Ladder Capital(US:LADR)2026-02-09 13:35Financial 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]