Granite Point Mortgage Trust (GPMT) 15 Feb 242023 Q4 Earnings call transcript

Good morning. My name is Donna, and I will be your conference facilitator. At this time, I would like to welcome everyone to the Granite Point Mortgage Trust's Fourth Quarter and Full Year 2023 Financial Results Conference Call. [Operator Instructions] Please note, today's call is being recorded. I would now like to turn the call over to Chris Petta with Investor Relations for Granite Point. ahead. go Please

this a Chief our Urbaszek, our release, good Executive my call and recap our Chief and Full comments, Thank for and Alpart with of supplemental the Chief Alpart, press Development website. and with and Officer; from Operating Chief Officer. After of introductory results Co-Head Steve the activities. highlight you available XXXX yesterday Taylor, Marcin business market Jack will Officer review filed Thank our and will Originations; Investment discuss morning, today's Granite our Officer were call SEC on Chief Relations financial me and associated to and results. will Officer; provide Plust, and and Originations; are our portfolio, Point's the are and items joining Investor Jack financial in our you, With capitalization. The Marcin everyone. morning earnings Financial brief Steve Fourth conditions President discuss Steve Year tables of our of Peter call key our current our section Morral, financial Co-Head Quarter

Form outside like the the call company's control. remarks uncertain XX-K file weeks. I supporting coming slides would the and We to by management expect statements, forward-looking to are which our that you this remind in made during may include

to risks forward-looking to expectations. SEC that cause our uncertainties any We Forward-looking statements Please could subject the of filings reflect materially our any our not with undertake results. discussion affect for some that are future views results obligation do and see to update regarding could actual statements. a events of differ from

a refer on intended with for This A certain accordance GAAP. substitute to is as the in considered this We not call. isolation information financial in measures or also available presented on financial call Jack. be earnings turn will to now be information and our can are the non-GAAP found most website. I comparable over measures release these slide of our in which will reconciliation to to GAAP non-GAAP measures

good and have low cost pressuring for us XXXX, to our the in the Chris, extremely sector. And property and a liquidity Granite market across our on cautious capital. increase year and and owners communicated visibility to cost and and remained Year liquidity another while sectors. reduced to was industry to and about also like for sheet challenging commercial further rates capital, you, everyone. our of estate joining the we continued interest XXXX higher Quarter proactively Point's real for Full thank Transaction Call. Fourth the into market morning, XXXX of maintaining would balance They for portfolio investors' lenders. We approach future volumes more values Earnings participants low. have both you Thank property High welcome created you managing protect capital for so emphasis putting have the

has interest various volatility experience various team market estate through and businesses lending Our credit economic, of by real rate decades caused cycles. managing

federal using our downside to fundamentals the number this during accomplished our and growth market believe near have by sheet proactively increasing from strategy shifted commercial the to we reserve the Even mid-XXXX, and valuations, protecting to opportunities. with in and though that actions of navigate originations steps goals managing working to with diversifying new approach, our funding our uncertainty navigating challenges. firmly strategy, resulting effectively challenging sources we impact that real the our market and emphasizing periods position portfolio today, stability and of the such for a is to loan we the further balance term. In estate such, report the expectation like and collaboratively company's the and success borrowers. We're liquidity business on prudent returns in pleased in pressure future As both to profitability continued

well industry resolutions, embedded reduced the totaling We million target one last levels year, several over the we below $XXX lowest realized loans volume our and leverage credit our illustrating the we in of issues. to have range. in portfolio. our liquidity loan paydowns as significant And We addressed of select nonaccrual and repayments, a resolved

of proactive the Our maturities, we $XXX each XXXX, cash repay also the not latest want to did strategy in sheet period. convertible access balance of of capital to within markets management enabled which bond months this other, to million over with XX was us totaling October during challenging as

capital our securities. into We own have deployed opportunistically also

future allocation capital our million has relatively the course our any across relative of shares over shares generally challenges common that many types, remain $X.XX markets attractive currently and activity. We their market portfolio authorization, diversification granular opportunistic sponsors couple under over despite has X.X% delivered flexible buyback stock, some of last our representing remain the years, investments. to faced remaining industry accretion returns intend shares property million a X existing higher of value, little benefiting the floating from and book of believe we significant rates respect loan rate to and generating over As common repurchased supportive attractive part our about strategy, many per who with of senior short-term X about and the value outstanding, given have We share. of XXXX, we of our our

has last remained XX% mentioned collateralized strong loans which the year over of to XX% properties. about focus. payoffs a subdued repayments of our Although have related was market from middle office property across realized diversification types, of by portfolio. of the across The or broad loan transaction loan have earlier, largest real been And as and estate pace market, volumes benefited its we I our portfolio

to years, and by due fact, Many over million and our from or the our benefit amended previously our will couple of on that come to to uncertain, repayments exposure significantly plans with primarily last manage exits either working of progress time continue resolutions. office more or refinancing. borrowers loans property their the select In illustrates declined their our repayments complete have borrowers. The $XXX remains pace and been allow business loan and paydowns to volatile also loans about accordingly. This business have and of XX%, of has repayments to sales we over through

believe severity given we we the proactively to our including in resolution of market has conservative we San the to performance, quarter. the While continue which portfolio not the select challenges, our issues, underwriting office immune are Diego fourth helped loan experiencing credit address, of

retail strategies downgraded will Chicago of a fourth risk X. assets resolution sponsors, shortly. the risk office office and assets potential we a rating certain progress loans, which their X resolutions loans in address mixed-use of Baton stages of are sales of various As quarter, from X to Steve Both on during for the we various property rating involving and Rouge by

Our provisions GAAP related credit X the to loss include additional mainly rated loans. results

improved reductions the in rate anticipated we will to While and about year. our sentiment and recent versus X.X% Overall overall funds has federal XXXX, total believe half fourth activity commitments the improve, sentiment quarter. pointing quarter CECL was over past during target X.X% likely second last of that the the months market reserve the particularly following the to stance during somewhat of Fed in shift continue

consumer timing recovery in and delay estate the may However, labor which U.S. continued such market. commercial market the overall may interest the the real economy of in the supporting cuts, performance spending impact the strength the rate of further

in modest industry, a contribute real believe remains Fundamental in seen estate to the have we of macro future the be we liquidity performance property in path uncertain. pickup transaction continued interest types constrained the uneven and to all volumes across high trends continues market. Although rates

liquidity, positioning As would with our redeploy attractive improve over while such, We capital discuss investments impact portfolio over these estate we will and facilitate like to now Alpart working the the market turn higher call will our actions repayments our the term, in us our maintaining given borrowers to detail. run to into in time and help profitability Steve our to stabilizes. I loans, our resolving their portfolio rate to as to meaningful real believe near activities emphasize nonaccrual more grow to our returns. that medium on continue

outstanding for for of all accounting call commitments. about morning. of only Thank of billion, total our with joining with and fundings commitments We $X.X an this portfolio balance about million you, ended thank total $X.X X% principal billion fourth the Jack, and future quarter $XXX you of

remains property and with include portfolio and our and million. Most $XX of benefit about average continue XX of well weighted generally at a origination size deliver credit average diversified stream from profile and types favorable across of interest to regions stabilized attractive an rates, loan Our carry a income XX%. short-term investments loans LTV with higher an

for basis have portfolio was yield fourth the loans, been which the of of nonaccrual XX Our net impact about X.X%, points. quarter we estimate to the about realized

and loan. upsizes we loan During rated of $XX previously funded to the for related one loan $XX resolution existing quarter, and million about million the San X commitments new of Diego office disclosed the risk fourth

first funded in the So quarter, have commitments. million of far existing about we $X

we across and primarily select portfolio assets repayment and properties were market About have was the XXXX, relatively been office loans. Despite including loan $XXX XX% including secondary from of million in primary the resolutions. assets some of challenges, market principal more markets. volume healthy, industrial million benefited of multifamily between middle paydowns the quarter, broader of liquidity over to office and volume allocated with has loan we hotel and During repayments in broad over balance fourth payoffs, as $XXX from loan loan our full diversification realized and repayments, XX% the consisting related about the our

to consensus commercial repayments cautious anticipate the Given path the volumes some and meeting repayment we our would anticipate real in of markets improving, improvement transaction balance portfolio liquidity. rates In half second continued we Interest year. We the levels are levels in trend capital our normalizing. estate and estate of continue current near the term, uncertainty, the loan lower follow decline increasing with the as to real predict. markets prioritize market maintain the higher stance hard to and

certain our interest benefited reduced our affected of rates of capital in the turn, liquidity returns performance loans. and and of several higher have and those have negatively industry, generally While our increased borrowers, costs

from senior property by and office Rouge, secured of X senior with $XX an and collateralized loan X, by we retail to loan During including downgraded Chicago. X a an use an $XX the million in property fourth office million retail Louisiana a loans component quarter, Baton rankings mix risk in

the we to resolution the properties it the asset. outcome, on in The to are ongoing. the some ultimate on remains We both to launched various for is And timing the potential for Rouge and stages a predict next have Borrower couple reach sell also Chicago time been potentially difficult these Baton while the resolutions. Borrower potential process a of and quarters. of sale hope negotiations loan monitoring process has assets in in property.

early the in stages. is However, process its

senior million In secured a loan that office risk $XX also Boston, to of negatively leasing environment addition, moved the during a the X, quarter, been market. in in soft located has impacted we by ranking by an ongoing smaller that property

active this weighted average the compared ranking discussions with with actions, this the steps on to resulted evaluate X.X We a along of we in in realized next are prior period. portfolio as the asset potential loan. borrower December in XX in quarter with respect as fourth These the to risk of X.X repayments

transaction new million meaningful owner over million to previously many $XX at acquisition Diego transaction senior a to earning a while our in conclusion nonaccrual with worked basis. and buyer a the we created collaboratively of the the ownership asset during to coordinated As and providing who new [indiscernible] a to loan loan disclosed, attractive $XX equity into process, rate the property the an sale office a reset quarter, this through resolved a borrower cash floating previous the we months bring invested and transaction. We San successful new

operating our profitability, a for conducting actively to in of redeploy our nonperforming and sale discussed Dallas. CECL through collateralized last our loan accounted these million a resolutions on Borrower we us and $XX which been our our various resulted process opportunistically resolution the impact that we loan are pursuing paths X by been assets call, an on allow property, has property most the loans rate our also results. These capital located have previously hotel had on million we As for senior reserves. Considering process remains for sold Minneapolis the a run in office the during value quarter, $XX.X book improve in losses, to ongoing. of

regarding million are $XX in and managing sponsors property respect the REO million with office to the take Phoenix, in and local loan actively LA property, than generate which potential other looking some assets of positive discussions are we $XX We resolve loan are the retail are the likely longer we which to modestly office asset office income. market given mixed-use to active the conditions. With to operating both of continues and on steps the Minneapolis next resolutions,

including our remain potential capitalization. of turn also a evaluate resolving results and these review to the on assets to the continue a We We're Marcin of over their to detailed financial next and loans. with now remain We're pleased committed date sale progress borrowers steps, nonperforming majority more pleased call on that to the process. all focused for assets. I will our our

a the to Good for joining $XX.X per and million Thank was write-off $X.XX in share afternoon, a share, we related $XX.X credit $XX.X quarter. reflects a impact related $X.XX realized share, the share million additional resolution loans per office $XX.X certain risk you, for includes of million basic for before of nonaccrual basic basic rated today. San during you quarter or loan loans. the including Steve. or per $X morning, December. Distributable provision on everyone, Diego basic fourth per disclosed Distributable of or loss to X status placed million loan quarter reported and losses per which was thank Yesterday net we and of $X.XX or loss repayments GAAP mainly $X.XX us or $X.XX million earnings basic our of the share, losses

decline book December X The or at share, decrease of repurchases we shares provision, partially $XX.XX of our $X.XX was the common million a quarter accretive the from value loan to common per which primarily $X.XX offset loss due benefited during value which book share XX per Our of about by was estimate the per impact was X.X% by about QX. about share.

X used Our Diego total and was in general reserve or reserve is specific quarter. of write-off change implies in the million modest to certain of to $XX additional was better about related slightly year-end mainly or rated offset to CECL share, the last allowance allowance which assumptions of our commitments X.X% total as new of at commitments $XXX X.X% CECL $XXX about reserve, San our loss loans. X/X $X.XX compared per million macro repayments X individually an severity about portfolio XX%. about reserve loan the to representing by our assessed The related or asset, allocated loans, estimating recorded of CECL estimated on partially million risk the about the

various most during resolutions. on were we which fourth of that had The on of accounted million additional year-end, of As of $X $XXX of for about nonaccrual the placed loans loans nonaccrual status, in million are stages over income interest quarter.

have anticipate on impact term. below the assets to we the near in earnings Given nonperforming dividend run rate our our be profitability, our

though progress exact make over the ultimate resolving believe improve we and outcomes these profitability remain assets, company's on to difficult As time, the we should predict. timing

was the to in from of liquidity and QX, $XXX quarter million partially quarter. JPMorgan in to of in X.Xx our to related to leverage mainly during ended QX which the an capitalization. October, borrowings Turning X.Xx loan and due continued upsizing offset with facility additional notes $XXX total million We decline unrestricted the to by in the over of cash, repayment convertible and modestly payoffs an

and remains we well Our continued from strength long-standing enjoy funding highlighting and support these diversified our lenders, the mix relationships. of stable

the of or repayment remaining. no corporate convertible Following we our notes, maturities have debt

for us joining As now again in carried to of like questions. the million we about ago, open $XXX today, unrestricted for would cash. I thank will we a you few days and call

Today's of Instructions] from [Operator Steve first coming Delaney JMP. Citizens is question

the loans Was It's that your the I X-rated in on XX not Steve a Page that downgraded year-end. first place you listed took quarter an you of it believe Alpart, to a as Boston the on XXXX? in of mentioned comments event indicated was loan, X. here

this our loan in to a a Steve, joining thanks X, morning. to the fourth for not X, quarter That from downgraded was call X a right?

in couple in was me Okay. Got of couple How transition quarter. the kind the X% a it to it. what's bucket of it to million. leads Xs X that left currently? sounds were X-rated was given could that in X next that of -- about Xs fourth loans my had said portfolio, question like which like are you loans And believe you $XXX many the I be -- the

X December. there's of -- loans, X as the There's bucket Sure. Steve, in

Okay. That's Great. helpful.

I Marcin's your losses but general you about this a simply of I'll And cash direct I And that kind earnings assumed comment, this comments model impacting we guess hearing EPS. Jack, about Okay. in guess and distributable some coming liquidity because you. retaining just talk to is of and well near-term dividend. the below as

now, You Board yield XX% mid-teens trim sense into more the or shares make have dividend the that trimming and less today, now than consider allocate where the of not of back using been the the it looking at here down higher dividend, your buying book. capital for stand things to buyback is would cash

on curious suggestion. that Just your thoughts

Steve, provide And this supported joining for of answer it's us. is income of stockholders. good you, the And in a expectations it Operating little for first, with it's by an and attractive dividend a by to goal saying key with long-term and the policy our our you our start to run our Jack, Sure, speak through stream our and desire profitability out the I profitability that. laryngitis. I'll and to to also I'll and dividend be bit the is that's me, feel a excuse -- sustainability view mind, for rate. thank

work uncertain really others periods the loans, period in and on resolving very challenging. this making challenges, and out. period as dividend really you we difficult other we environment industry pretty is we the time, for during earn is pointed that a estimates projections nonaccrual the especially And Given and and under recognize may the the as credit of of

below dividend that in meaningful in we resolve have, term. And as the be drag prepared out, we these our current a remarks, profitability. nonperforming the And they anticipate we our so our earnings assets, and near we will as pointed mentioned as on

Now to don't situation. be We to a permanent long take know and we don't how take. anticipate that how don't resolutions we certainly long will the anticipate that is that. But going

have will all evaluate Board. management, the we're account, ultimately to continue of factors the to quarters. And capital in take So value you And to to against with buybacks is, discount a our deep authorization including course, in taking our strategy what in the consider it of along as a we flexible and stock Board into But stock dividend dividend we the what very saying decision for allows about we of respect our company's have were be us, past. advantage buybacks. these future

I of appreciate end Right. buyback that, as Can was say Jack. 'XX? what authorization you remaining the of the

I million. have buyback have believe Yes, we million of remaining. we $X $X authorization

a it's a think little million. I $X.X more, bit but like something it's X-point

question Laws from next Raymond is of The James. coming Stephen

went half think be first to kind questions could of maybe it LA and ones mixed-use sooner NPLs. that But appreciate 'XX, of which around of and somewhat you Alpart, couple as the resolutions. what through I later which guess like kind rather rank color is them. ran addressed Minneapolis be said as the others resolved loans? are try the there second bucket longer those A through, be on Or you to can than the -- way any thoughts going first you you you ones about I as half? to Steve a Certainly, seems office force maybe

Good for morning. thanks this our Sure. joining Steve, to talk to call you.

FYI. the ongoing Minneapolis those some just asset, difficult market and that So march given Rouge a We're borrower. Chicago launched happening are component we process process timing, with markets, little take to that come timing hopeful in to term. in others. say as hope negotiations we a one the more The quick speak. It's the than They has for sell in that predict. This longer a stages. working Again, to which we but said bit to is this just the is the an hard think what's probably a that's That office property. retail We're of LA in to The Baton that when resolve mixed-use characterize predict next the sale earlier, I office those the are would to mixed-use, is as It's resolution. intermediate of would to probably couple potentially property. a we X early as here, borrowers deal, sell as well. quarters. I

exposure but ongoing, borrower also We is have they that them evaluate conducting once process, feedback, other soon. conversion have ongoing. And hotel market. next also potential that a more Again, to in REO some that is we've which steps well no office residential. also on lays Minneapolis prior then that the timing sale predict, is we'll quarters out hopefully The with loan, is asset, Phoenix configuration for talked to hard one

that a it's steps on now. process. share there's could potential multifamily, information as office, actively one So one develops. sale managing optionality, whether next We're whether that we're more some it's right it and include we'll evaluating that

to Will way you then any offer have in Or I the seller provide the think see ultimate And about follow-up assets that San we all are you to a don't to guess buyer we financing want to Great. willingness new those. assets Diego? there as to the process? kind going the financing you How forward? the or do did of with exposure sales financing buyers certain

Sure.

We it's particularly facilitate that market some necessary, is past. certainly In a the we've where So obviously done where the It's this can toolkit. the something in market, office it these sale. something necessary lending of do to for it's assets, in it's difficult.

we're going to a providing So of these probably not type lot office financing case. for on didn't that note of any probably financing the we the sale. provide some would necessarily Dallas that's resolutions office We be expect

can do something by by it's So case case. it evaluate case case. done it. We've we We'll

assets? as kind and potential far way you you're to rate associated you those When financing, on some drag on you as are? what the may run you about earnings get in as talk at what the think place can quantify resolutions there of And that maybe NPLs and able is in, lastly, that be to about financing benefit Is once look off Great. Marcin. some then the for the pay

say Sure. of in as positive over in of end it's would resolutions potentially the into us. -- would different mean turning Steven, accounted to the the interest as debt, the financed the about Alpart come from impact repaying year sort XX those impact an for said impact I from I of some say, joining pretty interest of the sort say of a variety Steve it's them remarks, for on from sort But they of decide biggest assets, as financing income. of of thank heard ways. assets, provide the meaningful. I I we them prepared us perspective. you most basis of of and would $XXX They're if or of expense about but of talked earning just million -- as points yield you sort income

pretty that's meaningful. So

of quantify on in but per on share it's which double depending per which resolution sort in hard digits happens to for it's earnings sure. So loan, quarter,

The Harter next from question of UBS. is Doug coming

of context upcoming Can us get have have the current in maturities you problems? that potential your ratings comfortable in just about around XXXX your you helping risk arms talk the new

thanks Doug, call. joining Steve, it's the for

So as good have think handle. into out pretty I we we XXXX, a XXXX, look

the loans will Some course. of these off pay in normal

last repayment pace we've on XXXX, saw pretty good in You these loans. had XXXX, year

loans the these pay course. of will some normal continue off just to So in

at Some of them will right. extend

be coming some Some of an on of extension, them final them maturity. for may qualify a up won't

question at. I think you're that's getting a

the the pay coming to and they're And time to situation. And committed try a got And good sell our property. win-win things, create Xs, replenished with all some and the up be property I sale. be potentially we'll plan right financially that where is may will borrowers downs, to the get there loans, take a a different sale have a and up handle bulk with for a borrower, of to could we've if smaller to those. just to then playbook approach. will we it. working asset, general, a be note something a cohort loan kind be of debt to what a We more for give get It reserves described the service kind for working doing of of resolving example, could have come In

by Going question, sell case provide we can to the financing. earlier case,

that of assets for of kind loans. have. these it's on. our or is it's The loans, We're seen on focused still about putting office a this. deals. that's since range increase outcomes But XXXX. the particularly very our why And borrowers very with recognize doubled of look, So CECL we -- tools lot we majority a money of positive. People QX something which these us obviously are in of focused reserve, I the our tone very is for range challenging you've It's are environment think to we're

much then defensive And Great. actions? how kind how save that you -- debt thinking to liquidity much much portfolio liquidity corporate for the be of your potential -- do for about no you current of in how maturities, -- are that could how of need with used buyback versus

some speak Jack. with we for on keeping period been Well, level that shares. time, into of to elevated joining focus of liquidity. we've maintaining Thank us. Good even And is a our during you. deployed purchasing you This an have

the XX% going And to in events. opportunistic in in with general going we've our providing we'll ability we've loan portfolio our is when, as capital to have so, credit base and that. We've remain remarks, so we're we about goal XX% we of maintain to do we predict when don't might more had respect asset with success but ourselves addressing and far financial so management liquidity tremendous of calls, stated in to prior to said our that to we're cash. that our We position. maintain And prepared -- potential -- our

respect we'll ways, in accretive of market dynamics, but opportunities we do deploy But as Now it elevated and believe past. that. the remain if currently we're that balance given to in sheet, quarter-to-quarter. well. And it's our keep capital done managing obviously that to there's we've north And varies opportunistic the prudent to with we'll

question next Rahmani is The KBW. from of Jade coming

of Since some the XX-Q million. for nonaccrual September past guess, nonperforming we nonaccrual the total of as loans. don't of XX had have the XX-K $XXX.X loans loans and you $XXX.X million and provide due loans please I time, could balance of

So for numbers. X those an on just update looking

Jade, Thank the thank question. joining us. for for you you

given As of the about million in remarks, prepared status. I mentioned we the downgrades had that my had year, the we $XXX sort at of end that loans are nonaccrual of

And total due? loans, past nonperforming do the have you the

same That's pretty the much number.

there Has far of this terms so Okay. credit? in any year been change

Jade, ask months since you Jan of if saying let the could XX clarify, you over X? me beginning are past the you or

X. Jan Since

say we things we've that Well, there's as are closely borrowers would long, to in and that the the official fatigue more gave. to of is would watching Jan post a borrowers. market -- there from Yes. in how subset we or terms of I have say just update -- we that nothing believe, our event. But -- had more I what of increase calibration rankings some report as money the are couple throughout how risk the to a there's so much market borrowers for Fed in put X general of a no even some including of we is the report there's our the observing just

and borrowers portfolio. given answer sponsors in increasing not general your the our from and and what know the Steve can multifamily that's We response the troubled sector. about to still in concern locations our that our multifamily our by continue And in would Alpart properties. we're we're performance sector talk good seeing a question. We market, this pretty that there's of But I

any provide did that good want or to to additional That's perhaps color Steve, on question multifamily? Okay. you hear.

think the there's on call guess about multifamily, see. a on and heightened our including on Jade, still stable we talked in concern in we this last the the we're the I which is quarter. on No, which about It's commenting supply, markets generally multifamily. lot I'm where of that in new obviously Sunbelt, healthy specifically Sure. I

assets Carolinas. in have We the doing Savannah, very supply. places Birmingham, fine, doing like They're well, new little

So the even Sunbelt the supply is not of uniform.

have other on in are the aren't not but and building of Austin. you've markets plans rent of slow, the in primarily growth over We've our in on We watching about seen, definitely business some Austin. growth. rent calls Texas. We're based seen some heard We

behind kind X if get do Would what that be multifamily underwritten, We maybe still some a surprised we're are it the we seeing see to that a rent borrowers we they're times, an were exit to be We do X rent the debt looking second value-add or loans far ton. call is seeing may of some. And did so turn ton was not take didn't assets think Our bit doing, just we loans business think get based exactly a our 'XX are to likely but bumps. plan. But not that were what extra yield. fall year on half that will getting We the And are plans two. XXXX, peak. doing we didn't or early increasing of at roll you just of bumps. renovation, It we or rent little usually it, a there.

probably was down a leverage protect. the So to amount points. X The equity have XX borrowers or of good

very I all carefully. are the So multifamily trend general watching are is seeing it But we the stable headlines, positive. and on think and we

$XX on date on their Since there those what's origination loan, potential the is Is with XX/XX, New against loss you originations, quite expect origination those those those? any on loans? two? reserve large an XX/XX. older update it's And could million, we Should mixed-use Illinois going York also Are and multifamily risk-rated since a X plans? is give any

Yes, they're X. ranked risk both

was actually it one in the The first looking -- is X? particular thing Illinois Is you're you multifamily at? mentioned was

Yes, carrying million last was quarter, about it value. $XXX

Got it.

kind real largely I ranked put is more asset. support It's office of, The the about floor is point to really one New around one. Okay. X, -- York Right. It's with leasing say, sponsors leasing retail up one space. that space. on Got The one, retail. it's up in The leased. directionally No this ground really mixed-use leasing is specific capital that currently on That fine. revolves -- business office would update one. that doing The office the about the plan at plan.

against this there Is reserve a old Because that? origination. a is really

against what up, if that on is mean, risks reserve this lease going to trying impairment to the this? are point? an there's it And be the the what's I So at held office still

obviously, our Yes, rated on has it, pool general part being loan, X. reserve this it's risk a of

may watching to the obviously about what going given what It are is our given in to assets there. sort that obviously closely is loan, assume predict see we're it's -- it's than the it's happen it And of but on other on hard or watching and what's not we'll may higher X-rated here, definitely New and I a are that happens here. list," "watch closely, it and the reserve safe that has we that loan think of some it's pool. a York it

And those but up wrong, know you reserve, variables any may I though, But any discretion. have the the there. And the Interest think can't The unemployment Okay. general taken can't by the Clearly, this others that rates be general and there's interest management I all of are rates. others. I down think of that fourth year. discretion I are has improved magnitude reserves in have. macroeconomic quarter. management then

headwinds market? So the still in down why Difficulty] the take [Technical

are for some to rest Obviously, said pool the of specific. function portfolio. reserves, question. as they sort reserve downgrades in Thanks That of from have the migrate, higher It's as may some X there loans X I sort like the general the of than X-rated a to the movement right? and of earlier some of the migrates from

is it. Repayments the and that's So of portfolio. another part general within movement sort of part the

continues. -- a right? have between what cycle degree the and general as sort run you pool I a of that's downgrades, to -- general, some group you across of sort the the close cautious, to where of specific X%. bit in little pool varying have as remain we we and sort and So and think the you you these general But shifts still will that have have continues Our of seen of you sort off portfolio sort would migration is expect the of to peer

Okay. That's did repayments. reserves there good were color. specific makes and because That the then sense increase,

probably movement paid to the due the into in off. the and general specific movement general -- loans that then out of So decline

Correct.

over this At the closing Mr. for floor back you. to time, to turn Taylor like Thank I'd comments.

Thank you, as hard with to support their next quarter. speaking and operator, I you to and would for thank work, forward you, our thank everybody, you. sure -- make again we look I I their for joining I Thank team for And want and our our to do, want call. investors always

thank Ladies This participation. for today's you your and gentlemen, concludes event.

or time, enjoy lines this may You your log and the your the rest webcast off of day. disconnect at