground within the real estate sector, given our sort of broad broad lens through which we invest, you know, keeping an eye frankly on, you know, what, what, what the Fed is doing and saying, I think is really important. And we're very attuned to that message.
spk03: All eyes are on 2.15 p.m. Eastern time today.
spk02: Definitely. Okay. Awesome. And then real quick, just, I guess, for modeling purposes, I mean, do you think that kind of the 30 cent DE that you posted this quarter, I mean, is that, kind of like where you guys think the footballer can kind of maintain here in the next few quarters, or any one-time things to call out?
spk03: We never provide guidance, but I think that backwording into that number and its composition, I think it's pretty easy to see what's being generated by the loan book and what's being generated by our small companies. REO portfolio. So, you know, we've been pretty clear about our dividend policy and our view about, you know, sustainable levels and distributable earnings and so on. We're comfortable with our current position but can't provide any guidance.
spk06: Yeah, I think it's just to give perhaps a little bit more context, which is helpful. As you think about the sort of leverage that we have to grow earnings, I would just kind of think, you know, what our balance sheet looks like. First and foremost, we have a substantial cash balance. That, combined with other available liquidity channels, totals approximately $371 million currently. You know, secondly, we are out there, you know, with a pipeline of, you know, potential investments that we, you know, could potentially pursue over the coming quarters. So just from a new investment perspective, that, of course, can drive earnings and then And then lastly, you know, again, to Bob's comment, you know, we have approximately 5% REO. In fact, as we navigate through those assets and maximize value, that also, you know, can be recycled into newer loan investments, which will also grow earnings over time. So kind of view that as the sort of broader qualitative picture on that point.
spk04: Okay, great. Thank you, guys. Thanks, Eric. Appreciate it.
spk08: Our final question is from Chris Muller with JMP Securities.
spk01: Hey, guys. Thanks for taking the questions, and congrats on a great start to the year. So following up on some of the prior questions, so now that you guys are back to lending and the portfolio is cleaned up, should we expect to see some portfolio growth in the back half of this year, or will it be more of a flattish-type portfolio? And I guess the root of the question is, how aggressively do you guys want to match repayment with new loans over the coming quarters? Thanks.
spk06: I mean, look, I think that we're, you know, from a strategic perspective, we've really kind of built the balance sheet to, you know, kind of stomach what I would describe as like a sort of all-weather outcome here, again, acknowledging those mixed signals. You know, where we are kind of currently sitting today, I would say it definitely kind of leans more towards the offensive. So from a deployment perspective, you know, I would expect us to be able to, you know, find new investments in the coming quarter. So as we think about kind of Repayments, you know, repayments so far definitely have slowed. I think that will be one of the byproducts, frankly, of both elevated rates, but also more probably elevated rate vol right now. But I would say generally speaking, as I mentioned earlier about the sort of three levers that we have to grow earnings, I would describe our ability and appetite to generate new investments is frankly at the top of the list to be able to grow our reach for the company.
spk01: Got it. That's helpful. And then the other one I have. So with some of your CLO financing out of the reinvestment period, can you just give your thoughts on if a new CLO is possible in 2024 and just how you guys are viewing that market today?
spk06: Yeah, sure. I mean, I think there has, of course, been a handful of series CLOs done recently in the market. It's a bit of an interesting dynamic right now where The available financing that we're being provided from just bank balance sheets continues to be more attractive than what we see within the CRE CLO market. Given that we're active really in kind of both worlds, we're always looking on a daily basis to frankly the sort of delta between, you know, what kind of advance and spread in terms we can get, you know, from banks on their balance sheets versus what the, you know, sort of, you know, bond market will bear. And Simply put, we will continue to optimize that going forward. So I would say spot right now. Again, to my comment earlier on banks just seem to have a lot of demand to put capital out. They're restrained on putting out direct lending capital, and they definitely have a lot of demand to be providing loan-on-loan financing for us. So I think that's really how we're looking at it. When we think about the series CLO market, series CLOs, of course, are a really important part of our capital structure. They do provide, say, frankly, a lot of flexibility from a financing perspective and then do, of course, offer the benefits of mass-term non-market-to-market, non-reforce financing. So as we balance, advance and spread, there also is the kind of structural side of things. But again, I think at this point, series CLO spreads have really kind of lagged and really kind of haven't. What I had mentioned earlier about the sort of moving corporate credit spreads, you know, close to the tights, but you really haven't seen series CLO spreads move back to, frankly, where they were. You think about the, you know, tights of the last three or four years, I mean, AAAs were really as tight as about, you know, it's called approximately at the time LIBOR plus 80. you know, now we're still seeing series AAA spreads in the kind of mid to high 100s, best case. So there's still, I think, a lot of compression to happen on the series ELO spread side.
spk01: Very helpful. Thanks for taking the questions.
spk08: Before we conclude the Q&A, we do have a follow-up from Rick Shane with J.P. Morgan. Please go ahead.
spk07: Hey, guys. Thanks for taking my follow-up. Having asked so many questions over time about repurchases and I think I'd be remiss not to address that. It's nice to see you guys announce a repurchase. I'm curious how you will approach that. It's a $25 million allocation. Do you expect to be pretty consistently in the market, or is that something that will just be there very defensively if you see some really bad days?
spk06: I think on the share repurchase side, First and foremost, it's a tool in our toolkit which we acknowledge and have knowledge of over time. It's a really powerful way for us to both generate earnings for the company, and also I think is a real statement about the fact that with the credit quality of our current book relative to book value, buying shares at today's market price for us does look very attractive. In terms of going forward, give me a tool, our toolkit, and I expect that over time, you know, we will continue to use this as a potential way to drive our company. Great. Thank you for taking the question, guys. Thank you, Rick. Thanks, Rick. I appreciate it.
spk08: Ladies and gentlemen, we have reached the end of the question and answer session. I would like to turn the call back to management for closing remarks.
spk06: I just wanted to thank everyone for taking the time this morning on the call and look forward to speaking to all of you next quarter. Thank you very much.
spk08: This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.
Disclaimer

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