Q4 2019 Earnings Call
Mark Realty capital fourth quarter full year 2019 earnings conference call. At this time all participants are in listen only mode of question answer session will follow the formal presentation. The funding which require operators. This is turn the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I would now let's turn the conference over to your.
Host Mr., Steve Swett Investor Relations. Thank you you may begin.
Yeah. Thank you for joining us today for bought Mark Realty Capital's fourth quarter 2019 earnings Conference call. In addition to the press release distributed this afternoon.
Filed a supplemental package with additional detail on our results.
And the best reception on our website at Www Dot Dot dot dot com.
Today's call management's prepared remarks, an interest your questions may contain forward looking statements.
Forward looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discuss today.
And other factors could cause actual results could differ materially from that was anticipated.
Forward looking statements are based on current expectations assumptions and beliefs.
Well as information available to us at this time and speak only as of today. They are made and management undertakes no obligation to update publicly any of them in light of new information on future events.
During this call will discuss certain non-GAAP financial measures.
More information about these non-GAAP financial measures reconciliations to comparable GAAP financial measures is contained in our earnings release and filings with the FCC.
It was up news conference call is hosted by Brad Martz, Chief Executive Officer, Jeff Pipe and Chief Financial Officer, David Schneider.
Management will make some prepared comments after which we'll open up the called your questions.
Now I'll turn call over to John.
Thank you, Steve and welcome to our fourth quarter and full year 2019 earnings call.
Our first earnings call since Broadsmart went public in November.
This afternoon I'll begin with a brief overview of our company in strategy.
I will then outline certain key operating metrics provide a summary of market conditions and discuss our view on growth.
Mark as we look ahead.
And I'll turn the call over to David did provide additional detail on our financial results in performance loan portfolio and balance sheet.
David is finished we'll open up the called for your questions.
Let me begin by acknowledging the turbulence, we're seeing in the markets the unfortunate impacted as having throughout so many of our daily lives.
That said our team abroad, Mark remains focused and committed to serving our customers and working through these challenges.
The great news is that we have a fortress balance sheet.
Hero debt.
We have built our pipeline of loans to its highest level in the past 10 years.
With that backdrop, let me thank our investors for the tremendous support that they've given us throughout our transition and welcome our new shareholders.
Since we founded broad Mark in 2010.
Even as we have grown our platform considerably we've committed ourselves to be an exceptional stewards of capital.
We believe that as a public company, we're better positioned than ever to grow our platform and drive shareholder value in the coming years.
We started broadsmart nearly 10 years ago, when we recognize that significant unmet demand existed for short term construction financing.
This opportunity resulted from certain structural changes and the lending market.
For one the community banks. It had historically provided these loans had meaningfully decreased the number over the past decade due to consolidation.
And second the regulatory environment in the wake of the financial crisis made a prohibitive for most banks to engage in construction lending activities.
Broad mark filled this floyd.
Biting attractive flexible capital to support the growth of these active builders.
We're building to meet the massive undersupply of residential housing we see in the U.S. today.
Now with the completion of our formation transactions in November 2019 broad Mark is the only internally managed commercial mortgage riet focused primarily on short term real estate back senior loans.
The short term financing loans range in size from $500000, the $30 million or more and our typical borrowers are local private builders, who use this capital to fund residential housing construction.
Preparation land acquisition or renovation of residential and commercial properties.
The loans that we originate or short term fixed rate and our secured by first liens all are underwritten with conservative loan to value ratios, which at the time of origination are always at or below 65%.
And are backed by personal guarantees.
This means that each of our borrowers has meaningful equity in their loans. Therefore, if there is a problem. They have a strong incentive to fix it first this helps to further reduce our risk for losses.
One of broad March unique competitive advantages besides our internal management structure and completely unlevered balance sheet is that we provide borrowers with significantly faster funding than banks can as few as five days from receipt of application to wiring out the funds compared to the 30 to 120 days it it typically.
Takes a bank to a proven fund alone.
Further we provide certainty of execution for our borrowers and flexibility around timing, which means we can command premium pricing.
As a result of these competitive advantages we have originated over $2.1 billion of loans since 2010 with minimal losses.
Paid attracted monthly distributions to our investors and significantly grown both the size and geographic scope of our lending platform.
Furthermore, as you can see on slide three of our earnings presentation.
Our portfolio of loans is concentrated in the residential sector.
We are certainly excited to be able to say that we see plenty of opportunities for future growth within our existing base of customers.
Definitely two thirds of home I repeat borrowers as well as growth in new markets.
Turning to slide four we currently operate in 14 states in the Pacific Northwest.
In West Southeast and mid Atlantic regions, plus the district of Columbia.
We chose these states primarily for two reasons first they have favorable demographic trends with net population growth driven by better affordability job growth and lower taxes.
This leads to greater demand for housing steady construction activity in more demand for our loans.
Second we operate primarily in states with non judicial foreclosure laws.
This means that if we need to foreclose on and then sell a property we can do so through a quicker legal process.
Looking ahead, we see opportunities to capture double digit growth in all of our regions with more growth on a relative basis in the southeast mid Atlantic regions, where we have more recently expanded.
With regard to our loan performance, we've had extremely low default rates over the years. Additionally, we have a remarkably strong history of resolving defaults and men minimizing capital losses.
The $2.1 billion of loans Weve originated we've had only $1.1 million of principal losses.
These losses exclude the more than $7 million earned on those loans during the life of the loans.
Our minimum loss history as a result of our diligent underwriting and local market leadership.
Our regional directors and their teams know their markets and their borrowers and every loan. They underwrite is reviewed by a central loan review committee for approval.
After a loan as approved our in house servicing procedures tight construction draws to a specific timeline, which minimizes risk.
Prior to approval, we worked with the borrower to put together construction budget and determine specific project milestones.
At each milestone we conducted in person inspection of the site.
We hire third party inspectors to ensure that the work for which funds are being requested has been completed in a satisfactory manner.
We make sure any necessary city or county inspections are completed and we collect lean releases. So we know our borrowers our current on paying their subcontractors.
Only then do we disperse the funds and we are usually able to do all of this within two business days from the time of the dry request, which keeps our borrowers projects moving along.
Again. This is one of our main competitive advantages and the reason that we have so many repeat borrowers other construction lenders typically takes several weeks to process draws.
We provide funding to an underserved market.
We do so significantly faster than our competitors and with underwriting standards that have resulted in minimal losses over a nine plus year history.
Now, let me outline some of the key performance metrics that are most important to understanding our business.
First is the interest income earned on our loans.
All of our loans are held for investment and our underwritten with the intention of holding them to maturity.
The interest rates on our loans are generally between 12 and 13%.
These are fixed rates on short term loans. So in the current interest rate environment. It's worth emphasizing that we're not exposed to the same kind of interest rate risk as other lenders, who originate floating rate debt.
Second we also are in origination fees on our loans. These are generally between four and 5% of the committed loan amount on an annualized basis.
The loan is extended cases, where the loan is not in defaulting continues to satisfy our underwriting criteria. We will continue to collect extension fees with a similar annualized yield.
Finally, and additional performance metric as the credit quality of our portfolio.
As I described earlier, we've had minimal losses over our nine year history.
Proximately, 0.05% on the $2.1 billion of loans, we have originated on our platform.
And we believe our underwriting standards will support our exceptional loan performance going forward.
Since our formation transactions were completed in mid November we've been focused on executing our strategy and preparing for accelerated growth.
Certainly our fourth quarter 2019 origination volumes reflected some of the natural seasonality inherent in our business.
While we originate loans year round, we make more disbursements in the spring summer and fall when the weather is more favorable for construction.
More impactful, however to our fourth quarter origination volumes, where the restrictions placed on us for most of the quarter related to our formation transactions that required us to essentially pause our ability to raise capital and in turn originations for several months.
We were also required to ensure we had additional liquidity to address any legacy investor redemptions in connection with the merger transaction.
As a result, when we started 2020, we needed to rebuild our pipeline which took longer than anticipated.
While the month of January was most impacted the good news is that in February and to date in March we have begun to see an uptick in lending as we head into the spring construction season.
Through March 11th origination volumes included 17, new loans totaling $100.6 million with the potential to close on another $60 million prior to quarter end.
Well, we won't typically provide mid quarter updates in the future. We felt this color was important to provide given that we're now in the second week of March. Additionally, in the first quarter 2020, we successfully launched our private rate, which will pay management fees to broaden mark.
We're pleased to offer this additional vehicle to investors for whom at private fund better suits their investment objectives.
We believe this is a unique offering which will unlock an additional source of income for broad mark.
Now that the fund is active and raising capital we expect to ramp at a ratable pace throughout 2020 and overtime work, our way up to our target run rate of $20 million per month.
Finally, I'd like to briefly comment on the culture, we've created here broad mark.
As a newly public company, we know that environmental social and governance or SG initiatives will be a metric by which we are measured.
From a governance perspective being internally managed fully alliance management with our investors.
We have also adopted many shareholder friendly measures and have a diverse board of directors.
Additionally over the past 10 years, we believe the very nature of our business, which has increased access to construction lending.
And therefore access to housing for underserved markets has helped us drive healthier economic results in many of our core markets.
Internally, we have a strong culture of Voluntourism and charity.
Supporting our imply employs diverse passions, we match their monetary donations and we contribute to charities and which our employees volunteer their time.
We will continue to look for ways to measure and communicate our progress on these important initiatives as we move ahead.
Now, let me turn the call over to David to review, our financial results in more detail.
Thanks, Jeff and good afternoon, everyone.
As a reminder, our financial results for the fourth quarter and full year 2019 are presented on a pro forma basis and include the financials. Prior to November 15th of the four broad Mark lending funds that combined to form broad Mark Realty capital.
Starting with our operating results, which are detailed on slide five of our earnings presentation.
For the fourth quarter of 2019, we reported total revenue of $30.1 million and a net loss of $6.8 million.
On a per share basis. This reflects a GAAP net loss of approximately five cents per common share.
Adjusting for the impact of transaction fees and other onetime items, our core earnings for the fourth quarter were $27.7 million or approximately 21 cents per common share.
Interest income on our loans in the fourth quarter was $26.1 million and fee income was $4 million.
For the full year 2019, we reported total revenue of $131 million and net income of $75.2 million or 57 cents per common share.
Adjusting for the impact of transaction fees and other onetime items, our core earnings for the full year 2019 were $113.3 million or 86 cents per common share.
Interest income on our loans for the full year 2019, with $95.4 million and fee income was $35.6 million.
With regard to origination volumes, which are presented on page six of the earnings presentation.
In the fourth quarter, we originated nine loans with a total beats value of $37.8 million.
For the full year 2019 originations were $479.7 million.
As compared to $644.7 million for the full year 2018.
Clearly originations were muted in the fourth quarter due to the timing of our formation transaction as our registration filing required that we stopped accepting additional capital and our private funds, which in addition to loan repayments as historically, how we have funded new originations.
We also required to retain excess cash for potential redemptions.
We recognize that this is a slower pace than we originally anticipated.
With that being said.
We expect to start to ramp up our origination volumes as we move through the first half of 2020 as we deploy the proceeds from the transaction.
As Jeff mentioned, we've already originated 17 loans with a total face value of $100.6 million in the first quarter to date.
As we entered the busy spring construction season.
Further we currently have a pipeline of opportunities that ranges from $250 million to $300 million.
As these and additional loans closed in the upcoming quarters. The current headwinds notwithstanding we will start to realize the full benefit to earnings from the deployment of this capital in the second half of the year.
Now turning to our balance sheet as detailed on slide seven in the earnings presentation.
We have zero debt at this time.
At December 30, Onest 2019, we had $238.2 million of cash on our balance sheet.
Which we believe positions us well as we work through our current pipeline.
We expect to complete the deployment of our cash proceeds from the transaction in the second quarter 2020.
While we have historically operated without debt and funded our unfunded commitments from pay offs. Our finance team spent a great amount of time watching the residential housing markets and analyzing our pipeline of loans and our unfunded commitments relative to anticipated pay offs.
As a result, we may consider adding a working capital credit facility to help us manage cash demands as we grow our business and we believe this additional source of capital will enhance our liquidity and flexibility.
Finally.
Let me comment on our dividend.
On December nine our board of directors declared a cash dividend of 12 cents per common share for the approximately six week period of November 15th through December 30, Onest of 2019.
For the month of January February and March of 2020.
We declare dividends of eight cents per common share or 24 cents for the quarter.
As we look ahead.
Our board continues to evaluate and set a monthly dividend rate that incorporates assumptions regarding originations and the deployment of transaction proceeds.
As well as the ramp up of the fee income for our recently launched private Ryan.
Our goal is to continue to grow our business and therefore, our dividends should grow overtime toward our target level.
Now I'd like to turn the call back to Jeff for a few closing comments. Thanks David.
We are thrilled to start this new chapter for broad Mark as a public company.
For nearly 10 years, we've run our business with prudent underwriting zero leverage while consistently pain at attractive dividends to our shareholders.
We provide capital that is in steady demand and utilize a unique and proven approach to maximize performance.
In today's market, our short term fixed rate loans offer us protection from a volatile interest rate environment, and we have a substantial cash balance to deploy into our healthy pipeline.
Longer term, we see many avenues for growth as we expand our platform continue to support demand in our current markets and begin to benefit from the fee income from our private fund.
Finally.
Our formidable balance sheet with zero debt.
And the internal management structure provides for the best possible alignment of management and shareholder interests.
Taken together, we expect this strategy will allow us to grow our dividend overtime and continue to create shareholder value.
This completes our prepared remarks, we will now open up the line for questions operator.
Thank you at this time, we will be conducting a question and answer session. If you would like to ask questions. Please press star one on your telephone keypad a confirmation so indicate your lines in the question Q.
You mean for starts from if you will let your move your question from the Q.
Participants using speaker equipment, and maybe that's sort of the comprehensive before person to start keys, one maam. Please as we pull for questions.
Our first question comes from the line of some pace with B. Riley FBR. Please proceed with your question.
Hey, good afternoon, Jeff David Thanks for taking my questions. My first one here.
Restate the one Q origination update can you just clarify how much of that is funded and how much of that is currently earning interest.
Sure absolutely I believe the number that we quoted in our prepared remarks was about $100 million.
I would say.
About 75% of that is was funded between January and early February so that would be earning interest.
And then as we mentioned we expect there is a potential for another 60 million before the end of March that will fund.
Okay got it Thats helpful. And then just from a higher level. The pipeline clearly seems strong and you seem pretty optimistic but are you seeing any waning demand from borrowers given all the uncertainty around the corona virus and potential economic impacts there have there been any share shifts in behavior or slowdown in new can you.
Production activity, yet and maybe if you could just touch on Seattle, specifically February data points seem pretty positive there, but are you starting to see any weakness in that market given the severity of the outbreak.
Hi, Tim as this is Jeff.
So far we havent seen any.
Downturn and volume.
As a result of of the krona virus or the volatility in the market.
Since you asked about Seattle specifically.
There was a homebuilder up here a national homebuilder, so not one of our customers who is.
Excuse me contemplating a big.
Grand opening at a at a plateau of theirs and.
Opted to cancel that as most public things had been canceled in Seattle and instead just.
As far as reaching out to individuals who have expressed interest and they said there has been very little downturn in interest.
All the data that we see and obviously.
Thursday is different from Wednesday, which is different from Tuesday.
That theres still remains strong demand.
Mortgage rates being what they are I think anyone who can buy a house is still trying to buy a house on the builder side.
We have not seen a decrease in an interest for loans.
And in fact.
As.
As we pointed out when we run our road show.
Being.
Unlevered with no debt on our balance sheet, we have always believed as one of our.
Separating factors from our competition and we have heard of at least two of our more aggressive competitors. This week, who are pulling way back because their lines of credit have been restricted and so we've gotten referrals from them.
And so we really see this is an opportunity and having said that we're we're monitoring the situation closely.
That's helpful. I appreciate the comments, there and I agree that being Unlevered is a great asset right now.
Maybe just humor me, though in a draconian scenario, where maybe your pipeline dries up in housing stand the market longer and people are less willing to attend open houses and buy homes. How are you position when would you do anything different in terms of how you handle extending loans and are charging higher interest in the case a default.
And what resources do you have to potentially take over projects. It defaults were to pick up.
I was there a lot of questions and sorry, I APAC Allied news and no one question there.
That's okay, let me start at the end.
Assuming there are defaults and we have to take projects back I'll remind you that because our maximum loan to value ratios, 65% that our borrowers have some.
Come into these projects with some real equity and so the vast majority of them work hard when there is a when they have a hiccup to solve those problems so that they don't lose their equity.
That said them.
Guys get tired they do whatever they do and they walk away we have a stable of third party contractors and other resources that we use whenever these kinds of things occur.
We're set up so that we can take a project over we discussed foreclosures, we have the ability to foreclose and and get a project finished and get it sold again I'm going to hammer on the fact that we don't have any debt.
We aren't going to have if a project goes into default, it's not going to be removed from our borrowing base like it would be if we were levered.
With another lender and so we're not going to be forced to dispose of assets simply to get them out to get our borrowing base back at our lender happy. So we can we can dispose of them in a in an orderly fashion.
Your draconian comment.
If our pipeline dries up.
Remember, we we've got.
Little over $1 billion in loans out there among 14 states.
And the district of Columbia and so.
For.
For the market to get that bad what I think happens.
Is that banks have stopped lending.
Our competitors have had their lines of credit called and so they are a quarter or a third of the size they are today and over.
Washington, Oregon, Texas, Colorado, Utah, Georgia, The Carolinas, Florida, Maryland, Virginia, I've forgotten the couple.
We only have to deploy about seven to $800000 a year.
And our current size.
Among all those states and all those cities in so builders still have to build there is still going to be projects that have to get done and so again. This is this has historically been a counter cyclical business, we've done really well in an up cycle.
Just as soon not have to tested in a down market because I know none of US wants one of those but we are set up no debt. Good pipeline. Good penetration that I think we're going to weather any downturn that see their imminent or coming someday well.
Okay.
Got it that's helpful and then I'll ask one more and not back in the Q.
Yeah.
Seeing as you gave one Q origination activity updates would you mind doing the same for the private read can you just give us an update of how much capital is been raised so far.
And what appetite for investors looks like if you're seeing any hesitation or follow on the pipeline there.
Given the uncertainty.
Okay.
Yes, sure Tim we can speak a little bit about that we mentioned in our prepared comments, we're working towards the run rate of $20 million.
To date.
March with our are kind of kick off month, we did take in funds about $10 million from the private read for March.
We think there's an opportunity to continue to grow that obviously the last we'll call. It 72 hours, probably give everyone a little bit scare, but we're still confident that theres plenty of appetite and interest.
From both legacy investors and new investors, who happened to prefer the private the private fund as opposed to investing in the public companies. So we feel confident that will still be able to ramp that up and it's just one more of our tools I think thats one of the messages were trying to send out there is.
We've got plenty of tools to manage our capital.
And we're going to continue to explore that to make sure as efficient as possible and just be as accretive as we can be paying a dividend to our shareholders.
Okay got it thanks again for taking my questions.
Thanks, Tim.
Our next question comes on line of Stephen Laws with Raymond James. Please proceed with your question.
Hi, good afternoon.
Hi, guys couple of different topics I want to hit on but I want to follow up on one at some questions. There on the private read but can you maybe give us a little color in the type of Investor you typically see that would prefer the private read over over the public led as it is at risk averse investors that don't like Mark to market losses. So this volatility.
So those funds more attractive or kind of what kind of invest are you targeting the private Reid.
Yes, so we typically see high net worth customers.
Very well maybe.
Hesitant about the variability of owning a fares in the public company.
But it's generally today similar demand it's been legacy investors that really like the broad marketing.
And like the structure of the legacy private funding.
So thats, where they that demand is primarily coming from there is also if I pardon me David.
There is not an insignificant number of.
In legacy investors Stephen who.
Had to redeem out before they before the public transaction because.
Bucket of funds that have had invested with us.
More specifically targeted toward private.
Funds and so that's an other that's an area, where we see a lot of growth opportunity.
Great.
Moving to the pipeline and following up on the questioning there, but Jeff with you in the last few weeks as you.
Looked at it real time data that is constantly evolving as you've seen the last few days, but if you guys change your underwriting guidelines or pricing or how how have you reacted on the underwriting side.
To this current environment.
Well.
That's always a tough question because we don't.
And I'm, not saying that you're implying this but theres an implication there that that we are underwriting more carefully than we have in the past and I will tell you. We aren't we are underwriting as we have always underwritten paying attention to loan to value to markets to asset class.
Budgets.
To the borrowers resume the guarantors financial strength.
We certainly will.
If somebody somebody brought us a restaurant project today I would probably look at that a little differently than I would another apartment project. So we look at all those things, but but we've had consistent underwriting that that we've had a.
570% loss ratio over 10 years.
And.
And yes, that's been in a in a in a market that we've had a nice tailwind.
But that said, it's all the same fundamentals and so we will continue to do that pricing wise.
Huh.
We.
When things get tough, we don't lower price point, when there's more competition, we don't lower our prices.
As if we see a greater pipeline then we have the ability to fund we're not going to two gouge. Our customers do you know two thirds of them are repeat borrowers we like them to know exactly what they're going to get so I think I think.
That is the best.
Approach.
Great I appreciate the color there and.
That's two more questions. One is just can you talk about about duration risk as we think about these projects are talking about your typical projects, how many workers and take it no average duration 11 months.
If we see issues with local transportation or public transportation, how do we think about.
The duration risk around your current portfolio.
That's that's something that we're contemplating.
And.
We haven't heard of any of our projects being shut down for.
I assume we're talking about the cobot, 19th we haven't heard of any any any projects being shut down it would certainly it could certainly happen we're planning for quite at that happened in our office. So we all should be planning for that.
We have the ability to extent loans.
And we do that on a regular basis and the construction visited business by its very nature.
His has problems right the city slow and getting you as an inspection or this happens or.
All the things that happened in the construction trade.
And so we work with our borrowers to maintain flexibility if they are working to solve problems. We work with them to solve problems could it make alone go out longer yes would that then eat into their.
Into their profits, yes, because we're going to get paid back everything were owed.
And if they're having to make extra interest payments because of project goes three or six months longer.
That is going to have a have an effect on them, but I don't.
I don't see going much beyond that.
Great. Thanks for the color on that Jonathan and David My last question, but can you talk to see solar or impacts on diesel that you've identified at this point I know it doesn't impact until Q1 results.
Yes, actually under as an emerging growth company were actually are required to adopted until 2023 with that being said.
We've already done our own analysis and generally we don't expect much of an impact given that the short term nature of our loans are loans are generally 12 months.
We're already analyzing generally the lifelong credit losses on those loans on a quarterly basis, so adopting seasonal and looking lifetime is not going to have a significant impact if anything.
It could actually give us a potential small benefit because we've probably been more conservative historically on those loans.
Great and the duration of the big Big input there and thanks for the clarification on that kicks up thanks for taking my questions.
You're welcome Thanks, David.
We have a follow up question from the line of Tim Hayes with B. Riley FBR. Please see with your question.
Hey, guys just a couple more follow ups here.
I know you made some comments around the dividend it and I know ultimately it's a board decision, but can you just maybe talk about the trajectory there given given what you put to work so far this quarter and the pipeline.
And your expectations for largely deploying that capital through the second the second quarter.
When do you think that you'd be in a position and maybe see growth in the dividend and or maybe just stronger dividend coverage.
Sure, Yes, I mean, we can't get too much into.
Forward looking guidance, but what we what we can say Tim is that we fully expect growth. We think the story for 2020 for broad market growth.
Includes earnings, which inherently that includes dividends so.
I think in our prepared remarks, we talked a little bit about that the slow down in Q4, which definitely impacted.
Our ability to make loans in Q4 and even through January.
Now that were up and running the machine is back up and running and we're putting out good loans that are accretive to our shareholders.
It doesn't.
Happen overnight, where it immediately hits earnings the way our our earnings work interest income that will come as we grow the portfolio fee income under us GAAP accounting is deferred and amortized over the life of alone. So it will take a little bit of time to ramp up but we really are looking at what we foresee at an impressive second half of 2020.
Where we start to look for those target.
Earnings and dividend level.
I see.
Okay.
Understood and then you know.
Even with the.
Robust capital deployment. So far you still have a lot of dry powder laughed and just wondering how you think about stock buybacks potentially here as a use of capital given and you're trading well south of tangible book in at a near 15% current dividend yield.
Yes. So I think that question is going to come up given where we're trading right now we haven't contemplated stock buybacks and frankly.
What I can say, we've obviously been in a dark period.
But one of the things I want to just point out is.
Jeff and I over the last 48 hours had had basically every employee that works at this company come to us and say when can we start buying the company stock because we know that were trading well below book value and our company, it's going to grow and.
Eventually reap the benefits.
So.
We don't have a stock buyback program in place right now, it's not something that were.
Currently considering.
But I will say there there's hunger to buy our stock just from the people that know how good. This company is so I think that that speak loans to us, but we're always going to think about what's best for our shareholders at the end of the day and if someday in the future buyback program is what makes sense for us.
Thats in the best interest of our shareholders then we would obviously consider it.
And it can remember we.
So we can't do.
ATM right for a while.
We have our private rate, which is which is access to capital.
And we've got loan pay offs and and so we and we have that 300 ish million dollar pipeline and so for us to do a.
Stock buyback.
Which then eliminates or reduces our ability to write new loans I think from a from a as David said every decision we make is going to be in the best interest of all the shareholders and and.
And I am a large shareholder were internally managed so youre in my.
Interests are well aligned.
And and I believe today that the best thing for us to do is to keep that dry powder and turn it into new loans. So that we can keep growing this business and growing revenue.
Hi here, Yeah, I, just figured I'd ask given that.
Always are approaching.
That have that are similar to the to loan originations, but completely here you there.
Okay and obvious question, yes.
That completes our question answer session and I would now let's turn the call back over to management for any closing remarks.
Thank you all for participating today. This is our first call and.
I Hope you felt a win as well as we did we look forward to talking to you again the next quarter. Thank you.
This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation have a wonderful day.
Hello.