Ladder Capital(US:LADR)2023-02-10 01:13Financial Data and Key Metrics Changes - Ladder generated distributable earnings of $38.9 million or $0.31 per share for Q4 2022, and $148.4 million or $1.16 per share for the full year 2022, representing a 9.7% after-tax return on equity [6][12] - The adjusted leverage ratio stood at 1.9x as of December 31, with a net leverage ratio of 1.1x when excluding cash and securities [9][3] - The company reported over $900 million in same-day liquidity, which includes cash, cash equivalents, and undrawn corporate revolver capacity [9][3] Business Line Data and Key Metrics Changes - The balance sheet loan portfolio totaled $3.9 billion, primarily floating rate and diversified in collateral and geography, with a focus on multi-family assets [16] - In 2022, Ladder originated $1.2 billion in balance sheet loans, with two-thirds being multifamily or manufactured housing [21] - The real estate portfolio generated net rental income of $67.9 million in 2022, contributing to distributable earnings [25] Market Data and Key Metrics Changes - 82% of the loan portfolio consists of 2021 and 2022 vintage loans, with 40% of the portfolio in multifamily or manufactured housing [16][22] - The company reported a competitive total cost of debt capital of 5.34% at the end of Q4 2022, benefiting from a large base of fixed-rate unsecured debt [14] Company Strategy and Development Direction - Ladder's strategy focuses on basis lending on smaller middle-market loans, with a strong emphasis on credit discipline and liquidity management [23][27] - The company aims to deploy significant liquidity into higher rate environments to grow earnings in 2023 and beyond [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current economic environment, highlighting strong liquidity and a diversified asset base [41][44] - The management team anticipates continued benefits from rising interest rates, which should enhance net interest income [36][92] Other Important Information - The company increased its quarterly dividend by 15% over the course of 2022, which remains well covered by net interest margin and net rental income [12][34] - Ladder's unencumbered asset pool stood at $3 billion, with 76% comprised of cash and cash equivalents and first mortgage loans [19] Q&A Session Summary Question: What is the current stock valuation for Ladder? - Management noted that despite a drop in stock price, the company has successfully raised dividends and expects to continue doing so based on strong earnings performance [86][88] Question: How does the company view the risk in multifamily loans originated post-COVID? - Management indicated that they have maintained a cautious approach to underwriting, focusing on high-quality assets and avoiding over-leveraged deals [91][96] Question: Can you provide details on the recent equity investment sales? - Management confirmed the sale of three properties, including a significant office asset, and provided details on cap rates and gains associated with these sales [113][120]