Ladder Capital Corp (NYSE:LADR) is included among the 14 Under-the-Radar High Dividend Stocks to Buy Now. Keefe Bruyette Cuts LADR Target to $11.50, Expects Dividend Growth Ahead Photo by nathan dumlao on Unsplash On March 17, Keefe Bruyette lowered its price recommendation on Ladder Capital Corp (NYSE:LADR) to $11.50 from $12. It reiterated an Outperform rating on the shares. The firm reduced its 2026 and 2027 earnings estimates, pointing to the timing of new originations and slightly lower loan yields ...

Dividend Announcement - Ladder Capital Corp announced a first quarter 2026 dividend of $0.23 per share of Class A common stock, payable on April 15, 2026, to stockholders of record as of March 31, 2026 [1] Company Overview - Ladder Capital Corp is a publicly listed, investment grade-rated commercial real estate finance company with a diversified nationwide platform, focusing on tailored capital solutions across the commercial real estate landscape, particularly in the middle market [1] - Since its founding in 2008, the company has deployed over $50 billion of capital across the real estate capital stack, serving both institutional and middle-market clients [1] - The company originates fixed and floating rate first mortgage loans collateralized by all major commercial property types and operates predominantly net leased, income-producing real estate [1] Management and Ownership - Ladder Capital is internally managed and led by a seasoned management team with deep industry expertise, with over 11% insider ownership, ensuring strong alignment with the interests of all stakeholders [1] - The company maintains a conservative and durable capital structure, reflected in its investment grade credit ratings of Baa3 from Moody's and BBB- from Fitch, both with stable outlooks [1] Financial Performance - For the quarter ended December 31, 2025, Ladder reported GAAP income before taxes of $15.5 million, or $0.13 of diluted earnings per share, and distributable earnings of $21.4 million, or $0.17 of distributable EPS [1]

Core Viewpoint - Ladder Capital (LADR) undercovered its dividend due to earnings available for distribution (EAD) being impacted by a realized loan loss in Q4'25, but reported solid overall results and maintains a strong liquidity position [1] Group 1 - Ladder Capital reported a dividend undercoverage in Q4'25, primarily due to a realized loan loss [1] - Despite the undercoverage, the company achieved solid results for the fourth quarter [1] - Ladder Capital has a strong liquidity position, which is crucial for its operational stability [1]

Group 1 - Ladder Capital (LADR) has been characterized as a low volatility investment since the last analysis in Q3 of 2025 [1] - Binary Tree Analytics (BTA) aims to provide transparency and analytics in capital markets, focusing on CEFs, ETFs, and Special Situations to deliver high annualized returns with low volatility [1] Group 2 - The company has over 20 years of investment experience, with a background in finance from a top university [1]

Financial Portfolio - As of December 31, 2025, the company held a portfolio of 73 balance sheet first mortgage loans with an aggregate book value of $2.2 billion, with a weighted average loan-to-value ratio of 68.8%[26][27] - The company owned 149 single tenant net leased properties with an undepreciated book value of $596.2 million, fully leased with an average age of 21.2 years and a weighted average remaining lease term of 6.7 years, collecting 100% of rent during the year ended December 31, 2025[34] - The company owned 56 diversified commercial real estate properties with an undepreciated book value of $370.0 million, collecting 98% of rent during the year ended December 31, 2025[35] - As of December 31, 2025, the estimated fair value of the company's portfolio of CMBS investments totaled $2.1 billion in 115 CUSIPs, with 98.6% rated investment grade[39] - The company's CMBS investments had a weighted average duration of 3.0 years, with 58.6% of the collateral distributed throughout the top 25 metropolitan statistical areas in the United States[41] - The company held one conduit first mortgage loan with an aggregate carrying value of $28.0 million, with a loan-to-value ratio of 58.9%[30] - The company selectively invests in other commercial real estate-related loans, holding a portfolio of 2 mezzanine loans with an aggregate book value of $7.3 million and a weighted average loan-to-value ratio of 69.2%[28] Financial Position and Debt - As of December 31, 2025, the company had $2.2 billion of senior unsecured notes outstanding, including $599.5 million in 4.25% notes due 2027 and $633.9 million in 4.75% notes due 2029[65] - The company maintains a $4.1 billion pool of unencumbered assets, primarily consisting of first mortgage loans and unrestricted cash as of December 31, 2025[66] - The Unsecured Revolving Credit Facility was increased to $850 million on January 2, 2025, with $280 million in outstanding borrowings as of December 31, 2025[68] - The company recorded $388.2 million in long-term, non-recourse mortgage financing as of December 31, 2025, net of unamortized premiums[74] - The company has a debt-to-equity ratio target of approximately 3.0:1.0 or below, which may fluctuate due to business operations and securitizations[78] - As of December 31, 2025, the company had $627 million of securities repurchase debt outstanding, secured by highly liquid AAA-rated CMBS[73] Investment Strategy and Risk Management - The company has a rigorous investment process that includes thorough due diligence, cash flow analysis, and borrower analysis to ensure systematic evaluation of each loan[46][47] - All loan and real estate investments above certain thresholds require approval from the company's Investment Committee and the Risk and Underwriting Committee[58] - The company is subject to financial covenants, including minimum net worth and liquidity levels, as defined in its financing agreements[80] - The company is in compliance with all material covenants under its financing arrangements as of December 31, 2025[82] - The company evaluates the financial capability of borrowers and the performance of collateral properties on a loan-by-loan basis[449] Earnings and Financial Performance - Distributable earnings for the year ended December 31, 2025, were $109.851 million, compared to $153.930 million for the year ended December 31, 2024[469] - The provision for loan losses for the year ended December 31, 2025, was $(0.2) million, compared to $13.9 million for the year ended December 31, 2024[453] - The allowance for loan losses at December 31, 2025, was $47.7 million, down from $52.8 million at December 31, 2024[454] - The company utilizes distributable earnings as a non-GAAP financial measure to assess operating performance and dividend capacity[462] - The company excludes unrealized gains and losses from securities in its calculation of distributable earnings[467] - GAAP realized gain on the sale of real estate for 2025 was $3,807, down from $25,277 in 2024, indicating a significant decrease[470] - The company recorded a release of loan loss reserves of $0.2 million in 2025, contrasting with a provision for loan loss of $13.9 million in 2024[470] - Adjusted loss on the sale of real estate for distributable earnings was $(871) for 2025, compared to $(7,010) for 2024[470] - The company recognized derivative results of $1,570 in 2025, a decrease from $5,366 in 2024[470] - The accumulated depreciation and amortization on real estate sold was $2,936 for 2025, compared to $18,267 for 2024[470] Corporate Governance and Culture - The company’s corporate culture emphasizes transparency, accountability, and ethical behavior, supported by a flat management structure[104] - The company employs 60 full-time persons as of December 31, 2025, with no union representation or work stoppages reported[103] - The company offers comprehensive healthcare benefits and wellness programs, including mental health services and an on-site fitness center[109] - The company engages in regular employee experience surveys to guide management decisions and enhance employee satisfaction[108] Regulatory and Compliance - The company aims to maintain less than 40% of total assets in "investment securities" to avoid being classified as an investment company under the Investment Company Act[97] - The company may face additional regulatory burdens if its investment adviser subsidiary expands its product offerings[91] - Future results may be affected by unusual or non-recurring items, similar to adjustments presented in the current report[473] Accounting and Financial Reporting - The company utilizes a current expected credit loss model (CECL) for estimating loan loss provisions, incorporating both portfolio-based and asset-specific components[446] - The company has established policies to ensure that critical accounting estimates are well controlled and consistently applied, impacting financial results significantly[444] - The company intends to maintain its REIT status by distributing at least 90% of its REIT taxable income annually[472] - The company declared regular quarterly distributions approximating its net taxable income to shareholders[472] - Distributable earnings should not be viewed as a substitute for net income attributable to shareholders or other GAAP performance measures[471]

Core Insights - Ladder Capital achieved significant growth in loan originations, with nearly $950 million in new loans in the second half of the year, marking the best performance in over three years [1] - The company generated distributable earnings of $109.9 million for the full year, achieving a 7.1% return on equity and maintaining a stable book value [3][4] - Ladder Capital became the only investment-grade rated commercial mortgage REIT, enhancing its access to capital markets and reducing its cost of funds [3][12] Financial Performance - In the fourth quarter, Ladder generated distributable earnings of $21.4 million, or $0.17 per share, which adjusted for a loan loss, would be $0.21 per share [4][11] - The loan portfolio totaled $2.2 billion at year-end, representing 42% of total assets, with a weighted average yield of 7.8% [1][16] - The company maintained robust liquidity of $608 million, including $570 million of undrawn capacity on its unsecured revolving credit facility [8][13] Investment Strategy - Ladder's investment strategy focuses on stable income-producing collateral, primarily in multifamily and industrial properties, with a reduction in office loan exposure from 14% to 11% [1][5] - The company made strategic investments in office properties, including a $25.8 million equity investment for a 20% interest in a Manhattan office property [5] - Ladder's securities portfolio totaled $2.1 billion, with 99% rated investment-grade and 97% rated AAA, underscoring its high credit quality [18] Market Positioning - Ladder's capital structure is predominantly unsecured, allowing it to operate independently of repo and CLO markets, positioning the company to capitalize on future opportunities [2][7] - The company has seen its bonds tighten significantly, outperforming comparably rated equity REIT bonds, which enhances its competitive positioning [7] - Ladder's focus on lower leverage models and disciplined underwriting practices has allowed it to avoid significant losses compared to industry peers [49] Future Outlook - The company plans to drive growth in loan originations and earnings in 2026, with expectations to increase the loan portfolio to over $6 billion by year-end [30][32] - Ladder anticipates a continued focus on lending opportunities, particularly in the commercial real estate market, as acquisition activity improves [5][23] - The company aims to attract high-quality equity REIT shareholders and align its valuation with peers to further reduce its cost of capital [9]

Financial Data and Key Metrics Changes - Ladder Capital generated distributable earnings of $21.4 million or $0.17 per share in Q4 2025, with adjusted earnings of $26.4 million or $0.21 per share after accounting for a $5 million realized loan loss [3][13] - For the full year 2025, distributable earnings totaled $109.9 million, achieving a 7.1% return on equity [3][4] - The adjusted leverage ratio was 2.0 times stable book value, with liquidity maintained at $608 million, including $570 million of undrawn capacity on the unsecured revolver [4][16] Business Line Data and Key Metrics Changes - In 2025, Ladder originated $1.4 billion in new loans, the highest annual volume since 2021, with nearly $950 million in the second half of the year [5][6] - The loan portfolio totaled $2.2 billion at year-end, representing 42% of total assets, with a weighted average yield of 7.8% [7][18] - The securities portfolio reached $2.1 billion, with 99% rated investment grade and 97% rated AAA, providing a strong liquidity source [20] Market Data and Key Metrics Changes - Office loan exposure decreased from 14% to 11% of total assets by year-end, while new investments in office properties were selectively pursued [7][18] - The real estate portfolio generated $14.8 million of net operating income in Q4 and $57.3 million for the full year, supported by active leasing and asset management [9][20] Company Strategy and Development Direction - Ladder Capital aims to drive growth by increasing loan originations to enhance returns and support dividend growth while maintaining balance sheet discipline [12][22] - The company plans to capitalize on opportunities in the commercial real estate market, with a focus on stable income-producing properties [7][11] - The achievement of investment-grade status in 2025 has enhanced access to capital markets and reduced funding costs, positioning the company for future growth [4][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating potential market volatility, viewing it as an opportunity rather than a threat [30] - The company anticipates a return to growth in the loan portfolio, projecting an increase to over $6 billion by year-end 2026 [32] - Management highlighted a cautious approach to underwriting, particularly regarding bridge loans, to avoid past mistakes seen in the industry [51][60] Other Important Information - Ladder Capital issued its inaugural $500 million investment-grade unsecured bond at a fixed rate of 5.5%, which has performed well in the secondary market [9][15] - The company repurchased $10.2 million of common stock in 2025, with $90.6 million remaining under the stock repurchase program [17][16] Q&A Session Summary Question: Plans in light of potential volatility in 2026 - Management does not plan to change strategies due to volatility, viewing it as an opportunity for stable dividends based on traditional real estate [27][30] Question: Achievable ROE and loan portfolio growth - Management targets an ROE of 9-10%, with plans to grow the loan portfolio to over $6 billion by year-end [34][32] Question: Impact of net interest income decline - Management noted that net interest income may dip due to timing of loan funding but expects recovery in subsequent quarters [40][42] Question: Underwriting discipline for bridge loans - Management acknowledged past mistakes in underwriting and emphasized a cautious approach moving forward, particularly in large cities and refinancing competitor loans [51][60] Question: Competitive landscape with banks returning to lending - Management noted that while banks are becoming more competitive, they are focusing on construction loans, leaving opportunities for Ladder in refinancing and bridge loans [67][70]

Financial Data and Key Metrics Changes - Ladder Capital generated distributable earnings of $21.4 million or $0.17 per share in Q4 2025, with adjusted earnings of $26.4 million or $0.21 per share after accounting for a $5 million realized loan loss [3][13] - For the full year 2025, distributable earnings totaled $109.9 million, achieving a 7.1% return on equity [3][4] - The adjusted leverage ratio was 2.0 times stable book value, with liquidity maintained at $608 million, including $570 million of undrawn capacity on the unsecured revolver [4][16] Business Line Data and Key Metrics Changes - In 2025, Ladder originated $1.4 billion in new loans, the highest annual volume since 2021, with nearly $950 million in the second half of the year [5][6] - The loan portfolio totaled $2.2 billion at year-end, representing 42% of total assets, with a weighted average yield of 7.8% [7][18] - The securities portfolio reached $2.1 billion, with 99% rated investment grade and 97% rated AAA, representing 39% of total assets [20] Market Data and Key Metrics Changes - The company reported a decline in office loan exposure from 14% to 11% of total assets by year-end, while selectively pursuing new investments in the sector [7] - The real estate portfolio generated $14.8 million of net operating income in Q4 and $57.3 million for the full year, supported by active leasing and asset management [9][20] Company Strategy and Development Direction - Ladder Capital aims to drive growth by increasing loan originations to enhance returns and support dividend growth while maintaining balance sheet discipline [12][22] - The company plans to capitalize on opportunities in the commercial real estate market, with a focus on stable income-producing properties [7][25] - Ladder's investment-grade status enhances access to capital markets, lowering the cost of funds and strengthening liquidity [4][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating potential market volatility, viewing it as an opportunity rather than a threat [30] - The company anticipates a loan portfolio growth to over $6 billion by year-end 2026, with a target return on equity of 9-10% [32][34] - Management highlighted a cautious approach to underwriting, particularly regarding bridge loans, to avoid past mistakes in the industry [59] Other Important Information - Ladder's CECL reserve level was maintained at $47 million, or $0.37 per share, deemed sufficient to cover potential losses in the loan portfolio [19][20] - The company repurchased $10.2 million of common stock in 2025, with $90.6 million remaining under the stock repurchase program [17] Q&A Session Summary Question: Plans in light of potential volatility in 2026 - Management does not plan to change strategies due to volatility, viewing it as an opportunity for stable dividends based on traditional real estate [27][30] Question: Achievable ROE and loan portfolio growth - Management expects to grow the loan portfolio to over $6 billion by year-end and anticipates an ROE of 9-10% [32][34] Question: Impact of net interest income decline - Management noted that net interest income may dip due to timing of loan fundings but expects recovery in subsequent quarters [40][42] Question: Underwriting lessons from past bridge loans - Management acknowledged past mistakes in underwriting and emphasized a more cautious approach moving forward, particularly in large cities and refinancing competitor loans [59] Question: Competitive landscape with banks returning to lending - Management noted that while banks are becoming more competitive, they are focusing on construction loans, leaving opportunities for Ladder in refinancing and bridge loans [67][69]

Core Viewpoint - Ladder Capital (LADR) reported quarterly earnings of $0.21 per share, missing the Zacks Consensus Estimate of $0.23 per share, and down from $0.27 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -9.99%, with the company previously exceeding earnings expectations in the prior quarter by posting $0.25 per share against an estimate of $0.23, resulting in a surprise of +8.7% [2] - Revenues for the quarter were $50.47 million, missing the Zacks Consensus Estimate by 7.74%, and down from $68.62 million year-over-year [3] - Over the last four quarters, the company has only surpassed consensus revenue estimates once [3] Stock Performance and Outlook - Ladder Capital shares have increased by approximately 0.6% since the beginning of the year, compared to a 0.5% gain in the S&P 500 [4] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][5] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $55.7 million, and for the current fiscal year, it is $1.09 on revenues of $235.3 million [8] - The estimate revisions trend for Ladder Capital was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [7] Industry Context - The REIT and Equity Trust industry, to which Ladder Capital belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, suggesting potential challenges ahead [9] - The performance of Ladder Capital's stock may be influenced by the overall outlook for the industry [9]

Financial Data and Key Metrics Changes - In Q4 2025, Ladder Capital generated distributable earnings of $21.4 million or $0.17 per share, which adjusted for a $5 million realized loan loss, resulted in earnings of $26.4 million or $0.21 per share [3][13] - For the full year 2025, distributable earnings totaled $109.9 million, achieving a return on equity of 7.1% [3][4] - The adjusted leverage ratio was 2.0 times stable book value, with liquidity maintained at $608 million, including $570 million of undrawn capacity on the unsecured revolver [4][15] Business Line Data and Key Metrics Changes - In 2025, Ladder originated $1.4 billion in new loans, the highest annual volume since 2021, with Q4 alone contributing over $870 million in new investments [5][6] - The loan portfolio totaled $2.2 billion at year-end, representing 42% of total assets, with a weighted average yield of 7.8% [18][20] - The securities portfolio reached $2.1 billion, with 99% rated investment grade and 97% rated AAA, indicating high credit quality [20] Market Data and Key Metrics Changes - The company reported a decline in office loan exposure from 14% to 11% of total assets by year-end, while selectively pursuing new investments in the office sector [6][10] - The real estate portfolio generated $14.8 million of net operating income in Q4 and $57.3 million for the full year, supported by active leasing and asset management [9][20] Company Strategy and Development Direction - Ladder Capital aims to drive growth by increasing loan originations to enhance returns and support dividend growth while maintaining balance sheet discipline [12][22] - The company plans to capitalize on opportunities in the commercial real estate market, with a focus on stable income-producing properties, primarily multifamily and industrial [6][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating potential market volatility, emphasizing that the current environment presents opportunities rather than challenges [28][30] - The company anticipates achieving a return on equity of 9-10% within the current capital structure, with plans to grow the loan portfolio to over $6 billion by year-end [31][34] Other Important Information - Ladder Capital's inaugural $500 million investment-grade unsecured bond was issued at a fixed rate of 5.5%, with pricing tightening significantly since issuance [9][14] - The company repurchased $10.2 million of common stock in 2025, reflecting confidence in its financial position and commitment to shareholder value [17] Q&A Session Summary Question: How is Ladder planning to address potential volatility in the market? - Management indicated no significant changes in strategy due to volatility, viewing it as an opportunity for stable dividend investments [28][30] Question: What is the achievable ROE and loan portfolio size by year-end? - Management expects an ROE of 9-10% and plans to grow the loan portfolio to over $6 billion by year-end [31][34] Question: How does Ladder view competition from regional banks? - Management noted that while banks are becoming more competitive, they are primarily focused on construction loans, leaving opportunities for Ladder in refinancing and bridge loans [66][69]