Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Ellington Residential Mortgage REIT 2022 fourth quarter financial results conference call. Today's call is being recorded. At this time, all participants have been placed on a listen-only mode. The floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. At any time, if your question has been answered, you may remove yourself from the queue by pressing star two. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Alaael-Deen Shilleh with Associate General Counsel. Sir, you may begin. Thank you. Before we begin, I would like to remind everyone that certain statements made during this conference call may constitute forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature and are subject to a variety of risks and uncertainties that could cause the company's actual results to differ from its beliefs, expectations, estimates, and projections. You should not rely on these forward-looking statements as predictions of future events. We strongly encourage you to review the information that we have filed with the SEC, including the earnings release in the Form 10-K, for more information regarding these forward-looking statements and any related risks and uncertainties. Unless otherwise noted, statements made during this conference call are made as of the date of this call, and the company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Joining me on the call today are Larry Penn, Chief Executive Officer, Ellington Residential, Mark Tecotzky, our Co-chief Investment Officer, and Chris Smernoff, our Chief Financial Officer. As described in our earnings press release, our fourth quarter earnings conference call presentation is available on our website, earnreit.com. Our comments this morning will track the presentation. Please note that any references to figures in this presentation are qualified in their entirety by the notes at the back of the presentation. With that, I will turn the call over to Larry. Thanks, Alaael-Deen. Good morning, everyone. We appreciate your time and interest in Ellington Residential. During the fourth quarter, inflation continued to moderate. The Federal Reserve ratcheted back the pace of its interest rate hikes. The market welcomed these developments. Agency RMBS rebounded sharply following three consecutive quarters of dismal performance. Volatility declined incrementally. Investor demand for RMBS increased. Together, this drove nominal and option-adjusted yield spreads tighter, especially in November. The year ended on a more positive note. Turning to the investor presentation, in the bottom sections of slide three, you can see the significant yield spread tightening that occurred across Agency MBS coupons in the fourth quarter, which caused MBS prices to rise even though long-term interest rates were actually moderately higher. Meanwhile, short-term interest rates spiked for yet another quarter. You can see on this slide just how much short-term interest rates moved, not just during the fourth quarter, but also over the course of 2022, in absolute terms, as well as relative to long-term rates. This trend has continued into 2023, and the yield curve is now the most inverted it's been since the early 1980s, with the two-year 10-year yield spread now more than 90 basis points negative. The inverted yield curve has pressured net interest margins industry-wide, and coupled with the extreme interest rate volatility that we've experienced since the beginning of 2022, it's really put the effectiveness of interest rate hedging programs under a microscope. For EARN, we've hedged along the entire yield curve and rebalanced our hedges frequently, both of which can be more expensive at times, but also more effective across a wider variety of market environments. As interest rates surged last year, we were continuously rebalancing our hedges. The delta hedging costs associated with this rebalancing were high, but they were essential in preventing deeper book value declines. With the yield curve currently converted, we're at least getting the benefit of positive carry on our interest rate swap hedges, where we are receiving the higher SOFR rate while paying lower fixed rates. In the fourth quarter, these swaps serve the dual function of offsetting some of the impact of the higher long-term interest rates while also boosting our net interest margin and adjusted distributable earnings. Let's turn next to slide four for an overview of EARN's strong results for the fourth quarter. MBS had weakened significantly in September of last year, and we had responded by buying MBS aggressively into that weakness. As a result, we entered the fourth quarter with a net mortgage exposure of 7.5 to one, which stood toward the upper end of our historical range. That positioned us incredibly well for the spread tightening that occurred during the fourth quarter. We were able to recoup a good chunk of unrealized losses from the prior quarter. For the fourth quarter, we generated a non-annualized economic return of 11.1%, a net income of $0.88 per share, which easily covered our dividends for the quarter. We were able to be positioned this way because we have been patient about portfolio turnover. We have been opportunistic about adding new investments. Throughout 2022, reinvestment yields were surging. Yield spreads were widening as well, especially on the lower coupon pools, where we saw the best relative value. Larger portfolio sales of our discount pools might have boosted ADE in the near term, but at the potential longer-term cost to book value per share. Instead, we were selective in turning over those portions of our portfolio that we viewed as offering superior relative value, particularly those lower coupon pools, and we continue to prioritize total return over short-term ADE growth. Our strong liquidity position enabled us to add pools opportunistically in September when spreads gapped out. Over the course of the fourth quarter, we continued to be opportunistic, in this case by opportunistically selling when we felt that the mid-quarter rally had run its course. As a result, by year-end, our net mortgage exposure had declined by a full turn to 6.6 to one, which brought it closer to our historical norms. I'll now pass it over to Chris to review our financial results for the fourth quarter in more detail. Chris? Thank you, Larry, and good morning, everyone. Please turn to slide five, where you can see a summary of EARN's fourth quarter financial results. For the quarter ended December 31st, we reported net income of $0.88 per share and adjusted distributable earnings of $0.25 per share. These results compared to a net loss of $1.04 per share and ADE of $0.23 per share in the third quarter. ADE excludes the catch-up premium amortization adjustment, which was positive $658,000 in the fourth quarter as compared to a positive $1.4 million in the prior quarter. During the fourth quarter, tighter Agency RMBS yield spreads and increased pay-ups drove significant net realized and unrealized gains on our specified pools, which, combined with net in-interest income, exceeded net realized and unrealized losses on our interest rate hedges. Our net interest margin increased slightly quarter-over-quarter to 1.37% from 1.28% as higher asset yields exceeded the increase in our cost of funds. That included the positive carry that Larry mentioned on our interest rate swap positions. Our higher NIM drove the sequential increase in ADE even as our average holdings declined quarter-over-quarter. Meanwhile, pay-ups on our specified pools increased to 1.26% as of December 31st from 1.02% as at September 30th. As prepayment rates continue to decline market-wide, specified pool investors are increasingly focused on extension protection rather than prepayment protection. This has been a tailwind for the pay-ups on our specified pools because the market is recognizing the significant extension protection they offer relative to their TBA counterparts. In addition, the pools that we did sell during the quarter had lower pay-ups relative to our overall portfolio. The combination of these factors led to the sequential increase in pay-ups. Please turn now to our balance sheet on slide six. Book value was $80.40 per share at December 31st, as compared to $7.78 per share at September 30th. Including the $0.24 of dividends in the quarter, our economic return was 11.1%. We ended the quarter with cash and cash equivalents of $34.8 million, up from $25.4 million at September 30th. Next, please turn to slide seven, which shows a summary of our portfolio holdings. In the fourth quarter, our Agency RMBS holdings decreased by 5% to $863.3 million. The decrease was driven by net sales and principal payments of $57.9 million, which exceeded net realized and unrealized gains of $11.8 million. Agency RMBS portfolio turnover in the fourth quarter was 18%. Over the same period, our non-Agency RMBS portfolio increased by $4.8 million to $12.6 million, while our holdings of interest-only securities were roughly unchanged. Additionally, our debt-to-equity ratio, adjusted for unsettled purchases and sales, decreased to 7.6 x as of December 31st, compared to 9.1x at September 30th. The decrease was primarily due to a decline in borrowings on our smaller Agency RMBS portfolio and higher shareholders' equity quarter-over-quarter. Similarly, our net mortgage assets to equity ratio decreased to 6.6 x from 7.5 x over the same period. On slide eight, you can see details of our interest rate hedging portfolio. During the quarter, we continued to hedge interest rate risk through the use of interest rate swaps and short positions in TBAs, U.S. Treasury securities, and futures. The size of our net short TBA position based on 10-year equivalents increased quarter-over-quarter. I will now turn our presentation over to Mark. Thanks, Chris. After a challenging nine months for Agency MBS, it's nice to be able to report a strong quarter and to make back some of the prior quarter's losses. Unlike most parts of securitized products, where investors take on credit risk and the possibility of principal loss in exchange for excess yield, the Agency MBS market is unique in its ability to offer high yields without credit risk. Most Agency mortgage REITs hedge a good deal of their interest rate risk, so the primary driver of quarter-by-quarter economic returns for a hedged Agency mortgage REIT is the relative total return of Agency MBS compared to hedging instruments, which are usually Treasuries and interest rate swaps. The total return of Agency MBS starts with the carry on MBS assets compared to the carry on hedging instruments. As interest rates and yield spreads move around, you also have to factor in delta hedging costs and the relative price performance of MBS assets, both pools and TBA, compared to hedges. In quarters where yield spreads are very volatile, as we've seen for the past four quarters, economic return tends to be driven primarily by the relative MBS price performance, whether outperformance or underperformance. For the first three quarters of 2022, the relative price performance of Agency MBS was negative. Agency MBS dropped in price a whole lot more than a basket of similar duration U.S. Treasury. In the face of heavy investor liquidations and soaring rates and volatility. In Q4, that reversed dramatically. What happened in Q4? You finally saw some evidence that inflation is responding to the Federal Reserve System's hiking cycle and a higher interest rate environment. These green shoots put a potential end of this hiking cycle in sight, that changed the direction of fixed income capital flows from outflows to inflows. When considered against the backdrop of greatly diminished new MBS production, those inflows led to significant MBS outperformance. You can see that in the price changes on slide three. Across the board, Agency MBS prices significantly outperformed their hedges. Financial markets generally normalize whatever current pricing levels are. What I mean by that is that the bond market participants and researchers, especially in spread sectors like MBS, typically start the assumption that current yield levels and spread relationships are fair. I think it's worth reminding everyone of the magnitude of the repricing in 2022 and what was considered fair versus where we are versus today. We started 2022 with Fannie 2s at a dollar price of 99.8, we ended the year with them at 81.6, down over 18 points. At the start of the year, Fannie twos, there are more than 1.5 trillion of them, were the bellwether coupon, they yielded about 2%. Now we're buying Fannie 5.5 at a discount, the nominal spread on the par coupon mortgage is significantly wider than the 20-year historical average. That's almost a 400 basis point move in a little more than a year, undoing a 15-year bull market and bringing MBS yields back to their 2007 levels. Mortgage rates are higher than before the Fed began its mortgage bond buying program, the Fed is just sitting on a large portion of the market, which has reduced what's available to private investors. Where are we now? The market is currently pricing in a terminal funds rate of almost 5.5%, that means more hikes from here, the biggest moves are clearly behind us from the market's perspective. What's this inverted yield curve saying about the future? It says lower rates are coming. The two-year note now yields almost 5%, the two-year note two years in the future is expected to be over 100 basis points lower. You put all this together, you can see why fixed income flows turned positive in Q4. There are some signs that inflation, while high, is starting to slow. Some Fed watchers expect the hiking cycle to pause as soon as next quarter, and the risk of recession has set market expectations of significantly lower rates sometime next year. Whether all that actually happens, nobody knows, but that set of expectations puts fixed income in a pretty good place to attract capital. Capital flowing into fixed income as opposed to out of it is very significant for MBS. Fixed income investors have not seen yields this high since 2007, and they are voting with their wallet. You can see funds flowing into ETFs and mutual funds. There are two headwinds. First, banks, which are normally huge Agency RMBS investors, have been quiet. They're struggling with diminished capital from held for sale losses and from weak deposit growth, given competition from money market funds. Commercial banks saw year-over-year deposits shrink for the first time in 70 years. Second, of course, is the absence of Fed buying. We get a lot of questions about what an inverted yield curve means for ADE and return expectations going forward. A sharp rise in the Fed funds rate is typically only a short-term headwind. Spreads have widened on longer-term repo, and in response, we've shortened the average tenor of our repo, as you can see on slide 17. As a result, our repo expense now goes up almost in lockstep with the Fed funds rate, but it takes at least a quarter or longer for our ADE to normalize for a few reasons. The floating leg we receive on our swaps will also reset higher, but those only reset every three months. The extent that our fixed payer swap portfolio is smaller than our asset portfolio, we need to raise asset yields through turnover to make up the difference. Once the hikes stop and our portfolio turnover continues, our asset yields should catch up and fully reflect the wider spreads currently in the market. Those wider yield spreads relative to financing costs and hedging costs should drive ADE moving forward. What will it mean for Agency MBS if the forward curve is correct and we get a mild recession and lower interest rates? That's probably the best case for Agency MBS. Nomura has put out some great research explaining this dynamic. A 75 basis point drop in the mortgage rate does very little for getting coupons in the money, so it's not material for refi supply. In a recession, banks typically favor securities over loans. In a mild recession, we would expect an incremental increase in bank demand. Within fixed income, Agency MBS tend to outperform corporates in a recession too. Slightly lower rates are also probably supportive of further fixed income flows. Right now, housing is relatively unaffordable, looking at monthly mortgage expense at current rate levels relative to median income. You are seeing existing home sales really drop like a stone. The other powerful force that is slowing existing home sales is what mortgage researchers refer to as the lock-in effect. The lock-in effect is when a homeowner has a mortgage rate that is several hundred basis points below the current rate. Their locked-in low payments significantly deter them from moving. Lots of moves are local. A growing family wants an extra bedroom or empty nesters want to downsize. These moves are discretionary, a 300 basis point jump in a new mortgage versus an existing one will dramatically change their monthly mortgage payment. This dynamic also helps keep new MBS supply in check. All in all, a mild recession probably ushers in a decent pickup in Agency MBS demand with only a very modest uptick in new supply. What did we do for the quarter, and how are we currently positioned, and what is our future outlook? You can see on slide 14 that we shrunk our Agency MBS portfolio during the fourth quarter. Given their strong performance in the quarter, it made sense to reduce MBS holdings as the relative value was not as compelling. It was our disciplined hedging process and cash management that allowed us to hold our portfolio intact through some very volatile times in 2022, and that allowed us to capture returns in Q4 to offset some prior losses. You can see on this slide that we reduced our holdings of 15-year mortgages. Given the inverted yield curve, that sector is seeing almost no new origination, so it's shrinking from pay downs. The net negative supply has driven prices to much tighter spreads relative to Treasuries than 30-year MBS. That may well continue, we are just finding better relative value in the 30-year market right now. January was another month of strong performance. February reversed some of those gains, we are still solidly up for the year. MBS spreads are currently attractive, and the consensus path of a few more hikes followed by some better inflation news and weaker economic numbers should be a very good backdrop for MBS performance. Experience has taught us that the forward curve is often wrong. We remain disciplined about hedges and are prepared for a range of scenarios. We see lots of relative value opportunities in the market, so that we look to exploit to drive incremental returns. Back to Larry. Thanks, Mark. 2022 was by many measures, the worst year for MBS in at least 40 years, and perhaps ever. In Ellington Residential's longstanding sector of focus, the Agency MBS sector, there was truly nowhere to hide as the Bloomberg MBS Index had its worst yearly performance on record on an absolute basis and its second worst year ever relative to Treasuries. Throughout 2022, we had to navigate periods of extreme volatility and market dysfunction, with interest rates rising rapidly and yield spreads widening along the way. Despite these challenges, our risk and liquidity management enabled us to avoid realizing even larger losses. As a result, we were able to buy into extreme weakness late in the third quarter and then sell into strength in the fourth quarter. By doing so, we entered 2023 with reduced leverage and strong liquidity, which is now allowing us to play offense once again. On last quarter's earnings call, we discussed that we are planning to selectively rotate a portion of our capital from Agency MBS to other residential mortgage sectors, that's still very much on our radar screen. As we pointed out before, EARN's smaller size should enable us to be nimble as market conditions evolve. As usual, absent a big yield spread winding event where we'll want to pounce, we plan to be patient and opportunistic, picking our spots. Far this year, January started the year off on a positive note, with Agency RMBS enjoying an excellent month as Agency yield spreads tightened further. The tide has turned a bit since then, with interest rates and volatility up both in February and so far in March, especially with Powell's comments this morning. Year to date through the end of February, we estimate that EARN's book value per share was up close to 4%. With that, we'll now open the call to questions. Operator, please go ahead. Thank you, sir. At this time, if you would like to ask a question, please press the star one on your touch-tone phone. You may remove yourself from the queue by pressing star two. Once again, please press star one to ask a question. Our first question comes from Eric Hagen with BTIG. Hey, thanks. Good morning, guys. I've got a couple here. I mean, how are you thinking about volatility in the market, especially connected to a recession, and the impact that it has on the flexibility from banks to support repo financing? Like, are there good ways you think to hedge against the kind of credit risk at banks because of the transition to SOFR from LIBOR over the last two years? As a smaller cap mortgage rate, are you concerned about the access that you have to repo and banks as the Fed continues to raise? You know, how do you think mortgages would respond to, you know, any further backup in rates at the long end of the curve as well as the short end? I mean, we all know that most of the sensitivity is concentrated at the long end. How sensitive do we think the basis is if Fed funds are meaningfully higher than what the forward curve currently projects? Thank you, guys. Hey, Mark, why don't I take the repo portion of that, and then you'll address the, you know, how the mortgages should react to what's going on in the yield curve? Sure. You know, we're not really concerned about repo. Repo especially in Agency pools, has just been incredibly resilient, including most notably through the financial, you know, global financial crisis. We have a lot of a very large, diverse set of repo counterparties. We explicitly limit our exposure to smaller counterparties. You know, we most of our repo is through the very large banks that are, again, since the global financial crisis, extremely well capitalized. It's something that we watch. I mean, there's been a couple of banks that have been, you know, in the news, and you've seen their the credit spreads on their own debt, you know, be a little bit volatile. We limit our exposure there down to residential to those counterparties, and it's just not something that we're worried about, whether it be from a counterparty credit risk of our repo counterparties or from a repo availability perspective. I mean, we've just seen absolutely no blips, you know, in terms of, in terms of that availability. Mark, do you wanna handle the second part? Sure. I think the first question, Eric, was about volatility. You know, volatility has been pretty high this year, but realized volatility is certainly down from last year. Like, to me, I think about sort of two types of volatility. One is, what's the volatility in Treasury yields, right? How many basis points a day are they realizing versus what's kind of built into market expectations? You've been sort of realizing about what's built on market expectations are priced in which it sort of means that if you think about things in OAS terms, that your delta hedging costs are about what, you know, the OAS you thought you were buying is predicated upon. That has been definitely manageable. It's been a more manageable than last year. The other part of volatility that I think a lot about is, what's the volatility of mortgage spreads relative to Treasuries? That's where you've really seen things come down. The amount by which mortgages outperform or underperform Treasuries on sort of a given day this year versus last year, it's a lot less. You've had kind of mortgages, they've had this modest outperformance this year, but the oscillation's been between sort of, you know, their best performing days and their worst performing days are a lot, they're a lot closer than what they were last year. I attribute that to the flows in mortgages are a lot more balanced. Sort of like anyone who needed to shed a lot of duration in response to the Fed hikes last year or outflows they had, let's say it's a mutual fund or, you know, it's a pension fund raising cash. I think you've seen those big outflows occur. If you look at ETF data and mutual fund data, you've seen kind of modest inflows into fixed income and some inflows into mortgages specifically, especially through some of the ETFs. The flows have been more balanced. The second question you had about how do mortgages perform if rates go higher than, you know, what's currently built in the forward curve. I mentioned that sort of like mild recession was probably the best case for mortgages. I would say that the case where I think right now, sort of terminal Fed funds rate is expected to be right around 5.5%. I think cases where it's materially higher than that and scenarios where you have, say, 10-year yields go materially through the highs of last year, I think last year we got to 4.35% or 4.40%. We sit a little bit below 4% now. I think scenarios where yields go up through last year's highs on the long end and Fed funds rate is a lot higher than what's currently built into expectations, I think those are harder scenarios for mortgages because I think in scenarios like that, you're more likely to see fixed income outflows. It's sort of a little bit of the opposite of what made, I think, kind of mild recession scenario, which is what's currently built into the forward curve. You know, is to, you know, that mild recession scenario, those technicals are sort of the best for mortgages. I think materially higher rates, you know, market seems like inflations aren't coming down as much, that I think is a more challenging scenario. Yep. Appreciate the color from you guys as always. Thank you. Sure. Thanks, Eric. Thank you. Our next question comes from Crispin Love with Piper Sandler. Thanks. Appreciate you guys taking my questions. Just, first on looking at potential buyers of Agency RMBS over the near term. Mark, you talked about this a bit, but with banks stepping back from the sector in 2022, do you still view that there's an opportunity there for banks to be a meaningful buyer in agency in 2023 if bank loan growth pulls back? Could that be delayed into kind of 2024? Just any other potential tailwinds for agency you think are worth calling out. Sure. I think what really turned the dial on Agency MBS performance in Q4 as opposed to, you know, quarters one, two, and three, was really money manager buying in response to inflows, right? Like, investors, like long-term pools of capital, you know, pension funds, insurance companies are seeing yields they haven't seen since 2007, right? That has been enough to get people, when they see some modicum of stability in rates, to commit capital of fixed income. I think it was really money managers are the type of buyers that really have driven, you know, performance in Q4 and so far this year. Banks so far has still been on the sidelines. You've seen them basically sell some of the Fannie, Freddies. The buying they're doing is mostly in Ginnies because it's a different capital weighting. They've also been preferring loans over securities for, you know, lower mark-to-market impact on their balance sheet. You know, you did see some bank buying. Banks typically buy after they've seen a little bit of a rally. They generally like, they're not the kind of catch a falling knife type of buyer. They're sort of like they'd rather buy the bounce type buyer. You did see a little bit of bank buying in earlier this year when, you know, we had rallied some, but I think that's dissipated a lot. I don't think you're gonna see material bank buying unless rates sort of stabilize, start going back down. If concerns about credit performance are significant credit performance and loan portfolios is significant enough to cause them to favor securities over loans for credit reasons. You typically see that happen in a recession. You know, right now, the economic numbers have been strong. The other thing, which can also drive some of the bank behavior is now everyone's under this CECL regime, right? If you do have weaker credit performance in the consumer or credit performance in mortgage loans, then that can drive a revision to the capital you need to hold against loan portfolios for CECL. If that starts happening, that's certainly something that would cause them to favor securities over loans. Thanks, Mark. Just one other for me. It's more of a numbers question from the quarter, but looking at core other income after making all the adjustments for ADE was pretty sizable in the quarter versus the previous quarter, kinda after backing out the adjustments. I still got to core other income, about $2.7 million. I'm just curious if you can comment on the key driver in the change there and kinda what's in there that drove the significant increase versus the previous quarter. Sorry, can you repeat the question? This is Chris. Looking at core other income after making all the adjustments for ADE, was about $2.7 million, which was a kind of significant increase over the previous quarter after making the adjustments for different, kind of realized and unrealized gains. I'm just curious if you can comment on kind of the key driver in what drove the higher core other income in the quarter. We can definitely take this offline if you don't have it handy. Yeah. Yeah. Cris, it's the swap payments, the swap benefit that we were talking about before. All right. Perfect. Thank you very much. Yep. Thanks, Cris. All right. Thank you. Thank you. Our next question comes from Mikhail Goberman with JMP Securities. Hey, good morning, gentlemen. Congrats on a solid quarter. Appreciate the book value update. Just a quick question from me on what kind of opportunities are you guys seeing in the non-Agency space? I guess you're mentioning here number two on your list of the annual objectives is to continue to rotate a portion of capital into that space. I'm just curious about that. Thanks. The two sectors in non-agencies that look to us most attractive right now are some of the more seasoned credit risk transfer bonds, and the other one is sort of the legacy non-Agency market. That's sort of the pre-crisis bonds, you know, 2007 and earlier. People have been in their homes 15, 16 years. It's kind of a fragmented market. It's a lot of smaller pieces. There's a lot of securities where, you know, you're backed by maybe 15, 20 loans, so cash flows are lumpy. Our analytics are very strong in that area. Because you really need to take a granular approach to looking at the individual loans, it's a deterrent to people that sort of just wanna buy beta. We see that sector as attractive now. It's now it's you have to counterpunch a little bit there. You have to wait for sellers because it's not like, the non-QM market or, you know, another new issue market where there's new issue deals, and you can just put in your order on new issue and get invested that way. This, you need to respond primarily to bid lists, but those are the two sectors that we see the best relative value. We're not looking to. That portfolio is not designed to or it's not sort of contemplated taking a lot of credit risk. What we're gonna put to work there are securities that we think, you know, you can shock home prices like a, you know, a great financial crisis shock, and you're gonna get your capital back. It's not gonna be way down the capital stack and things that are, you know, where small changes in loss expectations really change your expected returns, things higher up in the capital structure. It's very similar to what we did in 2020 out of COVID, right? 2020 out of COVID, we raised cash once the Fed started buying. You know, Agency MBS tightened. Agency MBS, their tightening cycle preceded the tightening cycle in credit sensitive assets. After the Agency MBS really started to form well, you know, post-March of 2020, we rotated into some of the non-agencies, and it worked out really well. Great. Thanks for that, Mark. Just kinda curious, obviously, it's not an issue at the moment, but. Kind of looking forward, at what point could prepay speeds start to spike? Or what kind of environment would we have to get to as rates keep on rising? Like I said, obviously not an issue at the moment, but what could happen down the road? It's a great question. We actually just got the new, you know, you get these monthly prepayment reports fifth business day of the month, so we got the prepayment report last night. You know, it showed a very modest uptick, maybe 10% from extremely low levels. I think about it two ways. There's some very small portion of the mortgage market where people have note rates, you know, 7.5%, 7.25%, bigger loans. We think those borrowers are gonna be very responsive to refinance opportunities if the forward curve is borne out and you see mortgage rates drop. You have still, you know, there's been layoffs, industry-wide among mortgage originators, but you still have excess capacity. If you saw, you know, 20, 30, 40 base point drop in mortgage rates, you're gonna see that very small portion of the market that has high note rates. People that took note rates, you know, Q4 last year, those are gonna be responsive. This, this recent prepayment report yesterday, you saw a little bit of that behavior because this prepayment report referenced mortgage rates a little bit lower than where we are now. Now if you think of it, the market in aggregate, to get a real prepayment wave, you need to get big portions of the market refinancable. I don't think you see that until you get, you know, well below 5%. You know, even you move things 75, 100 base points here, the percentage of loans that have a refinance incentive is very low. The first thing I think you'd see is that if you drop mortgage rates, let's say to five and a quarter, now all of a sudden people with, you know, four and a quarter, four and a half, four and three-quarter note rates, they're gonna be more willing to do cash out refinance. That can happen. That'd be sort of incremental. To get a real, you know, a big portion of the market refinancable with straight rate refis, you're gonna have to be well under 5%. I think, you know, you'll see sort of you can have little pockets of faster speeds along the way, and if you hold those pools, you can get hurt on those pools, but it doesn't change the supply-demand dynamic for mortgages until you get significantly lower rates. Got it. Thank you for that. Thank you very much, guys. Best of luck going forward. Thank you. Thank you. Our next question comes from Jason Stewart with JonesTrading. Hi. Thanks, guys. Just wanted to know a little bit further on your thoughts on investing across the agency coupon stack vis-a-vis the dividend. I guess, you know, kind of where we see the most value now is like a sweet spot. Like, it's coupons that are high enough where you're getting enough coupon that you're sort of, like, gonna be close or getting close to your financing costs, but aren't so high that a little bit of drop in mortgage rates, you can see a big pickup in speeds. You know, I would say, you know, fours, four and a half, five, even five and a half, that to us looks. I think that's where you wanna be. I think you wanna be positioned such that if you have, a drop in rates, if the forward curve turns out to be right, you have at least, you know, a few points of room before you get to par and before you really have to start worrying about prepayments. I'd say that those coupons kind of fit that bill. They also have the nice property that you're not seeing new production, say in fours and four and a half. Each month, you know, if you own pools, or even if you own TBAs, it's sort of you know, you own pools, everything's seasoned month by month. Even if you have TBA exposure there, the assumptions to what's deliverable is getting older each month, so you're getting kind of the benefit of seasoning there. I think that it's sort of the very higher coupons where you have really big loan balance that on small drop in rates, you're gonna have an army of people trying to refi those loans. That to me is I think, an area that will have challenging performance if the forward curve is borne out and you do have lower rates, you know, second half of this year and next year. If I could just add, you know, if you look at our net interest margin and you leverage that, you know, given you can look at our debt to equity, you can look at our net mortgage exposure, which, you know, we dial up and down, you can see that the, you know, the dividend should be well covered from that perspective, especially given where short-term rates are, 'cause that's a tailwind as well. It's really a spreads have been so volatile lately. I mean, you know, we talked about how they gapped out in September, tightened in November. Now, you know, obviously this year saw sort of a similar thing, January, tightening and February and March widening. It's definitely a market where we feel that by dialing up and down that net mortgage exposure, we can, you know, generate incremental earnings. I think, you know, with that as well, which obviously came into play in a big way in the fourth quarter, we can, you know, absolutely cover the dividend. Gotcha. Great. Thanks, guys. Thank you. That was our final question for today. We thank you for participating. We thank you for participating. In the Ellington Residential Mortgage REIT fourth quarter 2022 earnings conference call. You may disconnect your line at this time, have a wonderful day.