Broadmark Realty Capital Inc.

Good afternoon. Thank you for joining us today for Broadmark Realty Capital's third quarter 2022 earnings conference call. In addition to the press releases issued this afternoon, we filed a supplemental package with additional detail on our results, which is available in the investor section on our website at www.broadmark.com. As a reminder, remarks made on today's conference call may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. We do not undertake any obligation to update our forward-looking statements in light of new information or future events. For a more detailed discussion of the factors that may affect the company's results, please refer to our earnings release for this quarter and to our most recent SEC filing. During this call, we will also be discussing certain non-GAAP financial measures. More information about these non-GAAP financial measures and reconciliation to the most directly comparable GAAP financial measures are contained in our earnings release and SEC filing. This afternoon's conference call is hosted by Broadmark's Interim Chief Executive Officer, Jeffrey Pyatt, Interim President, Kevin Lubbers, and Chief Financial Officer, David Schneider. Management will make some prepared comments, after which we will open up the call to your questions. Now, I'll turn the call over to Jeff.

It's been a busy time here at Broadmark. This afternoon, we announced a change in leadership for the company. I have assumed the role of interim CEO, and Kevin Lubbers, the director and chair of the audit committee, has been named interim president. The board is in the process of launching a search for a new chief executive officer, and Kevin and I will serve in our roles until that individual is hired. Also, Kevin and I will remain members of the board, and I will continue to serve as its chairman. These appointments follow a mutual agreement to separate between the board and Brian Ward, who will leave his role as CEO and resign as a director of the company effective immediately. We thank Brian for his contributions to Broadmark, and we wish him all success in the future. Additionally, I am pleased to share that Jonathan Hermes has been hired as our chief financial officer affected December 1st, 2022. He's a highly capable financial leader with technical accounting and capital markets experience. John is no stranger to Broadmark as he worked closely with the company when we were going public. John will succeed David Schneider, who previously announced his intention to resign to accept an opportunity at a private company. David will remain with Broadmark until year end to ensure a seamless transition. Given this is his last call with us, David, on behalf of the board of directors, we thank you for your numerous contributions and helps you to transition. And we wish you all success in your next chapter. While we've experienced significant leadership change over the past year, the foundational principles of our business remain unchanged. We founded Broadmark over a decade ago in the wake of the global financial crisis. So we know a thing or two about navigating choppy waters. We built this business from the ground up and have been tested through multiple economic cycles. We have a long history of successfully deploying capital and we have originated over $4 billion in loans since inception. Through it all, we have lived up to our commitments to our borrowers and thrived as a trusted go-to provider of capital. The keys to our success have been woven into our DNA from the beginning. We are disciplined underwriters requiring significant equity from our borrowers. Our loans are generally short-term in nature, allowing us to reprice our book with relative speed. Notably, we have always operated with little or no debt, significantly reducing risks associated with liquidity, refinancing, and interest rate exposure. As we look to the future, we remain confident in our cycle-tested strategy. We are diversified across a national footprint and have a deep and experienced team of ground-level real estate investment experts. As we manage our existing portfolio and the current economic and financial market turmoil subsides over time, we believe we will emerge in a strong position to take advantage of the opportunities that arise to resume growth and create value over the long term. I'll now turn the call over to Kevin to share some additional perspective.

Thank you, Jeff. Good afternoon, everyone. I'd like to comment a bit more on the external environment and on one additional announcement we made today. 2022 continues to bring unprecedented challenges to the global economy, real estate, and the financial markets. Persistently high inflation has forced the Federal Reserve to rapidly increase rates, greatly impacting asset values in the near term. 30-year residential mortgage rates have risen from roughly 3% one year ago to over 7% today, and commercial mortgage rates have followed a similar pattern. And while overall employment has continued to grow, real wages have declined, and there are increasing signs of recession risk amid a backdrop of political uncertainty. With countervailing risks of inflation along with the rising rates and recession fears, financial market volatility has hit levels not seen since the global financial crisis in 2008, 2009. virtually all equity and fixed income assets have been significantly impacted. Despite this environment, we believe that Broadmark is positioned ultimately to thrive as opportunities arise, as they always do, for market dislocation and uncertainty. We believe over time we will be able to capture more than our share as we move ahead. Beyond originating new business, an ongoing critical priority that we are focused on is effectively addressing our non-performing loans. Capital is precious, and while we have confidence we will ultimately resolve those loans in a manner favorable to Broadmark, until they are resolved, it continues to create a drag on our growth and our earnings. To that point, the team will remain hyper-focused on this issue. David will provide additional detail, but we wanted to call out that this will continue to be one of our most important areas of focus. Let me now turn to our share repurchase program. Today, the board approved a share repurchase program to purchase up to $75 million of common stock. We remain committed to continuing to source and fund new loan originations, but we recognize the value of our company and wanted an additional capital allocation lever on which to potentially act opportunistically in the future. I'll end by saying that the board has taken decisive action on behalf of shareholders and stakeholders to ensure the company is positioned with strong leadership and clear strategy to weather the current environment and create long-term value. With an experienced team in place and the lowest levered balance sheet in the industry, Broadmark is poised to build the business in a disciplined and thoughtful manner. I'd like to thank our team for their hard work and contributions, and while this will take some time, we believe we are taking the right actions to move forward and achieve long-term success. And with that, I'll turn the call over to David.