And we recognize that and we want to be forward with that. With regard to the CECL we generally — listen, we saw the Fed reduce its commercial real estate index, which rolls into the [TREP] model. We did that right after our earnings last quarter, no surprise. This long for hire, we’ve heard this mentioned on other calls where it’s wearing borrowers out. Many borrowers were looking at, hey, if this cuts in May, my cap cost reup for the second half of the year is going to look better, and now that’s looking further away. And so we’re kind of recognizing those aspects in our model. And we’re trying to be — to lean more into it. We’re not — where we can — and then also where markets are softer, we’re really trying to make sure that the model is reflecting the softness in those markets.
So we really — it’s a combination of those three things. I can’t say there won’t be any more seasonal coming, but we are — this rate environment persisting where it is, did have a big effect on how we were looking at our model and the underlying trends.
Steve DeLaney: Applaud that for being ahead of it. With respect to the buyback, I know that liquidity is important to be able to manage your bank financings, et cetera. Obviously, with the stock in the 60% of book range or so and the peer group at 70-some percent of book, gosh, it would be great to — I guess my comment about not lending. I mean, if I was in your seat, I think I’d rather buy back some stock than make a new loan. But I hope the — I applaud the Board for putting the new authorization up and we’ll just watch to see how you’re able to work that into your cash flow going forward…
Mike Mazzei: I would say to you, arithmetically, you’re correct. But we’re here for a reason, let’s just be blunt. The stock is where it is because of the uncertainty around that. And I think our first job is to resolve that uncertainty. As I said, summing up here [indiscernible] done a good job at that, we need to follow that lead and make sure we’re doing that. And right now, I think buying back some stock, you’re right, it would have a bigger impact than making new loans, but letting capital get out of the firm isn’t really helpful right now. We are trading where we are. And I think resolving those watch list assets will pay us a bigger reward than buying back the stock.
Steve DeLaney: Well, we’ll keep that in mind and maybe defer that for our modeling purposes until later this year after you resolve some more of the problems.
Mike Mazzei: We’d love to be in a position where we can do that. But right now, I think near term it’s exactly what I said make headway on the watch list.
Operator: [Operator Instructions]. Our next questions come from the line of Matthew Erdner with JonesTrading.
Matthew Erdner: On some of these watch list loans, are you guys seeing a specific group of sponsors or borrowers kind of play out the same way?
Mike Mazzei: So all watch list is really divergent in terms of sponsors. But I think what you’re getting at politely is there are deals, especially in the multifamily sector where there have been syndicators and I think those are the weaker deals. We’re finding on the multifamily loans where you have local owners with friends and family money that they could go back and tap, those are proving more resilient, and we’re finding that where they’re more highly syndicated. And you don’t have that connectivity with your limit is, that is where we’re seeing more of a breakdown and we’re working more closely with those GPs. So really, it’s whether they’re syndicated, that’s the big sensitive point soft tissue in multifamily. In office, it don’t matter.
I mean in office, it’s office is the issue. And as we resolve the watch list, and I think this is going to be the case with everyone in our peer group. As we resolve the watch list and we get through the multifamily and there’s plenty of liquidity out there for multi and hotel, as Andy indicated in his remarks, we think that the watch list and — or the REO, we’re going to start to gravitate more towards the office. But to answer your question, it’s the syndicators in the multifamily sector that are probably the weakest tissue.
Matthew Erdner: And then talking about loan extensions, are you guys open to continue making those? And then I guess, what’s the willingness on your guys’ part to do that, and then are the borrowers willing to do that as well?
