Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the New York Mortgage Trust Fourth Quarter and Full Year 2020 Results Conference Call. During today's presentation all parties will be in a listen-only mode. Following the presentation the conference will be open for questions. [Operator Instructions].

This conference is being recorded on Thursday, February 25th, 2021. A press release and supplemental financial presentation with New York Mortgage Trust fourth quarter and full year 2020 results was released yesterday. Both the press release and supplemental financial presentation are available on the company's website at www.nymtrust.com.

Additionally, we are hosting a live webcast of today's call, which you can access in the events and presentations section of the company's website.

At this time, management would like for me to inform you that certain statements made during the conference call, which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Although the New York Mortgage Trust believes an expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.

Factors and risks that could cause actual results to differ materially from expectations are detailed in yesterday's press release and from time to time in the company's filings with the Securities and Exchange Commission. Now at this time, I would like to introduce Steve Mumma, Chairman and CEO. Steve, please go ahead..

Thank you, Operator. Good morning, everyone and thanks for being on the call. Jason Serrano, our President, will be speaking to our investment portfolio strategy today, and Kristine Nario, our CFO will be speaking in more detail about the fourth quarter results.

We'll all be speaking to our supplemental financial presentation that was released yesterday after the market closed and is available on our website. We will allow questions following the conclusion of the presentation. Company had a solid fourth quarter results, delivering $0.19 GAAP earnings per share and $0.20 comprehensive earnings per share.

As of December 31st, 2020, the company's book value for common share was $4.71, up 3% from the prior quarter, resulting in economic return of 5% for the quarter.

During the fourth quarter, the company was able to build on positive momentum from the prior two quarters, executing longer term financing through a residential securitization and expanding its investment pipeline to its highest level since March, 2020.

Past year was a difficult and challenging time for our Company, as well as many other mortgage REITs. Over a three-week span in March, we experienced unprecedented liquidity constraints on many of our credit asset classes as a direct result of the market disruption caused by the COVID-19 pandemic.

These constraints across markets created a valuation gap that further drove down values, in many cases, disconnected from the fundamentals of the underlying assets, and generated historic levels of margin calls from our financing counterparties.

Through the coordinated effort of our investment professionals, we were able to reposition the portfolio and stabilize the balance sheet, but not before incurring sizeable losses. These quick actions did allow us to maintain a large portion of our credit portfolio. But we saw significant improvements for those assets during the balance of the year.

Company was able to trim the total economic return to a negative 15% for the year, an improving from a negative 32% at the end of the first quarter. While the total economic return for 2020 on an absolute basis is disappointing. I am proud of our team and the way they performed throughout the year.

Now going to the presentation, I will start on slide six. Our investment portfolio total $3.2 billion at year end, up approximately $400 million from the previous quarter. Our total market capitalization was $1.9 million, an increase of approximately $500 million from the previous quarter.

Our capital is currently allocated at 71% to single-family and 25% to multifamily. Our portfolio growth has been focused on loan investments instead of CUSIP securities, as we believe we can generate better risk adjusted returns with more stable funding. Jason will speak later to this in the presentation.

We remain with 57 professionals, still mostly working from home and running our business with minimal disruptions. On slide seven, are some fourth quarter key developments. Our book value as I said before, was $4.71 at the end of the period, an increase of approximately 3% from the previous quarter.

We declared a common stock dividend of $0.10, an increase of $0.250 per share for the previous quarter, bringing our dividend yield to 10.8% at year end closing price and currently 9.4% as yesterday's closing price. We continue to strengthen our liabilities by cleaning our third securitization of the year.

This was our second residential loan securitization for a total of $364 million, reducing our mark-to-market debt, releasing excess margin and adding some additional liquidity to the company. We ended the year with a portfolio leverage of point two times, down significantly from 1.4 times as of December 31st, 2019.

On slide nine, we cover key portfolio metrics on a quarter-over-quarter comparison. Our net margin for the quarter was 2.3%, an increase to 12 basis points from the previous quarter.

Our asset yields increased 54 basis points, largely due to the continued rotation out of lower yielding fully valued CUSIP securities into higher yielding residential multifamily loans. Increase in asset yield was partially offset by an increase in financing costs of 42 basis points. The increase was due to several factors.

The addition of a non mark-to-market residential repo line. The previously mentioned third securitization and an increased costs from our residential loan warehouse lines that renewed in the fourth quarter. We would expect to see improved costs going forward as we look to complete two additional securitizations in the coming months.

As spreads have tightened significantly since our fourth quarter securitization. We will continue to focus on ways to extend maturities and decrease our exposure to mark-to-market call risk back to the company. Kristine Nario, our CFO, will now go over financial results in more detail. Kristine..

Thank you, Steve. Good morning, everyone, and thank you again for being on the call. In discussing the financial results for the quarter, I will be using some of the information from the quarterly comparative Financial Information section included in slides 21 to 28 of the presentation. Slide 10 summarizes our activity in the fourth quarter.

We purchased residential loans for approximately $320 million, Agency RMBS for approximately, $139 million and closed on $31 million of multifamily loan investments. We had net income of $70 million and comprehensive income of $83 million attributable to our common stockholders. Our book value ended at $471, an increase of 3% from the third quarter.

Slide 11 details our financial results. We had net interest income of $26 million, an increase of $0.4 million from the previous quarter.

Our interest income increased by $1 million primarily due to increase investment in higher yielding business purpose loans, offset by a $0.6 million increase in interest expense, which can be attributed to higher borrowing costs in the fourth quarter associated with a non mark-to-market repurchase agreement and non recourse securitization transactions that we entered to finance our residential loans.

We had non-interest income of $67.3 million, mostly from net unrealized gains of $52.5 million due to improve pricing on our residential loans, multifamily loans and investments securities, and $12.1 million of income generated from our multifamily and residential equity investments.

We had total G&A of $9.7 million, a decrease of approximately $0.5 million from the previous quarter. The decrease can be attributed to reductions in annual incentive compensation as the company did not achieve its annual quantitative performance targets.

We would expect our G&A expenses to be between $11 million to $11.5 million per quarter going forward. We had operating expenses of $3.5 million during the quarter primarily related to our investing activities and residential loans and direct multifamily lending. The graph on slide 11 illustrates the change in our book value from December 31, 2019.

Our book value increased 3% during the quarter and 21% from the end of the first quarter.

Although we sold assets and delivered our portfolio in response to the COVID-19 related market disruption, we avoided some of the larger scale for selling and that occurred during the first quarter, allowing us to retain assets whose pricing significantly improved throughout the remainder of the year, and contributed to the increase in our book value.

Jason will now go over the market and strategy update.

Jason?.

Thank you, Kristine. Now turning to page 13. After last year's funding reset that began in late March, we fundamentally restructured how we build our asset pipeline, and how we utilize our unrestricted cash. Prior to Q1, 2020, we've targeted income generation opportunities with our unrestricted cash through bond markets, which were quite liquid.

After assessing collateral risk, we felt the spread generated from these holdings was attractive. However, when the repo markets froze up in March, we required rapidly reduced borrowings against some of these positions.

At this time, we use repo funding opportunistically, as we still carried over $1.6 billion of unencumbered assets on our balance sheet. Our approach to protect against unexpected volatility in any associated margin calls was to post collateral or similar assets to meet any deficits.

To our surprise, and the overall market, we experienced a period where posting additional collateral along with additional cash was no longer accepted. It was a cash-only market at the time. This was highly unusual and not seen even during the peak of the housing crisis.

Without the confidence to continue rolling the financing on our security book, we focused on a full rotation into residential and multifamily loan program The beginning of Q2 was a wait and see approach on the pandemics development and governmental response to the crisis.

But as shown in Q2, our loan investment activity nearly dropped to zero as the market was resetting from a period of significant distress. At this time, many market participants focused on recapitalisation funding plans which provided us an opportunity to foster new long term sourcing relationships without high pressure of competition in tow.

In late Q2, we began to lock up attractive sourcing arrangements in both business purpose loans and multi-family direct origination.. Due to underwriting timelines, to close these loans, the fruit of this flavor became visible with investment growth witnessed in the fourth quarter. Now turning to page 14.

With the elevated rate of asset deployment, we lowered our unrestricted and restricted cash to $293 million versus $650 million, which will help to drive higher earnings. Now with $1.3 billion of unencumbered loans we are focused on incrementally adding term financing arrangements through the securitization market.

With our portfolio, we see an opportunity to generate 15% plus equity returns with selective use of term leverage. We're excited about our opportunity to -- we're excited about our portfolios ability to generate high economic return under low utilization of leverage. This is one metric we use to assess the quality of our risk adjusted returns.

We believe that provides sustainable growth, path to growth of the company's earnings. Now turning to page 15. The housing market had an extraordinary year. Supply of single-family houses on the market for sale is approaching sub-1 million units, are about two months of inventory of houses for sale.

These are record lows going back the beginning of this time series. A record 50% of houses across the United States went to contract within two weeks of listing in recent -- in 2020. The robust housing price growth continues to support this market as Case-Shillers has remained -- just reported a 10.4% year-over-year change in December.

Our portfolio was designed to take advantage of home price growth to unlock value, but was carefully constructed to minimize downside risk. First, in our RPL strategy. We have nearly a $1 billion in assets with a 75% LTV at a 4.8% coupon. We specifically targeted lower LTV loans provide additional downside protection.

HPA reinforces our alignment with the bar against delinquency. As I said earlier, we are very focused on adding to our securitization program with new issues in the near term in this sector. Our performing loan opportunity is really split between business purpose loans and scratch and dent. Starting with business purpose loans.

We are excited with providing short term high coupon loans to seasoned contractors that rehabilitate properties and resell into a technical constrained market of housing supply. We ramped up our focus in this sector over the last nine months given expected HPA growth and additional security around business plan success.

Our portfolio had a 65% LTV to completion value, 8% LTV to origination. With robust HPA, these properties can be efficiently sold or rented for investment purposes over the course of the year, which would pay off our loan.

We believe we hit a sweet spot in the market with the accumulation of these loans at a 6.5% to 7% on average coupon that presents an attractive way to play the technical housing supply squeeze, but with robust downside protection as a senior mortgage holder.

Over the past year, we carved a niche strategy with proprietary flow and expected benefit from this throughout 2021. On the scratch and dent side of the performing loan strategy, performance has been great with respect to this portfolio. We are able to acquire at a deep discount these loans.

The recent refi wave helped to create our book value to a par at a faster pace than projected. Pipeline to purchase scratch and dent loans at a steep discount are also increasing due to seismic growth of new originations. More on this point in a minute.

On the security side of the equation as a buyer of debt, we still hold certain CUSIPs that provide for near -- for an attractive near term unlevered return, considering the discount and increased probability of these trust being called.

Neither agency nor non agency sector is a large focus considering the excess liquidity built in with the fed support. Now turn to page 16. On single-family performance, COVID forbearance rates certainly moderate over the past quarter. We generally expect slight uptick in delinquency rates at year end, which is a seasonal factor.

Overall, our portfolio across our loan strategies has shown a strong reaction to high touch servicing efforts. Since March of last year, performance related to RPL strategy generated great returns for us with converting nearly 50% plus of loans into a current status. This allowed our book to gain over 8% on a price basis in a very tenuous period.

Lastly, I touched on this earlier in our securitization plan investment activity. Our team continues to be fully engaged in similar asset opportunities.

In particular through our scratch and dent strategy, we are seeing explosive growth require pristine loans at deep discounts, which is not surprising given the record origination volume that we saw in 2020.

More loans originated equal more loan opportunities to make mistakes for originators, which can become problematic for some loan originators with warehouse lines commonly structured as a 364-day facility. Now turning to page 17, our multi-family business. The multi-family sector contains 25% of our capital deployed today.

Our direct loan origination business continues to offer incredible value as we earn over a 11.5% coupon against stable properties located primarily in the south, southeast United States. Our portfolio continues to benefit from recent rate cap compression of 50 basis points, due to the stable cash flows produced over 2020.

I will touch on more that in a minute. But however, we see migration from the northeast is accelerating due to lockdown measures in large cities and corporate acceptance of work from home environment.

We also see consistent demand primarily due to sustained employment and growth and tax benefits in these regions which helps support the cash flows and demand of these multi-family properties. Like our single-family portfolio, our multi-family agency securities held is more of a near term pull-to-par opportunity to monetize in the near term.

While we do not currently have a joint venture multi-family investment listed here, that will soon change as the team recently evaluated numerous opportunities from sponsors with long standing relationships with our company.

The ability to earn a teens return in an expanding market is one of the most compelling risk adjusted returns we see in this market. Turning to page 18, our multi-family loan performance has been consistent as we have -- just a couple of loans that are under special service interview.

In each case, these loans are expected to pay off at par after change of control. As mentioned before, the company has never taken a loss in our direct multi-family origination business.

Our deep bench of asset managers and technology tie-ins to each property reporting with general ledger reporting has allowed us to quickly spot performance issues and resolve them through management correction or an asset sale.

A benefit that we have seen more regularly of late is the ability to earn an upside optionality with respect to our loan payoffs. Our loan agreements are commonly structured with minimum return hurdles to capture upside return benefit.

After a applicable return hurdle multiples, we earned a 14% or 1.45 multiple on the life of the loan in the quarter, the loan payments. We expect to see more loan payoffs to take advantage of this upside. Now turn to page 19. We are very much looking forward to a successful year in 2021.

A lot of the groundwork in building, our proprietary investment pipelines across the single-family, multi-family sector should continue to bring a high rate of capital deployment, which is evident in our investment activities through the first two quarters of -- through first two months of this year.

With a robust securitization market that is offering financing execution at better levels than prior than the COVID period. This is going to help drive our return assets from portfolio that we selectively finance while keeping our portfolio leverage low. At this time, I'll pass it back to Steve..

Thanks, Jason. Operator, you can open it up for questions, please. Thank you..

[Operator Instructions] First question comes from Bose George with KBW..

Hey, guys, good morning. First just on book value. Are there unrealized losses that we think about in terms of further book value recoveries? And also just any comment just on book value according to-date? Thanks..

Yes. I mean, clearly, first question -- first part of the question, unrealized losses, we certainly have some securities that still are underwater relative to the March 31 price, which we think we will continue to recover. Those amounts are probably in a neighborhood of $0.10 to $0.15 per share.

And then the -- as it relates to the current book value, we've had a pretty significant backup in rates. We don't have a tremendous amount of direct exposure to that rate from a leverage standpoint. So our credit assets, we've seen significant spread tightening in the first couple months.

So we would expect our book value to be up 1% to 2% right now, relative to where the market is..

Okay, great. And then just in terms of the earnings power of the portfolio.

Can you just talk about, where do you think that currently stands? And where that goes as you continue to optimize your funding?.

That's right. I mean, look, our total portfolio size still has a lot of room to grow, given the current capital we have on the balance sheet. So as we do continue to play out securitizations.

We continue to think that we will drive our -- we're going to continue to try to drive the net margin in what we would consider reoccurring revenues, which would include some aspects of income outside of the net margin, because many of the mezzanine loans in multi-family that we have are accounted for as equity investments for accounting.

And so, we'd like to think that that earnings power is going to grow substantially above our current dividend rate is today. But the portfolio needs has -- we can grow our portfolio another $700 million to $800 million in size without putting tremendous pressure on the capital structure of the company..

Okay, great. That's helpful. Thanks..

Your next question comes from Eric Hagen was BTIG..

Hey, good morning, guys. Lots of different business purpose loans out there. It sounds like fix and flip is what you're targeting.

Can you give us some color on the proprietary pipeline that you mentioned? Like, where are you guys sourcing loans from and what are you paying for them? And then on the two securitizations, you expect to complete? Can you say which types of loans do you expect to finance there?.

Yes. So, on the first question on business purpose loans, yes, we're focused on the fix-and-flip strategy. We like the short duration of these assets, and the pickup on HPA for the contractors to convert these loans -- to pay off our loans at maturity.

We have been -- there been a number of originators in the market that were supported by market participants that no longer was funding their strategies, because of the COVID stress and stress on their balance sheets and liquidity.

In that time period, we were able to foster relationships with these counterparties, these originators that needed funding programs and new funding programs. So we were able to carve really either flow agreements or bulk purchases with these organizations.

And the market did kind of reset at that time as well with lower LTVs and better experienced contractors that would be funded. So we saw an excellent opportunity to move in there and pick up market share.

Where before it was a well-banked market, plenty of liquidity and lots of demand and originators at that time, really had a hard time feeding the demand that was there. So as that fell off, it created a nice gap for us to move in and pick up loans over the course of 2020 at attractive levels.

You mentioned on costs, this is a -- for new fundings, new loan originations, it's a par market. The coupon or the servicing fee is mainly stripped off and paid over the life of the loan to align the duration of that loan with the investor. So they typically are kind of par execution for new loan origination..

Great. Helpful color. How about the securitizations that you guys plan on doing? I think you mentioned two deals.

One that you expect to complete before the end of the year or the quarter?.

Yes. We have about a $0.5 billion circle for securitizations and that's growing. We had a very active first two months of the year as I described earlier. And we are evaluating both rated securitization and unrated in the RPL space, and a securitization related to our BPL strategy as well.

The BPL securitization will be quite a little bit different than what's done in the RPL space as it’s a shorter duration loan and having to be able to recycle the cash in the securitization would be a nice feature to add. And those types of things we're working on at the moment..

Got it? Thanks. And then a couple more. Can you discuss the maturity schedule of the commercial loans? And then on the scratch and dent.

Are those loans delinquent and sub-performing? or have they been disqualified from the agency channel for some other reason?.

Yes. The commercial loans which were all multi-family loan originations, mezzanine or pref or loan originations, those are typically structured -- the structure is 10 years.

And in the case of scratch and dent, we are buying -- we think are technically -- loans that were technically dropped off of origination warehouse facilities because of some technical event that could be related to a notice period that the borrower was supposed to receive on their current coupon if it would have changed and items like that.

We typically do not fund more loans at that fall out, because of heightened consumer risk or because of a valuation change on the asset itself. So we're focused on more of the nuanced origination criteria that the GSEs require and fallouts related to that..

And just further to scratch and dent, they're generally performing. They're almost all performing when we buy them..

Yes. They're separately performing loans a year within a year of origination. And it's really a function of timing between when it was originated, when the scratch and dent item was noted, and the financing facility to hold that loan under an agency delivery..

Got it. So more documentation related issues, not related to delinquency. Got it. Thank you guys so much. Appreciate it..

Your next question comes from Christopher Nolan with Ladenburg Thalmann..

Hey guys.

On the dividend for 2021 given that your mortgage rate, should we assume that the dividend payout will go up? Go up, I should say?.

We continue to generate a large part of earnings from unrealized. It's obviously not distributable -- required distributable income. I mean, we will monitor a dividend and as we drive the portfolio size up and look at the what we would consider -- reoccurring revenue stream, that's really what will dictate the dividend pay rate.

But -- so that's really what will dictate. We don't really comment about what we're going to do with the dividend going forward in the future in absolute terms..

Okay.

And then, I didn't see in the deck, but how much dry powder, balance sheet dry powder do you think you have now?.

Yes. I mean, there's roughly $300 million of cash on our balance sheet as of -- and I'm speaking as of the Q4. We have vast amounts of activity that's happened in the first two months. I don't want to comment on directly. But as of the end of the fourth quarter, roughly $293 million. We just spoke about a securitization of upwards about $500 million.

That would free up some cash there. Most of those assets are unencumbered. I mentioned, we have over $1 billion of unencumbered loans and assets on our balance sheet.

So when you think about dry powder, the way we think about it is our unrestricted cash and financing ranges that we believe are prudent to execute that go with our liquidity plan as a company. So we see upwards of over a $1 billion of kind of that dry powder to execute into the portfolios..

Great. And then the follow up on Eric's question on the BPL loans.

Are those loans made to the originators? Are they sort of selling off their loan production to you guys?.

Yes. The originators are originally to distribute kind of model. They -- we're funding loans that they're originating directly for contractors and local markets that are either flipping houses or buying up portfolios for rental purposes, which is a trend that we see increasing. So it would be for both those purposes..

We're buying closed loans..

Yes. I cover fix and flip originator in my coverage. And the yield on those loans are closer to 12%, plus around 4% of fees and so forth.

And you're getting an average coupon, roughly 6%, 7% or so?.

Yes. The market is -- there's a couple of ways fix-and-flip loans originated in a couple of different paths. Without going into the specific -- very specific levels on what you're seeing at the 12% range, we can certainly structure a loan at a 15% coupon. And it would be more risk and higher risk of default.

One of the things that we do to manage the risk on fix-and-flip is to focus on the amount of work is required to actually go through the transitional plan for that contractor. And in that area, we'll focused on loans are generally about 10% to 15% type of cost, add to the purchase price to then transition into a sale or to a rental.

We don't want to take a lot of construction risk in this space, given the timelines that we've established for the opportunity.

Now, if the fix-and-flip market is not a market that you want to -- that would be ban for -- into perpetuity, but there are definitely pockets in the market where it makes sense to look at these types of --these 12-month type of bridge loan arrangements, and we're currently there.

So, for that reason, we are -- we're very cognizant of the potential extension risks due to construction. Construction, as we all know, we've all had experiences where it actually takes a little longer than suggested. And on top of that the cost of labor and other related materials with houses also then has gone up quite a bit in the last year.

So for those reasons, we kind of try to keep it tight to a quick turnaround with operators that have vast amounts of experience in these markets. And also, we also constrain ourselves to certain markets, where we see that migration of demand helping out -- helping to foster the execution.

So yes, there's a variety of fix and flip loans you can acquire in the market, and we're focused on a shorter duration part of that market..

Final question on the fix and flip, what sort of return does a contractor have to generate with your loan in order to make breakeven?.

The contract -- there's two types of loans that were -- two types of business plans that we lend to. One is, a turn around flip of the house. The other is a more of a cap rate model where it's a rental play.

And at times, that changes over the course of the loan where the rental play becomes more formidable, given cap rate compression and ability to sell a rented house in a market with vast amounts of quantity of cash that is looking to carve portfolios of rentals in certain markets.

So these contractors are feeding both sides, and also feeding the fact that there's a lot of housing construction in these markets, where this is a new upgraded product that's there, that would be typically sold to a new housing buyer.

So when we look at both the return that we're focused on for the contractor, its a bit different depending on the business plan. But depending on which market you're looking at. You can see cap rates in the 5% area, and also, as relates to the flip, they're definitely looking at teens return of opportunities.

And again, if it's a flip that is more of a just bought cheap and more of a superficial type of improvement. Our focus is really on what the value of the home is. What the potential opportunity for that sale is more so then the contractors earnings. We're aligned with them.

In the fact that we only fund low LTV loans, but with real cash contribution, we don't focus on refinance fix and flip loans. These are purchase loans for the most part only. And in that area, our alignment comes from that perspective, the cash that they have into the particular house..

Okay. Thank you for taking my questions..

Thanks, Chris..

[Operator Instructions] Next question comes from Jason Stewart with Jones Trading..

Hey. Good morning. Thank you. Steve, if we could just go back to your comments on the mid-teens ROE. Should we think about that split between net income spread or net spread as we do in the multifamily? It's two-thirds, one-third.

And I want to leave the legacy investments out and sort of think about it on a go forward basis?.

So that the two-thirds, one third is asset allocation, right. And really, that's because we're putting a lot of -- we're putting more leverage than a lot of leverage on the residential side securitization. The majority of our multifamily assets today are mezzanine loans, that we don't put financing on or secured financing on today.

So that asset balance will be a little different than the equity balance. But as we build out our pipeline, certainly our target return on anything that we're putting on the books is between 10% and 12%. And so when we look at those returns, it's a balance of -- in the residential side, it's a combination of the asset with leverage.

On the multi-family side, it's generally the coupon on the loan and the opportunities of how long we think that loan is going to be outstanding. And what other kinds of upside incentives we have on this particular lending model..

I think it's important to note that in the single-family strategy with particularly the assets, we're looking to leverage in the RPL strategy. We're buying these loans obviously at a discount. They are loans that have been paying for few months or have been delinquent for a few months. And our goal is to create those loans up.

So the first cycle of return in that opportunity is the accretion value we get from -- the benefit we get from the borrowers becoming consistent payers, which obviously has been a strategy. That's a focus, where we've had 46% of the borrowers that when we purchased them were current. And as of 12/31, our borrowers were 62% current.

The value increase we received from there from 90-94 is that first set of return opportunity. Once the borrower goes to a current status, there's a Phase 2, which is which is what we spoke of just earlier. The Phase 2 is taking those loans to a rated securitization market.

And when we do that, we believe that these securitization equity returns are 15% plus on our portfolio. So, we have basically book value creation in the first stage. And then more of a carry, excess cash flow stream on the NIM play on the RPL securitization. Just to be clear.

Multifamily, just to be clear, is an unleveraged strategy with respect to our direct originations..

Okay.

So strategy, asset aside, leverage aside, is there a minimum cash on cash return hurdle? Or is it because the duration is so short that you look at this as a total return play, and there's no minimum cash on cash hurdle?.

Yes. We don't focus on a particular IRR target for any portfolio, it's all risk adjusted, obviously. We will look at assets that have a carry of less than 10%, but had a total growth opportunity greater than 10%. That is the RPL strategy. And there's other asset classes where such as multi-family where it's unlevered double-digit type of return.

And that is more of a coupon, cash flow stream play. So, it depends on what strategy you're referring to. But, we look at both. And we do have -- there was questions earlier about recovery from the March declines.

Part of our book value growth also is, which we've had consistently, over the last few years is a function of the fact that we buy assets at a discount and accrete those assets through time.

So our expectation is that we will continue to having book value increases due to the fact that we were buying these assets at discounts and using a operational strategy to extract value of those assets..

Great. Thanks for taking the question..

Thanks Jason..

And I'm showing no further questions at this time. I would now like to turn the conference back to Steve Mumma, Chairman and CEO..

Thank you, operator. And thank you everyone for being on the call today. We look forward to discussing our first quarter as we continue to build the company and the portfolio. Have a good day. Thanks everyone..

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect..