Good morning, ladies and gentlemen, and thank you for being here. Welcome to the Ellington Financial First Quarter 2025 Earnings Conference Call. Today's call is being recorded. All participants are currently in listen-only mode. We will open the floor for your questions after the presentation. It is now my pleasure to turn the call over to Alaael-Deen Shilleh. You may begin.

Thank you. Before we begin, I'd like to remind everyone that this conference call may include forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are non-historical in nature and involve risks and uncertainties detailed in our annual and quarterly reports filed with the SEC. Actual results may differ materially from these statements. So they should not be considered to be predictions of future events. The company undertakes no obligation to update these forward-looking statements. Joining me today are Larry Penn, Chief Executive Officer of Ellington Financial; Mark Tecotzky, Co-Chief Investment Officer; and JR Herlihy, Chief Financial Officer. Our first quarter earnings conference call presentation is available on our website ellingtonfinancial.com. Today's call will track that presentation and all statements and references to figures are qualified in their entirety by the important notice and endnotes in the presentation. With that, I'll hand the call over to Larry.

Thanks, Alaael-Deen. Good morning, everyone, and thank you for joining us today. I'll begin on Slide 3 of the presentation. Ellington Financial started the year with a solid first quarter, driven by continued strength in our diversified residential and commercial mortgage loan portfolios in combination with continued excellent deal executions in our securitization platform. For the quarter, we generated GAAP net income of $0.35 per share and our adjusted distributable earnings at $0.39 per share continue to cover our dividends. Our loan businesses remain a dependable source of growth and profitability, and we again benefited from strong ADE contributions from our loan originator affiliates, as well as net gains on our forward MSR portfolio. Our reverse mortgage platform, Longbridge Financial, more than covered its proportional share of ADE to support the dividend despite lower seasonal origination volumes for HECM. However, with interest rates sharply lower over the quarter, losses on interest rate hedges led to slightly negative GAAP net income overall for the quarter at our Longbridge segment. I'll note that, while seasonality caused HECM origination volumes at Longbridge to decline sequentially, Prop Reverse origination volumes were stable and their origination margins actually improved, providing further evidence of the growing demand for our Prop Reverse product. In fact, in April, loan submissions in Prop were considerably higher year-over-year. Meanwhile, our non-QM originator affiliates, including LendSure and American Heritage, continued not only to provide us with excellent flow of product, but their strong profitability also continued to contribute nicely to our bottom-line. Extending the strong momentum we built in our securitization platform last year, we priced five new securitization deals in the first quarter, taking advantage of tight spreads to secure long-term, non mark-to-market financing at attractive terms. These transactions also enabled us to expand our portfolio of high yielding retained tranches to support earnings growth, and they added deal call rights to our portfolio, enhancing portfolio optionality. Thanks to the strong historical credit performance of our EFMT shelf, we were able to lock in some extremely favorable debt spreads on our first quarter securitizations. I'm pleased that we completed a high volume of deals in the first quarter, while market conditions were still favorable. In fact, securitization debt spreads widened somewhat late in the quarter and then surged in early April amidst the overall market volatility. And so, we refrain from pricing any more securitizations in April until very late in the month when we priced another non-QM securitization after debt spreads had recovered somewhat. Given the diversified array of warehouse lines that we have at our disposal, we can be patient during extended periods of debt spread widening. To that point, we added two more loan financing facilities during the first quarter. We've also made some important tactical moves in the form of outright asset sales. Earlier in the first quarter, we sold a wide variety of credit-sensitive securities before yield spreads widened to lock-in gains, free up capital, and enhance liquidity. Then, in early April, we sold most of our HELOC position, crystallizing profits on those investments, while freeing up capital to reinvest in the more attractive opportunities we are seeing in other sectors. Meanwhile, we closed on yet another mortgage originator joint venture investment in the first quarter. And as usual, this included a forward flow agreement with that originator. We have two more such investments in the term sheet stage now. We remain focused on establishing these joint ventures to secure consistent access to high-quality loans at attractive pricing and on a predictable timeline. Finally, we've made notable progress on a handful of commercial mortgage workouts, including one significant resolution in March and another one scheduled to close today, eliminating negative carry assets and freeing up capital for redeployment. We expect that, by the end of the second quarter, we will have only one significant remaining workout asset detracting from our adjustable distributable earnings. At the bottom of Slide 3, you can see that our recourse leverage remained low at just 1.7:1. That's even slightly lower than our year-end level of 1.8:1, with our significant securitization activity and opportunistic asset sales in the first quarter more than offsetting another $1 billion plus quarter of loan purchases. I'll make a few observations on our leverage. First, whenever we complete a securitization, we convert a sizable amount of borrowings from recourse to non-recourse, thus lowering our recourse leverage. Second, these securitizations also convert loan assets into retained tranches, which carry much higher yields and therefore require little or no leverage to generate attractive returns on equity. Third, in the wake of the March and April volatility, we continue to see better investment opportunities. So it's great to have made more room to add leverage from here. And fourth, if we're going to increase our recourse leverage significantly, we prefer to do it by issuing long-term unsecured debt. However, debt spreads are currently too wide in that market relative to asset spreads for us to be issuing unsecured debt. When that relationship between debt spreads and asset spreads normalizes, we'll consider issuing unsecured debt again. And with that, I'll turn the call over to JR to walk through our financial results in more detail. JR?

Thanks, Larry. Good morning, everyone. For the first quarter, we reported GAAP net income of $0.35 per common share on a fully mark-to-market basis and ADE of $0.39 per share. On Slide 5 of the deck, you can see the income breakdown by strategy, $0.58 per share from credit, $0.05 per share from Agency and negative $0.01 per share from Longbridge. And on Slide 6, you can see the ADE breakdown by segment, $0.32 per share from the investment portfolio segment net of corporate expenses, and $0.07 per share from the Longbridge segment. Positive performance in the credit portfolio was driven by sequentially higher net interest income, net gains from forward MSR related investments, commercial mortgage loans, closed-end second lien loans, non-QM retained tranches and ABS, and net gains on our loan originator equity investments. Partially offsetting higher net interest income were net realized and unrealized losses on consumer loans, CLOs, non-QM loans and residential transition loans, as well as losses on residential and commercial REO. Meanwhile, thanks to our coupon and hedge positioning, our agency portfolio generated excellent returns for the quarter, even as Agency RMBS slightly underperformed benchmarks market-wide. Turning now to Longbridge. While that segment reported a slight net loss overall due to interest rate hedges with rates sharply lower during the quarter, Longbridge had positive contributions from both servicing driven by a net gain on the HMBS MSR and from originations driven by higher origination margins for Prop Reverse and steady margins for HECM despite seasonally lower origination volumes in HECM quarter-over-quarter. Our results for the quarter also reflected gains on the fixed receiver interest rate swaps used to hedge the fixed payments on our unsecured notes and preferred equity with interest rates lower during the quarter. These gains exceeded net losses on our unsecured notes, which included a mark-to-market loss on our unsecured notes, driven by lower interest rates, as well as a realized loss related to the par redemption of our 6.75% notes that we had carried at a slight discount to par. Turning now to portfolio changes during the quarter. Slide 7 shows a 4% decrease for our adjusted long credit portfolio to $3.3 billion. The decline was due to the impact of securitizations completed during the quarter as well as a smaller residential transitional loan portfolio, where principal pay downs exceeded net new purchases and net sales of CLOs. Offsetting a portion of the decline were larger commercial mortgage bridge and non-QM loan portfolios both driven by net purchases. On Slide 8, you can see that our total long Agency RMBS portfolio declined by another 14% to $256 million by design, as we continue to sell down that portfolio and rotate the capital into higher-yielding opportunities. Slide 9 illustrates that our Longbridge portfolio increased by 31% sequentially to $549 million driven by proprietary reverse mortgage loan originations. Please next turn to Slide 10 for a summary of our borrowings. At March 31st, the total weighted-average borrowing rate on recourse borrowings decreased by 12 basis points to 6.09%. Quarter-over-quarter, the net interest margin on our credit portfolio decreased by 12 basis points, while the NIM on Agency increased by 24 basis points. Our recourse debt-to-equity ratio declined to set 1.7:1 from 1.8:1 quarter-over-quarter and including consolidated securitizations, our overall debt to equity ratio decreased slightly to 8.7:1 from 8.8:1. During the quarter, we paid off one of the tranches of unsecured notes that we brought over from Arlington upon their maturity in March. At March 31st, combined cash and unencumbered assets increased to approximately $853 million or more than 50% of our total equity. Book value per common share stood at $13.44 and total economic return for the first quarter was 9.5% annualized.

Thanks, JR. This was a strong quarter for EFC. We covered our dividends with ADE, made substantial progress in resolving our larger delinquent commercial mortgage loans and had broad-based contributions to earnings from our diversified investment portfolio. One highlight for the quarter was our portfolio of agency mortgage servicing rights, where we not only had substantial positive carry, but a substantial mark-to-market gain as well. These MSRs are backed by very low-rate Fannie Freddie loans. We acquired these MSRs through the Arlington acquisition and they remain one of the few holdings of theirs that we kept in our portfolio. On prior calls, we have spoken about the mortgage lock-in effect, putting a wet blanket on prepayments and creating a huge opportunity in second liens and HELOCs for us. Another consequence of that lock-in effect is that values of servicing have gone up as each month's prepayment data confirms very slow speeds on low coupon MBS. In addition, there has been a trend in the mortgage space to put an increasingly higher value on the customer relationships that come with owning servicing rights, particularly customers with high FICO scores. That is part of the driver behind Rocket's recently announced acquisition of Mr. Cooper. While we don't expect this quarter's mark-to-market gain to be repeated, we do expect an ongoing meaningful contribution to our ADE from this MSR portfolio. We also had a great quarter in our non-QM loan business. For our non-QM origination partners in which we had ownership stakes, their strong profitability in 2024 has continued into 2025. We continue to expand our footprint in non-QM and we remain an active deal sponsor. We waited at the mid-market April volatility and priced the non-QM deal last week and were rewarded with great execution. The securitization process creates high-yielding investments for the EFC portfolio as well as giving us a growing portfolio of call options that potentially provide us access to high note rate season loans in the future. In recent months, we have been tightening our underwriting guidelines, preferring to focus on higher FICO borrowers and loans with a more extensive underwrite. That view is heavily informed by Ellington's internal research, and as we see the market now pricing in a greater probability of a slowdown in the U.S. economy that scenario should favor a more conservative positioning. We also had another strong quarter from non-agency RMBS both in terms of earnings contribution and portfolio growth. With the growing securitization market in non-QM, jumbo, and second liens, we are finding a rich opportunity set in the market and have been deploying capital accordingly. Last year, we identified as a growth area for us equity release products offered to high FICO agency borrowers with low fixed rate mortgages. Since then, we have been an active buyer and securitizer of second lien loans. We had strong contributions from those investments in the first quarter and have also been co-sponsoring third-party securitizations of closed-end seconds that create retained tranches for us to hold. We expect those retained tranches to provide very high yields and generate outsized ADE. We also made substantial progress in a handful of delinquent commercial mortgage loans in our portfolio. One resolved in the first quarter, one is scheduled to resolve today, and one is in the middle of CapEx and lease-up. We continue to originate commercial bridge loans and are seeing a stronger set of sponsors looking to partner with us. The relationship and expertise that our origination affiliate Sheridan are a big benefit to us here. Similar to residential, we have become progressively more restrictive in our underwriting guidelines, but our pricing power remains strong and we continue to see a high volume of deal flow. We also had a very strong quarter in our agency portfolio, as we were well-positioned to capture both positive carry and mark-to-market gains over our hedges. Now let's talk about April. That was one of the most volatile months we have seen in a long time. While results are still preliminary, we estimate that it was a positive return month for EFC. The uncertainty surrounding tariffs is creating challenges for many business models and leading to significant volatility in both high-yield bonds and bank loans. Despite the market weakness, low loan-to-value real estate loans with high credit score borrowers in residential lending and strong sponsors in commercial lending have proven to be a safe and lucrative investment, as they seem to be more resistant to tariff uncertainties compared to various segments of the corporate market. As shown on Slide 19, we have continued to increase our credit hedges in the first quarter, primarily focused on corporate credits, which effectively helped maintain our book value in April. Looking ahead, we are closely monitoring credit performance across various market sectors for indicators of weakness, allowing us to adjust our credit hedges or shift our focus between sectors as necessary. Additionally, we aim to leverage our advantage in vertical integration to enhance value creation in our portfolio origination companies and generate investment opportunities for EFC's portfolio. We are also starting to see the benefits of several technology initiatives that were developed last year, and we are actively working on creating more proprietary tools to aid in loan origination.

Thank you, Mark. I'm very pleased with how we started out the year. In the first quarter, we continued to grow our residential and commercial loan businesses, building on the strength of our vertically-integrated platform, opportunistically accessing securitization markets and maintaining dividend coverage. Our investment teams executed skillfully in the face of growing macro headwinds, generating solid returns and executing key tactical and strategic maneuvers, such as asset sales, securitizations, and hedging adjustments. As a result, we were positioned really well coming into the second quarter. The current high levels of volatility are recharging the opportunity set and creating compelling trading opportunities. This is an environment that we believe is well-suited to our core strengths. Our short-duration loan portfolios continue to steadily return principal, enabling us to redeploy capital at higher yields. As during previous periods of market stress, our dynamic hedging strategies, diversified portfolio, broad financing base, and low leverage are all helping us protect book value. To that point, please turn to Slide 19. As Mark mentioned, we have built up our credit hedges considerably since mid-2024. So we were able to amass a significant portfolio of credit hedges when spreads were much higher than they are now. Even though our assets are mortgage focused, we mostly use derivatives on corporate bonds, especially high-yield corporate bonds to hedge credit risk, because of their liquidity and their robust protection in big market tail events, like what we saw during COVID. We also opportunistically use CMBS to hedge. Those are credit default swaps on commercial mortgage-backed securities. On this slide, you can see that at quarter end, our corporate credit hedges alone represented an estimated short position of over $450 million high-yield corporate bonds. For context, that figure one year prior was only about $120 million. In April, those credit hedges did their job beautifully. They generated huge profits and cash for us when credit spreads blew out earlier in the month. And for the full month of April, even with credit spreads staging somewhat of a recovery later on, they still helped to offset valuation declines that we saw in the loan portfolio. As a result, despite the widespread market weakness in April, we estimate that our economic return was still positive for the month. In summary, with our strong capital base, ample liquidity, highly-diversified portfolio strategy, disciplined leverage, and active hedging, I believe that we are exceptionally well-positioned to take advantage of the recharged opportunity set that we're seeing in this period of heightened market volatility. With that, let's open the floor to Q&A. Operator, please go ahead.

We'll take our first question from Crispin Love with Piper Sandler. Please go ahead. Your line is open.

Thank you. Good morning, everyone. Just drilling a little bit deeper on the volatility that you've seen in the past months setting you up for some attractive trading opportunities. So far have you been able to deploy a material amount of capital in these types of trades? And then, also where are you seeing the best opportunities in addition to the credit hedges that you've called out?

Hi, Crispin. It's JR. Thanks. Mark, do you want me to start off with the first half of that? Sorry to interrupt you, the first half of the question and then you can do the second half?

Yes, absolutely.

Thanks, Crispin. Crispin, I would say not material growth in April, but the portfolio has grown net relative to where we were March 31st. I would put the growth in two buckets, bucket one being continuing to grow loan portfolio. So I think non-QM, close-in seconds, proprietary reverse, kind of somewhat ordinary course, although we've seen spreads widened and recharging the opportunity set. But then in bucket two, we're able to pick up securities more opportunistically and non-agency MBS for example has grown in April in that category. So we have grown in those areas. And Mark, I don't know if you want to talk about more specifically what you like and what you're seeing in this market?

Sure. Yes. So there was, by middle of April, I mean, the volatility was really extreme. And so, to put a perspective on it, we saw quality non-QM deals from good originators with AAA bonds priced at 190 to the curve and those same deals earlier in the year were 115 to 120 to the curve. So 70-odd basis points widening. Now Larry mentioned, the deal we did at the end of April, give you a sense what the recovery is. We wound up getting 160 in our AAA. So waiting out sort of the eye of the storm definitely worked to our advantage. But by mid-April, when you saw these 190 prints on AAA, there were people pretty nervous. So we were able to buy some loan packages that made sense even assuming 190 execution, the top part of the capital stack. And also, CUSIP, we mentioned I mentioned in the prepared remarks, how we're seeing a better, a richer opportunity set in non-agency CUSIPs than we had maybe a couple of years ago. And part of that is the non-agency securitization market has grown in jumbos, in non-QM, in seconds. And so, we actively find opportunities in buying securities in that market. And a lot of times, there's a pretty healthy new issue concession that we can capture and monetize. So those probably have been the biggest areas.

Great. I appreciate all the color there, JR, Mark. Then you also called out the resolutions in some of your commercial bridge loans recently. Can you just give a little bit more detail on what those resolutions look like? Were the loans modified? Were they sold? Just curious on those details. And then, the positive impact you would expect to see to ADE from those resolutions on a go-forward basis?

Sure. So, let me think. One was a discounted payoff. One that's scheduled to close today is an REO sale. And then, we have another that goes in active CapEx and lease up that's a longer horizon. In total, the fair value on those at quarter end were, excuse me, at year end were in the $50 million to $60 million range and we've resolved by fair value a little less than half of that. So freeing up $20 million to $25 million to reinvest and maybe some financing on that as well. But the numbers aren't huge, but they're disproportionate in terms of not just being available to invest in high-yield assets, but also turning off negative carry on the underlying.

Yes. Just as we said, we think by the end of the second quarter, we'll just have one significant one left. That's I think in the $30 million range in terms of the value of that. And that's great. So we really just are going to have some continued negative ADE drag from that, but that's a very small, obviously, percentage of our portfolio. So I think it's great to have these behind us. And I think in retrospect, compared to what a lot of other lenders, especially lenders in the commercial space, have seen, I think we did great in terms of limiting how many problem assets we end up having and I think we're towards the end here a lot sooner than other people. So I think, yes, teams have done a great job.

Yes. I would just clarify. So one, an REO sale, it's pretty straightforward. Maybe discounted payoff, it was in a bankruptcy process. So it was a little more complicated than that, but to give you a flavor of how the resolution happened. I just want to say one more thing. That bankruptcy asset was an asset that we had inherited from Arlington. So even then, not something that was the result of our underwriting team. So I think they've done a great job.

We'll take our next question from Trevor Cranston with Citizens JMP. Please go ahead. Your line is open.

Hi, thanks. Mark just mentioned the spread volatility you guys have seen in the securitization market so far in the second quarter. Does that high level of spread volatility have any material impact on your guys' near-term appetite for loan acquisitions given some level of uncertainty about ultimate securitization execution levels and can you maybe just provide some color on what loan acquisition activity has been like through the market volatility over the last several weeks? Thanks.

Sure. This is Mark. That's a great question, right, because we think about that all the time. We have choices in these markets to just buy securities that other people make and sometimes you have to be deal sponsor to get the ones you want, sometimes you don't or taking a longer view and doing securitizations yourself and then retaining things that you've had more control over the underwriting and more control over the guidelines and how the deal is put together. But if you want to do the latter, you have to go through a fairly long process, a couple of months process of ramp-up, where you're acquiring loans, you're hedging the interest rate risk. We have been diligent about hedging, spread widening risk, and then executing the deal in the open market. So, there are pros and cons to both. When you see heightened volatility, if you don't get a corresponding widening of loans relative to securitization execution, then it looks like that ramp-up risk you might not be getting fully paid for it. So I think our view of the world in April was that, when spreads really widened a lot, top of the capital stack, we thought that the securities looked really cheap, a little bit cheaper than loans, and we responded by buying some securities. Then, as you started to get a little bit more consistent pricing on deal execution, loans didn't fully tighten to reflect that, then we thought loans looked attractive. I think one thing about April, which was very interesting and it was materially different than what you saw in kind of the last big stress was maybe March 2020, is that, in April, there were people that want to sell risk, but there were people that want to buy risk. So it's not as though the origination market shut down the way it did in COVID, where you're kind of flying blind as to where securitizations would be and you had to price loans assuming just going to hold them in portfolio on repo, which is what we did. But, in April, there were as many or more buyers I think than there were sellers. So deals were getting consistently done. The way they were getting priced, they were getting priced very quickly. So there was capital on each side of the market. So, I think that definitely gave us a little more confidence in things. So I think the first leg we thought securitizations had lagged, were a little cheap, we had some securitizations. And then through the course of the month, as we saw opportunities to buy loans and you had better transparency and just tighter spreads on securitizations, then we thought loans looked attractive relative to securitizations and ultimately sort of re-expressed that by pricing and securitization, I guess, last week or week before in April.

And if I could just add one more thing to that, Mark. The velocity, the frequency of our especially in non-QM securitizations has increased a lot versus where it was a couple of years ago, for example. So instead of doing one deal a quarter, we're looking at under normal circumstances do at least two deals a quarter, right? So that just cuts down the time frames. So when we're if we're buying a loan package. We might be doing a securitization, granted not of those very loans, but of loans that we've held, we might be doing a securitization in that same week, for example, that we're buying a new loan package. And so, you're derisking one package and then putting on risk in another. And if you have this frequent volume of securitizations, that just limits kind of that gestation risk, if you will. And at the same time, as we mentioned, we are doing something that we think not a lot of other people are doing, which is we're using credit hedges to mitigate those spread movements. And we've found that they've been extremely effective and correlated with the spreads that we've seen in the securitization markets versus how our hedges have reacted. So we think that's working well for us.

We'll take our next question from Randy Binner with B. Riley. Please go ahead. Your line is open.

Hi. Thanks for taking the question. I think we heard in the prepared remarks that you're in discussions with potential JVs with two originators. Just wondering, if you can share kind of timing on that or any size, so we might gauge the impact there?

Sure. Yes. Thanks, Randy. I would say that, maybe starting with size neither of these is a large investment under $5 million I think in total would be our equity investment. So but we have a stable of these types of small investments that have produced loan flow well multiples in excess of what our equity investment is. So I think we point those two deals out in term sheet stage. I think we put it to point out that we're further diversifying our sourcing channels in the same products, not necessarily that either will be material in size, but just adding to the stable of originator investments that have been successful for us over the last couple of years.

Yes. And it's a win-win. I mean, even with the amount of money that we're providing in terms of working operating capital for them may not be a big number for us in terms of an investment. But it's very meaningful, especially for an originator that is not so long established for them to ramp up. And so, a lot of these smaller originators just getting started. They could be originating $40 million a month, something like that, pretty soon after we supply that working capital. And so, if that's supplying us close to $0.5 billion a year alone, it's just a win-win for both parties, right? They jumpstart turbocharge their growth, gives them they don't have to worry about an outlet for their product. They could even sell to us on a forward basis, which they do all the time. So they can even lock-in a sale even if they haven't originated the loans yet. So there's just lots of advantages going both ways. These are great joint venture arrangements that we've put in over time, and we now have a lot of these.

Yes. And I'd say timing-wise next quarter or two is the expectation.

Got it. Okay. Thank you for that. But they're small, but agree on your comments. And then, I just one more if I could. Just something that Mark said stood out to me and that kind of the increased value on consumer relationships and how Rocket Coupe is an example of that. I guess the question I have is that just a reflection of this lock-in effect where the mortgage rates are higher now than they were before, or is this more of a permanent shift in your view?

A lot of cross-selling options. Yes, go ahead, Mark.

I believe this goes beyond just the current situation. We had Rocket Coupe, and prior to that, we had Rocket Redfin. This highlights the idea of viewing home buying as a process where various services are provided and fees are incurred along the way. Initially, you engage a real estate agent, then you find and purchase a home, which involves real estate commissions, title insurance, and mortgage insurance. After securing a loan, you might hold onto it for three years, and if rates drop, you could refinance. As family needs change, you might sell that home and buy another one. There's a growing recognition among major players that by building a relationship with a customer now and maintaining it over time, there can be multiple loans and house purchases. This leads to several fees and commissions being generated, not to mention opportunities to cross-sell second liens or consumer loans. This pattern is similar to trends seen in other sectors of the economy, where larger players are capturing more market share. This is evident in the actions of National Builders as well. When considering this perspective, it becomes clear that the clients you want the strongest relationships with are those who consistently pay their bills, which is reflected in their FICO scores. These clients typically demonstrate financial responsibility by providing substantial down payments when purchasing homes. This trend is similar to what we've seen with American Express in residential markets, where customers might use their cards for restaurant reservations and hotel bookings, illustrating how this mindset is now permeating the mortgage sector.

That's really interesting. I appreciate the comments.

We'll take our next question from Bose George with KBW. Please go ahead. Your line is open.

Hi, this is Frank on behalf of Bose. Last quarter, you mentioned that the Longbridge segment had $0.09 earnings as a long-run rate. Is that still attainable considering the current trends?

Yes. We think it is. They were $0.07 of ADE in Q1, which as a percentage of their capital usage covers $0.39, but we did we have said kind of consistently $0.09 is the longer-term run rate as we see it. Their volumes were down seasonally. So they originated $420 million combined tech and prop in Q4 down to $340 million in Q1, I think largely seasonally driven. So margins held up and they were still profitable within originations and servicing, you're setting aside the interest rate hedge. So with April selling season and April, excuse me, spring selling season and April looking good from a proper reverse submission perspective as Larry mentioned in his prepared remarks. I think we haven't changed the outlook for those reasons.

Also, it's going to be a little lumpy based upon securitization activity at Longbridge. So we did not do a deal in the first quarter, but I think we expect to do one shortly. So every time when we do the deals, that's when they ring the cash register in terms of the AD on origination profits, so on prop. So with that prop reverse deal securitization deal expected to come soon, and you didn't have one in the first quarter, I think that explains a lot of it as well.

Great. Thank you. And then you noted some sales of CLOs during the quarter. Can you just talk about current performance and dynamics in that market? Thanks.

Yes. I would say CLOs for EFC have been a small part of the portfolio. It's ebbed-and-flowed kind of opportunistically across the last several years frankly. So it's more of a complementary business to the core businesses, loan businesses than a core business on its own. So a lot of the so the negative performance for CLOs came from spread widening, particularly in CLO equity, which is not necessarily reflective of underlying credit issues or impairments, but more reflective of wider credit spreads market-wide. So I would just highlight that for EFC, the invested amount of CLOs is a pretty small amount. I mean, in our earnings release, you could see that we own CLOs of $28 million at March 31st down from $61 million at year end, but that compares to a total adjusted loan credit portfolio of $3.3 billion or 1% less, exactly.

Thank you. And that was our final question today. We thank you for participating in the Ellington Financial first quarter 2025 earnings conference call. You may disconnect your line at this time and have a wonderful day.