Ladder Capital(US:LADR)2025-10-23 15:00Financial Data and Key Metrics Changes - Ladder generated distributable earnings of $32.1 million or $0.25 per share, achieving a return on equity of 8.3% with adjusted leverage of 1.7 times [3][10] - The loan portfolio grew by approximately $354 million to $1.9 billion, representing 40% of total assets [4][14] - The company maintained $879 million in liquidity, including $49 million in cash and $830 million of undrawn capacity on its unsecured revolver [8][11] Business Line Data and Key Metrics Changes - Loan origination activity accelerated with $511 million of new loans across 17 transactions, marking the highest quarterly origination volume in over three years [3][4] - The securities portfolio totaled $1.9 billion, with a weighted average yield of 5.7%, of which 99% was investment-grade and 96% was AAA-rated [15] - The real estate portfolio generated $15.1 million in net operating income during the third quarter, primarily consisting of net lease properties with long-term leases [5][15] Market Data and Key Metrics Changes - The company successfully closed its inaugural $500 million investment-grade bond offering at a rate of 5.5%, representing the tightest new issuance spread in Ladder's history [6][10] - As of quarter end, 75% of Ladder's debt consisted of unsecured corporate bonds, with a weighted average remaining term of four years [10][11] Company Strategy and Development Direction - Ladder aims to capitalize on investment opportunities while maintaining prudent credit risk management, expecting fourth quarter loan originations to exceed third quarter production [8][9] - The company plans to position itself alongside high-quality peers, including equity REITs, rather than solely within the commercial mortgage REIT space [8][9] - The focus will be on organic growth of the loan portfolio, with expectations of adding $1 billion to $2 billion of assets net on the balance sheet [32][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of credit performance and the quality of assets being originated, indicating a favorable lending environment [40] - The company anticipates that the yield curve will steepen next year, which could lead to more regular contributions to securitizations [19] - Management noted that the stock price has been affected by broader market concerns around private credit, but they believe the dividend remains stable and the asset base continues to improve [13][19] Other Important Information - Ladder's undepreciated book value per share was $13.71, net of a $0.41 per share CFO reserve [12] - The company repurchased $1.9 million of common stock in the third quarter, with $91.5 million remaining outstanding on its stock repurchase program [12] Q&A Session Summary Question: Are there any changes in origination strategy post investment-grade rating? - Management indicated they are looking at slightly larger transactions and noted improved stability in financing, leading to more profitable outcomes [22][23] Question: Is there growth expected in the $1.9 billion loan portfolio? - Management expects the loan portfolio to grow by approximately $1 billion, with a strong origination quarter leading to increased borrower interest [30][32] Question: Will improving ROE be part of the strategy in the next one to two years? - Management confirmed that the plan includes writing more loans and optimizing the capital structure to improve ROE [35][36] Question: Are there plans to launch a securities fund? - Management acknowledged past considerations for launching a securities fund but emphasized a focus on the commercial mortgage business over residential [57][59] Question: How is the New York office equity investment performing? - Management reported positive developments in the investment, with the building now over 90% leased and plans for further similar investments [61][63]