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Two Harbors Investment Corp (TWO 2.03%)
Q1Â 2020 Earnings Call
May 8, 2020, 11:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day, and welcome to the Two Harbors Investment Corp. First Quarter 2020 Financial Results Conference Call. [Operator Instructions]
At this time, I would like to turn the conference over to Ms. Margaret Karr. Please go ahead.
Margaret Karr -- Investor Relations
Thank you, and good morning, everyone. Thank you for joining our call to discuss Two Harbors' first quarter 2020 financial results. With me on the call this morning are Tom Siering, our President and CEO; Mary Riskey, our CFO; and Matt Koeppen and Bill Greenberg, our Co-CIOs.
On our call today, given potential conflicts of interest, any comments about internalization will be delivered by Mary, Bill and Matt. The press release and financial tables associated with today's call were filed yesterday with the SEC. If you do not have a copy, you may find them on our website or on the SEC's website at sec.gov. In our earnings release and slides, we have provided a reconciliation of GAAP to non-GAAP financial measures. We urge you to review this information in conjunction with today's call. I would also like to mention that this call is being webcast and may be accessed in the Investor Relations section of our website.
I would like to remind you that remarks made by management during this conference call and the supporting slides may include forward-looking statements. Forward-looking statements are based on the current beliefs and expectations of management and actual results may be materially different because of a variety of risks and other factors. We caution investors not to rely unduly on forward-looking statements. Except as may be required by law, Two Harbors does not update forward-looking statements and expressly disclaims any obligation to do so.
I will now turn the call over to Tom.
Thomas Siering -- Chief Executive Officer, President and Director
Thank you, Maggie, and good morning, everyone. We hope that you had a chance to review our earnings press release and presentation that we issued last night. Coming off the heels of a very strong 2019 for the company, we could not have imagined the societal and economic conditions that would result from the global coronavirus pandemic. This has been a challenging time for our nation and the world, and our thoughts are with those most affected by COVID-19, especially those who have lost loved ones. Additionally, we want to express our gratitude and admiration for the heroes who are on the front lines. We, like everyone else, are hoping for a return to normalcy soon.
First and foremost, we have been concerned about our most valuable asset, our people. We have implemented mandatory work from home measures across our three offices and are utilizing technology to stay well connected. We're all adapting to the new reality and we were able to execute our day-to-day business with very minimal disruption. In the first quarter, none was spared from the volatility of the markets. Unlike the 2008 financial crisis, the speed with which the market dislocation appeared and the large spread moves that occurred on a daily basis were unprecedented.
Every asset class was impacted. spreads, especially on the illiquid assets widened dramatically. Margin calls were swift. Nonetheless, I'm proud of how our team managed the volatility by actively derisking our portfolio in order to establish and maintain a very strong defensive liquidity position. Throughout this period, we satisfied all margin calls and did not enter into any forbearance arrangements with our lenders.
In the midst of the volatility, we also made the difficult decision to suspend our first quarter preferred stock dividends in order to ensure we maintain sufficient excess liquidity and preserve stockholder value for the long-term. Our decisive actions allowed us to weather extreme volatility in March and ended the quarter with $1.2 billion in unrestricted cash.
Given the derisking of our portfolio and increased confidence in our liquidity position, we announced an interim common stock dividend of $0.05 per share as well as full payment of our first quarter preferred stock dividends. Though we are not able to provide guidance on future dividends, together with the board, we will be evaluating our quarterly dividends going forward based upon the composition of our portfolio and evolving market conditions. Additionally, post quarter end, we announced the independent members of our board of directors elected not to review the company's management agreement with PRCM Advisers. Mary will comment on this in more detail shortly.
We believe that how we are regarding once this crisis passes will depend upon our actions now. We strive to be best-in-class. And in this time of great uncertainty, we are committed to all of our stakeholders, our employees, stockholders, business partners and communities. We are weathering this storm together. While we can't predict how this global pandemic will play out and what its lasting effects will be, we are making every effort to best position our company for events outside of our control. Despite all the uncertainty, we believe that we can withstand future volatility and ultimately, on the other side of this crisis, once again, drive long-term stockholder value.
With that, I will now turn the call over to Mary to review our financial results.
Mary Riskey -- Chief Financial Officer
Thank you, Tom. Turning to Slide 4, let's review our financial results for the first quarter. Our book value at March 31 was $6.96 per share, representing a decline of 52% from $14.54 at December 31. On the right hand side of this slide, we have provided a more detailed attribution of our portfolio decline in the quarter. As expected, the sale of substantially all of our non-Agency securities was the largest contributor, resulting in over 70% of the decline. Our rate strategy also contributed to the decline, driven by fair value markdowns on MSR, specified pool underperformance as well as specified pool sales as a result of delevering our portfolio in March. Matt and Bill will detail this portfolio activity shortly.
Moving to Slide 5, let's discuss our core earnings results. Core earnings were $0.25 per share in the first quarter consistent with the previous quarter. Core earnings was favorably driven by higher net interest income due to purchase of higher coupon Agency RMBS early in the quarter and lower amortization. This was offset by increased interest spread cost on swap positions due to LIBOR resets and lower TBA dollar roll income.
Turning to Slide 6, our portfolio yield in the quarter was 3.52% and our net yield decreased to 1.13% from 1.19%. We saw improvement in repo costs, but this was more than offset by higher swap costs as three month LIBOR rates declined in the quarter. As funding rates have come down post quarter end, we expect to continue to see improvement in repo costs.
On Slide 7 we have summarized our financing profile as of March 31. As the turmoil in the market unfolded in March, our financing and investment teams worked closely together to preserve liquidity and delever the portfolio. As a result, we have made all of our margin calls. Our liquidity position remains strong, and we are confident in our ability to continue to meet margin calls and servicing advance requirements on our MSR.
Our economic debt-to-equity at quarter end was 7.0 times compared to 7.5 times at December 31, and our quarterly average economic debt-to-equity was 7.4 times. It is important to note that we sold our lower levered non-Agencies during the quarter. So while the change was nominal in our quarter-over-quarter debt-to-equity, the leverage on Agency RMBS and MSR decreased meaningfully.
We did not experience any issues with accessing the Agency repo market and were active in rolling our repo positions. At March 31, we had 22 active Agency repo counterparties with a weighted average maturity of 52 days. In aggregate, we have been able to roll our Agency RMBS positions without much change in haircut. As was true in many markets, repo levels were stressed in March. However, as we have progressed past quarter end, we have seen more clarity and consistency in rates and term markets are developing again. Repo levels for one month to three month terms are indicated today in the OAS plus 25 basis point to 35 basis point range.
As of March 31, we had $252.1 million outstanding across our MSR bilateral facilities and $400 million outstanding MSR term notes. Our total committed capacity across our MSR financing alternatives is $450 million. Importantly, we are in advanced discussions with two major banks on servicing advanced facilities. This will provide us with additional liquidity to continue to make servicing advances in the event of increased forbearance or defaults. For more information on our financing profile, please see appendix Slide 28.
Please turn to Slide 8. On April 13, we announced our election to not renew the management agreement with PRCM Advisers. As a result, the agreement will terminate on September 19, 2020, and we will become a self-managed company. The decision was the result of a diligent, thorough and extensive month-long process led by the independent directors of our board with the advice of independent legal and financial advisors.
The board-driven process commenced long before the COVID-19 pandemic, and timing of the announcement was predicated in part on the non-renewal provisions of the management agreement. We believe that our stockholders will benefit from significant annual cost savings as well as from further alignment of interest of management and stockholders, enhance returns on any future capital growth and the potential for attracting new institutional investors.
Under the terms of the agreement, we are required to pay a one-time cash termination fee, which we estimate will be approximately $144 million. We expect to realize an annual cost savings of approximately $42 million or $0.15 per share, before giving effect to any additional cost savings from the elimination of the management fee on future capital growth. Therefore, the payback period on the termination payment is relatively short at just over three years and the return on investment is approximately 29% per annum, without accounting for future capital growth. The manner in which the termination payment is calculated using a 24-month look back period is such that when the lower management fees paid in earlier quarters is taken into consideration, the payment of the estimated termination fee results in the most favorable economic benefit to stockholders.
In conclusion, we are confident that this is the right time to make this change, given the maturity of our business model, our well established infrastructure and the material economic benefits to stockholders, and we believe strongly that the transition to being self-managed is a very positive step for the future of our company.
With that, I will now turn the call over to Bill and Matt for a market overview and portfolio update.
William Greenberg -- Co-Chief Investment Officer
Thank you, Mary, and good morning, everyone. We'd like to start this morning by spending a few minutes discussing the effects of the COVID-19 pandemic on the residential mortgage market. Then we will discuss our portfolio activity for the quarter. Finally, we will talk about our outlook for servicing advances and our portfolio liquidity.
Please turn to Slide 9. In March, the COVID-19 pandemic had a swift and dramatic effect on valuations, leading to extraordinary spread widening across virtually all asset classes. Left hand chart shows the 10-year swap rate and the S&P 500 in the first quarter. Although the 10-year swap rate trended lower early in the quarter, it moved sharply in March, finishing the quarter roughly 120 basis points lower. The S&P 500 performance really emphasizes how quickly events unfolded and the all-time high on the index was realized on February 19 before falling 35% just a month later.
The right hand chart shows spreadwidening impacts across various fixed income asset classes from pre-crisis levels in mid-February, indicated by the low through each vertical line, through the crisis indicated by the high point in key vertical line and then ending mid-April, indicated by the gray circles. No asset class escapes and this affected us and other mortgage REITs significantly. Most spreads remained significantly wider than they were in February, with the exception of Agency RMBS, which have retraced all of their widening more due to the direct impact of QE4 purchases by the Federal Reserve.
Moving to Slide 10, the left hand chart compares an MBS treasury spread index in 2008 versus March 2020. While the magnitude of the widening is notable and similar in both cases, the real difference was the speed at which it unfolded. The round-trip was completed in three weeks in March compared to six months in 2008.
The right hand chart shows the large intraday spread changes in the Fannie 4% coupon during the most volatile week in March. As you can see in this chart, each day is delineated by the vertical lines and starts at zero. It was not uncommon during that week to see 50 basis point moves, both widening and tightening, sometimes even in the same day. This high level of volatility was further exacerbated by extremely low levels of liquidity in the MBS market. At times, the bid offer spread in the most actively traded securities were as much as 100 times than normal levels. By the end of April, the Agency market had substantially yield and bid offer spreads were largely back to normal.
Please turn to Slide 11. As the stress on the RMBS market grew, the Federal Reserve took a number of actions meant to stabilize the markets. At the outset, the Fed cut interest rates by 50 basis points on March 3, in an attempt to offset increasing liquidity fears. The market was not soothed, and by March 15, it was clear that the system needed additional action. The Fed responded by cutting rates to zero and announcing its commitment to purchase $500 billion in treasuries and $200 billion in RMBS. The market was still underwhelmed and volatility in the treasury and RBS markets actually worsened. In response, on March 23, the Fed committed to unlimited purchases of both and what has become known as QE4.
Following the recommendations of various market participants, the Fed also began to buy bonds on a short settle basis instead of waiting until regular mid-month settlements. Fed's RMBS purchases were also expanded to include higher coupons and not just the lower dollar price production coupons. This was very helpful for many market participants, including mortgage REITS, who generally had large holdings in the higher coupon bonds. The left hand chart shows daily Fed purchases of MBS, which have now exceeded $500 billion. The right hand chart shows the pace of QE4 compared to QE1 in 2008 and QE3 in 2012, demonstrating again the speed and size at which events are unfolding today.
With that, I will hand it over to Matt.
Matthew Koeppen -- Co-Chief Investment Officer
Thank you, Bill, and good morning, everyone. Please turn to Slide 12. With the foregoing discussion as a backdrop, let's now discuss the actions we took in March in response to the liquidity crisis caused by the pandemic. As volatility increased and spreads widened on Agency RMBS, we delevered, reduced risk to raise excess cash. We liquidated around $18 billion specified pools and TBA, representing about 50% of our Agency portfolio. When liquidity was poor in March, we initially sold lower coupons where there was some sponsorship, but eventually reduced exposure to higher coupons when the Fed adjusted its program to focus on purchases in that part of the coupon stack. Timing of most of these portfolio sales occurring as they did before unlimited QE was announced was such that we did not fully benefit from the spread tightening driven by outsized spread purchases.
With respect to our legacy non-Agency portfolio, we had become increasingly concerned about levered portfolio liquidations occurring across the market, acceleration in size and frequency of margin calls arising from widening spreads, increasing haircuts and the future ability to access ongoing funding in the repo market. As a result, we decided to liquidate substantially all of our non-Agency portfolio and to eliminate the aforementioned risks. The charts on the bottom of this slide show our portfolio composition on December 31 where you can see the effect of the portfolio sales we just described.
Please turn to Slide 13. Another large driver of performance during the quarter was the collapse in specified pool pay-ups. The chart on the upper right hand side of the slide shows 3.5 coupon high loan balance specified pool pay-up levels. This chart is indicative of the price action that impacted all specified pools in March. As the month unfolded, with the risk appetite and balance sheet capacity low, specified pool pay-ups suffered.
The pay-ups are indicated by the blue bars and measured on the left axis. The gray line shows the ratio of the pay-ups to one measure of its theoretical value and is measured on the right axis. You can see the premiums fell from around four points to around one point at the end of the quarter. There were even trades that took place in the market at negative pay-ups, indicating that the specified pools traded below settlement date-adjusted and cost of funds-adjusted TBA levels.
Specified pools have significantly recovered in April. The lower charts show our specified pool breakdown on December 31 and on March 31. You can see that we liquidated essentially all of our lower pay-up stories during March to minimize losses while delevering. Specifically, we sold a net of $13.4 billion pools during the quarter across 3% to 4.5% coupons, predominantly in high LTV pools. Today, we are positioned largely in loan balance and geography stories.
Please turn to Slide 14. The graph on the right hand side of this slide shows coupon performance for the first quarter. Despite the massive volatility, Agency RMBS ultimately performed well after the Fed stepped in with support. Coupons in the middle of the stack, including 3s, 3.5s and 4s, all outperformed by a point or more. Our effective coupon positioning is shown in the bottom chart. Our implied short positioning from the MSR asset moved to the 2% coupon in March from 2.5s and 3s at the end of December as a result of the interest rate value. Our long holdings include 2.5s through 5s.
Please turn to Slide 15. This slide shows our interest rate and mortgage spread exposure. Although we recognize that these representations of our exposures are too simple to have been accurate descriptions of portfolio performance during the crisis, as volatility subsides and market movements return to normal, these kinds of risk measures regain their usefulness. Exposures remained low consistent with our historical positioning.
In the top right chart, you can see our exposure to instantaneous changes in mortgage spreads. As of March 31, a 25 basis point spread widening would decrease book value by 1.4%. Chart on the bottom of the page shows our book value exposure to instantaneous parallel changes in all interest rates. You can see that as of March 31, an instantaneous parallel shift in interest rates upward of 50 basis points would negatively impact book value by only 1.3%.
Please turn to Slide 16. We'd like to dedicate the time today to one of the biggest challenges we are currently facing, increasing mortgage loan forbearances and servicing advances. While the COVID-19 pandemic began as a liquidity crisis, as these things often go, it has transformed into a credit crisis. Shutting down large parts of the United States has had far-reaching economic impacts. Unemployment has skyrocketed and is expected to continue to climb. With so much of the economy shut and people out of work and staying home, the ability of all types of borrowers, renters and lessees to pay their obligations has been called to question.
At the end of March, Congress enacted the CARES Act, which besides including relief checks and other supporting measures, has an important impact directly on our industry. One provision fee act provides for up to 180 days of forbearance relief from mortgage loan payments, with the right to extend up to an additional 180 days for borrowers with federally backed mortgages who experienced financial hardship related to the pandemic. The act also prohibits foreclosures for 60 days. Through one of our subsidiaries, we owned the MSR for over 8,000 loans guaranteed by Fannie Mae and Freddie Mac. And as a result, we are responsible for making advances for certain payments in the events they are not made by our borrower.
In normal times, indication is not burdensome. Pre-COVID, our 60-day delinquency rate was about 30 basis points, and we were able to manage the liquidity needs related to this in the ordinary course of our business. However, with the forbearance programs now in place as a result of the CARES Act, the situation is different. During the forbearance period, we are responsible for remitting monthly scheduled principal and interest for loans backed by Fannie and monthly scheduled interest for loans backed by Freddie. Additionally, we are responsible for making intermittent tax and insurance payments to local authorities and insurance companies.
On this slide, we show our MSR portfolio forbearance rates since we started collecting data on March 23. This data is shown by the blue bars at the bottom of the chart and references the left axis. As of April 28, our experience is at 5.7% of our loans by count have entered forbearance. The gray line shows the daily percentage changes in the number of loans entering forbearance and is measured by the right axis. This number has been steady in the low-single-digits for some time. It's worth pointing out that both the Mortgage Bankers Association and Black Knight, a loan servicing technology company, publish data regularly regarding forbearance rates for GSE loans, and our data has so far been very consistent with both of those sources.
Please turn to the page -- to Slide 17. On this slide, we consider how our servicing obligations intersect with our liquidity position. We have taken a scenario analysis approach and created few scenarios; base case, a moderate stress case and a severe stress case. Depending on the speed of the realization of social distancing measures and the reopening of the economy, we believe that a 15% rate is a reasonable estimate for a base case. Of course, it is impossible to predict the ultimate take-up rate with any certainty, but as you will see, we believe our liquidity position is strong enough to withstand stresses to this outcome. Scenarios differ primarily by varying the maximum forbearance take up rates. The base case assumes 15%. The moderate stressed case assumes 20%. And a severe stressed case assumes 25%.
Additionally, moving across these three scenarios, we vary prepayments from 25 CPR in the base case to 20 CPR in the moderate stressed case to 15 CPR in the severe stressed case. Repayment rate is an important driver in forecasting the advancing obligations since the custodial accounts for principal and interest can be used to offset obligations, though of course, these funds must be paid back the next month.
Next variability is the existence of a servicing advance facility. We are in the process of negotiating documents on such facilities for large Wall Street banks. We expect that any facility would accommodate both Fannie and Freddie advances. Although subject to customary closing conditions and GSE approvals, we have included the existence of such a facility in our scenarios.
The last variable is the valuation of our existing MSR portfolio. We have two outstanding facilities where we borrow against our MSR assets, a distinct state-of-the-art facilities which are meant to finance the advances and the borrowing base depends on the market value of the MSR. Therefore, in each scenario, we stress the start price in order to simulate potential market costs. These price stresses start from our 3.31 valuation and decline from a 3.0 multiple down to a 2.0 multiple in the severe stress scenario. All three scenarios explicitly include payments of the estimated non-renewal fee due in September.
Chart at the bottom left of this slide shows our projection for advancing obligations. In all three scenarios, you can see that the servicing obligation peaks right around December 2020. Before this, the curves rise quickly due to the accumulation of P&I and T&I advances and then decline as we are able to recoup T&I advances from interim claims processing. You see that in the base case, the maximum advancing obligation is around $100 million, while in the moderate stress and severe stress scenarios, the obligation increases to $250 million and $450 million respectively. To determine whether or not those are big numbers or small, we need to overlay those predictions with our liquidity.
The chart on the bottom right of the slide lays out a path of our liquidity over the next 18 months. We start with a steady-state cash balance of around $1.2 billion. The reason we are holding such a large cash balance today is precisely in consideration of this future advancing obligation. As you can see, we expect our excess cash balances to decline as we pass through the advancing wave and then to return to a more normal level. In all three cases, we maintain an excess liquidity buffer of between $400 million and $600 million.
For a portfolio of our size and with the risk tolerances we expect to be running, we believe $450 million is the best comfortable amount. It's important to us that you have full transparency about what we're seeing around servicing advances and how we're thinking about this in the context of our MSR portfolio. We hope this explanation helps. In summary, based on the information we've been discussing today, we feel quite confident about our liquidity position.
Please turn to Slide 18. The reality is that this pandemic has reordered everything and we have a lot of work to do before we are in a position to return to business as usual. The advancing obligation is significant. And while we feel confident in our ability to manage it, it will take time for events to unfold before we anticipate returning to a steady-state business model.
To be sure, there are multiple obstacles that will certainly drag down earnings in the near-term. These include higher than normal cash balances, increased servicing costs from our subservicing delinquent loans, costs to setup and maintain the servicing advance facilities and uncertainty in MSR pricing. Having said that, we believe that the opportunity set in our target assets is very attractive today.
We discussed earlier with Fed support, Agency TPAs recovered all of the March widening and then some, so that returns in that part of the market are similar to what they were pre-crisis. Specified pool pay-ups have recovered much of what they lost in March, but are still somewhat lower than they were when the crisis began. As a result, we are seeing returns on rate hedged Agency RMBS in the low to mid-teens.
In the MSR asset that we're seeing the most interesting opportunities. While it's true that there's much to work through regarding forbearances, advances and higher cost of service, we still estimate that the forward-looking returns on our existing book of MSR, when paired with MBS, is in the mid-teens based on our Q1 valuation. Earlier, we discussed some potential scenarios about the future path of MSR prices. Should MSR multiples decline to 2.5 times on our existing book from 3 times, we would estimate that the paired return would be in the very high-teens.
The MSR bulk market remains shut down, so it's not possible at the moment to acquire new assets there. The MSR flow market slowly come back to life, and indeed, we are buying a trickle of MSR assets in that channel. The multiples in the flow market are usually lower than in the bulk market. And while visibility remains somewhat unclear, today we think that flow product can be acquired below two multiples.
On a forward basis, we think that translates to yield north of 25% when paired with Agency RMBS. We don't yet know the amount of assets that can be acquired at those levels, but it is clearly very interesting at those prices. The barriers to entry in the servicing business are many. Every asset is time-consuming and complex. Only market participants who already have the infrastructure, processes and relationships in place will be able to access the kinds of returns just mentioned. We at Two Harbors are uniquely positioned to take advantage of that attractive opportunity on an ongoing basis. With each day that passes, the outlook gets a little clearer. As Tom said at the outset, we aim to be as transparent as possible and we will continue to update you with new developments over time.
With that, I will turn it back to the operator.
Questions and Answers:
Operator
[Operator Instructions] We will take our first question today which comes from Doug Harter. Please go ahead.
Douglas Harter -- Credit Suisse Securities -- Analyst
Thanks. First, thanks for the additional disclosure around the liquidity. Just Matt, then on your commentary about the attractiveness of new returns, can you just talk about kind of where you are in the flow program? Is that something that you guys are acquiring loans or MSRs through the flow today or what it would take from a liquidity position to feel comfortable acquiring loans through flow?
William Greenberg -- Co-Chief Investment Officer
Yeah. This is Bill. I'll take that. So as Matt said, we are acquiring what we call a trickle during the depths of the liquidity crisis. We, like many of other competitors, suspended our acquisitions there. As I said, that market is slowly coming back to life. We are back in the market on a limited basis, really in a way that does not increase our forbearance and advanced risk. There's different ways to view that by targeting certain types of collateral and so forth, maybe we can talk about later, if you like. So we're doing it in a way that, that minimizes that liquidity burden, and we're using the opportunity to see how much assets can be acquired at those levels and how much. And obviously, at those levels, it's very interesting. And if we're able to do that, we will figure out a way how to make that work.
Douglas Harter -- Credit Suisse Securities -- Analyst
Great. And then if you could just talk about the capital structure after the book value decline in the quarter, the mix of preferreds is obviously much higher now and kind of how you think about that mix? And kind of what would be the plan to kind of get that back in line with goals you had previously or targets you had previously mentioned?
Thomas Siering -- Chief Executive Officer, President and Director
Thank you. Good morning. Obviously, it's something that we're acutely aware of and are reviewing. So yes, you're right that it had that effect on our capital structure. And so it's something that we have under review. So people will might be curious as to whether or not we would raise common equity. And obviously, that would be very dependent upon the opportunity set. So that's something that we're obviously aware of, we have a review and we will attempt to deal with that the best we can.
Douglas Harter -- Credit Suisse Securities -- Analyst
Okay. Thank you, Tom.
Thomas Siering -- Chief Executive Officer, President and Director
Thank you.
Operator
Our next question today comes from Mark DeVries. Please go ahead. Your line is open.
Mark C. DeVries -- Barclays Capital -- Analyst
Yeah, thanks. I had a question about the liquidity projection chart on Slide 17. Is that liquidity number, does that assume -- is that just based on the cash you have on hand now or does it also assume draws on these facilities during the process of negotiating?
William Greenberg -- Co-Chief Investment Officer
This is Bill. I'll take that. It's a combination of all of that. It's a pretty comprehensive set of assumptions and models that incorporate to the best of our knowledge, all of the potential drags and sources that we will have at our disposal. I mean we think where we can, and we've tried to be fair, but conservative and try to stress the model as you see by the three scenarios. So it includes all of those things.
Mark C. DeVries -- Barclays Capital -- Analyst
Okay. Got it. And just given the high quality nature of the servicing events and all risk around it, are you generally sensing somewhat unlimited capacity to finance that? So if god forbid, you had a scenario that's even more stressful than your severe stress, can you would just be able to expand the financing available to you?
William Greenberg -- Co-Chief Investment Officer
Yeah. I mean, we are certainly -- I think you can see this in liquidity projections. We are certainly sizing our needs based on stresses to the base case, to the severe stress and even a little bit more than that. You can't see that in your liquidity projection because we only went to this stress, but it would still be true it would hold up for somewhat bigger than that.
Now it is true if we see forbearance rates increasing a lot higher than 25%, which frankly, I mean, I don't see. I think we're already starting to see -- I mean as staggeringly big as the unemployment statistics are that we're seeing in the market, we are starting to see them leveling off a bit. And so we feel pretty good about the projections that it won't rise above 20% or 25%. But obviously, if that does, we're -- the negotiations that we have with the banks could allow potentially to be renegotiating upsize, but we're sizing it to be something larger than 25% at the moment.
Mark C. DeVries -- Barclays Capital -- Analyst
Okay, great. And then could you give us a sense of how your blended returns might be impacted under the different scenarios? And maybe just to kind of force to reallocate some capital to funding advances on other business scenarios?
William Greenberg -- Co-Chief Investment Officer
Well, that might be a little bit more -- I don't know if I have those numbers at my fingertips. I do know what we said was including the higher forbearances and increased cost of service and reduced cash flow from loans in forbearance on the servicing asset. That in our base case, the paired levered return is still in the mid-teens. I'd have to check about the other scenario. I don't have them handy. We can get back to you.
Mark C. DeVries -- Barclays Capital -- Analyst
Okay. Got it. That's helpful. Thank you.
Operator
Our next question today comes from Bose George. Please go ahead. Your line is now open.
Bose George -- Keefe, Bruyette & Woods -- Analyst
Hey all. Good morning. Hope everyone is staying safe. Actually first, can you give us an update on book value since quarter end?
Thomas Siering -- Chief Executive Officer, President and Director
Sure. Good morning, Bose. This is Tom. I'll take...
Bose George -- Keefe, Bruyette & Woods -- Analyst
Hey Tom.
Thomas Siering -- Chief Executive Officer, President and Director
I'll take that first and then hand it out to Bill and Matt for further comments. So firstly, I always have to open up the caveat that five weeks to model a quarter. But as Bill and Matt alluded to in their script, in April and May, we experienced a notable and favorable repricing of spec pools, which generated a significant amount of P&L. However, there is a couple of other things to note. As Bill and Matt discussed, there is some uncertainty with respect to the effects that forbearance and intended service and advances will have on future MSR marks. And then additionally, we plan to record the internalization fees to time wherever in Q2. So there's a couple -- the big variable, obviously, is the forbearance effect. Bill, Matt, please.
Matthew Koeppen -- Co-Chief Investment Officer
Yeah, I'll take that one. Thanks Tom, and good morning, Bose. So to put a little more color around those moving parts, the specified performance has been strong in April and followed on in May. We've seen a multiple point recovery after the big sell-off in March, basically brought things back to closer in line with where we saw them in February. So that component for Q2 is driving an attribution of around up 14%.
Tom also mentioned servicing. So we, like always, are getting our servicing valuations. They're valued by three independent brokers. However, as time passes, and we had this in some of our liquidity projections as you can imagine as forbearance flows through and prepayment fees possibly pick up, we might see some pressure on multiples. And so if that sort of pricing were to come through, we could see that sort of in the base case with the 2.5 mod leading to a book value change of about -- that could be $150 million or $175 million. So that could be around an 8% or 9% impact.
And the third thing that Tom noted, the internalization payment, although it is due to be paid in September, we are going to record it in Q2, so that's about another 8% offset. So I'd like to give you a more straightforward answer, but there's a lot of moving parts here and it will depend on how those things play out.
Bose George -- Keefe, Bruyette & Woods -- Analyst
Okay. Thanks. That is very helpful. So actually just leaving aside the charge for the management fee, the spec pool up 14%, the MSR may be down 8% or 9%. So like a 5% up for the quarter-to-date is probably a reasonable ballpark? Again, just leaving aside...
William Greenberg -- Co-Chief Investment Officer
This is Bill. I'll take the first one, for a second. So the MSR mark that we're guessing about that, that we don't know. We don't -- we have end of April, March, which don't reflect that kind of movement at the moment, given what we think is happening with forbearance rates increasing and how we think the world will think about that, that is a possibility of how we think the world might unfold, right? But that depends on the path of how the MSR asset performs and what the future marks end up being. We highlighted, and we flagged it just to put it out there that, that is a possibility and could happen. But we don't know, we'll have to wait and see.
Bose George -- Keefe, Bruyette & Woods -- Analyst
Okay. No, that's really helpful. And obviously that makes sense in terms of conservatism on that estimate. So yeah, thanks very much. And then just going back to that stress scenario slide, you note that you assumed the reimbursement on that -- the P&I is after the 15 months. There's been some discussion and some chatter that the GSEs might come out with something to reimburse servicers sooner than that. Do you have any thoughts on how that might play out?
William Greenberg -- Co-Chief Investment Officer
I don't unfortunately. I'm hearing the same thing as you are. There's lots of proposals and possibilities in flux. These projections are made with the best information and assumptions that we have at the time. We update them every day as we learn new things and incorporate new information. So as of the moment, that's what these things include. And should we be able to reimburse differently or hopefully better, then we'll include those and we can update you guys on those when they have.
Bose George -- Keefe, Bruyette & Woods -- Analyst
Okay, great. Thanks very much.
Thomas Siering -- Chief Executive Officer, President and Director
Thanks, Bose.
Operator
Thank you. Our next question comes from Trevor Cranston. Please go ahead.
Trevor Cranston -- JMP Securities -- Analyst
Hey, thanks. One more question on the liquidity projections and the forbearance scenarios. I guess first, I just wanted to clarify that, that does include the buyout of the management contract? And then two, I was curious if there was any assumption in that projection around the dividend level changing from what was paid for the first quarter? Thanks.
William Greenberg -- Co-Chief Investment Officer
Sure. Hi Trevor. Thanks for the question. So the answer to the first question is, yes, it explicitly includes that payment. I'll also point out, by the way, what's not included in here is any liquidity or cash raising from any portfolio adjustments that we could make if necessary, right? This is all keeping the portfolio constant of what it is. It does not include any dividend payments. Well, it does and it doesn't in a way. But the idea here is that the portfolio is going to earn what it's going to earn, right? And that's going to be paid out, right? So we're not building into these liquidity projections, a growth in the liquidity from not paying the dividend, right? It assumes to all be paid out. So that included or not included I'm not sure, but we're not taking that money and hoarding it to make the liquidity look better. It's assumed to be paid out to the dividend.
Trevor Cranston -- JMP Securities -- Analyst
Okay. Got you.
Thomas Siering -- Chief Executive Officer, President and Director
So is that clear Trevor?
Trevor Cranston -- JMP Securities -- Analyst
Yes. Thank you for that. And then on the scenarios you were discussing for MSR valuations, I was curious if there's any way for you to provide some context around kind of what you think the rough approximate sort of multiple on the MSR book would be in the scenario with your stress case in terms of forbearance combined with like a significant compression in the primary secondary mortgage rate spread?
William Greenberg -- Co-Chief Investment Officer
Look, it's very -- thanks for the question. It's -- that's a very hard question. It's very hard to know. You're asking about what I think the future prices of something might be as the world unfolds, right? That said, and we've talked about this a little bit on earlier in the quarter. The MSR market is hard to value in, especially today because there's not very many trades taking place, right? And so the brokers are in a situation where they say, well, how do I put numbers on something when I don't see any observable trades in an illiquid and stressed market without willing buyers and willing sellers, right?
And so in the absence of that, the brokers have taken the approach that let's keep for the moment risk premiums constant to what they were. I don't know whether that's true or not. The speed with which the markets have been evolving and moving has been astonishing. As Matt just told you, specified pool pay-ups. And you saw on the chart in the presentation, they went from four points down to one point or below, right, in some cases, back up to four points. They're all back to where they were, right? Now there will be increased costs from servicing delinquent assets from the forbearances, there will be reduced cash flows as the non-paying borrowers don't pay their service fees. So there is what I would call a technical cash flow effect from the servicing of cash flows. But depending on the current scenario that you think might exist in the world, whether it's a deferral option or something, how long that persists for is unknown. Maybe it's even short, maybe after one year people start paying their mortgages again if some of these deferral options come to fruition. And there's not that much of an interruption. So it's hard to know, right?
I think we do think generally that below two multiple is very hard to achieve on any long-term basis for these assets with the willing buyers and willing sellers, just the nature of the cash flows and the timing and what's the worth and the interest rate and convexity characteristics and so forth. As I said in a previous comment, I think it could go to 2.5% depending on some of these things, depending on lots of factors. I don't see it going much below that, below two. I guess we had some very high stress scenario, 25% that no one is expecting, including us. I guess, it's very hard to know. As things normalize, as trades start to occur, the market starts to heal, we'll get more visibility, and we'll be able to speak with more clarity on what we think those scenarios are.
Matthew Koeppen -- Co-Chief Investment Officer
Trevor, I will just add. In our liquidity projections, we did and have, like Bill said, there's all kinds of uncertainty, but we did and do include scenarios that do take us down to a two mod even though we think that's -- maybe that's severe. We'll have to see what happens, but we do include those numbers in our projections.
Trevor Cranston -- JMP Securities -- Analyst
Okay. Got you. That's helpful. And then on the advanced facilities, you guys are working on I know they're not closed yet, but are you able to say anything about kind of what the cost of those facilities are likely to be when they're utilized and assuming they do close?
William Greenberg -- Co-Chief Investment Officer
Not really. I'd say, we're still working on them and they're not closed and we're still negotiating. I mean there are very market times I would say. Not preferred.
Thomas Siering -- Chief Executive Officer, President and Director
Yeah. We prefer not to discuss that today.
Trevor Cranston -- JMP Securities -- Analyst
Okay. Thank you, guys.
Thomas Siering -- Chief Executive Officer, President and Director
Thanks, Trevor.
Operator
Our next question today comes from Rich Shane. Please go ahead.
Rick Shane -- J.P. Morgan -- Analyst
Hey guys. Thanks for taking my questions this morning, and I hope everybody is doing well. I want to touch on servicing advanced facilities briefly. Historically, and I think Mark pointed this out, servicing advances are AAA-type assets and get very favorable financing. I am curious, in this environment, if pricing remains as attractive as it has historically and does access to servicing advance borrowing represent another barrier to entry in terms of that business?
William Greenberg -- Co-Chief Investment Officer
Sure. Thanks for the question. So servicing advancing as an asset class does typically enjoy financing sponsors and so forth. That would be an asset though that -- I think what you're thinking of is, if we were to create the advancing securities and then sell them to the marketplace, what it would look like. They'll be a AAA security for the investor that would buy those notes, right? So that's on the end user side to what we're making here. So we may do that...
Rick Shane -- J.P. Morgan -- Analyst
Actually you -- I misspoke and you're overcomplicating my question, I apologize. I just meant from a collateral perspective, the servicing advance is considered to be AAA collateral that it gets -- that it is because of where it stands in the waterfall, you typically get very favorable borrowing costs and very high advance rates.
William Greenberg -- Co-Chief Investment Officer
Yes, that's true, because the counterparty risk is generally considered to be GSE risk instead of the servicer risk. Yes, the advance rates are typically -- and I can tell you, market advance rates on advance facilities depending on T&I, P&Is, corporate advances typically range in the 85% to 95% range. Those are just market terms for those kinds of things which are reflective of what you just said.
Rick Shane -- J.P. Morgan -- Analyst
Yeah. And are you seeing any change in pricing given that the current market conditions related to those facilities?
William Greenberg -- Co-Chief Investment Officer
Yeah. I'd say it's probably a little bit wider than what it was and what it would have been in February, but it's still very low. I consider it's still very low compared to other things in the world at the moment.
Rick Shane -- J.P. Morgan -- Analyst
Got it. Okay. Yeah, you made the classic mistake of assuming my question was smarter than it really was. I was -- wanted to on a very simple level, make sure I understood that. Second thing, look, you've exited the non-Agency business, we understand given market conditions why you did that. I am curious if you think that that is a permanent exit or that will be a business that you will -- and an opportunity that you'll revisit when markets normalize?
Thomas Siering -- Chief Executive Officer, President and Director
Well, obviously -- good morning, Rick. It's Tom. Obviously, it's something that we have seen a deep expertise in, but we'll just have to see how things unfold.
Rick Shane -- J.P. Morgan -- Analyst
Okay, great. Thanks, Tom.
Thomas Siering -- Chief Executive Officer, President and Director
You bet.
Operator
Our next question today comes from Stephen Laws.
Stephen Laws -- Raymond James -- Analyst
Hi. Good morning. Effectively no credit risk now. So I want to focus one question on prepayments and two on servicing, if I can. First, on repayments and refinance activity, really more at the higher level. How do you see the recent environment impacting processing times and repayment speeds. A lot of conforming applications, borrowers that would have maybe been a clean rate driven refi, we'll now have an employment gap, unemployment, possibly other things that I would have to take or slow that approval pipeline. But how do you guys see that impacting refinance activity? I know the mortgage banker is pretty optimistic that the mortgage treasury spread tightens pretty quickly back to pre-COVID levels. But would love to get your thoughts? And then how to think about that from a lag on the refi index? Is it going to extend where that instead of six weeks is more of eight or 10 or 12 or more? So comments around that would be great.
Matthew Koeppen -- Co-Chief Investment Officer
Sure. I'll start with that one. Stephen, that's a great and interesting question these days. There's definitely a lot of uncertainty and speculation going on out there. I think one interesting thing that we've observed very recently, just yesterday actually, speeds were released for the April period. And broadly, I think they surprised most of the market on the high side. So the April closings would have reflected the very high MBA refi rate and the rate environment sort of back in the end of February and early March before we really came under any stress.
And I think most market participants would have thought that there would have been a very big impact on the ability of people to sort of go through with closings just with social distancing, right, and the country being a shutdown as it was. I think the speeds that came through in April showed that there probably was a pretty high pull through rate. They were actually -- they actually increased by about 25%, which I think is what people might have thought they would have increased in typical times, in normal times, given the prevailing interest rates and conditions. So I think that was -- it's only one month and it was a bit surprising and we'll have to see. This is unlike anything anyone's ever really observed. So we're monitoring that and we're obviously going to watch the data as it comes in and see where that goes.
William Greenberg -- Co-Chief Investment Officer
Yeah. I'll just add a few words to that. I think there are forces on both sides. Obviously, rates are at low levels. So that in ordinary time should be creating very high refinancing volumes. 47 states now permit some sort of remote notarization. By our count or things that we've read, two-thirds of recording offices allow electronic filings today. Verification of employment requirements have been relaxed across the country and so forth. So the world has made adjustments to allow for the refinancing machine to continue. And I think that this month's speed has been a reflection of that.
That said, which was a surprise to many people. That said, I think various Wall Street analysts are projecting speeds to slow down as much as 15% or maybe even more next month. This -- we're seeing some signs in the refi index and so forth. But I think it's slowing down from a high level and from -- and so I think that speeds will probably remain more elevated than people might think given a more naive thought about what the pandemic is doing in the social distancing measures.
Stephen Laws -- Raymond James -- Analyst
Great. I appreciate the comments. And I guess before asking you to predict the future, again, I'll ask about the servicing portfolio and just how the advanced obligations are structured. But can you provide any kind of mix of your obligations? How much of it is scheduled versus actual for both interest and principal? I know it's different across Fannie and Freddie. And certainly, Ginnie, I believe, is scheduled, but I don't think you guys have any exposure there. Can you give us any breakdown there? And maybe you can quantify the difference? I mean how much of an average payment is principal. And so if it's actual principal advances instead of scheduled, how much is it. Is that a savings on the total advance obligation to you guys of 5% or 15% or what is that number on a delinquent payment?
William Greenberg -- Co-Chief Investment Officer
Okay. So the short answer to your last question is, I don't know. I don't have those numbers handy. On the breakdown of the portfolio, 20% of our portfolio is Fannie Mae actual actual. I want to say around 30% is Freddie Mac and therefore, scheduled actual, right? And the balance is Fannie Mae scheduled schedule. Even the actual actual -- I was going to say, even the actual actual, though, which has no principal and interest advancing obligation does have T&I, advancing obligation. And in most ways, the way the modeling works and the modeling way the world works, is that's the bigger part of the obligation anyway.
Stephen Laws -- Raymond James -- Analyst
Okay. But still, I mean, if I've heard it correctly, 20% is scheduled -- is actual actual, which means you're not advancing any scheduled and unreceived interest for principal in that 20%?
William Greenberg -- Co-Chief Investment Officer
That's correct.
Stephen Laws -- Raymond James -- Analyst
Great. I appreciate you clarifying that. I'm digging for that information. Back to predicting the future, W recovery or W of that outlook is certainly a concern people are talking about. And one aspect of the 120-day rule is if you get one good payment when they go into forbearance again, the clock resets. So I don't want to ask you to run a scenario for every possible situation. But in that event where you're may be forced to cover seven of the next 10 mortgage payments, how does that look from a liquidity standpoint? I would imagine the government would have to step in, in that type of situation with some facility because it's certainly not a Two Harbor-specific problem, it would be every one. But do you have any thoughts around that with the clock resetting, if you get one payment in?
William Greenberg -- Co-Chief Investment Officer
Not very deep ones. I would say that the advanced facilities are built to cover that. So I think these things, they would be scalable in order to accommodate that, but the sizes are large enough. As you know, especially with the P&I advancing, the principal and interest custodial accounts can be used to offset that. And so look, while low rates and fast prepayments for premium mortgage portfolio are generally not great. In this instance, it would go a long way toward covering those sorts of obligations. As I said, the P&I part of the advancing is generally we look at it as being the easier to accommodate because of that. And so I think all those thoughts would be true if that were to take place.
Stephen Laws -- Raymond James -- Analyst
Great. I appreciate the...
Matthew Koeppen -- Co-Chief Investment Officer
And like we said earlier -- I would add too. Like we said earlier, if a scenario like that were to happen, we of course will then have time. We do have -- we don't have an unlimited amount of time, but as time passes, that allows us to sort of be reactive and work on either additional facilities or upsizing of facilities, which I think we would be able to do if we needed to in that scenario.
Stephen Laws -- Raymond James -- Analyst
That's a great point because it's not a margin call one day issue, it's something you'll see playing out over months and you'll see the W as you follow your delinquency numbers. So I appreciate the comments today, and thank you very much.
William Greenberg -- Co-Chief Investment Officer
Thank you.
Thomas Siering -- Chief Executive Officer, President and Director
Thanks, Stephen.
Operator
Our next question comes from Kenneth Lee. Please go ahead.
Kenneth Lee -- RBC Capital Markets -- Analyst
Hi. Thanks for taking my question. Just wondering, on a broader level, how would you characterize your current appetite for making investments in -- over the near-term, just given the potentially attractive opportunities you see weighed against the uncertainty that's around the environment? Thanks.
Matthew Koeppen -- Co-Chief Investment Officer
I'm sorry, could you repeat that question? I don't think I caught it.
Kenneth Lee -- RBC Capital Markets -- Analyst
Yeah. Certainly, just on a broader level, just wondering how would you characterize your current appetite for making investments in the near-term given the potential attractive investment opportunities you're seeing weighed against the uncertainty you're seeing around the environments? And relatedly, how leverage and the portfolio could evolve over the near-term?
Matthew Koeppen -- Co-Chief Investment Officer
Yeah, I'll start. This is Matt. I mean in one word, we are quite cautious here. I think we have to get a little bit of time passage and a little bit more visibility into what our advancing obligations are going to be and see how forbearance unfolds and sort of look at its impact on all mortgage assets. And we're looking forward to doing that. I think we're not quite there. We do need some passage of time. But like I said earlier, there's indications that there's interesting opportunity out there once we feel like we're in a comfortable position to take advantage of things, but we're still pretty cautious today.
William Greenberg -- Co-Chief Investment Officer
I mean I would add one thing that I think is sort of self-evident in a way, like one signal for that would be when the forbearance uptake rates start turning over, just like seen in other context. Once you see that, then you can sort of project really what the future is going to look like and so forth. And so I think that's one of the main things that we're looking for.
Kenneth Lee -- RBC Capital Markets -- Analyst
Okay. Very helpful. Thanks again. And hope everyone stays safe.
William Greenberg -- Co-Chief Investment Officer
Likewise. Thank you very much.
Thomas Siering -- Chief Executive Officer, President and Director
Likewise, yeah.
Operator
Our final question comes from Matthew Howlett. Please go ahead.
Matthew Howlett -- Normura Company -- Analyst
Hey guys. Thanks for taking my questions. Just a few quick ones. First, how are you monitoring sort of counterparty risk with the non-bank subservicers or the guys you buy from flow? Just curious on what's it like out there?
William Greenberg -- Co-Chief Investment Officer
I'm sorry, from people who we're buying from or...
Matthew Howlett -- Normura Company -- Analyst
Well, kind of both. I mean well, kind of mainly subservicers with some of the capital rules coming out or could come out on liquidity, obviously, issues. How is that just sort of being monitored? I guess the question is, you feel like there's going to be a need to transfer servicing at some point?
William Greenberg -- Co-Chief Investment Officer
Right. So the answer is, no. I mean we have three subservicers, as you know, and we've been public about who they are. It's Flagstar Bank, which is a bank. There is Dovenmuehle, which is a pure subservicer. They don't own any servicing. They don't have particularly any capital stress here. And then we have Mr. Cooper. And we have ongoing diligence reviews with them, and we check in with them about these sorts of things regularly and periodically. So we don't have concerns at the moment about that.
Matthew Howlett -- Normura Company -- Analyst
Okay. So there's no reason to go back up servicing or anything of that nature if we went into any one of the momentary liquidity issues?
William Greenberg -- Co-Chief Investment Officer
I'm sorry. Can you say it one more time? I'm sorry.
Matthew Howlett -- Normura Company -- Analyst
I'm just saying backup servicing, things like that. I mean there's no -- is there anything in place to move servicing if you have to?
William Greenberg -- Co-Chief Investment Officer
We do not have like a hot backup in place. No, we don't have that. And one of the advantages, I think of our model is its diversified nature of the thing that we have. It's spread out among different subservicers. So as you know, our portfolio is roughly split 40/30/30. To the extent that we would be able to potentially see through our regular reviews any stress or maybe on a forward-looking basis, try to anticipate such things. We can, of course, enter into the process to move servicing from one to the other. That -- we do that not regularly, but we do it. We're very experienced in that. That could be accommodated in some number of some amount of time, obviously, requires coordination and approval from the GSEs. So we could do that, but we do not have a hot backup in place.
Matthew Howlett -- Normura Company -- Analyst
Got it. Okay. Thanks a lot for that. And then on -- just from -- a modeling question, that sort of net interest spread that you guys get that 1.13%. I mean there's been a lot of moving parts, obviously, with the sale of non-Agency book, the repo cost coming down. How do we think about trending? How is that going to trend? How should we think about modeling that going forward?
Mary Riskey -- Chief Financial Officer
So I can take that question. This is Mary. So I think we expect on the asset side the yields to be in the low to mid-3s in the near-term. I would note that as we delever the portfolio, we correspondingly needed to reduce our net swap book at a time when three month LIBOR was extremely elevated and stressed and long-term rates were low. So we do expect that this will impact yields in Q2. But as swap and repos reset, we expect the net yield to return to more recently observed levels.
Matthew Howlett -- Normura Company -- Analyst
Got it. And will there be an impact on the lower yields because the non-Agency -- the higher yielding non-Agency book is out?
Mary Riskey -- Chief Financial Officer
Yeah, that will have a slight impact.
Matthew Howlett -- Normura Company -- Analyst
Got it. Great. Thank you.
Thomas Siering -- Chief Executive Officer, President and Director
Thanks a lot.
Operator
Ladies and gentlemen, that concludes today's question-and-answer session. I'd like to turn the call back over to Margaret Karr for any additional or closing remarks.
Margaret Karr -- Investor Relations
Thank you, Claire, and thank you all for joining our conference call today. We look forward to speaking with you again soon. Have a wonderful day.
Duration: 73 minutes
Call participants:
Margaret Karr -- Investor Relations
Thomas Siering -- Chief Executive Officer, President and Director
Mary Riskey -- Chief Financial Officer
William Greenberg -- Co-Chief Investment Officer
Matthew Koeppen -- Co-Chief Investment Officer
Douglas Harter -- Credit Suisse Securities -- Analyst
Mark C. DeVries -- Barclays Capital -- Analyst
Bose George -- Keefe, Bruyette & Woods -- Analyst
Trevor Cranston -- JMP Securities -- Analyst
Rick Shane -- J.P. Morgan -- Analyst
Stephen Laws -- Raymond James -- Analyst
Kenneth Lee -- RBC Capital Markets -- Analyst
Matthew Howlett -- Normura Company -- Analyst
