Bryan Wulfsohn: I mean, today, its Bryan, you think about the immediate potential, right? We have some unrated deals that were issued a few years ago that have paid down significantly. So say if we called one of those deals, that might unlock $70 million to $80 million in liquidity where the cost might be say 200 to 250 basis points more for that financing, but the ROEs generated are, that mid to high teens. So it definitely makes sense for us to execute that type of transaction. For some of the other deals, it’s not an immediate thing. It’s more the next two to three years where we’re going to have opportunities to call those.
Mike Roper: And Doug, just to add a little more color to Bryan’s example. So if you think about non-performing loan re-securization done a few years ago, calling that deal, what has Bryan said, will unlock additional liquidity, but a substantial number of the loans in that deal are likely now performing. And those could be re-securitized as rated, re-performing loan deals, which trade at obviously lower yields than an unrated non-performing loan deal. So there’s a lot of nuance in this. And it’s just something that we want to point out is something that we’re keenly aware of. And there are opportunities that will continue to be opportunities to optimize that liability structure.
Gudmundur Kristjansson: Yes, Doug, just to put a pin in that. Like the, we think of this also as just a significant optionality from the liability structure. So to the extent that like the world can change and things could evolve in many different ways. So to the extent that rates are lower, for example, if the Fed is cutting rates and the curve is steeper, most of these deals are priced on the front end of the curve. So to the extent that the curve is steeper in the future, it just gives us an optionality to recycle capital, perhaps at the same cost or better over the next couple of years. And so for equity investors, I think it’s just important to understand that optionality. And that’s really kind of what we’re trying to point out for the next couple of years.
Doug Harter: Got it. And I guess understanding if you don’t call the deals, then I guess, are they cash flowing or are they still kind of, are the subordinates cash flowing, or are they still sort of paying down the seniors? It’s just how to think about the alternative if you decide not to call the deals?
Craig Knutson: So again, it depends on the deal, Doug. So, you know, in some rare cases, there might be a step up after so many years where the coupon will step up. But in most cases, we’re not obliged to call the deal. I think on the RTL side, after the revolving period ends, there’s more incentive to call the deal because you can’t add new loans to the deal. But it’s really deal and type of deal specific.
Doug Harter: All right, I appreciate the answers. Thank you.
Craig Knutson: Sure, thanks, Doug.
Operator: All right, our next question comes from Brian Violino with Wedbush Securities. Please go ahead.
Brian Violino: Great, thanks, good morning. Just curious if there is any notable extension or modification activity this quarter for the transitional book, like we’ve seen with some other BPL lenders over the last couple quarters, and if so, under what terms were those made?
Mike Roper: Yes, great question, thank you. So, see, for our portfolio, the percentage that was extended is relative to UPB at the end of the first quarter is about 12%, and that’s ticked up a little bit from about 8% to 9% at the end of the last quarter, but really remains relatively modest in the historical context. I think, in the normal course of business, extensions happen, and that’s nothing that is unusual about that. It’s usually, borrower needs additional time to kind of market and sell a completed project. It could be delays and completing rehab or construction, and the project importantly remains feasible and attractive, and then on a small balanced multi-family, you may need additional time to lease up the property and get it into a stabilized state for longer-term financing.
The important part about all this stuff is like, we don’t extend delinquent loans. So, again, you have to be current to qualify for an extension, and then in the normal course of business, we see extended loans payoff. I think last quarter, probably $35 million to $40 million of extended loans payoff that were previously extended. So, from our perspective, it’s normal course of business, and it comes to the territory.
Brian Violino: Great, thanks. One more on the, you announced the new stock repurchase and ATM program. Earlier in the quarter, it doesn’t sound like either of those were used recently, but just curious on thoughts in terms of under what sort of conditions you would look to lean into either one of those programs?
