Greetings, and welcome to the Eagle Point Income Company Fourth Quarter 2025 Financial Results Conference Call. As a reminder, this conference is being recorded. At this time, I will turn the conference over to Mr. Darren Daugherty from Prosek Partners. You may begin.

Thank you, operator, and good morning. Welcome to Eagle Point Income Company's Earnings Conference Call for the Fourth Quarter and Fiscal Year 2025. Speaking on the call today are Thomas Majewski, Chairman and Chief Executive Officer of the company; Dan Ko, Senior Principal and Portfolio Manager for the company's Adviser; and Lena Umnova, Chief Accounting Officer for the Adviser. Before we begin, I would like to remind everyone that the matters discussed on this call include forward-looking statements or projected financial information that involve risks and uncertainties that may cause the company's actual results to differ materially from such projections. For further information on factors that could impact the company and the statements and projections contained herein, please refer to the company's filings with the SEC. Each forward-looking statement or projection of financial information made during this call is based on the information available to us as of the date of this call. We disclaim any obligation to update our forward-looking statements unless required by law. Earlier today, we filed our full year 2025 audited financial statements and fourth quarter investor presentation with the SEC. These are also available in the Investor Relations section of the company's website, eaglepointincome.com. A replay of this call will also be made available later today. I will now turn the call over to Thomas Majewski, Chairman and Chief Executive Officer of Eagle Point Income Company. Tom?

Thank you, Darren, and good morning, everyone. During 2025, the CLO market experienced challenging conditions, and the company was not immune to these broad market dynamics. While default rates in the loan market remain below long-term historic averages, the company's financial performance and total return for shareholders last year were adversely impacted by a number of key factors. These factors included the effect of reduced SOFR levels on CLO debt investment income, ongoing loan spread compression impacting our CLO equity portfolio, and a broader negative sentiment in the market towards credit. Throughout the year, we actively managed our portfolio within our investment mandate as the market evolved, seeking opportunities across both CLO debt and equity as well as certain other asset classes beyond CLOs. We believe our long-term distribution track record reflects the durability of our strategy across different interest rate cycles and credit environments. As we move into 2026, we believe healthy underlying borrower fundamentals and our disciplined approach will position us well. Looking at the company's results for the year, EIC generated a GAAP return on equity of negative 0.7% and a total return on our common stock of negative 15.2%, assuming reinvestment of distributions. We paid $1.98 per share in cash distributions to our common shareholders or 15% of our average stock price during the year. During 2025, the elevated level of CLO refinancings, resets, and calls contributed to early repayments across our CLO debt portfolio. Paydowns within our CLO debt portfolio totaled $147 million during the year. Because many of these investments were purchased at discounts and were then repaid at par, the repayments did generate $0.12 a share of realized capital gains during the year. During the course of 2025, we participated in 10 resets and 6 refinancings across our CLO equity portfolio. Each reset extended the reinvestment period to 5 years, and together with the refinancings resulted in average CLO debt cost savings of 46 basis points for those CLOs. Looking at the fourth quarter results from last year, the company generated net investment income less realized losses of $0.03 per share, which was comprised of $0.35 of net investment income and offset by $0.32 of realized losses. The realized losses were primarily attributable to portfolio repositioning, including rotating out of certain positions from underperforming CLO collateral managers. The fourth quarter net investment income of $0.35 per share compares to $0.39 of net investment income per share recognized in the prior quarter. The decline in net investment income was driven primarily by two factors; first, SOFR declined during the quarter, reflecting the continuation of Fed rate cuts in the second half of 2025. This directly impacted our CLO debt portfolio as the coupons on our CLO debt positions generally have a floating rate based on SOFR. Second, continued tightening in broadly syndicated loan spreads, which has outpaced the decline in CLO liability costs, also reduced earnings from our CLO equity portfolio. We refer to this market dynamic as spread compression. Despite the decrease in net investment income, portfolio cash flows remain robust. Recurring cash flows for the fourth quarter totaled $19 million or $0.79 per share, which compares to the prior quarter's $17 million or $0.67 per share, representing an approximate 18% increase quarter-over-quarter. The increase reflects the quality and diversification of the company's investment portfolio. Notably, fourth quarter recurring cash flows exceeded our regular common distributions and total expenses by about $0.15 per share. NAV decreased to $13.31 per share as of December 31, which is down from $14.21 per share at the end of September. This was largely driven by continued loan spread compression, which has caused CLO equity valuations to decline. Our GAAP return on equity for the fourth quarter was negative 4.2%. Our investment strategy allows us to deploy capital across CLO debt, CLO equity, and other credit asset classes in both the primary and secondary markets. This flexibility enhances our ability to allocate capital where we find the most compelling relative value. During the fourth quarter, we deployed about $45 million into new investments. Of that amount, $26 million was invested in other credit asset classes such as infrastructure credit, asset-backed securities, portfolio debt securities, and regulatory capital relief transactions with a weighted average effective yield of 21.6%. Importantly, our adviser has expertise in these other credit strategies and has been invested in them for some time for other funds and accounts that our adviser manages. We've also continued to actively optimize our capital structure seeking to reduce financing costs. During the fourth quarter, we completed the full redemption of our 7.75% Series B term preferred stock. We also entered into a new revolving credit facility with an attractive cost of capital and a 3-year maturity. Earlier today, we announced our intention to fully redeem the company's 8% Series C term preferred stock, which at present represents our highest cost of capital. During the quarter, we also repurchased $19 million of common stock at an average discount to NAV of 18.2%, resulting in a NAV accretion of approximately $0.14 per share. In November 2025, we announced that our Board of Directors had increased our common share repurchase authorization to $60 million. These actions reflect our ongoing commitment to enhancing shareholder value, and we expect to opportunistically continue buying back shares when they are trading at material discounts to NAV. We believe our shares remain undervalued, and repurchasing them represents a very attractive use of the company's capital. Last week, we declared three monthly distributions of $0.11 per share for the second quarter of 2026, which is in line with the distributions we declared for the first quarter. We believe the current monthly distribution level of $0.11 per share aligns with the company's near-term earning potential in today's lower interest rate environment. As a reminder, when setting the monthly distribution level, the company's Board of Directors considers numerous factors, including the cash flow generated from the company's investment portfolio, our GAAP earnings, and the company's requirement to distribute substantially all of its taxable income. CLO debt is a floating rate asset, so it is expected that our earnings power will generally move in line with benchmark rates. That said, we continue to believe CLO junior debt offers compelling risk-adjusted returns compared to many other broader credit market opportunities. We believe the company's portfolio is well positioned to drive returns in any economic environment and rate cycle. The scale and experience of our adviser, Eagle Point, remain key advantages as we seek to capitalize on opportunities in a dynamic market environment. I'll now turn the call over to Senior Principal and Portfolio Manager, Dan Ko, for an update on the market.

Thanks, Tom. I'll provide a quick update on both the loan and CLO markets during the fourth quarter. Loan market fundamentals remained largely stable throughout the year despite occasional bouts of volatility due to headlines concerning tariffs, interest rates, and global geopolitical factors. Loan issuers continue to have positive growth in their revenues and EBITDA throughout the year, contributing to a relatively healthy credit market. The S&P UBS Global Leveraged Loan Index posted a 1.2% return for the fourth quarter and a 5.9% return for the entirety of 2025. The trailing 12-month default rate decreased from 1.5% at the end of September to 1.2% as of December 31, still considerably below the long-term average of 2.6%. As of December 31, our portfolio's default exposure was 32 basis points. Continued rate declines should support a lower default rate environment as issuers save on interest costs. CLO new issuance rose slightly to $55 billion in the fourth quarter, totaling $209 billion for 2025, surpassing the 2024 record of $202 billion. Fourth quarter resets and refinancings were $54 billion and $20 billion, respectively. Combined full year CLO issuance, including resets and refinancings, hit $546 billion for 2025, exceeding last year's total volume of $511 billion. Tight loan spreads and increased supply of new issue CLOs were headwinds to CLO equity returns, causing some pressure on our results. At the same time, new issue loan activity is picking up with several large loan deals recently announced. This increase in supply could cause loan spreads to widen as the market absorbs higher loan volumes, leading to potentially higher equity cash flows in the future and creating a potential tailwind for CLO equity. CLO debt spreads have remained resilient despite the modest volatility that we observed in the fourth quarter. Our CLO BB positions, which are focused on the higher quality portion of the market, benefit from attractive yields and our subordination. As of December 31, we had $52 million of cash and undrawn revolver capacity available, providing ample liquidity to deploy into attractive investment opportunities or opportunistically repurchase our stock and deliver long-term value for our shareholders. With that, I'll hand the call over to our adviser's Chief Accounting Officer, Lena Umnova, to walk through our financial results.

Thank you, Dan. During the fourth quarter, the company recorded net investment income or NII less realized losses from investments of $0.7 million or $0.03 per share. This compares to NII less realized losses of $0.26 per share in the prior quarter and NII and realized gains of $0.54 per share in the fourth quarter of the last year. Including unrealized investment portfolio losses, GAAP net loss was $15 million or $0.60 per share for the fourth quarter. This compares to GAAP net income of $0.43 per share for the third quarter. The company's fourth quarter net loss was comprised of investment income of $15 million, offset by net unrealized losses of investments of $16 million, net realized losses of $8 million, and financing and operating expenses of $6 million. In addition, the company recorded an other comprehensive loss attributable to changes in the mark-to-market of the company's liabilities recorded at fair value of $1 million for the fourth quarter. We paid three monthly distributions of $0.13 per share during the fourth quarter of 2025. Last week, we declared monthly distributions of $0.11 per share for the second quarter of 2026, in line with the distributions for the first quarter of 2026. As of December month end, the company had outstanding preferred securities which totaled 31% of total assets less current liabilities. This is within our long-term target leverage ratio range of 25% to 35%, where we expect to operate the company under normal market conditions. As of December 31, the company's NAV was $312 million or $13.31 per share versus $14.21 per share as of September month end. During the fourth quarter, we repurchased over 1.6 million shares of our common stock for $19 million at an average discount to NAV of 18.2% per share, which resulted in NAV accretion of $0.14 per share. Looking at our portfolio activity during the month end of January, the company received recurring cash flows from its investment portfolio of $14 million. It's noteworthy that some of the company's investments are still expected to make payments later in the quarter. As of January month end, net of pending investment transactions and settlements, the company had $85 million of cash and revolver capacity available for investment and other purposes. Management's unaudited estimate of the company's NAV as of January month end was between $13.23 per share and $13.33 per share. I will now turn the call back to Tom to provide closing remarks before we take your questions.

Thanks, Lena. The fourth quarter reflected our continued focus on active portfolio management amid dynamic market conditions. Performance faced technical headwinds driven by spread compression in the leveraged loan market and the pace of repricings rather than deterioration in credit fundamentals. Throughout this environment, we have focused on relative value and disciplined capital allocation across CLO debt and selectively CLO equity and other asset classes in the credit market beyond CLOs. We continue to actively execute on our share repurchase program as we view our stock as undervalued and believe repurchasing shares at a discount represents an attractive use of capital. Looking ahead, we remain constructive on the CLO market fundamentals. We have a robust pipeline of refinancings and resets, which we believe will help lower the liability costs in our CLO equity portfolio. At the same time, increased new issue loan activity may help rebalance supply and demand in the loan market over time, which we also believe could be incrementally supportive for CLO equity. Overall, we believe the current market environment represents a compelling opportunity for patient, well-capitalized investors with a strong balance sheet. With active portfolio management and a continued focus on relative value, we believe Eagle Point is well positioned to navigate the evolving market conditions and deliver solid risk-adjusted returns and long-term value for our shareholders. Thank you for your time and interest in Eagle Point Income Company. Lena, Dan, and I will now open the call to your questions.

Our first questions come from Erik Zwick with Lucid Capital Markets.

I wanted to start with just a follow-up on some of your comments, Tom, about the realized losses in the quarter being driven by rotating out of some underperforming managers. I wonder if you could just add a little more color to that on what particular measures or metrics were they kind of falling short of expectations? Just kind of curious if you can add something there.

Erik, this is Dan. So I guess in terms of the underperforming collateral managers, these are some of the ones that had, I guess, more credit issues and kind of loan spread compression that we had kind of anticipated on the CLO equity side. Maybe there were a handful on the CLO BB side as well that have kind of underperformed our expectations on credit. We just thought that it was best to exit and rotate into both other CLOs, but also some of the asset classes away from CLOs that you've seen kind of grow within your portfolio, whether it's collateralized fund obligations, asset-backed securities, and then some other portfolio debt securities, which are all asset classes that Eagle Point and other funds within Eagle Point are investing in. We just found better relative value there. So we thought we would enhance the yield of the portfolio as well as kind of add a little bit of diversity within the portfolio through those.

That's great color. And then in terms of the announced redemption of the Series C term preferred stock, curious about your source of funds for redeeming that? Is it kind of a combination of cash on hand and maybe utilization of the new revolver? Or how do you plan to fund that?

Yes, exactly. So it's definitely the revolver, new revolver that's in place. There's cash on hand, but also just there continues to be a lot of refinancings and resets. For our CLO debt, that means that we're getting paid off at par for stuff that we typically bought at a discount earlier. So we're achieving that convexity and then able to get par back and use those proceeds to ultimately pay back the EICC.

Got it. And then last one for me. In the press release, there's an indication that the weighted average expected yield on the CLO portfolio was 12.5% at the end of the quarter, and that was up from 11.6%. Curious the driver of that increase, was it kind of income related or more in the denominator, just the change in the fair market value of the portfolio?

I think it's more just so that it was a little bit, I guess, of the denominator, but it was also just kind of being able to redeploy into wider yielding assets versus CLO BBs and CLO equity. So it's really that kind of non-CLO bucket that was accretive.

Our next questions come from the line of Christopher Nolan with Ladenburg Thalmann.

Lena, were there any nonrecurring items in the earnings?

No, there were none this quarter.

Okay. And then I guess a follow-up on Erik's question on the refi. Should we expect the investment balance sheet investment portfolio to shrink in the first quarter and possibly into the second quarter as well relative to year-end?

No. I mean, I guess we're obviously redeeming kind of the EICCs, but we have been kind of opportunistically buying back our stock. That being said, we typically, over the long-term target a 25% to 35% leverage ratio. We will be kind of on the lower end of that. So I guess we have that target of 25% to 35%. And that's really kind of all I can say for now.

Okay. And then I guess the indication is you're going to be focusing less on CLO, more on alternative credit assets. Are these going to be assets which you have any sort of direct exposure you directly underwriting let say, a company? Or is it you're going to be buying packaged securities as before?

Yes. No. So these are investments that are being made kind of across the Eagle Point platform and other funds or accounts that we manage. We have dedicated teams that are focusing on these investments. Based on the merits of the investment and based on kind of my decision as the portfolio manager, the EIC can participate in these investments. Relative to the opportunities that we were seeing in CLOs, we found that these other non-CLO investments, I guess, provided a better relative value opportunity. That could change tomorrow if we find CLOs provide a better kind of relative value attractive yield. But during the fourth quarter, we found better relative value within these non-CLO asset classes.

We have reached the end of our question-and-answer session. I would now like to hand the call back over to Tom Majewski for any closing comments.

Great. Thank you very much, everyone. We appreciate your time and interest in Eagle Point Income Company. Hopefully, we're giving some good color on the strategy for the portfolio as we move forward. Certainly, we will remain in the foreseeable future focused on the core of the CLO BB portfolio, but with the goal of enhancing the return where we can just as we've added CLO equity from time to time, similarly introducing some other asset classes that we're investing in across Eagle Point's broader platform where we see opportunities on a relative basis to add incremental value. So we're excited about the company. Our number one job is to be delivering strong returns to shareholders through credit products. We believe as we continue to evolve the strategy of the portfolio consistent with broader developments here at our firm, we're excited for the future prospects for EIC. We appreciate your time and attention. Lena, Dan, and I are around today if anyone has any follow-up questions. Thank you.

Thank you, ladies and gentlemen. This does now conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.