The securitization markets were changing quickly. It was getting hard to do deals. People that were active in the space before buying loans moved away. So it was a tremendous amount of disruption in 2022. And with our combined effort, we were able to make sure that we had enough liquidity, but also the strategic focus on — focus on high-quality borrowers and what that allowed us to do was actually go upstream in terms of credit quality in 2022 when smaller originators were exiting the business. And so the credit quality of our transitional loan portfolio has improved tremendously over the last 2 years, but at the same time, we’ve increased volume. And I think that could not have happened unless you combined our efforts, Lima’s expertise, sourcing the borrowers, underwriting and clothing and then MFA’s expertise on the securitization front, but also on the kind of macroeconomic and housing front.
So I think that is a really, really important point. The other thing about Lima One, which is a unique is that they are highly diversified. And so often smaller lenders it will be specialized in a certain segment of the market. But Lima is really well diversified across the products. So as demand shifts with real estate investors, Lima is able to continue to maintain sizable volumes of attractive credit and so they are diverse in terms of product, geography distribution, in terms of borrower concentration and that’s a really, really important concept in terms of growing the portfolio. What it also means for the future is that we don’t have to — like our concentration in any of these markets isn’t too big. So there is tremendous upside for us in the years ahead as well.
Steven Delaney: Well, congratulations on what you’ve accomplished there all around. Craig, one quick one for you. Looking at your valuation now trading around 70 a book and the yield up 14, kind of what are your thoughts? And anything you can share as far as the Board’s thinking on the balance between the dividend and share buybacks, given your current market valuation?
Craig Knutson: Sure, Steve. So I think it’s actually probably closer to 15%, given where it’s trading. But I think if you look at our dividend, our annualized dividend on economic book value, it’s about 10%. And that feels like about the right place, right? I think Gudmundur mentioned that acquisitions in the third quarter are putting up sort of mid-teens, maybe to high-teen ROEs. So it feels like the right level. And as far as dividend versus share buybacks, I think at least — and again, these are Board decisions. We have a board meeting in December. But at least more recently, I think the feeling was that share buybacks, I mean, we tried that didn’t seem to help all that much. And with just what’s happened with book value around the world, I’m not sure that necessarily it’s a better thing to be a smaller company. So I think that’s one of the things that goes into that whole thought process.
Operator: Your next question comes from the line of Stephen Laws from Raymond James.
Stephen Laws: I wanted to follow up on your discussion first question. As coupons have continued to move higher, and you touched on this, I believe, in your answer around credit, but how do you think about not pushing coupons as much looking for lower attachment points or finding other ways to get a better credit loan in a lower — less competitive environment. Kind of what’s the trade-off there as you think about pushing coupons higher?
Craig Knutson: Sure. So I assume you’re probably focus more on business purpose loans with that question?
Stephen Laws: Yes. Yes, I think it was maybe 10.5 on the recent stuff, up from 9.9 or something like that.
