Core Viewpoint - Investors in the REIT and Equity Trust sector should consider Apollo Commercial Finance (ARI) and Ladder Capital (LADR) as potential value investment opportunities [1] Group 1: Investment Strategies - A strong Zacks Rank combined with a high Value grade from the Style Scores system yields the best returns for value investors [2] - The Zacks Rank emphasizes stocks with positive earnings estimate revisions, while Style Scores highlight specific company traits [2] Group 2: Current Rankings and Outlook - Both ARI and LADR hold a Zacks Rank of 2 (Buy), indicating an improving earnings outlook due to positive analyst estimate revisions [3] - Value investors focus on various valuation metrics to identify undervalued companies [4] Group 3: Valuation Metrics - ARI has a forward P/E ratio of 9.44, while LADR has a forward P/E of 11.48 [5] - ARI's PEG ratio is 0.25, indicating a favorable valuation compared to LADR's PEG ratio of 2.31 [5] - ARI's P/B ratio is 0.74, compared to LADR's P/B of 0.94, suggesting ARI is more undervalued [6] - Based on these valuation metrics, ARI is rated with a Value grade of B, while LADR has a Value grade of D [6]

[UNITED STATES SECURITIES AND EXCHANGE COMMISSION Form 10-Q](index=1&type=section&id=Form%2010-Q%20Header) - The document is a **Quarterly Report (Form 10-Q)** for the period ended **June 30, 2025**, filed by Ladder Capital Corp (Commission file number: 001-36299)[2](index=2&type=chunk) - **Class A common stock**, $0.001 par value, is registered on the New York Stock Exchange under the trading symbol **LADR**[4](index=4&type=chunk) [Registrant Information and Filing Status](index=2&type=section&id=Registrant%20Information%20and%20Filing%20Status) - The registrant has filed **all required reports** during the preceding 12 months and has been subject to filing requirements for the past 90 days[5](index=5&type=chunk) - Ladder Capital Corp is classified as a **Large accelerated filer** and is not a shell company[5](index=5&type=chunk) Class A common stock | Class | Outstanding at July 18, 2025 | | :---------------- | :--------------------------- | | Class A common stock | 127,460,976 | | Class B common stock | — | [Index to Form 10-Q](index=3&type=section&id=Index) [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) - The report contains **forward-looking statements** identified by terms such as 'anticipate,' 'estimate,' 'expect,' 'project,' 'plan,' 'intend,' 'believe,' 'may,' 'might,' 'will,' 'should,' 'can have,' 'likely,' 'continue,' and 'design'[10](index=10&type=chunk) - Actual results may **differ materially** from forward-looking statements due to various factors, including market volatility, geopolitical uncertainty, changes in economic conditions, real estate market risks, interest rate changes, and regulatory compliance[11](index=11&type=chunk)[13](index=13&type=chunk) - The Company assumes **no obligation to update** or supplement any forward-looking statements, as new risks and uncertainties arise over time[12](index=12&type=chunk) [References to Ladder Capital Corp](index=6&type=section&id=REFERENCES%20TO%20LADDER%20CAPITAL%20CORP) - References to 'Ladder,' 'Ladder Capital,' the 'Company,' 'we,' 'us,' and 'our' refer to **Ladder Capital Corp and its consolidated subsidiaries**, with Ladder Capital Corp acting as a holding company and general partner of Ladder Capital Finance Holdings LLLP (LCFH)[15](index=15&type=chunk) [Part I - Financial Information](index=7&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements of Ladder Capital Corp, including balance sheets, income statements, comprehensive income statements, statements of changes in equity, and cash flow statements, along with detailed notes explaining the company's organization, significant accounting policies, and specific financial instrument details [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Total Assets | $4,457,474 | $4,845,073 | | Total Liabilities | $2,957,404 | $3,312,134 | | Total Equity | $1,500,070 | $1,532,939 | | Cash and cash equivalents | $134,939 | $1,323,481 | | Securities | $1,966,471 | $1,080,839 | | Debt obligations, net | $2,783,166 | $3,135,617 | - Total assets decreased by **8.0%** and total liabilities decreased by **10.7%** from December 31, 2024, to June 30, 2025[20](index=20&type=chunk) - Cash and cash equivalents saw a significant decrease of **89.8%**, while securities increased by **82.0%** over the six-month period[20](index=20&type=chunk) [Consolidated Statements of Income](index=9&type=section&id=Consolidated%20Statements%20of%20Income) This section details the company's financial performance over specific periods, highlighting net interest income, net income, and earnings per share | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net interest income | $21,530 | $34,317 | $41,859 | $71,457 | | Net income (loss) | $17,108 | $32,125 | $28,664 | $48,553 | | Basic EPS | $0.14 | $0.26 | $0.23 | $0.39 | | Diluted EPS | $0.14 | $0.26 | $0.23 | $0.39 | - Net interest income decreased by **37.2%** for the three months ended June 30, 2025, compared to the same period in 2024, and by **41.4%** for the six months ended June 30, 2025, year-over-year[23](index=23&type=chunk) - Net income decreased by **46.7%** for the three months ended June 30, 2025, and by **40.9%** for the six months ended June 30, 2025, compared to the respective prior year periods[23](index=23&type=chunk) [Consolidated Statements of Comprehensive Income](index=10&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's comprehensive income, including net income and other comprehensive income components, reflecting changes in equity from non-owner sources | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) | $17,108 | $32,125 | $28,664 | $48,553 | | Total other comprehensive income (loss) | $1,576 | $(932) | $(773) | $3,101 | | Comprehensive income (loss) | $18,684 | $31,193 | $27,891 | $51,654 | - Total other comprehensive income (loss) improved significantly from a loss of **$0.93 million** in Q2 2024 to a gain of **$1.58 million** in Q2 2025[25](index=25&type=chunk) - For the six months ended June 30, 2025, total other comprehensive income (loss) was a loss of **$0.77 million**, a decrease from a gain of **$3.10 million** in the same period of 2024[25](index=25&type=chunk) [Consolidated Statements of Changes in Equity](index=11&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) This section outlines the changes in the company's total equity, including retained earnings, treasury stock, and additional paid-in capital over the reporting period | Metric (in thousands) | Balance, Dec 31, 2024 | Balance, Jun 30, 2025 | | :---------------------------- | :-------------------- | :-------------------- | | Total Equity | $1,532,939 | $1,500,070 | | Retained Earnings | $(206,874) | $(236,595) | | Treasury Stock | $(30,475) | $(36,584) | | Additional Paid-in Capital | $1,777,118 | $1,781,307 | - Total equity decreased by **$32.87 million** (**2.1%**) from December 31, 2024, to June 30, 2025[34](index=34&type=chunk) - Dividends declared for the six months ended June 30, 2025, totaled **$58.825 million**, contributing to the increase in retained earnings deficit[34](index=34&type=chunk) [Consolidated Statements of Cash Flows](index=15&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section reports the company's cash inflows and outflows from operating, investing, and financing activities, providing insights into liquidity and financial health | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by (used in) operating activities | $15,318 | $25,031 | | Net cash provided by (used in) investing activities | $(779,357) | $586,720 | | Net cash provided by (used in) financing activities | $(433,673) | $(480,213) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(1,197,712) | $131,538 | | Cash, cash equivalents and restricted cash at end of period | $148,327 | $1,207,480 | - Net cash used in investing activities significantly increased to **$(779.4) million** for the six months ended June 30, 2025, compared to **$586.7 million** provided in the same period of 2024[40](index=40&type=chunk) - Cash, cash equivalents, and restricted cash at period end decreased by **87.7%** year-over-year, primarily driven by investing activities[41](index=41&type=chunk) [Notes to Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes supporting the consolidated financial statements, covering organization, accounting policies, and specific financial instrument details [Note 1. Organization and Operations](index=17&type=section&id=Note%201.%20Organization%20and%20Operations) This note describes Ladder Capital Corp's business as an internally-managed U.S. REIT specializing in commercial real estate finance and its consolidation structure - Ladder Capital Corp is an **investment grade-rated, internally-managed U.S. REIT** specializing in commercial real estate finance[44](index=44&type=chunk) - The Company's investment activities include originating senior first mortgage loans, owning and operating commercial real estate, and investing in investment grade securities[44](index=44&type=chunk) - Ladder Capital Corp consolidates the financial results of Ladder Capital Finance Holdings LLLP (LCFH) and its subsidiaries, in which it holds a **100% economic interest and control**[44](index=44&type=chunk) [Note 2. Significant Accounting Policies](index=17&type=section&id=Note%202.%20Significant%20Accounting%20Policies) This note details the accounting principles and methods used in preparing the consolidated financial statements, including GAAP compliance and specific accounting models - The consolidated financial statements are prepared in accordance with GAAP and include accounts of majority-owned/controlled subsidiaries and variable interest entities (VIEs) where the Company is the primary beneficiary[46](index=46&type=chunk)[47](index=47&type=chunk) - The Company uses a **Current Expected Credit Loss (CECL) model** for estimating loan loss provisions, considering possible credit losses over the life of an instrument, with both portfolio-based and asset-specific components[50](index=50&type=chunk) - The Company adopted ASU 2023-07 (Segment Reporting) in Q4 2024, which **did not have a material impact**, and does not expect a material impact from pending ASU 2023-09 (Income Taxes) and ASU 2024-03 (Disaggregation of Income Statement Expenses)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) [Note 3. Mortgage Loan Receivables](index=21&type=section&id=Note%203.%20Mortgage%20Loan%20Receivables) This note provides details on the company's mortgage loan portfolio, including held-for-investment and held-for-sale categories, and the allowance for credit losses | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Mortgage loan receivables held for investment, net | $1,541,544 | $1,538,999 | | Mortgage loan receivables held for sale | $28,347 | $26,898 | | Allowance for credit losses | $(52,166) | $(52,323) | | Non-accrual loans (amortized cost basis) | $162,264 | $76,875 | - The amortized cost basis of non-accrual loans more than doubled from **$76.9 million** at December 31, 2024, to **$162.3 million** at June 30, 2025[82](index=82&type=chunk) - The Company recorded a release of loan loss reserves of **$0.1 million** for the six months ended June 30, 2025, compared to a provision of **$10.8 million** for the same period in 2024, primarily due to a decrease in portfolio size offset by macroeconomic uncertainty[85](index=85&type=chunk)[86](index=86&type=chunk) [Note 4. Securities](index=24&type=section&id=Note%204.%20Securities) This note describes the company's investment in securities, primarily AAA-rated real estate securities, and reports realized and unrealized gains or losses | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Total Securities (Carrying Value) | $1,966,471 | $1,080,839 | | CMBS (Carrying Value) | $1,957,762 | $1,058,874 | | Total Debt Securities (Carrying Value) | $1,960,103 | $1,062,284 | | Realized gain (loss) on securities (6 months) | $1,029 | $75 | | Unrealized gain (loss) on securities (6 months) | $790 | $(27) | - The Company's securities portfolio, primarily AAA-rated real estate securities, increased significantly by **82.0%** in carrying value from December 31, 2024, to June 30, 2025[90](index=90&type=chunk)[93](index=93&type=chunk) - Realized gains on securities for the six months ended June 30, 2025, were **$1.029 million**, a substantial increase from **$0.08 million** in the prior year period[98](index=98&type=chunk) [Note 5. Real Estate and Related Lease Intangibles, Net](index=27&type=section&id=Note%205.%20Real%20Estate%20and%20Related%20Lease%20Intangibles,%20Net) This note details the company's real estate holdings, including net leased properties and diversified commercial real estate, along with related lease intangibles | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Real estate and related lease intangibles, net | $690,186 | $670,803 | | Unencumbered real estate | $266,800 | $213,400 | | Total real estate depreciation and amortization expense (6 months) | $15,379 | $16,715 | | Net intangible assets | $52,991 | $50,618 | - The Company acquired an office portfolio in Carmel, IN for **$42.4 million** via foreclosure in April 2025[109](index=109&type=chunk)[110](index=110&type=chunk) - A retail property in Jenks, OK was sold in March 2025 for **$13.079 million**, resulting in a realized gain of **$3.807 million**[113](index=113&type=chunk) [Note 6. Debt Obligations, Net](index=30&type=section&id=Note%206.%20Debt%20Obligations,%20Net) This note outlines the company's various debt instruments, including senior unsecured notes, repurchase facilities, and mortgage debt, and their outstanding balances | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Total Debt Obligations, net | $2,783,166 | $3,135,617 | | Senior Unsecured Notes (Outstanding Principal) | $2,018,458 | $2,041,557 | | Loan Repurchase Facilities (Outstanding Principal) | $62,738 | $62,738 | | Securities Repurchases (Outstanding Principal) | $294,428 | — | | Mortgage Debt (Outstanding Principal) | $419,172 | $443,733 | - Total debt obligations, net, decreased by **11.3%** from December 31, 2024, to June 30, 2025[115](index=115&type=chunk) - Subsequent to quarter end, the Company issued **$500 million** of **5.50%** senior notes due 2030 and redeemed in full the **$285.0 million** 2025 Notes[120](index=120&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) - The Company redeemed all outstanding obligations of LCCM 2021-FL2 (February 2025) and LCCM 2021-FL3 (June 2025), resulting in **no CLO debt** on the consolidated balance sheet as of June 30, 2025[124](index=124&type=chunk)[125](index=125&type=chunk)[355](index=355&type=chunk) [Note 7. Derivative Instruments](index=35&type=section&id=Note%207.%20Derivative%20Instruments) This note explains the company's use of derivative instruments, such as interest rate caps and futures, for managing market risk and fair value variability | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Total Derivatives (Fair Value Asset) | $247 | $437 | | Total Derivatives (Notional) | $115,000 | $90,000 | | Net result from derivative transactions (6 months) | $1,849 | $4,637 | - The Company primarily uses derivative instruments (caps and futures) to manage fair value variability of fixed rate assets and overall portfolio market risk[140](index=140&type=chunk) - Net result from derivative transactions for the six months ended June 30, 2025, was **$1.849 million**, a decrease from **$4.637 million** in the same period of 2024[142](index=142&type=chunk)[143](index=143&type=chunk) [Note 8. Offsetting Assets and Liabilities](index=37&type=section&id=Note%208.%20Offsetting%20Assets%20and%20Liabilities) This note clarifies the company's accounting policy for presenting derivative assets and liabilities on a gross basis on the consolidated balance sheets - The Company's accounting policy is to record derivative asset and liability positions on a gross basis, not net, on the consolidated balance sheets[147](index=147&type=chunk)[152](index=152&type=chunk) - As of June 30, 2025, gross derivative assets were **$0.25 million**, with **$0.64 million** in cash collateral posted, resulting in a net amount of **$(0.39) million**[148](index=148&type=chunk) - Gross repurchase agreement liabilities were **$62.738 million** as of June 30, 2025, with an equal amount of financial instruments collateral[149](index=149&type=chunk) [Note 9. Equity](index=38&type=section&id=Note%209.%20Equity) This note details the company's equity structure, including common stock, share repurchase programs, dividends declared, and accumulated other comprehensive income - The board of directors authorized the repurchase of **$100.0 million** of Class A common stock on April 23, 2025, with **$93.4 million** remaining available as of June 30, 2025[153](index=153&type=chunk)[155](index=155&type=chunk) - Dividends declared per share for Class A common stock were **$0.23** for both March 14, 2025, and June 13, 2025, totaling **$0.46** for the six months ended June 30, 2025[158](index=158&type=chunk) - Accumulated Other Comprehensive Income (Loss) decreased from **$(4.87) million** at the beginning of the period to **$(5.64) million** at June 30, 2025, primarily due to unrealized losses on available-for-sale securities[159](index=159&type=chunk) [Note 10. Noncontrolling Interests](index=39&type=section&id=Note%2010.%20Noncontrolling%20Interests) This note describes the company's consolidated ventures with noncontrolling investors, detailing their ownership percentages and the assets held by these ventures - As of June 30, 2025, the Company consolidates two ventures with noncontrolling investors owning between **10.0%** and **25.0%** of such ventures[160](index=160&type=chunk) - These ventures hold a 40-building student housing portfolio in Isla Vista, CA (book value **$77.3 million**) and a single-tenant office building in Oakland County, MI (book value **$8.5 million**)[160](index=160&type=chunk) [Note 11. Earnings Per Share](index=40&type=section&id=Note%2011.%20Earnings%20Per%20Share) This note provides a breakdown of basic and diluted earnings per share calculations, including the weighted average shares outstanding for various periods | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $0.14 | $0.26 | $0.23 | $0.39 | | Diluted EPS | $0.14 | $0.26 | $0.23 | $0.39 | | Basic Weighted Average Shares Outstanding | 125,796,410 | 125,730,765 | 125,713,143 | 125,523,265 | | Diluted Weighted Average Shares Outstanding | 126,204,424 | 125,839,500 | 126,242,515 | 125,679,937 | - Basic and diluted EPS for the three months ended June 30, 2025, decreased by **46.2%** to **$0.14** from **$0.26** in the prior year period[161](index=161&type=chunk) - For the six months ended June 30, 2025, basic and diluted EPS decreased by **41.0%** to **$0.23** from **$0.39** in the prior year period[161](index=161&type=chunk) [Note 12. Stock-Based and Other Compensation Plans](index=41&type=section&id=Note%2012.%20Stock-Based%20and%20Other%20Compensation%20Plans) This note details the company's stock-based compensation plans, including expense recognition, unrecognized costs, and shares available for future awards | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Stock-based compensation expense | $2,996 | $3,117 | $14,211 | $13,415 | - Total unrecognized compensation cost related to share-based awards was **$16.0 million** as of June 30, 2025, with a weighted average remaining vesting period of **25.9 months**[164](index=164&type=chunk) - The 2023 Omnibus Incentive Plan, approved by stockholders, superseded the 2014 plan, making **3,000,000** new shares available for issuance, plus **10,253,867** shares remaining from the prior plan[166](index=166&type=chunk)[167](index=167&type=chunk) [Note 13. Fair Value of Financial Instruments](index=44&type=section&id=Note%2013.%20Fair%20Value%20of%20Financial%20Instruments) This note explains the methodologies and inputs used to determine the fair value of financial instruments, categorizing them into a three-level hierarchy - Fair value is based on internal models, market quotations, broker/counterparty quotations, or pricing services, which are subject to significant variability based on market conditions[183](index=183&type=chunk) - CMBS, CMBS interest-only, GNMA interest-only, and Agency securities are measured at fair value on a recurring basis, with unrealized gains/losses recorded in other comprehensive income or current period earnings[186](index=186&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - The Company did not have any Level 3 financial instruments as of June 30, 2025, or December 31, 2024, indicating high observability of inputs used in fair value measurements[205](index=205&type=chunk) [Note 14. Income Taxes](index=48&type=section&id=Note%2014.%20Income%20Taxes) This note outlines the company's income tax status as a REIT, tax expenses for its TRSs, and the deferred tax assets and liabilities - The Company elected to be taxed as a REIT, **generally exempting its income from U.S. federal, state, and local corporate income taxes**, except for its Taxable REIT Subsidiaries (TRSs)[207](index=207&type=chunk)[208](index=208&type=chunk) - Current income tax expense for TRSs was **$1.0 million** for the six months ended June 30, 2025, an increase from **$0.8 million** in the prior year period[208](index=208&type=chunk) - Net deferred tax assets (liabilities) were **$(6.4) million** as of June 30, 2025, compared to **$(4.6) million** as of December 31, 2024[209](index=209&type=chunk) [Note 15. Related Party Transactions](index=48&type=section&id=Note%2015.%20Related%20Party%20Transactions) This note discloses any material transactions or relationships between the company and its related parties - The Company has **no material related party relationships to disclose**[213](index=213&type=chunk) [Note 16. Commitments and Contingencies](index=48&type=section&id=Note%2016.%20Commitments%20and%20Contingencies) This note details the company's contractual obligations, including lease liabilities, unfunded loan commitments, and potential contingent liabilities - As of June 30, 2025, the Company had a **$16.1 million** lease liability and a **$15.0 million** right-of-use asset related to its operating lease of office space[214](index=214&type=chunk) - Unfunded commitments on mortgage loan receivables held for investment totaled **$47.9 million** as of June 30, 2025, with **74%** requiring specific 'good news' events[218](index=218&type=chunk) - Operating expenses related to operating leases were **$1.9 million** for the six months ended June 30, 2025[215](index=215&type=chunk) [Note 17. Segment Reporting](index=50&type=section&id=Note%2017.%20Segment%20Reporting) This note provides financial information for the company's operating segments: Loans, Securities, and Real Estate, detailing their net interest income and net income - The Company operates in three reportable segments: **Loans, Securities, and Real Estate**, with performance measured by net income (loss)[221](index=221&type=chunk) Segment (6 months ended June 30, 2025) | Segment (6 months ended June 30, 2025) | Net interest income (in thousands) | Segment net income (loss) (in thousands) | | :------------------------------------- | :------------------------------- | :------------------------------------- | | Loans | $56,842 | $67,496 | | Securities | $42,193 | $44,615 | | Real Estate | $(13,046) | $2,992 | - Corporate/Other segment includes senior unsecured notes of **$2.0 billion** at both June 30, 2025, and December 31, 2024[226](index=226&type=chunk) [Note 18. Subsequent Events](index=53&type=section&id=Note%2018.%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period but before the financial statements were issued, such as debt issuances or redemptions - Subsequent to quarter end, the Company issued **$500 million** in aggregate principal amount of **5.50%** senior notes due 2030[227](index=227&type=chunk) - The Company also redeemed in full the 2025 Notes, which had an outstanding principal amount of **$285.0 million** as of June 30, 2025[228](index=228&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and liquidity, offering a detailed analysis of performance across its loan, securities, and real estate segments, as well as its financing strategies and critical accounting estimates [Overview](index=54&type=section&id=Overview) This section provides a high-level summary of Ladder Capital's business as an investment grade-rated REIT specializing in commercial real estate finance - Ladder Capital is an **investment grade-rated, internally-managed REIT**, a leader in commercial real estate finance, focusing on senior secured assets[231](index=231&type=chunk) - Since inception (October 2008) through June 30, 2025, the Company originated **$30.4 billion** of commercial real estate loans, acquired **$15.2 billion** of investment grade-rated securities, and **$2.1 billion** of net leased and other real estate assets[232](index=232&type=chunk) - The Company has sold **$16.9 billion** of conduit loans into 75 CMBS securitizations, making it **one of the largest non-bank contributors in the U.S.**[233](index=233&type=chunk) [Our Businesses](index=55&type=section&id=Our%20Businesses) This section details the composition of the company's investment portfolio, including mortgage loans, real estate, and CMBS investments - The Company's investment portfolio as of June 30, 2025, includes **$1.6 billion** in balance sheet first mortgage loans, **$7.3 million** in mezzanine loans, **$28.3 million** in conduit first mortgage loans, **$592.0 million** in net leased properties, **$344.0 million** in diversified commercial real estate, and **$2.0 billion** in CMBS investments[236](index=236&type=chunk)[241](index=241&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk)[255](index=255&type=chunk) - The balance sheet first mortgage loan portfolio consists of 52 loans with a weighted average loan-to-value ratio of **67.1%** at origination[241](index=241&type=chunk)[242](index=242&type=chunk) - The real estate portfolio includes **149** single tenant net leased properties (**100% leased**, **7.2 years** weighted average remaining lease term) and **55** diversified commercial real estate properties (**98% rent collected** in Q2 2025)[249](index=249&type=chunk)[250](index=250&type=chunk) [Our Financing Strategies](index=60&type=section&id=Our%20Financing%20Strategies) This section describes the company's approach to funding its operations, including senior unsecured notes, credit facilities, and debt-to-equity targets - As of June 30, 2025, the Company had **$2.0 billion** of senior unsecured notes outstanding and maintained a **$3.6 billion** pool of unencumbered assets[262](index=262&type=chunk)[263](index=263&type=chunk) - The Revolving Credit Facility's maximum borrowing amount was increased to **$850.0 million**, with **no outstanding borrowings** as of June 30, 2025[264](index=264&type=chunk) - The Company **redeemed all outstanding CLO debt** (LCCM 2021-FL2 and LCCM 2021-FL3) in February and June 2025, respectively[266](index=266&type=chunk)[267](index=267&type=chunk) - The Company generally seeks to maintain a debt-to-equity ratio of approximately **3.0:1.0** or below and was in **compliance with all financial covenants** as of June 30, 2025[273](index=273&type=chunk)[278](index=278&type=chunk) [Results of Operations](index=63&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing net interest income, net income, and key expenses across different reporting periods Consolidated Results of Operations (QoQ Comparison) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Difference | | :---------------------------------------- | :------------------------------- | :-------------------------------- | :--------- | | Net interest income | $21,530 | $20,329 | $1,201 | | Net income (loss) | $17,108 | $11,555 | $5,553 | | Real estate operating income | $25,775 | $21,773 | $4,002 | | Compensation and employee benefits | $11,561 | $18,761 | $(7,200) | Consolidated Results of Operations (YoY Comparison) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Difference | | :---------------------------------------- | :----------------------------- | :----------------------------- | :--------- | | Net interest income | $41,859 | $71,457 | $(29,598) | | Net income (loss) | $28,664 | $48,553 | $(19,889) | | Provision for (release of) loan loss reserves, net | $(123) | $10,823 | $(10,946) | | Compensation and employee benefits | $30,322 | $34,510 | $(4,188) | - Net interest income **increased quarter-over-quarter** due to increased income from securities and lower interest expense from CLO payoffs, but **decreased year-over-year** primarily due to net payoffs in the loan portfolio[285](index=285&type=chunk)[304](index=304&type=chunk) [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its financial obligations, detailing its liquidity sources, cash flow, and unencumbered assets - The Company maintains diverse liquidity sources, including cash, cash generated from operations, debt financing, principal repayments on investments, and proceeds from asset sales[327](index=327&type=chunk) - Cash, cash equivalents, and restricted cash decreased by **$(1.2) billion** for the six months ended June 30, 2025, primarily due to cash used in investing activities[335](index=335&type=chunk) - As of June 30, 2025, the Company held **$3.6 billion** in unencumbered assets, including **$134.9 million** in cash, **$1.5 billion** in loans, **$1.6 billion** in securities, and **$266.8 million** in real estate[342](index=342&type=chunk) Contractual Obligations as of June 30, 2025 (in thousands) | Contractual Obligations | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Total | | :---------------------- | :--------------- | :--------- | :--------- | :---------------- | :--------- | | Secured financings | $402,479 | $227,047 | $59,068 | $87,744 | $776,338 | | Senior unsecured notes | $285,049 | $599,490 | $633,919 | $500,000 | $2,018,458 | | Interest payable | $112,489 | $167,870 | $92,681 | $58,805 | $431,845 | | Other funding obligations | $349 | $12,180 | — | — | $12,529 | | Operating lease obligations | $3,469 | $4,590 | $4,789 | $7,646 | $20,494 | | Total | $803,835 | $1,011,177 | $790,457 | $654,195 | $3,259,664 | [Critical Accounting Estimates](index=79&type=section&id=Critical%20Accounting%20Estimates) This section highlights the accounting estimates that require significant judgment, such as allowance for loan losses, real estate valuation, and fair value measurements - Critical accounting estimates include Allowance for Loan Losses (CECL model), Acquisition of Real Estate, Identified Intangible Assets and Liabilities, Impairment or Disposal of Long-lived Assets, and Fair Value of Assets and Liabilities[380](index=380&type=chunk)[381](index=381&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk)[394](index=394&type=chunk) - The CECL model for loan losses requires significant judgment, considering possible credit losses over the life of an instrument using a forward-looking econometric CRE loss forecasting tool[381](index=381&type=chunk) - **No impairments of real estate were recorded** for the six months ended June 30, 2025, or June 30, 2024[393](index=393&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=82&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides a reconciliation of non-GAAP financial measures, such as distributable earnings, to their most directly comparable GAAP measures - The Company uses **'distributable earnings'** as a **non-GAAP financial measure** to evaluate operating performance and dividend-paying ability, excluding certain non-cash expenses and unrealized results[396](index=396&type=chunk)[397](index=397&type=chunk) Distributable Earnings (in thousands) | Metric | June 30, 2025 | March 31, 2025 | | :---------------------- | :------------ | :------------- | | Income (loss) before taxes | $20,822 | $10,717 | | Distributable earnings | $30,925 | $25,452 | - Distributable earnings increased to **$30.925 million** for the three months ended June 30, 2025, from **$25.452 million** for the three months ended March 31, 2025[403](index=403&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=85&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the company's exposure to various market risks, including interest rate risk, market risk, liquidity risk, credit risk, credit spread risk, risks related to real estate, covenant risk, diversification risk, and regulatory risk, and outlines strategies for mitigation - The Company is exposed to **interest rate risk**, which directly impacts net income; it mitigates this risk using **hedging instruments, primarily interest rate futures agreements**[409](index=409&type=chunk) Projected Change in Net Income and Portfolio Value (12 months commencing June 30, 2025, in thousands) | Change in interest rate | Projected change in net income | Projected change in portfolio value | | :---------------------- | :----------------------------- | :---------------------------------- | | Decrease by 1.00% | $(27,526) | $(186) | | Increase by 1.00% | $28,758 | $205 | - The Company manages credit risk through **deep credit fundamental analyses and ongoing asset management**, with a portfolio weighted average loan-to-value of **66.9%** as of June 30, 2025[417](index=417&type=chunk)[418](index=418&type=chunk) - Regulatory changes include Tuebor Captive Insurance Company LLC **no longer being licensed as a captive insurer** (effective January 31, 2025) and LCAM redeeming both CLO Trusts, **eliminating its advisory clients and regulatory assets under management** as of June 30, 2025[424](index=424&type=chunk)[425](index=425&type=chunk) [Item 4. Controls and Procedures](index=88&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, and states that there were no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's **disclosure controls and procedures were effective** as of June 30, 2025, providing reasonable assurance for timely and accurate reporting[429](index=429&type=chunk) - There were **no changes in the Company's internal control over financial reporting** during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[430](index=430&type=chunk) [Part II - Other Information](index=89&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=89&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, enforcement actions, or litigation related to regulatory compliance matters - The Company is **not presently a party to any material enforcement proceedings, litigation related to regulatory compliance matters, or any other type of material litigation matters**[433](index=433&type=chunk) [Item 1A. Risk Factors](index=89&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been **no material changes during the three months ended June 30, 2025, to the risk factors** in Item 1A in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[434](index=434&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=89&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities and details the company's Class A common stock repurchase activity for the three months ended June 30, 2025 - There were **no unregistered sales of equity securities** during the period[435](index=435&type=chunk) Share Repurchase Activity (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--------------------------- | :------------------------------- | :--------------------------- | | April 1, 2025 - April 30, 2025 | — | — | | May 1, 2025 - May 31, 2025 | 401,396 | $10.34 | | June 1, 2025 - June 30, 2025 | 234,094 | $10.49 | | Total | 635,490 | $10.40 | - As of June 30, 2025, **$93.393 million** remained available for repurchase under the board's authorization of **$100.0 million**[436](index=436&type=chunk) [Item 3. Defaults Upon Senior Securities](index=89&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were **no defaults upon senior securities** during the period[437](index=437&type=chunk) [Item 4. Mine Safety Disclosures](index=89&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is **not applicable to the Company**[438](index=438&type=chunk) [Item 5. Other Information](index=89&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - **No director or officer of the Company adopted, modified, or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement'** during the three months ended June 30, 2025[439](index=439&type=chunk) [Item 6. Exhibits](index=90&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including indentures, credit agreements, certifications, and XBRL documents - Exhibits include the **Indenture dated June 23, 2025, and the First Supplemental Indenture dated July 3, 2025**[441](index=441&type=chunk) - The **Amended Credit and Guaranty Agreement dated December 20, 2024, is incorporated by reference**[441](index=441&type=chunk) - **Certifications by Brian Harris (CEO) and Paul J. Miceli (CFO) pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are furnished**[441](index=441&type=chunk) [Signatures](index=91&type=section&id=SIGNATURES) - The report was **signed on July 25, 2025, by Brian Harris, Chief Executive Officer, and Paul J. Miceli, Chief Financial Officer**, on behalf of Ladder Capital Corp[443](index=443&type=chunk)

Financial Data and Key Metrics Changes - In Q2 2025, the company generated distributable earnings of $30.9 million or $0.23 per share, achieving a return on equity of 7.7% with adjusted leverage of 1.6 times [4][11] - The company achieved investment grade ratings from Moody's and Fitch, marking a significant milestone in its history [4][11] - The company had $1 billion in liquidity as of June 30, 2025, including an undrawn $850 million unsecured revolving credit facility [6][12] Business Line Data and Key Metrics Changes - The securities portfolio totaled $2 billion, up 82% from the end of the previous year, with a weighted average yield of 5.9% [16] - The loan portfolio stood at $1.6 billion with a weighted average yield of approximately 9%, and five loans on nonaccrual totaling $162.3 million [15][16] - The real estate portfolio generated $15.1 million in net operating income during Q2 2025, primarily consisting of net lease properties with long-term leases [8][16] Market Data and Key Metrics Changes - The company successfully issued a $500 million five-year investment grade unsecured bond at a fixed rate of 5.5%, which was oversubscribed by 5.5 times [5][11] - The company noted that the cost of debt capital has begun to decrease due to its investment grade status, with spreads tightening on new bond issuances [9][18] Company Strategy and Development Direction - The company aims to increase its stock price and position itself as the only current investment grade mortgage REIT in the country, focusing on a senior secured investment strategy [19][20] - The company plans to maintain a conservative balance sheet while deploying capital into new higher-yielding investments [10][22] - The management emphasized a focus on capital preservation and attractive dividend payments, with intentions to grow dividends in the future [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong liquidity and a disciplined approach to credit as key factors for capitalizing on investment opportunities [23] - The company anticipates continued tightening of credit spreads and a favorable market environment for investment-grade issuers [18][23] Other Important Information - The company repurchased $6.6 million of common stock during the quarter, with $93.4 million remaining under its stock repurchase program [14] - The company has a CECL reserve of $52 million, which is deemed adequate to cover potential losses in the loan portfolio [15] Q&A Session Summary Question: Thoughts on the securities portfolio and selling activity - Management indicated that the securities portfolio is performing well, and they are selectively selling as they transition from securities to loans [25][27] Question: Convertibility of the loan pipeline into the book - Management noted a dip in loan origination volume but indicated that they have already written more loans in the third quarter than in the entire second quarter [29][30] Question: Impact of investment grade rating on investment opportunities - Management stated that the investment grade rating has made investments more profitable but does not change their core investment strategy [36][37] Question: Expectations for net portfolio growth in the second half of the year - Management expects to write approximately $1 billion in loans by year-end, with a focus on acquisition loans as the market stabilizes [68][73]

Core Insights - Ladder Capital (LADR) reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, but down from $0.31 per share a year ago [1][2] - The company achieved a revenue of $56.26 million for the quarter, surpassing the Zacks Consensus Estimate by 2.48%, but down from $76.72 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +4.55%, following a previous quarter where the company reported earnings of $0.20 per share against an expectation of $0.22, resulting in a surprise of -9.09% [2] - Over the last four quarters, Ladder Capital has exceeded consensus EPS estimates three times [2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $69.4 million, and for the current fiscal year, it is $0.97 on revenues of $255.1 million [8] - The Zacks Rank for Ladder Capital is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [7] Industry Context - The REIT and Equity Trust industry, to which Ladder Capital belongs, is currently ranked in the top 20% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Financial Highlights - New investment activity reached over $1 billion[7] - Investment assets and unrestricted cash totaled $4.7 billion, including $1.6 billion in senior secured first mortgage loans[8] - Total liquidity was approximately $1 billion, which included an $850 million undrawn unsecured corporate revolver[8] - The company issued $500 million in inaugural investment grade unsecured bonds[8] Portfolio Composition - First mortgage loans accounted for $1.6 billion, or 35%, of the total investment portfolio[11] - CRE equity represented $936 million, or 20%, of the portfolio[11] - Securities comprised $2 billion, or 42%, of the portfolio[11] - 82% of the company's assets are senior secured and/or investment grade rated[11] Key Metrics - Distributable earnings were $30.9 million, resulting in distributable EPS of $0.23 and a distributable ROAE (after-tax) of 7.7%[11] - The company declared a Q2 2025 cash dividend of $0.23 per share, representing an 8.3% annual dividend yield[11] - Unencumbered assets totaled $3.7 billion, which is 83% of total assets[11] - The adjusted leverage ratio was 1.6x, or 1.5x net of cash[11] - 74% of total debt was comprised of unsecured corporate bonds[11]

[Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Highlights) Overview of Ladder Capital Corp's Q2 2025 financial performance and strategic achievements [Q2 2025 Financial Performance](index=1&type=section&id=Q2%202025%20Financial%20Performance) Ladder Capital Corp reported GAAP income before taxes of $20.8 million and diluted EPS of $0.14 for Q2 2025, with distributable earnings reaching $30.9 million and distributable EPS at $0.23 Q2 2025 Financial Performance Summary | Metric | Q2 2025 (Millions) | Q1 2025 (Millions) | Change (QoQ) | Change (%) | | :---------------------- | :----------------- | :----------------- | :----------- | :--------- | | GAAP Income Before Taxes| $20.8 | $10.7 | $10.1 | 94.4% | | Diluted EPS | $0.14 | $0.09 | $0.05 | 55.6% | | Distributable Earnings | $30.9 | $25.5 | $5.4 | 21.2% | | Distributable EPS | $0.23 | $0.20 | $0.03 | 15.0% | [CEO Commentary & Strategic Achievements](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Achievements) The CEO highlighted the achievement of investment grade status and the completion of an inaugural unsecured bond offering, positioning Ladder as the only investment grade mortgage REIT, strengthening its foundation, reducing capital costs, and enabling new investment opportunities - Achieved **investment grade status** and completed an inaugural unsecured bond offering in the investment grade market[2](index=2&type=chunk) - Positioned as the only **investment grade mortgage REIT**, anchored by a diversified, highly liquid, senior secured asset base and a predominantly unsecured capital structure[2](index=2&type=chunk) - Reduced cost of capital, enabling deployment into new investment opportunities, expansion of investor base, and delivery of attractive, risk-adjusted returns[2](index=2&type=chunk) [Company Overview](index=1&type=section&id=Company%20Overview) This section provides an overview of Ladder Capital's business, investment strategy, and corporate governance [About Ladder Capital](index=1&type=section&id=About%20Ladder%20Capital) Ladder Capital is a publicly listed, investment grade-rated commercial real estate finance company with a diversified, nationwide platform, focusing on tailored capital solutions to the middle market to preserve shareholder capital and generate attractive, risk-adjusted returns - Ladder is a publicly listed, **investment grade-rated commercial real estate finance company** with a diversified, nationwide platform[5](index=5&type=chunk) - Delivers tailored capital solutions across the commercial real estate landscape, with a focus on the **middle market**[5](index=5&type=chunk) - Investment objective is to preserve and protect shareholder capital while generating attractive, **risk-adjusted returns**[5](index=5&type=chunk) [Business Model and Investment Strategy](index=1&type=section&id=Business%20Model%20and%20Investment%20Strategy) Since its founding in 2008, Ladder has deployed over $48 billion of capital, primarily originating fixed and floating rate first mortgage loans collateralized by commercial property types, and also owns net leased real estate and invests in investment grade securities - Deployed more than **$48 billion of capital** across the real estate capital stack since 2008[6](index=6&type=chunk) - Primary business is originating fixed and floating rate **first mortgage loans** collateralized by all major commercial property types[6](index=6&type=chunk) - Owns and operates predominantly net leased, income-producing real estate and invests in **investment grade securities** secured by first mortgage loans on commercial real estate[6](index=6&type=chunk) [Corporate Governance and Capital Structure](index=1&type=section&id=Corporate%20Governance%20and%20Capital%20Structure) Ladder is internally managed by a seasoned team with over 11% insider ownership, ensuring strong alignment with stakeholders, and maintains a conservative capital structure with investment grade credit ratings of Baa3 from Moody's and BBB- from Fitch, both with stable outlooks - Internally managed by a seasoned management team with over **11% insider ownership**, ensuring strong alignment with stakeholders[7](index=7&type=chunk) - Maintains a conservative and durable capital structure, reflected in **investment grade credit ratings** of Baa3 from Moody's Ratings and BBB- from Fitch Ratings, both with stable outlooks[7](index=7&type=chunk) [Corporate Information](index=1&type=section&id=Corporate%20Information) This section outlines important disclaimers regarding forward-looking statements and details for investor relations [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section provides a disclaimer that certain statements are forward-looking, based on management's current expectations, and involve risks and uncertainties, with actual results potentially differing materially and the company disclaiming any obligation to update these statements - Statements are based on management's current opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or results[9](index=9&type=chunk) - Forward-looking statements are predictions, not historical fact, and involve certain risks and uncertainties; actual results could differ materially[9](index=9&type=chunk) - Ladder expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements[9](index=9&type=chunk) [Investor Relations & Conference Call](index=1&type=section&id=Investor%20Relations%20%26%20Conference%20Call) Details for investor contact and the Q2 2025 earnings conference call are provided, including dial-in information, webcast link, and replay access - **Investor Contact:** - Phone: (917) 369-3207 - Email: investor.relations@laddercapital.com[10](index=10&type=chunk) - **Q2 2025 Earnings Conference Call:** - Date: Thursday, July 24, 2025 - Time: 10:00 a.m. Eastern Time - Domestic Dial-in: (877) 407-4018 - International Dial-in: (201) 689-8471 - Webcast: ir.laddercapital.com/event - Audio replay available until August 7, 2025[4](index=4&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents Ladder Capital's consolidated balance sheets and statements of income for the specified periods [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show a decrease in total assets and liabilities from December 31, 2024, to June 30, 2025, with cash and cash equivalents significantly decreasing while securities held increased substantially Consolidated Balance Sheets Summary | Item | June 30, 2025 ($ Thousands) | December 31, 2024 ($ Thousands) | Change ($ Thousands) | Change (%) | | :------------------------------------------ | :-------------------------- | :------------------------------ | :------------------- | :--------- | | **Assets** | | | | | | Cash and cash equivalents | 134,939 | 1,323,481 | (1,188,542) | -89.8% | | Securities | 1,966,471 | 1,080,839 | 885,632 | 81.9% | | Total assets | 4,457,474 | 4,845,073 | (387,599) | -8.0% | | **Liabilities** | | | | | | Debt obligations, net | 2,783,166 | 3,135,617 | (352,451) | -11.2% | | Total liabilities | 2,957,404 | 3,312,134 | (354,730) | -10.7% | | **Equity** | | | | | | Total shareholders' equity | 1,502,616 | 1,535,030 | (32,414) | -2.1% | | Total liabilities and equity | 4,457,474 | 4,845,073 | (387,599) | -8.0% | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) For the three months ended June 30, 2025, Ladder Capital reported a significant increase in income before taxes and net income attributable to Class A common shareholders compared to the previous quarter, driven by higher net interest income, real estate operating income, and increased net results from mortgage loan receivables held for sale, alongside a decrease in total costs and expenses Consolidated Statements of Income Summary | Item | Three Months Ended June 30, 2025 ($ Thousands) | Three Months Ended March 31, 2025 ($ Thousands) | Change ($ Thousands) | Change (%) | | :-------------------------------------------------- | :--------------------------------------------- | :---------------------------------------------- | :------------------- | :--------- | | Net interest income | 21,530 | 20,329 | 1,201 | 5.9% | | Real estate operating income | 25,775 | 21,773 | 4,002 | 18.4% | | Net result from mortgage loan receivables held for sale | 4,914 | 162 | 4,752 | 2933.3% | | Total other income (loss) | 34,731 | 30,874 | 3,857 | 12.5% | | Total costs and expenses | 35,481 | 40,567 | (5,086) | -12.5% | | Income (loss) before taxes | 20,822 | 10,717 | 10,105 | 94.3% | | Net income (loss) attributable to Class A common shareholders | 17,328 | 11,775 | 5,553 | 47.2% | | Diluted EPS | 0.14 | 0.09 | 0.05 | 55.6% | | Dividends per share of Class A common stock | 0.23 | 0.23 | 0 | 0.0% | [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures, including distributable earnings and EPS, and outlines their limitations [Definition and Purpose](index=5&type=section&id=Definition%20and%20Purpose) Ladder Capital utilizes non-GAAP financial measures such as distributable earnings, distributable EPS, and after-tax distributable ROAE to supplement GAAP measures, aiming to provide a more relevant and consistent comparison of operating performance and dividend-paying ability by excluding certain non-cash expenses, unrealized results, and timing differences - Distributable earnings, distributable EPS, and after-tax distributable ROAE are non-GAAP financial measures used as supplemental measures of operating performance[16](index=16&type=chunk) - These measures assist investors in comparing operating performance and dividend-paying ability by excluding non-cash expenses, unrealized results, and timing differences[16](index=16&type=chunk) - Management uses these metrics to evaluate earnings, and the board of directors considers distributable earnings in determining quarterly dividends[16](index=16&type=chunk) [Adjustments to GAAP Measures](index=5&type=section&id=Adjustments%20to%20GAAP%20Measures) Distributable earnings are derived from GAAP income before taxes by applying several adjustments that primarily address non-cash items, unrealized gains/losses, and timing differences related to real estate depreciation, derivative transactions, loan sales, securities valuation, and loan loss provisions [Real Estate Depreciation, Amortization, and Sale Adjustments](index=5&type=section&id=Real%20Estate%20Depreciation%2C%20Amortization%2C%20and%20Sale%20Adjustments) This section details adjustments made for real estate depreciation, amortization, and gains/losses on sales to derive distributable earnings - Excludes the Company's share of real estate depreciation and amortization from distributable earnings[18](index=18&type=chunk) - Adjusts GAAP gains and losses on sales of real estate to eliminate the portion derived from previously recognized depreciation and amortization[18](index=18&type=chunk) [Derivative Results and Loan Sale Activity](index=5&type=section&id=Derivative%20Results%20and%20Loan%20Sale%20Activity) This section outlines adjustments for derivative activity and economic gains or losses from inter-segment conduit loan sales - Excludes GAAP results from derivative activity until the associated mortgage loan or security is sold or paid off, or the hedge position is closed, to adjust for timing differences[19](index=19&type=chunk) - Includes adjustments for economic gains or losses related to the sale of inter-segment conduit loans when risk has substantially transferred, excluding subsequent GAAP amortization of related premium/discount[20](index=20&type=chunk) [Unrealized Gains/Losses on Securities](index=6&type=section&id=Unrealized%20Gains%2FLosses%20on%20Securities) This section describes adjustments for unrealized gains and losses on securities, including realized gains/losses and non-recoverable impairments - Excludes the impact of unrealized gains and losses associated with securities recorded at fair value from distributable earnings[21](index=21&type=chunk) - Includes realized gains and losses in connection with any disposition of securities[21](index=21&type=chunk) - Declines in fair value deemed non-recoverable impairments for GAAP are included in distributable earnings in the period such determination is made[21](index=21&type=chunk) [Provision for Loan Losses and Real Estate Impairment](index=6&type=section&id=Provision%20for%20Loan%20Losses%20and%20Real%20Estate%20Impairment) This section details adjustments for unrealized and realized provisions for loan losses and real estate impairment - Includes adjustments for unrealized provision for loan losses and real estate impairment[22](index=22&type=chunk) - Recognizes realized losses on loans and real estate in distributable earnings when the asset is sold or deemed non-recoverable[22](index=22&type=chunk) [Reconciliation of Non-GAAP Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The reconciliation table details the adjustments made to GAAP income before taxes to arrive at distributable earnings and distributable EPS for the three months ended June 30, 2025, and March 31, 2025, with key adjustments including real estate depreciation, derivative results, and non-cash stock-based compensation Reconciliation of Distributable Earnings and EPS | Item | Three Months Ended June 30, 2025 ($ Thousands) | Three Months Ended March 31, 2025 ($ Thousands) | Change ($ Thousands) | Change (%) | | :---------------------------------------------------------------- | :--------------------------------------------- | :---------------------------------------------- | :------------------- | :--------- | | Income (loss) before taxes | 20,822 | 10,717 | 10,105 | 94.3% | | Our share of real estate depreciation, amortization and real estate sale adjustments | 7,755 | 4,503 | 3,252 | 72.2% | | Adjustments for derivative results and loan sale activity | (724) | (435) | (289) | 66.4% | | Non-cash stock-based compensation | 2,996 | 11,215 | (8,219) | -73.3% | | **Distributable earnings** | **30,925** | **25,452** | **5,473** | **21.5%** | | Estimated corporate tax (expense) benefit | (1,990) | (206) | (1,784) | 866.0% | | **After-tax distributable earnings** | **28,935** | **25,246** | **3,689** | **14.6%** | | Weighted average diluted shares outstanding | 126,204 | 126,280 | (76) | -0.1% | | **Distributable EPS** | **0.23** | **0.20** | **0.03** | **15.0%** | [After-Tax Distributable Return on Average Equity (ROAE)](index=7&type=section&id=After-Tax%20Distributable%20Return%20on%20Average%20Equity%20(ROAE)) The after-tax distributable ROAE for the three months ended June 30, 2025, was 7.7%, an increase from 6.6% in the prior quarter, reflecting improved after-tax distributable earnings After-Tax Distributable ROAE Calculation | Item | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Change (Percentage Points) | | :---------------------------- | :------------------------------- | :-------------------------------- | :------------------------- | | After-tax distributable earnings | $28,935 | $25,246 | $3,689 | | Average shareholders' equity | $1,509,642 | $1,525,849 | ($16,207) | | After-tax distributable ROAE | 7.7 % | 6.6 % | 1.1 pp | [Limitations of Non-GAAP Measures](index=8&type=section&id=Limitations%20of%20Non-GAAP%20Measures) The company highlights several limitations of its non-GAAP financial measures, including that they do not reflect certain cash charges, are not necessarily indicative of cash needs, rely on estimated tax rates that may differ from actual rates, and may not be comparable to measures used by other companies, thus they should not be considered substitutes for GAAP measures or cash flows from operations - Non-GAAP measures do not reflect the impact of certain cash charges not indicative of ongoing operations and are not necessarily indicative of cash needed to fund cash needs[25](index=25&type=chunk)[28](index=28&type=chunk) - Based on a non-GAAP estimate of the effective tax rate, which may differ materially from the actual tax rate[28](index=28&type=chunk) - Other companies in the industry may calculate non-GAAP financial measures differently, limiting their usefulness as comparative measures[28](index=28&type=chunk) - Should not be considered in isolation or as a substitute for net income (loss) attributable to shareholders, earnings per share, book value per share, or as an alternative to cash flows from operations[25](index=25&type=chunk) - Distributable earnings should not be considered equivalent to REIT taxable income for determining minimum dividend distribution requirements[26](index=26&type=chunk)

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]