You have lease income that you’re matching up against your expenses and your debt service. And if there’s a mismatch there, we’re going to have a conversation. And generally speaking, I think most of our borrowers will still tell you that they believe strongly in their project and property and they want to support it. I mean generally, those conversations at this point are still very productive and that we do have situations where in this loan sale where we had conversations and you could see that probably was not going to get better. And at that point in time, we have to make a decision as to do we because of there’s so much liquidity still in the market, this was an opportune time to just say the situation is probably not going to get any better and we need to probably think about some alternatives.
Brody Preston: Got it. Okay. That’s helpful. Thank you for that. And you mentioned – you did mention that there you’re still seeing a lot of liquidity in that end market? Is that for a wide range of projects? Or is it more, I guess, more tailored to specific asset classes within construction where there’s available liquidity?
Richard Murphy: Yes. That’s a good point. If it’s multifamily, if it’s industrial, there’s just – there’s a lot of appetite still out there for that type of product. Obviously, in some of these more distressed areas like CRE and Retail, that’s a different story altogether. But we don’t do a lot of the construction financing in those segments. So generally speaking, where we’re looking to transition loans out to for end financing, those – we’ve been really focused heavily on more multifamily and industrial over the past three, four years.
Brody Preston: Got it. And I know it was a small – it was a smaller amount of loans and it was [indiscernible] team of things that was a relatively small charge. But am I – did I hear you right then and read right, I guess, that the $8 million charge that you took against $17 million of co-working office loans. Was that – was it an $8 million charge on a $17 million loan portfolio?
Richard Murphy: That’s correct. It was a small group of properties no one market in particular, but they were all, as I said, the common denominator is that co-working space, which we think is probably going to be the last piece to recover in office and probably the hardest to kind of re-tenant at this point. So where as we have said in the past, we try to be really strategic in terms of taking advantage of the liquidity and albeit there’s probably less liquidity for this type of product out there and that’s why the discount, but it’s better off just to get the runway clear because we’re not sure what’s coming down the road, but we want to be prepared.
Brody Preston: Yes. No, I understand that. And so you don’t think that that level of charge is indicative of what you might see if you or other banks maybe had to sell what I would call a more regular way kind of normal office property?
Richard Murphy: No, no, not at all. I mean, again, in the co-working space which we have very little of and this was almost half of that total that we have. It’s a much more distressed sub-segment of this office category. So we think that you’re probably going to see a little more stress in that subcategory. But in general, no, we’re still pretty confident about where valuations are.
