Lument Finance Trust, Inc. (NYSE:LFT) Q4 2023 Earnings Call Transcript

The dollars being expended to increase NOI are still accretive to us as lender and to the sponsor. So it is a difficult question to answer as the whole portfolio because you really have to individually look at each asset and determine is this asset just deteriorating in performance, which in most cases, the answer is no. But are they — how are they executing on their business plan.

Christopher Nolan: Right. Okay. Turning to capital management. Your stock is trading roughly 63% of your book value in considerations in terms of buybacks and if not, at what point would you consider buybacks?

James P. Flynn: The buybacks are something we do discuss with the Board. And there’s no kind of — if we’re at this level, we would do it. We do think that our stock trades at a discount to fair value, particularly relative to the peers and to the expected full recovery of our portfolio. The challenge that we’ve always had with discussion around buybacks has been, one is we’re already undersized and under scale and reducing our growth even further. What impact would that have on long term on the stock price. And also how does that impact our desire, which is to actually find ways to expand the common equity base. So that — those are always the push and pull. There isn’t a specific answer that says if we’re at 50% of book, we’re going to do a buyback. But in terms of where our stock trades and relative to management’s view and the Board’s view of value, it’s a topic of discussion broadly every quarter.

Christopher Nolan: Well, on the point, your stock has really taken a nose dive ever since you did the rights offering a couple of years ago. And I’m just trying to think in terms of under scale, I totally get that. But at some point, it makes more sense just to buy back your stock as opposed to investing in and do multifamily loans?

James P. Flynn: I think that certainly, the Board and we have to respect those alternatives and options, and will continue to do so.

Christopher Nolan: Okay, that’s it from me. Thank you.

Operator: Thank you. And at this time, Mr. Flynn, we have no other questions registered. Please proceed.

James P. Flynn: Okay. I want to thank you all for your time today and interest and look forward to speaking again next quarter. Thank you, all.

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.