Ladder Capital(US:LADR)2025-02-10 11:55Financial Position - As of December 31, 2024, the company held a portfolio of 53 balance sheet first mortgage loans with an aggregate book value of $1.6 billion and a weighted average loan-to-value ratio of 66.6%[28] - The company owned 151 single tenant net leased properties with an undepreciated book value of $604.9 million, fully leased with an average age of 20 years and a weighted average remaining lease term of 7.6 years[34] - As of December 31, 2024, the estimated fair value of the company's portfolio of CMBS investments totaled $1.1 billion, with 97.6% rated investment grade[38] - The company held $1.1 billion of U.S. Treasury securities classified as cash and cash equivalents on its consolidated balance sheet as of December 31, 2024[42] - The company maintained a $3.8 billion pool of unencumbered assets, primarily consisting of first mortgage loans and unrestricted cash as of December 31, 2024[65] - As of December 31, 2024, the company's mortgage loan receivables held for investment totaled $1.6 billion, with an associated allowance for credit losses of $52.3 million[545] - The allowance for credit losses reflects the company's estimate of current expected credit losses (CECL) on mortgage loan receivables, including unfunded loan commitments, over the life of the loans[545] Investment and Loan Portfolio - The company held a portfolio of 4 mezzanine loans with an aggregate book value of $11.6 million and a weighted average loan-to-value ratio of 72.3%[29] - The company aims to maintain flexibility in its loan portfolio, allowing for contributions to CLOs, selling participation interests, or whole loans[27] - The company executed 16 new term debt agreements during the year ended December 31, 2024, with a carrying amount of $81.9 million, and total mortgage loan financings of $446.4 million[72] - The company has $1.2 billion of committed loan repurchase agreement facilities, with $62.7 million of borrowings outstanding as of December 31, 2024[69] - The company has the option to extend existing facilities, subject to customary conditions, and lenders have discretion over collateral inclusion[70] Revenue and Income - The company recorded a provision for loan loss of $13.9 million and charged off $5.0 million during the twelve months ended December 31, 2024[509] - Distributable earnings for the year ended December 31, 2024, were $153,930,000, a decrease of 8.3% from $167,727,000 in 2023[506] - The company reported a comprehensive income of $116,434 in 2024, compared to $107,657 in 2023, an increase of about 8.2%[565] - Net income attributable to Class A common shareholders increased from $101,125 in 2023 to $108,255 in 2024, representing a growth of about 7.1%[562] - Basic earnings per share rose from $0.81 in 2023 to $0.86 in 2024, an increase of about 6.2%[562] Cash Flow and Liquidity - Cash and cash equivalents increased from $1,015,678 in 2023 to $1,323,481 in 2024, a growth of approximately 30.3%[559] - The total cash, cash equivalents, and restricted cash reported in the consolidated statement of cash flows was $1.35 billion in 2024, compared to $659.60 million in 2022, marking a significant increase of 104.5%[578] - The company had a net increase in cash, cash equivalents, and restricted cash of $270.10 million in 2024, down from $416.34 million in 2023, a decrease of 35.1%[578] - Cash flows from financing activities showed a net outflow of $796.59 million in 2024, compared to a net outflow of $557.77 million in 2023, indicating a 42.9% increase in cash used[578] Regulatory and Compliance - The company is subject to financial covenants, seeking to maintain a debt-to-equity ratio of approximately 3.0:1.0 or below[78] - The company is in compliance with all covenants as of December 31, 2024[83] - Ladder Capital Asset Management LLC is a registered investment adviser under the Investment Advisers Act of 1940, providing advisory services primarily to Ladder-sponsored collateralized loan obligation trusts[89] - The company may face additional regulatory burdens if its investment adviser subsidiary expands its product offerings[533] Employee and Corporate Culture - As of December 31, 2024, Ladder employed 54 full-time employees, with no union representation and a strong employee relations environment[105] - Ladder's corporate culture emphasizes transparency, accountability, and ethical behavior, supported by a flat management structure and open-door policy[107] - The company offers comprehensive healthcare benefits, including mental health services and family leave, to promote employee wellness[112] Accounting and Financial Reporting - The company's internal control over financial reporting was deemed effective as of December 31, 2024, based on the COSO criteria[551] - The consolidated financial statements present fairly the financial position of the company at December 31, 2024, in conformity with U.S. generally accepted accounting principles[539] - The critical audit matter involves the subjective nature of estimating credit losses, which requires significant judgment[546] - The company utilizes distributable earnings as a non-GAAP financial measure to assess operating performance, excluding certain non-cash expenses and unrealized results[497] Market and Economic Factors - The interest rate environment significantly affects the company's net income, with changes in rates impacting both borrowing costs and yields on securities investments[477] - The company's securities investments are subject to fluctuations in estimated fair value primarily due to changes in interest rates[517] - The projected change in net income for a 1.00% decrease in interest rates is a loss of $28,146,000, while a 1.00% increase would result in a gain of $28,576,000[515]