Group 1 - The Payout Desk focuses on high-yield equities, REITs, and long-duration total return strategies, emphasizing resilient cash flows and sustainable dividend growth [2] - The research is based on fundamental analysis and informal discussions with a network of analysts and investors, ensuring a diverse perspective on investment ideas [2] - The analyst has a beneficial long position in LADR shares, indicating a personal investment conviction in the company [3] Group 2 - Seeking Alpha welcomes contributions from analysts, allowing them to share investment ideas and gain exposure to a wider audience [1] - The platform emphasizes that past performance does not guarantee future results, highlighting the importance of individual research and due diligence [4]

Group 1 - David A. Johnson is the founder and principal of Endurance Capital Management, a New Jersey Limited Liability Company, with over 30 years of investment experience [1] - The company engages in a diverse range of investments including stocks, bonds, options, ETFs, REITs, real estate, closed-end funds, hedge funds, and private credit [1] - David holds a Master of Science (MS) Degree in Finance with a concentration in Investment Analysis from Boston University, a Certificate in Financial Planning, and an MBA from Fordham University [1]

Group 1 - Mortgage REITs have a long history, gaining popularity in the late 1960s and early 1970s as large banks and mortgage brokers established their own [1] - The iREIT® Tracker provides comprehensive data on over 250 tickers, including quality scores, buy targets, and trim targets, aimed at enhancing investment research [1] - The introduction of the iREIT Buy Zone Ratings Tracker allows members to screen for value, enhancing investment decision-making [2] Group 2 - A promotional offer includes a 2-week free trial and a complimentary book, aimed at attracting new members to the iREIT® platform [4]

Core Insights - Ladder Capital (NYSE: LADR) reported weaker-than-expected earnings for the first fiscal quarter, indicating a decline in net interest income as the company aims to reduce its balance sheet and portfolio [1] Financial Performance - The earnings report highlighted a drop in net interest income, reflecting the company's strategic decision to shrink its balance sheet [1]

Loan Origination and Portfolio - Ladder Capital has originated $30.3 billion of commercial real estate loans since its inception in October 2008 through March 31, 2025[220]. - The company has acquired $14.6 billion of predominantly investment grade-rated securities secured by first mortgage loans on commercial real estate[220]. - As of March 31, 2025, Ladder Capital held a portfolio of 54 balance sheet first mortgage loans with an aggregate book value of $1.7 billion, with a weighted average loan-to-value ratio of 67.5%[229][230]. - The company owned 149 single tenant net leased properties with an undepreciated book value of $591.5 million, fully leased with 100% rent collection during the three months ended March 31, 2025[237]. - Ladder Capital's CMBS investments totaled $1.5 billion in 105 CUSIPs, with 99.3% rated investment grade as of March 31, 2025[243]. - The weighted average duration of the CMBS investments was 2.9 years, with 59.0% of the collateral located in the top 25 metropolitan statistical areas in the U.S.[245]. Financial Position and Debt - As of March 31, 2025, the company had $2.0 billion of senior unsecured notes outstanding, including $500.0 million due in 2031[250]. - Ladder Capital maintains a $3.7 billion pool of unencumbered assets, primarily consisting of first mortgage loans and unrestricted cash[251]. - The company held $483.1 million of U.S. Treasury securities classified as cash and cash equivalents on its consolidated balance sheet as of March 31, 2025[248]. - As of March 31, 2025, the company had $850.0 million in its Revolving Credit Facility, increased from $725 million on December 20, 2024[252]. - Total debt obligations as of March 31, 2025, amounted to $2.77 billion, with significant components including $2.01 billion in senior unsecured notes[336]. - As of March 31, 2025, the Company had $2.0 billion of senior unsecured notes outstanding, including $287.7 million of 5.25% notes due 2025, $599.5 million of 4.25% notes due 2027, $633.9 million of 4.75% notes due 2029, and $500.0 million of 7.00% notes due 2031[339]. Income and Expenses - The company reported a net interest income of $20.3 million for the three months ended March 31, 2025, a decrease of $6.9 million from the previous quarter[270]. - Interest income decreased by $13.8 million to $64.3 million, while interest expense decreased by $6.9 million to $44.0 million for the same period[270]. - Total other income decreased by $10.5 million to $30.9 million for the three months ended March 31, 2025[270]. - Real estate operating income decreased by $1.6 million during the three months ended March 31, 2025, primarily due to sales that occurred in the previous quarter[279]. - The company recorded a net income of $11.6 million for the three months ended March 31, 2025, down from $16.4 million in the same period of the previous year, reflecting a decrease of $4.9 million[293]. Cash Flow and Investments - The company funded $316.4 million in commercial mortgage loans and purchased $521.8 million in securities during the three months ended March 31, 2025, contributing to a net increase in the securities portfolio of $395.5 million[294]. - Cash and cash equivalents were $479.8 million as of March 31, 2025, down from $1.3 billion at the end of 2024[325]. - The company experienced a net decrease in cash of $812.7 million in Q1 2025, driven by cash used in operating, investing, and financing activities[327]. - Proceeds from the sale of securities provided net cash of $39.9 million for the three months ended March 31, 2025, compared to $4.8 million for the same period in 2024[363]. - The Company had $13.1 million of proceeds from sales of real estate for the three months ended March 31, 2025, with no proceeds from real estate sales in the same period of 2024[364]. Loan Loss Provisions and Allowances - The provision for loan losses for the three months ended March 31, 2025, was $(0.1) million, compared to $5.8 million for the same period in 2024[381]. - The allowance for loan losses as of March 31, 2025, was $52.8 million, unchanged from December 31, 2024[382]. - The company utilizes a current expected credit loss model (CECL) for estimating loan loss provisions, which includes both portfolio-based and asset-specific components[375]. - The company evaluates the financial capability of borrowers and the performance of collateral properties on a loan-by-loan basis, considering factors such as cash flow and liquidation value[378]. Shareholder Distributions and Stock Repurchase - The Company has authorized the repurchase of $100.0 million of its Class A common stock as of April 23, 2025, increasing the remaining authorization from $66.8 million[356]. - The company intends to distribute at least 90% of its taxable income to maintain its qualification as a REIT, with regular quarterly distributions planned[359]. - The company intends to continue declaring regular quarterly distributions to shareholders approximating the REIT's net taxable income, maintaining its REIT status[399]. Market and Economic Conditions - The company’s critical accounting estimates are subject to uncertainty due to changing macro-economic conditions[381]. - The CECL accounting estimate is sensitive to macro-economic conditions and the vintage and location of underlying assets[381].

Financial Data and Key Metrics Changes - In Q1 2025, the company generated distributable earnings of $25.5 million, or $0.20 per share, with a return on equity of 6.6% and adjusted leverage of 1.4 times [5][21] - As of March 31, 2025, the company's liquidity stood at $1.3 billion, including $480 million in cash and cash equivalents, with 83% of total assets unencumbered [10][21] - The company's total gross leverage was 1.83 times, with 72% of debt comprised of unsecured corporate bonds [22][24] Business Line Data and Key Metrics Changes - The company originated $329 million in new loans and acquired $521 million in AAA securities in Q1 2025, totaling over $800 million in investment activity [7][12] - The loan portfolio as of March 31, 2025, was $1.7 billion, representing 38% of total assets, with a weighted average yield of 8.7% [11][28] - The real estate portfolio generated $12.2 million of net operating income during Q1 2025, primarily consisting of net leased properties [15][30] Market Data and Key Metrics Changes - 74% of new loan originations in Q1 2025 were backed by multi-family or industrial assets [13][50] - The company expects muted payoffs for the remainder of the year due to strong payoffs achieved in 2024 [13] Company Strategy and Development Direction - The company aims to redeploy liquidity generated from loan payoffs into new loans that better reflect current market conditions [6][9] - The strategy includes a shift towards unsecured debt as the primary funding source, with a focus on maintaining a robust balance sheet and high credit ratings [10][11][24] - The company is prepared to navigate market volatility and capitalize on opportunities with the best risk-adjusted returns [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the potential for market volatility and uncertainty but remains optimistic about the company's liquidity and balance sheet strength [8][9] - The company anticipates attractive opportunities arising from the current economic environment, particularly in conduit securitizations [40] Other Important Information - The company has a CECL reserve of $52 million, which is deemed sufficient to cover potential losses in the loan portfolio [14][28] - The company repurchased $20 million in principal value of unsecured bonds during Q1 2025 and declared a $0.23 per share dividend [26][27] Q&A Session Summary Question: Regarding origination activity and spreads - The company noted that the blended spread of 394 basis points was influenced by market volatility, with expectations for continued opportunities in the high 300s range [44][49] Question: Expectations for origination pace - Management expects origination to exceed the pace set in Q1 2025, despite some slowdown in securitizations due to market volatility [56][61] Question: Long-term views on the net lease portfolio - The company is open to holding or selling properties based on market conditions, with no active attempts to sell but willing to grow the portfolio [63][67] Question: Outlook on interest rates and their impact - Management anticipates a steeper yield curve, with expectations for the 10-year treasury yield to rise, which could create opportunities for the company [72][77] Question: Asset allocation and future mix - The company does not have a fixed game plan for asset allocation but aims to maintain liquidity while adjusting to market conditions [90][92]

Financial Performance - Ladder Capital reported distributable earnings of $25.5 million, resulting in a distributable EPS of $0.20 and an after-tax distributable ROAE of 6.6%[9] - The company declared a Q1 2025 cash dividend of $0.23 per LADR share, representing a 9.0% annual dividend yield[9] - Net interest income was $20.3 million for Q1 2025[42] Balance Sheet & Liquidity - Total liquidity exceeded $1.3 billion, including $480 million in unrestricted cash and cash equivalents, and an undrawn corporate revolving credit facility[7, 9] - The company's investment assets and unrestricted cash totaled $4.6 billion, including $1.7 billion in senior secured first mortgage loans (38% of total), $892 million in CRE equity (20%), and $1.5 billion in securities (32%)[7, 9] - Unencumbered assets totaled $3.7 billion, representing 83% of total assets, with 85% comprised of cash, first mortgage loans, and investment grade securities[7, 9, 34] Loan Portfolio - New loan originations amounted to $329 million, leading to a $138 million growth in the loan portfolio[7] - The weighted average spread on new balance sheet loans was 394 basis points[7] - The loan portfolio totaled $1.7 billion with a weighted average loan-to-value (LTV) of 67%[7, 15] Capital Structure - 72% of total debt was comprised of unsecured corporate bonds[9, 33] - The adjusted leverage ratio was 1.4x, or 1.2x net of cash[7, 9, 33] - 98% of debt is non-mark-to-market[7, 9, 33]

Over the last four quarters, the company has surpassed consensus EPS estimates three times. Ladder Capital, which belongs to the Zacks REIT and Equity Trust industry, posted revenues of $51.2 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 10.64%. This compares to year- ago revenues of $69 million. The company has topped consensus revenue estimates three times over the last four quarters. This quarterly report represents an earnings surprise of -9.09%. A quarter ago, it was ...

Ladder Capital (LADR) Q1 2025 Earnings Call April 24, 2025 10:00 AM ET Company Participants Pamela McCormack - PresidentPaul Miceli - Chief Financial OfficerBrian Harris - Founder, CEO & DirectorRandy Binner - Managing DirectorJade Rahmani - Managing DirectorSteve Delaney - Director of MortgageJohn Nickodemus - Vice President, Equity Research Operator Good morning, and welcome to Ladder Capital Corp. Earnings Call for the First Quarter of twenty twenty five. As a reminder, today's call is being recorded. Th ...

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