Jade Rahmani: Thank you very much. What do you make of the current stock valuation for Ladder, in particular, given the lower-than-peer leverage and the strong outlook based on rates? Also, do you think you would consider stepping up your pace of stock buyback and how are you feeling about the dividend relative to the strong level of earnings you posted?
Brian Harris: Okay. I’ll try to keep those in order. And if I don’t, please remind me at the end. First of all, the stock price, a little bit discouraging at times because when I sat down and I began to write the year-end review, I basically said, okay what did we do in 2022? We absolutely nailed the Fed correctly. We have the lowest €“ we went from the highest cost of funds because of our corporate debt at the lowest cost of funds in the space. We have it for years to come, whereas you’re seeing a lot of other ways of raising money taking place in the space. And I think it’s a real differentiator for us this year. Our income €“ our top-line income went through the roof because, again, our interest income was going up, but our interest expense was not really going up very quickly at all.
So the whole plan worked, and our credit acumen did well. We didn’t have too much difficulty there. And for all of that, getting it right, the stock dropped from, I think it was, $11.90 something at the end of last year to a high 10 number or $10.99 this year. So, you really can’t fight to tape it is what it is. It was a tough year for all investors last year. And some parts of the stock market, I think the S&P was down 18%. Then of course, it was up 20%. So you try not to look at that too much. But we’re doing what we can do and controlling what we can control and sometimes, you get caught up in a little bit of narrative where you just get caught up in the whole market swings. So we’re not put off by it. We wanted to €“ we pretty much told people we’re going to keep raising our dividend, which we did and each time we raise our dividend, the stock fell.
So now we’re covering it very easily, and there’s always some version of the quality of earnings. You’ve covered your dividend because you sold some retail centers or we sold an office building. And we are now covering out a straight carry and rents. And it looks like, I personally defend, it’s going to keep raising rates here. If they do, we make more. Too much of a good thing obviously can be a problem. But at the end of the day, it’s a lot easier as a lender when rates are higher than when rates are lower. So we are very comfortable here. We think our income is with our leverage point below 2.0 we have a full turn we can put on to the company, and that those earnings would just go to the bottom-line if we use no leverage at all. Even our cash, we’ve been buying two-week treasuries, which I think today, we were buying at 4.6%.
So even cash sitting around is doing better. So earnings look very good. We are a little countercyclical at times. And so I suspect that we’ll have no trouble with our dividend. I imagine we will be in frank discussions with our investors as well as our Board of Directors about what to do with the dividend going forward. And as long as credit is holding up, I don’t see really anywhere around not raising it. And I think €“ what was the last part?
Jade Rahmani: Stock buyback.
