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Broadmark Realty Capital (BRMK)

Participants
Nevin Boparai EVP & Chief Legal Officer
Jeffrey Pyatt President, CEO & Executive Chairman
David Schneider CFO & Treasurer
Timothy Hayes BTIG
Steven Delaney JMP Securities
Stephen Laws Raymond James & Associates
Matthew Howlett B. Riley Securities
Call transcript
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Operator

Greetings, and welcome to the Broadmark Realty Capital's Fourth Quarter and Full Year 2021 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Nevin Boparai, Chief Legal Officer of Broadmark Realty Capital. Please go ahead, sir.

Nevin Boparai

Good afternoon. us Year Broadmark XXXX joining Quarter Capital's for Full and Earnings you today Realty for Fourth Thank Conference Call.

the supplemental details www.broadmark.com. to have Investors section is addition press website this the issued In at our afternoon, available filed in a our package on additional on with results, which release we

remarks reminder, conference a on As call may today's made include forward-looking statements.

materially obligation do to risks statements of cause update to differ may not forward-looking and actual We today. any that subject from uncertainties are in discussed statements new to future Forward-looking our information undertake those events. results light or

For a quarter more our affect the SEC to detailed refer release results, earnings recent factors and that the to discussion please may our of this for most company's filings.

conference Chief Chief This some be after afternoon's by information measures. open Jeff which also release and our non-GAAP During will to your and we GAAP Officer, financial up prepared directly questions. measures in filings. Schneider. Financial Pyatt; make we discussing about to non-GAAP comments, answer measures this will More the Broadmark's Management most financial Officer, earnings SEC Executive call David reconciliations comparable the will financial these call is contained hosted certain are call, and

call Now I will the Jeff. over turn to

Jeffrey Pyatt

portfolio. XXXX detail our and investment and management to provide you, Thank about begin briefly and Nevin, transition. financial to the on David year call. overview, and some I'll our results, call market then full with turn XXXX our announced fourth earnings discuss remarks quarter performance welcome additional and activity to over our I'll This we'll then afternoon,

your will then for questions. open We the up call

Brian invested with the capital completed transformation Trimont envisioned effective month, President, take year, billion. $XXX is of deep an we this under we estate asset search and real Officer. including real new When Ward Estate has we a recently management leadership a the with management we will Brian a earlier aggregate our would commercial Advisors, plan veteran estate as have most for As of CEO Executive our global began of experience, as time. succession Real X of accomplished Chief firm announced March leadership hiring year last over this place that

as company the finding know and vibrancy will Brian, were excited for Chairman vision continued our I will transition. able future. experienced bring veteran look and an of and Broadmark. to Board his in However, to industry growth in I accelerate we in serve the continue this and Brian, to leader to welcome, forward I our lead he Brian I Directors, I'm to of help our

quarter Historically, our has increase the on competition. than the on new quarter generated an in of the business Moving heels the We slower increasing seasonally been of originations year. XX% originations. we million amendments. face the fourth of fourth more record accomplished This a to and quarter for fourth and of year's fourth $XXX of quarter, quarter last represented this quarter a In performance. third from volume activity

and pandemic. amendments, reach to originations grow not the the a as of the to of and a full in commercial in wake discussing remiss would high-quality continues level economy the year. team, real has lending to in build. executed representing borrowers prior platform of I the strength new short-term depth our the markets competition construction This $XXX the our residential growing year estate demonstrates million the increase we be For XX.X% number continued the ability of in and XXXX, and over activity of

ensure at structures the our to price disciplined remain At origination market we approach projects. high-quality commensurate view book, believe we can single loan continue risk level competitors to levels and and ever-changing a underwrite those conditions. Specifically, residential transaction multifamily with withstand Broadmark, thoughtful for we of as economic sectors, seeing in we the and we and maintain that loans our are not which in

grow proven better are to may to portfolio. will our the long loan this We guidelines to headwinds. our compared to from economic term, to we pipeline we percentage believe discipline which run in In competitors, simply execute. unwilling the short deviate face reduce our on prepared of stand underwriting our But that the and we benefit be

one we expand initiatives our geographic footprint. of on delivered prudently Importantly, our to

and more loans portfolio. of will to are the in originated plus active states, is District and now providing result This Specifically, XX X a expansion in in states a year-over-year loan in increase. we opportunities XXXX, diversified we access Columbia, new XX% more

of XX, weighted a by $X.X consisted of origination with high-quality real portfolio of our of average estate secured billion As December at XX%. loan-to-value loans

pervasive will We believe are our across which drivers well representing drive housing, of new future. resulting residential diversified property from sector We well with construction the well population XX% types we shortage in favor continue of of a the portfolio. because into demand power target as our markets as the to residential growth

We land fourth type, of quarter also and properties. by QX development. commercial office. and secured within to including the seen retail high-quality pricing retain of as underwriting the are loans remainder executable that in guidelines XX% of portfolio storage, The of where pivot by commercial is were of the new flexibility our regardless XX% the originations our for our consisted to collateralized portfolio Approximately of hotels, end at projects, collateral the

portfolio the region diversified also XX% of by with XX% our East. Central the in in and geography U.S., in are XX% the loan Western We

Eastern the regions, Over Colorado, have in the our and we Texas Central Southeast. portfolio the years, past X primarily in methodically and grown

X% grown rate, ourselves has testament differentiate ability time. maintaining both default that is markets time a local to to a during over underwriting our while and fourfold by which in region Southeast Our

has As Broadmark, a we to reminder, everywhere. remains active and be while for not a focus expansion are strategic looking been

very market lending new to economy states enters opportunities fundamentals buyers acute and targeting housing are remain expectations industry office move The our an change The allow remains growth spending markets lenders. notwithstanding. there with XXXX. construction an the active demand and construction and to ahead, highly grow additional December in storage, real estate increase housing housing the finance strong. and household we growth This Broadmark as The to lower-cost market many supportive of In in favorable currently spending dynamics We and strong demographics, sheets construction. more in and aligns the expand, in of are we showed continues Furthermore, markets and to for lend. related markets, generation landscape are Americans after laws data with shortage of of remote where as commercial relocate working continues to balance the a lodging, construction which in for years pandemic, competitive depressed high nonresidential lead increases should consecutive notable to expected sector, the X retail in of XXXX activities.

which the We labor cost of line and potentially continue to impact disruptions monitor time our inflation, shortages, could and supply chain projects.

loans forced short respond to the and rate reserve duration of quickly federal to expectations the more Fortunately, have allows to conditions. hawkish shifted Inflation our us has become to changing future hikes.

rates to levels, this Broadmark. robust should for mortgage principles remain remain relative market opportunity I'd rates we ESG, to the modestly. if believe our to housing take so overall However, commitment even discuss to are like rise which historic foundational low

constantly into a on performance, community incorporate business proud difference committed our decision-making. on broader structure ESG We to record in of to and our and strive and positive We making organizational the our our all and are improve responsibility fronts. I'm world, we

Board, are beyond. senior and team to the continuing leadership entire in Importantly, our improve to committed XXXX and

and us of heard that draws my Broadmark. involved were From it's easy you finishing through repayment, much harder last with and construction me whom Many owe this to in quip thank money, in all it's paid is a and that back. continue to me loan with our and a origination, few have get for ask this call around everyone of debt underwriting today. I of thanking you indulge our be also coworkers focused teams, a I accounting, finance became since which Whether or capital. CEO. you minutes I lending private a been Finally, and shareholder Broadmark of shareholders, with the preservation gratitude of by on crew have hyper to process must many our funds proud since my you. am Add begin is at compliance our as at you I inception investors part. to XXXX, recently to of have

big to co-founder, you give without thank wouldn't Joe have my I is. Finally, Broadmark one where to last it whom Schocken, must gotten

look As to I reins of the his more Brian hand as with that, team I'll David the Chairman serving turn And can. I couldn't financials. over and review any to to excited I forward the supporting Brian, be of it way Board about I the Broadmark. and in to of future leadership

David Schneider

good and Jeff, afternoon, everyone. Thanks,

earnings our of operating are detailed X Slide on Our results presentation.

noncash net were quarter Interest For million. income reported in the income diluted was million of Adjusting $X.XX total or share. income for quarter we of loans $XX.X investments diluted income and common quarter $XX.X items, of million, net million per per $XX.X this fourth GAAP basis, On other per prior fourth $XX.X was $X.X our earnings impact a costs share. our realized share and XXXX, of the to million. approximately reflects fee revenue nonrecurring loss the for of distributable the common on a $X.XX on fourth and

GAAP a and net basis, of income net per total $XXX.X $X.XX million. diluted full share. we the million XXXX, the $XX.X For common produced year revenue reflects of On of share per this income

Our $XX.X common on $X.XX distributable realized full for earnings per year the million were share. prior or loss investments diluted to

growth. with continue On modest the balance we efforts G&A side, expense to anticipated our reduction expansion headcount support to

the to our had XXXX, by the facility expense from issuance the expense revolving compensation in a slowdown with expense a million million. have $X.X expense fourth finished in on result the With and bond With $XXX in million we and about For achieved and million regard of was million $X.X associated This presentation, of the full and cash typical we for the credit issuance $X.X the compensation and interest originations origination benefit G&A G&A of $X.X Page of reduction with and amendments. cash year fourth of offset seasonal XXXX. which given partially volumes, debt million experienced quarter, year $XX.X which X quarter, are we improvement we presented strong costs is earnings This employee of XXXX. past.

from vary timing naturally As volumes closings. based a loan quarter-to-quarter origination on of reminder, the

We continue size average fourth scale, originations amendments we from loan any to while percentage and executed with grow to to low. very our and loan which of exposure our XX $X.X million. individual size keeping risk-reducing size us has the average benefit enabled In an on our loan increasing quarter,

are system, we loans, to typically borrower Further, a credit ability reaching our in set increased pricing we while perspective, opportunity have expense to collateral. today's previously offer experienced greater lending market we we with discussed, borrowers of competitive are metrics. more through credit cohort an and our risk-based and underwrite our pool dynamic larger pricing better from allows which expanding achieved As that efficiency superior typically that has a us as reach

was over the And As stabilize of range December XX.X% a coming quarters, yield the the our XX, from to portfolio in ago. yield to XX.X%, XX%. portfolio of expect year XX% down we

our Slide As XX, a these yields to lower than underwriting provides paramount, borrowers maximum Still, we are with can volumes margins. origination our of with peers. And a our amount seen conservative over asset yields believe maintain significant offset we on reduced impact capturing, in which to we and particularly the tandem of increased remain perform. the leverage, equity that loan-to-value, remain our incentive XX% standards time higher

remain rate allows with loans to our our interest of as at term and fluctuations. average origination capital markets. property a quarter. types and the XX of the exposure term evolves short-term environment pivot also months shift us The short weighted our to reduces across fourth to nimble Additionally, be our It nature loans for quickly

X the we commensurate Slide balance in cash earnings few our higher-than-usual to December. competitors. reflects specifically, of from construction lending construction of inaugural had on of November, completion risk bridge prepayments cash indicator our typically taking the permanent of We aggressive level turning during something detailed and a bond refinancing the proceeds borrowers the see the not quickly is lenders, and deployed We of presentation. Now and $XXX XX and This issuance December are sheet currently is large weeks last pricing. to that million another XX. on of prior as observing of balance our without as we a More from

For purposes, a continue to cash balance approximately we million $XX flexibility cash management and of $XXX financial target million. to

when We undrawn outstanding, XX, remain fully fourth shares did our on policy, to our the in access is only senior credit not in December X% capital And of we intent million interest shareholders. As $XXX of million had long-term $XXX it a issue our Broadmark under is X-year, believe facility. quarter. of that unsecured coupon and ATM we notes the any we as it

rate with providing borrowers of always optimize prudent risk interest corporate structure part our a with debt, not a rise, capital grow competitive very we remain sheet remains execute portfolio by As environment, fortress rising be to expected rate interest Unlike issuances XXX% rates competitive Maintaining expect our certainty and cost of we balances to leverage achieving this our change our a low as fixed execution. additional has and to been even a debt our DNA, leverage capital. coupons able our balance competitors, as industry and in are standards. at is will of that we

management. portfolio to Turning

million had total in loans we commitments XX, in by XX $XXX.X total of value. December of portfolio contractual or representing XX.X% default, As the

percent, $XX rate reflects from slightly the At year-end, with at losses, resolved carrying contractual XXXX, with year-end, by third our finding primarily to default Overall, owned outcomes originally X the anticipated. we in year. at default, than our of million X.X% was we and loans from for albeit minimal slower foreclosed $XX this during value. a pace we prior down defaults in and properties was commitment positive million quarter down As a

X cures payoffs default, representing total the we loans loans on commitment $XX.X of and During fourth million. X foreclosed a quarter, received in on or

a in loans reminder, drag earnings. a status to on continue have As nonaccrual

approximately share. per was drag earnings $X.XX the quarter, fourth the For

limiting on our over to monthly Directors continue coverage maintains continues Broadmark From environment. likely to factors our the to take perspective, resolve dividend and consider for best diligently these when over issues dividend result shareholders, to to in focus although achieve time this time Board instability. work We setting is the various a time while a of current achievable dividend

it As in to a while positive be disciplined that will that we ahead, nonaccrual to and to we going loans. have continue understand look difficult to approach we view our grow on the given remain long-term we're in earnings, we XXXX underwriting navigate

CEO While invigorated EPS last discussed. building are in experience restart will some have year, our market us time current it we and and under new we conditions growth on realize invested his all of take and strong with the challenges to the

like distinguish to and factors point, that we stockholders. ahead, and itself is that we peers Broadmark will outperform. to positioned a to believe while highlight As Broadmark drive that believe our well we from to To look I providing differentiate would growth dividend stable

refinancing experience whom billion below First, take This advantage conservative amounts and to on our positioned $X.X well servicing carry million in variable their rate debt large of most of to capital rate opportunities of in balance structure. we mortgage a have It's debt. lending debt their sheets, REIT are environment. as just We rising impacts equity competitors, a value of We the X.X%. ratio of XXX%. of very currently believe find and debt-to-equity rare to $XXX a over equates

with Second, internally managed scalability.

we we to incurring our grow expenses. the shareholders, ability significantly while headcount portfolio minimal are size interests and aligned increases with have and believe Our our to

just inception scratching $X Southeast Third, the to loans untouched. marketing with in originations the strategy should increase expansion. marketing. time. remains while our geographic region, still Northeast strategy. our XXXX billion our lending We digital in up but beginning the leads nearly relatively We're Enhancing Fourth, funded over in significantly ramp limited surface, since marketing

geographic expansion. to our our growth. we in time Nevada provides To the construction finally, complementary areas addition, in significant we've date, loans. limited license presence In Arizona have opportunities lending Increasing currently for and our of product And product offering are state California. over and begun recently lending for seeking these

factors, whole, However, interest the completes are prospects loans business to other and as type. as to long-term purpose our Broadmark's us of These borrower various individually in there future. a give prepared remarks. our confidence This look we

the will open up We questions. now for line Operator?

Operator

[Operator Instructions].

comes Our question with BTIG. from first Tim Hayes

Timothy Hayes

of do. the the luck the of on to else your and with all, next transition, Exciting whatever kind involvement stuff. you're company stage and first congratulations Jeff, of best of Well, for going

Jeffrey Pyatt

you, Thank Tim.

Timothy Hayes

chain a this Well, strong but shortages the about near competitive you housing investment, supply Yes. of time, at Can and those talk there is Like impacts lot resi there's right? term first just are you factors? And call, outlined inflation, some then aside challenges and the the higher now? tailwinds cost issues, I demand any right? in on rates. labor you mean of that of borrower problem. on foresee same supporting from landscape, the other from mortgage impact having guys lot a question, the No right any

Jeffrey Pyatt

Sure.

borrower, I confidence lot there's their just that And overall You've now, think a right the I subjects borrowers. still Tim, touched among on of impact a the of lot opinions. think our

demand. are is million like, that housing we so of number demand exceeds units the think plenty supply. There's X.X And seeing about still I

So there. there's of opportunity plenty

You borrowers talked to their from quicker because nature doors then been getting planning a of garage about think, out that. or less orders impact project. -- or how as big door further to these of openers really, the have an those they're ahead, long impacted I X-year the things. sort cabinets that have supply on everything a X- going enough kinds a And those loans, inflation, there. little of with would issues garage a short-term going chain the learned But have their as little isn't inflation issues. They're it by of so being on deal or There's to to appliances

are think So looking remain and they overall, optimistic I for projects.

David Schneider

Yes. And Tim...

Timothy Hayes

yes. ahead, Go

David Schneider

just add quick. real David. want it's to Sorry, I

that view to about expected hikes probably as that. inflation, and as all think actually rate we Fed at we about think when us. Broadmark, we Just We, right, beneficial

loans. asset fixed XXX% have fixed debt, corporate yields rate our rate on We

significant given for our a probably execution from where no I more financing our from of be rate impacted we're as balance I to sheet at, to perspective a our And stand benefit hikes. of as lot yield loans, us. will to think impact there think with certainty think asset and much of extent peers we well an I are both limited perspective the

Timothy Hayes

and expect demand mean, mortgage that you buyers handle and do the from support in consumer But in? a home environment Right. will sheets the I construction-lending to all balance appreciation and price rates, home and impact higher can from -- growth healthy economic you're markets continue

David Schneider

-- multifamily our much we direct be would say Yes. do. Well, on relatively I would it. competitive. this the so We loans can. the think there do think portion still and commercial and less seen remarks, I see more We prepared we of Single-family We we growth commercial a quarter. don't there's there of shifted going in did when in multifamily XXXX portfolio. I we We I haven't think in beyond. a mean lot impact remains can be perspective. mentioned construction to is small the some

our can loans the of nature mentioned, where risk. close short-term pricing the is pivot the we present can Jeff like like where commensurate given feel with loans, as We -- we they needed. So and we themselves

Timothy Hayes

require that more entrance coupon some loan in bridge kind leverage? lower you product made compression Okay. yields over does type the direction in the bit lending coming does the -- year. of David, of lending into comments where all the then or construction products that's strategy? a Or other of yield And your expected that that heading? just might little portfolio about what helpful. some I'm just And the core And also reflect is reflect curious, of

David Schneider

question. It's definitely primarily -- great we are exploring Yes, bridge.

loans portfolio. small We our some amount have on of bridge

construction we're talked the Now we're -- remarks, on yields the really look we're again, pricing as I've those, competitors of on. we'll lower prepared competition that focused we not We taking about view continue the that but in seen. our with at seeing seeing, asset loans. core are would are risk personally getting that or commensurate they're always level competitive always the than to Not

We're many years, cheap in the out structures a with that out just decade. many, and put really the a terms lot So coming industry seen seeing over there. compression is construction if capital we in haven't not of

We're We're coming to and all-in stand it's LTV of timing That's right and that and the now. not when it's or LTV. guidelines in So going are just XX% the of really terms underwriting -- X% only is looking we're of we're out X% we're by -- -- seeing competition, yield. refis seeing range the like getting XX% offered. the XX% XX% yields LTC, or what our

to We're with makes we're the don't pricing purely underwriting. -- the on deals. justifying pricing chase in taking it we risk compete deals where think pricing our winning we're sense and still our But our of that's model. going our we're with coming So and out accordance just not

Timothy Hayes

and sounds you. about Well It's into bridge that's earnings like Got certainly, of challenges earnings achieving around some good near and term. just significant comments my question lot a look, the a growth, your last growth towards in here. it roadblocks

$X.XX So to instantaneously if given quarter, market weighing did you your compression assuming resolve about -- the there, yield hot earnings from and disciplined you growth, defaults $X.XX I you $X.XX potential to a have talk guess, $X.XX would there's at there's that in headwinds then be this on -- here. but those, you're

do the guys your for where really what is to get intermediate growth how about it in you really to So earnings set the get some sustain near and the see ability to And take it going is -- you higher? in nice to dividend term? dividend to feel

David Schneider

the every end any We going That's being their Board laid in think, deals. can shortsighted great into dividend deals We we make would think that are find little sense, dividend? question, we dividend find while not the continued of Directors factors. coverage yes. instability So -- dividend, bit month, perspective, remarks, the the achievable say dividend. is cover we of prepared prudent to markets how our out right? think Tim. a state. we I cover over focus time, prudent a will get expansion our almost considers various there? a Yes. I it in Sure, towards we We eventually limiting From an can maintaining

from there, volumes. continue to our footprint continue we'll to markets, expand expand So increase into

we come $XXX you towards second but we're a can very the us. did of production you in million in I But be weighted QX. can to think QX, quarter XXXX we we what saw think as we a half from $XXX starting perspective, saw heavily also, for in about should see was That at where normal think I million. production

to production. to increase it give So going we're

that we're I I has the to offsets yields, which of you the compression of that come in focus seeing nonaccruals. $XXX some -- think from QX, about think XXXX. asset from continue down we said, the earlier Like million nonaccrual, on have the beginning of

not So there's or there's we'll growing fruit quarter And the that. X grow we continue well over think in time. X fighting it's happen but And dividend earnings all shop, definitely to management going earnings, and path will I recommend as low-hanging growth. to as a

Operator

next Securities. question from Delaney JMP comes Steve with Our

Steven Delaney

Great. built hope on you Joe like of Tim's very congratulations miss role. to working Chairman what add -- proud that move comments into with the be was with time should I full apologies. still you. I just as you I'd and just to mute. And you you'll have directly, to together We'll but My you take my you Broadmark. I with

Jeffrey Pyatt

Thank lot. That Steve. a means you,

Steven Delaney

Yes.

X, think, You guys was the marketplace. And remarkable years. note about had in the were it very for of competitive commenting X straight made clear, pretty I I Page

volume. very hearing dispersed, of or portfolio you maintain platform what your expand hopefully I'm of liquidity going your understanding get and convey accurate yield and your of to you had year in hard to were is going growth level You've more that of but that, my get annual trying caving pretty maintaining geographically the remarks? And opportunities your an work just Is probably interpretation this not to portfolio to million to -- more. some realistic your without much say that expand that's $XXX you yield and on you're while -- net you're

David Schneider

million really Yes, the Tim, is We're to mentioned growth Steve. a perspective, can focus looking normal just I that the grow hit. -- to run ways I I dividend. like that's comments growth. $XXX to a say earnings, was would that on at on earnings the production From think Thanks, feels Yes. we rate a grow

be able portfolio to certainly the we to So in XXXX. do expect grow

default balance our that the all-in I yields. QX yields continued away some trending on with of of sting like the X looks direction. looked originations Increasing resolution. will a compression a it's the the to think those on in been we've and similar a take we're what pretty in some were But of similar seeing. quarters, between Couple focus remarks some specific that decrease of QX and

So we're it will the going to volume, to think a do landscape quarter, grow We growing can more I but continue focusing challenging put focusing we nonaccruals. significant nature or think portfolio, origination pricing million the earnings. perspective continue $XXX grow out a on with competitive be and from

Steven Delaney

the your because I taken the as Yes. heard Thank earnings, sort it about I you maybe thing I about for clarifying that of -- portfolio. comment same had but thought that you saying were

lower community banks? the rates the coming primarily is and from the market, this are into that On coming competition

David Schneider

mix. I would a it's say

seeing really, to cost, a in much than loan offer getting higher-than-typical offer seeing asset we recourse, really -- LTVs higher-than-typical offering competing, nonbanks We haven't that our look doesn't seen that perspective, we and are from attractive. we're yield seeing no we're years. -- just We're banks underwriting loans also it's that construction an through higher whether then structuring

So I more out take there banks always think we It's on it's some same the quarters. in that seeing we mix. a competitors we're little a well than as risk nonbank have as prior of see bit

Steven Delaney

you I and Virginia opportunity Virginia? West most in I'm final and the And West one well. you what time That's did Interesting. in for Virginia find pretty helpful. curious so just based -- me. I'm thing property of know submarket just type that

David Schneider

storage have facility. I'll did to that. commercial facility in commercial we bit It West that of We Georgia, was new we more a prepared I'd that storage storage about concentrated million first in one one state. quarter. bit Virginia collateral then remarks of did Texas And doing most we was The a That execute. follow little was over $XX as But as Tennessee, [indiscernible] Virginia on our was in West talked little storage up was -- some did there. collateral of facilities. facilities that several a was the well. storage online loan and this the we as and well in get

So those part are attractive capital we immediately. acquisition construction for where [indiscernible]. deployed construction or have and limited All most those loans loans risk the were risk no

wasn't money not that's construction use. there to being or put So any holdbacks

Steven Delaney

Got it.

were in years, takes it you in but lease-up you're life X whether So correct? So the XX time whatever, period, that didn't is have you're you funding the but months, property? of stepping construction -- funding the your risk, that's and

David Schneider

Correct. Correct.

Operator

Laws question Our Raymond comes from with next Stephen James.

Stephen Laws

Jeff, as as CEO. and well as congratulations your have transition, said, job your others on time done

Jeffrey Pyatt

Thank you.

Stephen Laws

Yes. think the on David, you prepared touched in given remarks, certainly the leverage, notes price given unsecured new where you accretive investments. the I

look some when of think acceptable you of is do the on down amount might forces the happen? kind you like portfolio? performance leverage think you competitive well. the when as And that for do and line, given what focus do As there's It sounds -- also, portfolio here,

that when? might be more think how and you leverage what adding So level do and about

David Schneider

Yes, a Sure. Stephen. question, great that's

wouldn't number. I say we So targeted exact have an

very potentially something a debt-to-equity peers. rare We out debt our the ratio, think slowly our balance to our years, we think balance of strategically sheet think distinction. still is next X, in over financing and more which we're increase a that to we to from debt-to-equity go introduce X find still want sheet. view huge planning XXX% mortgage out leverage all capital REIT. we differentiator can But look X to ratio as if below keep I raise years, I We to the

need in we So The out I from us, it perspective. capital We perspective, going that quickly. and million And really structure not were put did $XXX $XXX we type that that little a was the competitive from to into like basically. investors was only can go balance higher Pricing read a X%. think November we're million ended put out deal when We to we we in when able it cash going for a to bit good we really do obviously of year covenant than the expected. that increments we're and out came deal. just

had the nice coming last us weeks, in. the in that in elevated into a quickly normal were with some there mentioned year-end. and we out put X brought some prepayments put that's X at new million almost balance we can out in payoffs weeks. our for we that we loans, then think But basically in the But cash I payoffs, payoffs size come $XXX conjunction

I as XXX% So sheet, ratio, X, years XX% now, think probably and target still leverage each our out balance in could we fund portfolio about of fund the below debt-to-equity a growth X year ratio. from

and types would change. that, like today, in that's how how and it. look source -- I to where of products We'll we're of kind Just as that subject that's structures. we we things view of and diversify to capital the just alter at obviously, could see But kind

Stephen Laws

the Great. That's year? rate year, expectations kind And then G&A. this about think we for are looking expenses helpful, of David. run rate run out then as comp and your What

David Schneider

Sure. Yes.

expense I to in came referred in I million so as we prepared the of like cash -- under -- So came at we $XX.X remarks. think in

benefits and excluding as expense. So administrative excludes intangible and well of as interest of and It expense. RSUs amortization assets amortization that's cash comp general

million factor for full have we'll we $XX year, target we a that. -- targeting under But and were we'll interest this of to year came have expense that XXXX with those expenses obviously, exclusions $X.X ratio think So in in of beyond. million cash in, and I

think issued we've coupon got target $XX will expenses. but good perspective, is be comp on a those around XX-K, we From interest this an G&A cash of somewhere still million $XXX million in benefits expense the in and that November. X% and for and that the I bonds our

year extent we additional of half a So your of year. the you've the typical expense interest in capital, have some might see got kind issuance raise amortization that. And you of then debt the second go To you'll full costs. of

So can that it will partially to I in an additional XXXX, capital by but figure you don't we because exact out. want interest be driven need how expense much throw number probably

As of today, cash. we're at in about $XXX million

perspective liquidity for for term So looking and at this a cash aren't and financing moment. the good we're near from

Operator

comes Howlett B. Our with from next Riley. question Matthew

Matthew Howlett

Brian Congrats shortly. forward hearing to again, certainly Jeff. I from look

Jeffrey Pyatt

you. Thank

Matthew Howlett

to excess revolver. stock potentially under periods The grow the out price way, know in mean with to just authorization you it availability make does If weaken, the to that have the question, question on get does continue originations, of it stock to the to buybacks. sense weakness? -- in back first have you but question will want cash, place the the I I buy of be

David Schneider

could see program don't It's prudent use we exist. up. Thanks talk doesn't something it that stock our have. make it's be But loans it's hope would got one right QX, funds. for deployment we But that a I or further a places that with have we'll a Again, you, it's about. buyback of not really it feel to in good the a would But now, that we're again, not past nice I Board now. have have to we have which capital case, cash. we from in expect with if could Yes, something sense, and occur, explored question. setting we talked about something the in absolutely that focused I place. -- we've agree our We've into something for of whether we our on right good put see with something Board, where

nothing considered that at up want we've do this quarters, to It's something at we up question. least and if setting the understand but most something So to and least availability appreciate have it's at time, it. the comes

Matthew Howlett

shareholders. question mean are not be is beef in of players ROEs look What I in Are just are it tell the course to second out mitigation Just quicker and of the could that, some it sort pocket business market at up one certainly, to given as you loss you a than in quarter? you market. could received -- of the the maybe be the just at and well point mitigation. earnings trying every some in is subject know that really the ordinary never -- And nonaccruals, just time you're there of internally get improving hip department? at to which volatility think space managed your to us other the of it to maybe to -- With from a plans loss have how of that volatile few public. terms can the you players of have on the the market drag on different

David Schneider

say, from my starting through half X we company. know perspective idea have this again, I gotten technical, our good think have. contractual that And into a have Yes. and I he aggressive. say year, see well before default. what I they loans made when modify proactive default And default, you'll to is this would second -- in more as which watch us think they amendments we And default. That's tomorrow, We've a monetary not from go in looking default. make a the would We we of actually. the always into continue avoid great entering question started as Brian huge a where think -- ever to them -- loans focus to borrower Matt, we've going as being we've well and sense starts potential I'd both gotten adapted into those and I for in say I quarters, identified, list, more the have last once

extent a history where XXXX, awaiting started limit was one it loans So most -- using foreclosed I and the And just the of sense. economically was have makes economic prudent. X defaults. of that where -- other properties seeing most thing you to the thing because We think It to was doing in it those sense. new did only XXXX, we've think we possible on the been made we and I try in foreclosure that's

expect sheet we outcomes, have of as most, of on all, positive XX/XX. We not to no the if economic the that have REO balance on losses

with sense, having being of it foreclosure exit the for property the doubt, control better makes and outcomes not benefit to us. allow of more the really at So will taking borrower that foreclosures, where control the then aggressive us with giving moving quickly forward

I more you because coming to you'll sticking default there's me, telling is So to probably earnings trust in continue quarters or us aggressive that each $X.XX continue see that quarter. $X.XX a can you -- of think evolve I see proactive, on nonaccrual hate that lost -- management, to the think, more for point I it

to priorities for down, balance ways bought lug looking have nonaccrual the be us, kind probably as we of think but continue creative it's defaults going get well legacy of as to the defaults. of avoid new this through for I last top to one

Matthew Howlett

rate X%, level? X% the run total normalize to believe still you balances, Would would sort of,

David Schneider

were or much at in between get So somewhere like XX.X% us X% see of realistically. with somewhere I'd we're like X numbers Historically, we as year-end. at less. pre-COVID, a those smaller portfolio to

So X% I think or somewhere X%.

get it's going time -- to there's think take I to there.

lot of made lot that to I -- REO, get to a nonaccrual be work work got hopefully definitely, to but there's a in think us through progress, XXXX existing of lower. we've we've cut still population through But ahead done of get there.

think XX.X% coming see those into I do in I look year. get of not. I'd Probably rate? as X out our like normalized the size rate? normalized us is think X%, Do we not So somewhere is a with to between portfolio, numbers the

Operator

And Ladies like to the and for gentlemen, closing Pyatt turn Jeff would remarks. we call end Mr. session. I back have reached question-and-answer the to the of

Jeffrey Pyatt

me very in these And to participating Thank wish you an I honor look Capital. to you all and best, side. again Take been Realty everyone. say allow on Broadmark other forward the it's the calls again, care. leading

Operator

concludes today's conference. This

for You disconnect participation. may this lines your your time. at all Thank you