Bose George: And then can you remind us just how much of the cash you have at year-end is kind of deployable. Like how much is sort of the minimum amount that you need to keep and how much you deploy or could deploy?
T.J. Durkin: Yes. I mean I think from like a risk reserve perspective, we probably want to keep $75 million to $85 million, depending on our leverage, whether we’re in between deals or how big our sort of loan balance on warehouses, right? So it’ll kind of accordion up and down depending where we are in that securitization basing, but that’s probably a rough range of cash that we’d want to keep around at times. So we have excess liquidity.
Operator: [Operator Instructions] We’ll take our next question from Eric Hagen with BTIG. Your line is open.
Eric Hagen: One follow-up on the new originations in the non-QM. I mean, are all of the loans that are coming into the portfolio originated by Arc Home? Or do you see opportunities to buy loans from banks, other brokers, just any word across the street? Are you guys are sourcing those loans?
Nick Smith: Yes, I alluded to in the previous answer for Matt. We’ve sort of repositioned how we’re acquiring some loans given some changing dynamics. We’re finding more and more large originators willing to make this product rather than broker it out. And to the extent that’s the case, we’re expanding the delegated or B2B channel through Arc Homes. So even though Arc Home will be purchasing these loans, and be the intermediary on them, they won’t necessarily be funding the borrower. So we see that as an area of growth. With regard to the banking pressure in the regional space, obviously, that’s a well telegraphed narrative. Obviously, with Wells Fargo’s exit a good amount of time ago and Chase issuing the first deals post-GFC from the portfolio side, obviously, flows to be found.
I think it speaks more to the returns that exist in sort of that prime jumbo space where banks tend to traffic more. At the moment, we don’t see that as particularly attractive, but are paying very close attention to it. Our expectation is and what we’re seeing from most of the securitization market today despite the broader narrative of regional banks selling, most of the originations hitting the securitization market and by most the very, very large portion is actually from nonbank originators, which sort of flies in the face of this narrative. Not saying that, that won’t change, but we’re paying close attention to it. And if it does change, we’d like to think we’d be in a place to be able to opportunistically take advantage of that dislocation.
Eric Hagen: Just one on the — just the credit in the portfolio just in general. I mean, you guys have been pretty active in non-QM in the investor property space. Just any thoughts there on the credit performance going forward? I mean, is there a way to like sensitize how sensitive some of the credit could be relative to like the Agency space, for example?
Nick Smith: Yes, certainly. So obviously, we traffic in a slightly more credit-sensitive space. That being said, even in my prepared remarks, we talk about the strong housing fundamentals, the mark-to-market LTV or HPI adjusted LTV of the book is very, very low. And the performance, as I stated in the prepared remarks, the delinquency trends are still below our original underwrite. So there has been a modest uptick, but that modest uptick is still well below our underwrite also in the prepared remarks versus the broader non-agency market our originations, the credits we’ve securitized have been outperforming comparables. I think it’s also worth noting there that unlike the broader market, on average, we probably don’t make 25% to 35% of the loans in sort of the average issuer shelf out there with some issuers being as much as 50% [indiscernible]. So we have a tighter credit box. We’ve stayed true to what we’ve said over the years and expect to do so going forward.
Operator: And it appears that we have no further questions at this time. I will now turn the program back over to our presenters for any additional or closing remarks.
Jenny Neslin: Thank you to everyone for joining us and for your questions. We very much appreciate it. Look forward to speaking to you again next quarter. Good day.
Operator: That concludes today’s teleconference. Thank you for your participation. You may now disconnect, and have a wonderful day.
