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]

Financial Data and Key Metrics Changes - In Q4 2024, Ladder generated distributable earnings of $33.6 million or $0.27 per share, achieving a return on equity of 8.9% [4][14] - For the full year 2024, distributable earnings totaled $153.9 million, delivering a 9.9% return on equity while maintaining low leverage and stable book value [4][14] - As of 12/31/2024, Ladder had $2.2 billion in liquidity, with $1.3 billion or approximately 27% of total assets in cash and cash equivalents [6][15] Business Line Data and Key Metrics Changes - The loan portfolio stood at $1.6 billion with a weighted average yield of 9.3%, and minimal future funding commitments of only $35 million [9] - In Q4 2024, Ladder originated six loans totaling $129 million, primarily focusing on multifamily industrial properties [9] - The real estate portfolio generated $13.2 million in net rental income during Q4 and $56.3 million for the full year 2024 [10][21] Market Data and Key Metrics Changes - Ladder's loan portfolio paid down significantly in 2024, with $1.7 billion in proceeds from loan payoffs across 61 loan positions, marking the highest annual payoffs in the company's history [9][19] - The securities portfolio totaled $1.1 billion with a weighted average unlevered yield of 6%, primarily comprised of AAA rated securities [11][20] Company Strategy and Development Direction - Ladder's conservative business model and disciplined credit underwriting have reinforced its position as a leading middle-market focused commercial real estate finance REIT [5][12] - The company aims to achieve investment-grade ratings to strengthen its market position and lower funding costs [8][18] - Ladder plans to deploy its substantial liquidity prudently in 2025, focusing on new acquisitions and refinancing opportunities [12][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, anticipating a rebound in transaction volumes and improved valuation clarity in commercial real estate markets [12][29] - The company noted that while credit spreads are tightening, interest rates remain high, impacting the types of loans being originated [41][42] - Management highlighted the importance of maintaining a disciplined approach to risk and growth while capitalizing on market opportunities [28][29] Other Important Information - Ladder's adjusted leverage remained modest at 1.4 times, with 77% of its asset base unencumbered [6][15] - The company repurchased $6 million of its common stock in Q4 2024 and $8 million for the full year, indicating a commitment to returning value to shareholders [22][23] Q&A Session Summary Question: Opportunities in CMBS conduit originations - Management sees potential to increase CMBS conduit originations as banks pull back, but current market conditions are not yet fully favorable [33][34] Question: Diesel reserve levels - Management plans to maintain the current reserve levels due to ongoing potential risks in the economy, with a likelihood of releasing reserves in the future [36][37] Question: Impact of tightening yields on origination pipeline - Management acknowledged tightening credit spreads but noted that interest rates remain high, affecting the types of properties they are willing to lend on [41][42] Question: Growth of loan book in 2025 - Management is optimistic about growing the loan book by $1 billion in 2025, targeting an unlevered return of around 8.5% [55][56][61]