Good morning, and welcome to the Rithm Capital Fourth Quarter 2025 Conference Call. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Emma Holke, Deputy General Counsel. Ma'am, please go ahead.

Thank you, and good morning, everyone. I would like to thank you for joining us today for Rithm Capital's Fourth Quarter and Full Year 2025 Earnings Call. Joining me today are Michael Nierenberg, Chairman, CEO and President of Rithm Capital; Nick Santoro, Chief Financial Officer of Rithm Capital; and Baron Silverstein, President of NewRez. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rithm Capital website, www.rithmcap.com. If you've not already done so, I'd encourage you to download the presentation now. I would like to point out that certain statements made today will be forward-looking statements. These statements, by their nature, are uncertain and may differ materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplement regarding forward-looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non-GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement. With that, I will turn the call over to Michael.

Thanks, Emma. Good morning, everyone, and thanks for joining our fourth quarter earnings call. So much to be excited about with our company. And before I get into the discussion, I want to thank our partners for all your support as well as our employees across all of our companies for all of your hard work and effort in driving excellent results for our LPs and shareholders. On today's call, I welcome Peter Brindley, one of our new partners who has been leading all leasing and other divisions at Paramount. Peter will be speaking about Paramount, which is one of our new acquisitions on the real estate side, and Baron Silverstein, who you've heard from in the past will be speaking about NewRez. As we think about 2025, it was an excellent year for the company, in which we executed for our clients by creating outsized returns for our LPs and higher earnings year-over-year for our shareholders. We grew our asset management business, both organically as well as through acquisition, including adding Crestline Asset Management and a take private, as I just pointed out of the real estate REIT name Paramount to our stable of companies. Today, we manage over $100 billion in investable assets across the firm. As I've said repeatedly, we will grow our firm prudently by creating alpha and results for our clients. While all of us in the asset management business want more assets, we will earn each and every one through performance. Financially, our company had a great year, a great fourth quarter, which I'll get into in our supplement. The diversification of our platform is paying off as we had a record fourth quarter from an EAD perspective. Book value year-over-year was higher despite paying out north of $600 million in dividends. Our Genesis…

Thank you, Michael. I'll start by saying Paramount owns, manages and operates high-quality, centrally located Class A office properties in New York and San Francisco. The portfolio consists of 10 core assets totaling 9.9 million square feet, 3 noncore assets totaling 2.4 million square feet and 3 managed assets in New York totaling 600,000 square feet. The entire portfolio is approximately 13 million square feet. In 2025, we leased more than 1.7 million square feet in our core assets, up 235% from 2024 and our highest annual total on record. Approximately 62% of our 2025 leasing velocity was on vacant space and space scheduled to expire in 2025. The balance of our 2025 leasing served to derisk future lease roll. At year-end, our core portfolio leased occupancy at share was 86.9%, up 220 basis points year-over-year. Our core portfolio boasts a weighted average lease term of 8.4 years for office leases with an average in-place rent of $90 per square foot. Our tenant roster is comprised of best-in-class companies with significant industry diversification. The portfolio is largely comprised of financial services, legal, insurance, technology and media companies. Turning to our leasing results on Page 14. In New York, at year-end, our New York core portfolio's leased occupancy was 92.8% at share, up 780 basis points year-over-year. During 2025, we completed 43 deals totaling 1.3 million square feet with an average lease term of 13.8 years. Our 2025 leasing includes 5 deals greater than 100,000 square feet, a testament to the quality of our assets and the strength of our team, as Michael alluded to previously. With regard to the New York market, it just continues to gain strength. Manhattan has experienced the strongest return to office momentum in the country with visits to Manhattan office buildings nearing pre-pandemic levels. In-person…

Awesome. Thanks, Peter. Just a side note on San Fran. I know when you look at the slide, it says 62% leased. What I would say in our -- as we form -- as we do our capital formation around this transaction, the amount of incoming phone calls we've had from folks that want to play the recovery, I'm not going to call the trade, the recovery investment in San Francisco has been extremely significant. And one of the things I'd also point out at Rithm, we made an early investment in the debt -- in Columbia Property Trust on the debt side. So we've had an exposure to San Francisco and have seen the growth in that in San Francisco since I think it was 2023. So we have a really good feel for that market. I do think there's going to be a ton of money made there. Peter pointed out on AI. There's been like Anthropic has gone in and just taken down a whole new building. Just one other note, and then I'll talk about Genesis. When you look at this office portfolio, one of the things that we all know today, when folks go to work in an office, they want a lifestyle. You can look what the JPMorgan folks have done at 270, like they built this amazing building. We are doing a lot of the same things when we think about amenity packages in a number of our buildings. So again, very, very excited about this investment and truly believe it's going to be a very good one for our shareholders and LPs. Just quickly for me on the Genesis side, then I'll turn it over to Baron, who will talk about NewRez. It's been a great business for us. We bought this from Goldman Sachs Merchant Bank going back to 2022. Clint Arrowsmith, who leads that organization for us has done a fantastic job growing, not only just growing the business and when you think about from an origination perspective and UPB, but sponsors and most importantly, credit matters. We see this when we look at companies all day long, delinquency trends and what you see with some folks that are truly in either whether it be an AUM race or try to grow their origination business where they shouldn't be from an overall credit standpoint. We've seen this in our careers many, many times. But when we look at the Genesis business and if you have a look at Slide 16, the team there has done just a great job. And that product is one of the hottest products in the marketplace. You'll see us expand our multifamily origination as well as our RTL origination as we go forward. With that, I'm going to turn it over to Baron, who will talk about NewRez, and we're going to open up on Page 19.

All right. Thank you, Michael. Good morning to everybody. NewRez had a great 2025, and we're really excited about where we're headed in '26. We finished the year with a total pretax income, excluding mark-to-market of approximately $1.1 billion, which is a 17% increase year-over-year and a milestone for our platform. Our fourth quarter pretax income, excluding mark-to-market, was $249 million, driven by our origination strategy and our disciplined origination strategy, our third-party servicing business and despite the impact of faster prepayment speeds, we delivered a 17% ROE on the quarter and a 20% ROE for all of 2025. For context on speeds, the composition of our servicing portfolio is deliberate and reflects a balance between third-party servicing and owned MSR. Approximately 30% of our overall portfolio is third-party high-margin fee-based servicing. 18% of the overall portfolio or 26% of the owned portfolio are Ginnie MSRs, of which approximately 1/3 were originated in the last 3 years. Regarding our quarterly MSR mark-to-market, while our high-quality owned MSR portfolio continues to perform well, we saw seasonal increases in delinquencies and advances. And the new FHA modification rule has increased immediate delinquencies to encourage long-term stability. Our mark-to-market approach has remained consistent with prior quarters and in our view, conservative. Overall, these results continue to show the power of our platform and our ability to drive consistent earnings. Turning to Slide 20 and regarding our 2026 technology strategy. Yesterday, we announced our partnership with Valon Technologies on our servicing operating system. And 2 weeks ago, we announced our partnership with HomeVision for our underwriting decision engine. These partnerships are designed to upgrade our core operating platforms with AI as a fundamental core component rather than adding AI as an afterthought to existing structures. The first phase of our HomeVision rollout has already…

Thanks, Baron. Just a couple of notes on the mortgage company stuff. Obviously, a little bit of noise -- I shouldn't say a little bit, but some noise around our equity got hit as did some of the other kind of mortgage companies over the course of the past few days. We don't -- we're not in a race to grow origination. We're not in a race to grow AUM unless we can make money. So when you think about it, if folks are out there pricing origination through the market, it's not going to be us. So origination volumes will vary. Similarly, when you think about the MSR business, we're fully hedged against our MSR. I did point out we have a steepener on. But when we think about that, you are going to have some mark-to-market volatility in a quarter when rates move or mortgage spreads tighten. It's just the nature of the business. You take a step back and you think about that as well as some of the things we're doing around the technology side, Baron pointed out Valon. Valon is -- Valon came to us years ago. We spent some time with them. We seeded them with a portfolio of loans on the servicing side. At that point, we took an equity stake in the company. And if this thing plays out the way that we think it could and will, we believe that the sheer size of -- or the market valuation of Valon could be a substantial P&L contributor to our business from an overall market value standpoint as we go forward. When you look at tech valuations and if this company is worth $10 billion, for example, that could be worth a couple of dollars a share. So I look at this…

[Operator Instructions] Our first question today comes from Crispin Love from Piper Sandler.

First, just looking at your funded volumes, purchase versus refi, refi made up 40% plus for you in the quarter. I think that's the highest level for several years, at least on a percentage basis. Can you just detail that a bit? Were those competitive takeaways, recapture on your own book? A little color there would be great. And then just expectations into the first quarter, thoughts on overall volumes relative to 4Q, just given recent mortgage rate moves.

Yes. So look, we're a large correspondent buyer. So what you're seeing is a reflection of the market. You saw the rally in late summer and in September and that you saw the refi volume picked up, and you see that in speeds overall going into the fourth quarter. And that's really kind of the measurement for what you've seen for refis going up. And then just going into January, Michael referred to what we call the Trump bump. So you saw kind of spreads tighten and then you saw the pickup in production coming into the month of January. And I think you'll see that when our numbers come out at the end of the first quarter.

And what do you think regarding -- just getting to Crispin's question, production for Q4, let's just go '26?

Our forecast for '26 is going to be up. We think we're going to be up around where the market is estimating, which I think is approximately 10%. I do think, Crispin, our internal views is that as we continue to connect with our homeowners, as we continue to deliver better and faster service for them and better tools that we will continue to basically improve and pick up market share.

And Crispin, part of this goes back to the investments we're making on the marketing side. We speak about AI. We speak about bringing in some new talent who are going to help lead certain divisions, who are leading certain divisions. I think all that's going to help on the recapture side. So somebody doing this, we built Mr. Cooper when we were at Fortress. We know what refi recapture numbers should be. I don't think there's a real -- I mean, we could say there's a science, but you just have to be really good at it. I think we're really good at it because we have really good experience. While saying that, if you go into any kind of cycle thinking you're the best, you're going to be the loser, and we don't always think we're the best, and we're going to invest both resources capital to make sure that our refi numbers or recapture numbers, I should say, continue to go up, but the market is going to give you what the market is going to give you.

Great. I appreciate all that. And then, Michael, you alluded to it, but can you discuss competition in the mortgage space, definitely been a popular topic just from some competitors' results in the last few days. Gain on sale margins have been lower from a lot of others out there, but your's helding well, actually expanded. Just what's your view there? Are you seeing mortgage players being irrational in the fourth quarter and today?

You really asking me to comment on an earnings call if mortgage players are being irrational. I don't know if anybody is being irrational. What I would say is it is a competitive business, always has been. You're going to see more origination. Certain players are -- they're more aggressive. It doesn't mean they're going to make more money. The one thing I would say about our company and when you look and Baron referred to amortization and as we look at where we are, the breadth of the company, when we were able to put up a $400 million quarter in Q4 and quite frankly, when you look at the MSR business, take a little bit of a more conservative approach, I think, Q4 because we could is something that really differentiates us. So when we look at the competition and we think about our friends in the space who just want to grow origination, we don't -- we're not -- it's not going to be us. We want to keep all our customers on our platform for sure. We're going to do that through refi and recapture. But the government has come out with some changes as well, right? I mean when you look at the Ginnie program, that's why you saw a small spike in delinquencies in the fourth quarter. We do think a lot of that, if not all of that, based on a 430 10-year note and call it a low 6 mortgage rate will reverse here in the first quarter. So we expect to see that mark-to-market actually go the other way here in the first quarter. As it relates to the broader mortgage business and originators, there are some folks that have been in, what I would say, real competition for many, many years on the origination side. That hasn't been us and it's not going to be us. So there's a lot of levers that we can pull that make our shareholders and LPs money. We'll continue to do that without getting into a race.

Our next question comes from Bose George from KBW.

Just wanted to follow up on the gain on sale margin. On the retail channel specifically, there was a pretty good increase this quarter. Last quarter, you guys noted that I think it was Ginnie's streamlined refis were driving some of the decrease that you saw in 3Q. So just quarter-over-quarter, fourth quarter over third quarter, just curious how much of the improvement was mix versus kind of an apples-to-apples improvement by product type?

Yes. So it's definitely mix is always a driver, right? You saw our correspondent share, which was hovering around 70% is now, I think, 62% for the quarter as we picked up our production overall in our consumer direct channels. And then I would tell you, look, we felt like we were able to kind of maintain our margins overall. But then you also have what I would just say is from a timing perspective, some of the timing of completion accrual, but also how we basically book our MSR recapture is driving what you see is a little bit of that increases in our margins on the consumer direct channel.

Okay. Great. And then actually, on the wholesale side, you guys alluded to the competition in that market. But then when I look at your numbers, volumes are up by 1/3, your wholesale margin is up pretty meaningfully. So yes, can you just kind of tie the 2? I guess, it did not impact your performance?

Yes. So look, it's driving to our mix. Michael talks very much about us not chasing market share. So if we don't like where pricing is on, say, conventional or government product. But our focus is on non-agency, and we continue to grow on our non-agency and driving our non-agency production through wholesale. It's a really important channel to us. We're looking to basically try to expand as much as we can, but stay focused on and be disciplined on our margins.

Yes. Just one further comment on that, Bose. When you look at the non-agency space, and I brought up the so-called ABS space in the fundraising side or on the LP side. The ABF space, asset-based finance space is the hottest thing that any asset manager is going out to talk about. Our ability to differentiate ourselves where we could actually originate these loans and service these loans gives us a real edge over a lot of competition. So you're going to continue to see, I think, the non-agency space grow. We just got to make sure that not just on us, quite frankly, as an industry, we maintain discipline around credit here.

Our next question comes from Doug Harter from UBS.

Can you talk about [Technical difficulty].

Operator?

[indiscernible] Operator.

[Operator Instructions] are you able to hear me, sir?

Yes, I think we lost our queue.

Yes, sir. We're getting people back in now. While we're waiting for Doug to rejoin, I can join in Eric Hagen from BTIG.

So if the expectation is that you could remain in this REIT structure for the foreseeable future, but obviously, the clear focus is on growing your asset management at the same time. How do you think that affects your capital allocation plans? And if it ever looked like you could shed your REIT status, would that maybe catalyze a change in capital allocation in any way across the segments that you guys manage?

It's a good question. It's something that we get asked all the time. We're very focused, obviously, on our capital structure, as you know. at some point, we do need to be a C-Corp. We need to grow our asset management business a little bit more. I don't think that's going to take away from the way that we run our business where we try to drive higher earnings for our shareholders and obviously better results for our LPs. We're -- our FRE continues to grow as an organization. But like I said, we're going to lead with performance first. There'll be -- I'm sure at some point, there'll be some kind of opportunity to actually grow FRE, which at that point then probably gives us the ability to have a separately listed asset management business. We do toy with -- and I don't use the word loosely, but we think about the mortgage company and should we have a separate track mortgage company, which kind of simplifies the story a little bit. We also own or actually, we manage Rithm Property Trust, which we're exploring some capital formation around that organization as we build out more in the commercial real estate space. So there's a bunch of moving parts. The one thing I would want every analyst and everybody to understand is we're focused on performance first, which includes earnings for shareholders and LPs. When you think about the company today, we have about $8.5 billion of permanent capital. The company makes north of $1 billion in pretax, and we trade at whatever, 6x or something like that. Real asset management businesses trade anywhere from 10 to 30x. You look at the more -- the heavier balance sheet concentrated asset management firms, which trade south of there, but there's a ton of upside in our opinion to grow. But the corporate structure or the REIT space as we think about the way that we currently run is something that will change over time. That doesn't mean we're not going to have a REIT. You look at Blackstone, they got BXMT, Blackstone is a C-corp on top. So I say this every earnings call, I would expect at some point we get towards that. We're not going to be Blackstone, but there's -- the corporate structure works.

Yes. Great. Great stuff. Do you guys think there are combination opportunities for Genesis to essentially apply the same playbook that you just did for Paramount, where you have this synergistic platform that you can raise capital around to support the acquisition? I mean maybe a better question is like within the various strategies that you guys do manage, where do you think you can apply that playbook where you raise capital for the asset manager, which gives you scale that you can plug into with another business that you also manage at the same time?

Well, it's a great question. That will be at the Rithm Property Trust, where what you're going to see is we're going to originate more multifamily loans into RPT or Rithm Property Trust. That capital base will continue to grow. So when you look from a market -- from an overall equity standpoint, Rithm Property Trust, which is an externally managed vehicle where Rithm owns 1.5 and over 20 over 8, I believe it is. We will raise capital around that. That balance sheet will grow through a lot of the so-called Genesis origination as well as third-party origination. So when you think about it, it's a permanent capital vehicle. We've done this with New Residential in the past, where we -- again, we started with $1 billion of capital. It's now $8.5 billion. You look at Blackstone, they started BXMT with a small amount. They did a transformational -- a couple of transformational deals to actually grow that. We're going to do the same thing with RPT, and that will be fed by Genesis.

And our next question once again is from Doug Harter from UBS.

Hopefully, this works better this time.

It does.

Good, Hoping you could give us an update around the capital raising for Paramount and when -- how we should think about the magnitude and the structure of that?

It's a little bit fluid, quite frankly. We closed Paramount at the end of December. We're exploring whether we raise -- again, we funded on a third-party balance sheet. We did a pref offering in the quarter at the Rithm level, where we raised $250 million of permanent capital in the pref market. We're in no rush, quite frankly, to turn around and just say, okay, we have to do a fund or we're going to bring in JV partners. In the real estate world, when you look at the commercial side, a lot of folks bring in partners. So we're exploring both. We're on the road thinking about what's the best structure. We do want to expand, as I pointed out, when we bought this or announced this deal, we want to expand our relationships and partnerships with LPs in the commercial real estate space. That continues to be the primary focus. I think you'll see a combination of both fundraises, permanent capital raises as well as JV related partnership. So it's fluid is what I would say.

Great. And just sense as to the timing, like how we should think about the timing? Is there -- how do you think about wanting to free up the capital to redeploy versus kind of making sure you got the right structure?

Yes. We closed the quarter with $1.7 billion of cash and liquidity. So we're not -- what I would say is we're not fussed with the capital at this point. While saying that, we -- we're a dividend payer, and we always want to -- and we always spend money. We do shop. So when you think about it from that perspective, it's now where the teams are now. The one thing I didn't mention to the group is we have a couple of key hires in the asset management business as we continue to grow that and we'll be putting out a press release here over the next week. One of them is a former partner of mine from Fortress, who will help us on the lead the asset management business along with our other partners at the different organizations. And then we hired an old -- not an old colleague, but somebody that's highly recommended that comes -- that had retired from Blackstone to help on leading the capital formation business. So we have some significant hires on the asset management side. I think you'll continue to see us grow. But like I said, the most important thing is we got to perform for LPs. Once we do that, we'll grow exponentially.

[Operator Instructions] Our next question comes from Giuliano Bologna from Compass Point.

Congrats on the continued performance. When I think about some of the commentary you just gave on the asset management side and the C-Corp, you've obviously grown the asset manager tremendously. You obviously rolled in a few acquisitions, integrated them well over the past couple of years here. Is there a sense of scale that you want to achieve because you're obviously getting much closer to a large scale -- being a large-scale alternative asset manager within that segment? And is there a profitability target or kind of a rough threshold that you want to be at before you try to turn that into a C-corp?

I say there's no amount that we have in mind. I think it's what the market expects. So when you look at -- even just taking a step back and when you say about scale, when we go see an LP, an LP wants to do business with fewer institutions, but want to have more products. When you think about our credit business now between Sculptor, Crestline and Rithm, we have all the products we need on credit. We have all the products we need on mortgage. We have all the products we need on ABF. We have all the products we need in commercial real estate. But I think it is more about -- it's really about the FRE and how you're going to get valued and make sure that these organizations are sizable enough so they don't trade by appointment is what I would say. So it's not like -- and I say this, we're never going to be Blackstone and we want to be who we are. We want to grow prudently, and we want to be valued with the best of the best. And that's really what we're out for. It's like how do we get valued in a different way than we currently get valued. And I think there's no set amount. I would expect over the next year, we get to that point, but I don't know what that size is going to be, Giuliano.

That's helpful. And then maybe going over to the mortgage side. When I think about gains on sale, I'm assuming there's probably some positive lift from some of the recapture in the consumer direct channel. Just thinking about the amount of leverage that you have on that side, especially as recapture should continue at least in the near term, do you think that should continue to be a driver of stability for your gain on sale margins on a consolidated basis?

Yes, absolutely. Michael talked about us continuing to drive our brand, connecting with our customers. right? It's -- we have 4 million customers on our platform and making sure that we stay connected as best we possibly can are going to continue to be a key driver for our business, our growth strategy and our platform overall.

[Operator Instructions] And ladies and gentlemen, at this time, we do have an additional question from Bose George from KBW.

In terms of recapture expectations in the market, I mean, do you think recapture expectations embedded in some of these servicing transfers that have happened or even in the correspondent channel are potentially a bit high?

I don't know what the expectations are from different folks. What I would say is, again, going back to my fortress days and our fortress days, we built what is now known as Mr. Cooper, along with Jay and his team, obviously. We know what recapture percentages are. I do think the world has gotten more efficient. I think with technology, it's only going to get more efficient. We alluded to the Valon partnership. We spoke about HomeVision. That is going -- those kind of things will help. And I think the mortgage industry will get more efficient -- I don't, you're only going to be as good as what the market is. It's a very competitive space. People do things that are noneconomical. That's not who we are. But while saying that, we do want to keep our customers. I can't tell you if other folks assumptions are too high or not. I think you should speak to them about that. Okay. Well, I want to thank everybody for dialing in today. We appreciate your support. We have -- I was going through my notes last night, and I looked at the amount of times I was using the word great or terrific or wonderful, and I was looking for more adjectives. And the one thing you'll get from us, we're not going to show up in a meeting or tell you that we're the best in anything that we do because if we take that approach, we're not going to be the best. But we always have things to learn while saying that we have a very, very good company, and we care first about driving results. And with that, hopefully, we get a much better result on our equity price, and we'll continue to do the same thing we've been doing for our shareholders. So thanks again. Look forward to updating you throughout the quarter and on our next call. I appreciate everybody dialing in.

Ladies and gentlemen, we thank you for joining today's conference call and presentation. You may now disconnect your lines.