Andrew Ahlborn: Yes. So, our existing authorized repurchase plan, we filled that in the fourth quarter. So, we have to go through the new authorization from the board to put a new plan in place. Some more to come on that once all of that’s ironed out.
Matt Howlett: Got you. Look forward to that. Thanks, everyone.
Operator: Thank you. Our next question is coming from the line of Jade Rahmani with KBW. Please proceed with your questions.
Jade Rahmani: Thanks for taking the follow-up. Could you give any color on the due diligence process? How long did you spend on the deal with Broadmark and going through their portfolio?
Adam Zausmer: Sure. Hey, this is Adam. So, we’ve been doing due diligence on the portfolio for a while. Really several months, two plus months. Ready Capital and Broadmark team performed property inspections and analysis together, and we met many sponsors and towards the local markets. We had multiple roundtable meetings to dive into assets. And given many of the loans had a history of modifications or other moving parts, it’s just really crucial for us to quickly understand what was happening at the asset level and form credit views. Fresh valuations were obtained and reconciled for every asset in the portfolio. Existing and future workout plans were evaluated for the highest risk loans in the portfolio, and we engaged counsel to perform loan document and title review, as well as borrow background searches.
Jade Rahmani: Thanks very much. Great to hear. And a question for Tom on office. What’s your company’s experience level with office loan workouts in particular, and do you see any interest in perhaps creating a fund, an opportunistic fund to pursue distressed office deals or anything in that space?
Tom Capasse: Well, most of what we’ve done in Ready Capital in office is small balance, including workouts. Like we bought $6 billion plus of GFC, of which maybe 10% was office. So, you’re not dealing with large CBD, BC office properties, which are really the pain point today. Away from that, in terms of, we always look opportunistically, we at Ready Capital, to work with the external manager, and there’s unequivocally opportunities to look at broken office properties that – for readaptive use. And so, yes, there are opportunities to deploy capital there, and we also have an opportunistic private equity strategy that Ready Capital participates in with the external manager. And we’re seeing a lot of office opportunities there to provide preps on recaps and a number of other things.
So, yes, a long way of saying yes. We do have experience definitely on the small balance side. There’s very little, what we have in current of our current portfolio. It’s 2% of Broadmark and only 5% of Ready Capital. But we definitely are looking at portfolios from especially regional banks in cities where the work from home has been a real big impact, which could provide the opportunity for raising targeted opportunistic capital.
Jade Rahmani: Thank you very much.
Operator: Thank you. Our next question is coming from the line of Crispin Love with Piper Sandler. Please proceed with your questions.
Crispin Love: Thanks. Also, just one more follow-up for me. Tom, and Andrew, you mentioned, I think you said substantial expense synergies. Just curious if you can provide a little bit more detail there on where you expect to expect the majority of synergies, how much in like dollar terms or percent of Broadmark’s expense base do you think those synergies could be on the expense side?
Tom Capasse: Andrew, you want to comment?
Andrew Ahlborn: Yes. So, the expense synergies are going to come through a combination of employee comp and benefits, as well as G&A. The integration plan on a go-forward basis, well, obviously, to evaluate staffing across the combined companies and sort of pick the best of the best across functions as we move forward. Total net cost synergies in €˜24, €˜25 and ’26, are expected to be roughly $7.5 million, $12.5 million, and $16.5 million, and that is net of the incremental management fee that comes with the new equity.
