TPG Mortgage Investment Trust Inc Q4 FY2025 earnings call

• T.J. Durkin reported strong fourth quarter and full year financials, with continued execution of core strategy. Highlighted optimizing legacy WMC financings, returning Arc Home to profitability, and maintaining cost controls. - Nick Smith discussed investment portfolio growth, securitization activity, Arc Home's performance, and call rights strategy. - Anthony W. Rossiello covered financial results, including book value increase, EAD, net interest income, and liquidity status.

Fourth quarter book value remained stable, increasing from $10.46 to $10.48. EAD was $0.25, covering the dividend. Full year 2025 saw quarterly dividend increase 3x by over 21%, 6.5% economic return on equity, and total return to shareholders including dividends and stock price appreciation at 42%. Investment portfolio grew 27% in 2025 to $8,500,000,000, with $4,200,000,000 in securitizations. Home equity portfolio had $1,100,000,000 of loans and $107,000,000 of non-Agency RMBS. Arc Home had strong origination volumes in 2025, achieving breakeven in second quarter and 10% annualized ROE, with January 2026 being strongest month since profitability with monthly earnings over $1,000,000. Legacy WMC CRE loans had $28,000,000 equity remaining.

• Resolve legacy WMC CRE loans in first half of 2026 and reinvest into core higher ROE strategies. - Continue building on Arc Home's earnings momentum. - Drive further earnings power and capital rotation through focusing on legacy deals callable in 2026. - Expect to exercise call rights on in-the-money securitizations to redeploy capital into core higher returning strategies, with potential $35,000,000 of equity rotation this year.

Q: First on Arc Home, originations increased in the fourth quarter and momentum in 2025 and early 2026. Can you give more detail on first quarter volumes and gain on sale margins relative to fourth quarter, and did Arc Home generate $1,000,000 in EAD in January?

A: Nick Smith said that was Arc Home's individual profitability, volumes continue to gain market share with tailwinds from margin standpoint due to CPE yield curve and tighter credit spreads.

Q: Where are you most interested in investing incremental capital today?

A: Nick Smith said focus is on home equity, which has been a good performer, and agency eligible credits, continuing that thematically through 2026 and beyond.

Q: Spreads in securitized financing markets have tightened a lot. Talk about how that has not resulted in increases in book value and is that a key factor in attractiveness of calling legacy deals?

A: Nick Smith said calls benefit from lower nominal yields and tighter/flatter credit curve, but book value has drag on IOs from past acquisitions with faster speeds into lower nominal yields and tighter credit spreads.

Q: Detail on pace of executing call rights over the course of 2026 and if any in first quarter?

A: Nick Smith said two focused deals freeing up ~$35 million of equity, much coming in this quarter with rest in subsequent quarters.

Q: Unlevered home equity loans?

A: Nick Smith said they are loans held unlevered as cash substitute against favorable financing not being utilized to offset cash drag.

Q: As debt capital rolls up on CRE loans, should we look at $50 odd million with mid teens ROE or impairment risk?

A: T.J. Durkin said converting legacy WMC CRE loans to 15-20% ROE is worth ~$0.20 annualized as $28,000,000 is rotated.

Q: Competitive dynamics in non-QM space?

A: Nick Smith said increased visibility and competition is a headwind but pie is growing as products meet consumer demand, supply absorbed by securitization and balance sheets.

Q: Turn to securitizations and ROEs compared to fourth quarter and expected pace in first half?

A: Nick Smith said pace dependent on equity capital back, decent amount of organic equity capital to rotate, ROEs on securitizations higher than competitors at 5-10% higher.