Ladder Capital Corp Reports Results for the Quarter Ended March 31, 2025
NEW YORK--(BUSINESS WIRE)--April 24, 2025--
Ladder Capital Corp (NYSE: LADR) ("we," "our," "Ladder," or the "Company") today announced operating results for the quarter ended March 31, 2025. GAAP income before taxes for the three months ended March 31, 2025 was $10.7 million, and diluted earnings per share ("EPS") was $0.09. Distributable earnings was $25.5 million, or $0.20 of distributable EPS.
"We are pleased with our first quarter results and the overall strength of Ladder's balance sheet after a record year of loan payoffs in 2024. Our origination efforts continue to build momentum, with new loans outpacing payoffs in the first quarter as we remain modestly levered and flush with liquidity to invest in opportunities as they arise," said Brian Harris, Ladder's Chief Executive Officer.
On April 23, 2025, the board of directors authorized the repurchase of $100.0 million of the Company's Class A common stock from time to time without further approval. This authorization increased the remaining outstanding authorization per the April 24, 2024 authorization from $66.8 million to $100.0 million.
Supplemental
The Company issued a supplemental presentation detailing its first quarter 2025 operating results, which can be viewed at http://ir.laddercapital.com.
Conference Call and Webcast
We will host a conference call on Thursday, April 24, 2025 at 10:00 a.m. Eastern Time to discuss first quarter 2025 results. The conference call can be accessed by dialing (877) 407-4018 domestic or (201) 689-8471 international. Individuals who dial in will be asked to identify themselves and their affiliations. For those unable to participate, an audio replay will be available until midnight on Thursday, May 8, 2025. To access the replay, please call (844) 512-2921 domestic or (412) 317-6671 international, access code 13753048. The conference call will also be webcast though a link on Ladder's Investor Relations website at ir.laddercapital.com/event. A web-based archive of the conference call will also be available at the above website.
About Ladder
Ladder is a leading diversified commercial real estate finance platform that specializes in underwriting commercial real estate across the capital stack. With $4.5 billion of assets, our investment objective is to preserve and protect shareholder capital while generating attractive risk-adjusted returns.
Since 2008, we have invested over $47 billion in debt and equity, serving both institutional and middle-market clients. Our primary business is originating fixed and floating rate first mortgage loans secured by all commercial real estate property types. We also own and operate commercial real estate, including net leased commercial properties, and we invest in investment grade securities secured by first mortgage loans on commercial real estate.
We are internally managed and members of our management team and board of directors collectively own more than 11% of Ladder's equity, making them the Company's largest shareholder and aligning their interests closely with fellow stakeholders. Since our founding, their vision has been to support the Company's investment platform with a conservative and durable capital structure. Our industry-leading credit ratings reflect this differentiated financing strategy.
Ladder is headquartered in New York City with a regional office in Miami, Florida. All amounts in this section are as of March 31, 2025.
Forward-Looking Statements
Certain statements in this release may constitute "forward-looking" statements. These statements are based on management's current opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. These forward-looking statements are only predictions, not historical fact, and involve certain risks and uncertainties, as well as assumptions. Actual results, levels of activity, performance, achievements and events could differ materially from those stated, anticipated or implied by such forward-looking statements. While Ladder believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect actual results on the Company's business. There are a number of risks and uncertainties that could cause actual results to differ materially from forward-looking statements made herein including, most prominently, the risks discussed under the heading "Risk Factors" in each of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as well as its consolidated financial statements, related notes, and other financial information appearing therein, and its other filings with the U.S. Securities and Exchange Commission. Such forward-looking statements are made only as of the date of this release. Ladder expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or changes in events, conditions, or circumstances on which any such statement is based.
Ladder Capital Corp
Consolidated Balance Sheets
(Dollars in Thousands)
March 31, December 31,
2025(1) 2024(1)
----------- ----------------
(Unaudited)
Assets
Cash and cash equivalents $ 479,770 $ 1,323,481
Restricted cash 13,731 12,608
Mortgage loan receivables held for
investment, net, at amortized cost:
Mortgage loans receivable 1,665,243 1,591,322
Allowance for credit losses (52,208) (52,323)
Mortgage loan receivables held for sale 90,420 26,898
Securities 1,476,380 1,080,839
Real estate and related lease
intangibles, net 654,709 670,803
Investments in and advances to
unconsolidated ventures 19,191 19,923
Derivative instruments 467 437
Accrued interest receivable 15,274 12,936
Other assets 107,022 158,149
--------- ---------
Total assets $4,469,999 $ 4,845,073
========= =========
Liabilities and Equity
Liabilities
Debt obligations, net $2,769,754 $ 3,135,617
Dividends payable 30,593 31,838
Accrued expenses 45,412 74,824
Other liabilities 109,883 69,855
--------- ---------
Total liabilities 2,955,642 3,312,134
--------- ---------
Commitments and contingencies -- --
Equity
Class A common stock, par value $0.001
per share, 600,000,000 shares
authorized; 130,790,591 and
129,883,019 shares issued and
128,096,466 and 127,106,481 shares
outstanding as of March 31, 2025 and
December 31, 2024, respectively. 128 127
Additional paid-in capital 1,778,311 1,777,118
Treasury stock, 2,694,125 and
2,776,538 shares, at cost (29,964) (30,475)
Retained earnings (dividends in excess
of earnings) (224,592) (206,874)
Accumulated other comprehensive income
(loss) (7,215) (4,866)
--------- ---------
Total shareholders' equity 1,516,668 1,535,030
Noncontrolling interests in
consolidated ventures (2,311) (2,091)
--------- ---------
Total equity 1,514,357 1,532,939
--------- ---------
Total liabilities and equity $4,469,999 $ 4,845,073
========= =========
_________________________
(1) Includes amounts relating to consolidated variable interest entities.
Ladder Capital Corp
Consolidated Statements of Income
(Dollars in Thousands, Except Per Share and Dividend Data)
Three Months Ended
------------------------------
March 31, December 31,
2025 2024
------------- ---------------
(Unaudited)
Net interest income
Interest income $ 64,326 $ 78,102
Interest expense 43,997 50,890
----------- -----------
Net interest income (expense) 20,329 27,212
Provision for (release of) loan
loss reserves, net (81) 47
----------- -----------
Net interest income (expense)
after provision for (release
of) loan loss reserves 20,410 27,165
Other income (loss)
Real estate operating income 21,773 23,368
Net result from mortgage loan
receivables held for sale 162 (608)
Gain (loss) on real estate, net 3,807 12,419
Fee and other income 5,285 4,753
Net result from derivative
transactions 323 1,549
Earnings (loss) from investment
in unconsolidated ventures (732) (68)
Gain (loss) on extinguishment of
debt 256 (9)
----------- -----------
Total other income (loss) 30,874 41,404
----------- -----------
Costs and expenses
Compensation and employee
benefits 18,761 11,754
Operating expenses 4,516 4,863
Real estate operating expenses 8,766 9,637
Investment related expenses 1,188 1,809
Depreciation and amortization 7,336 7,466
----------- -----------
Total costs and expenses 40,567 35,529
----------- -----------
Income (loss) before taxes 10,717 33,040
Income tax expense (benefit) (838) 1,711
----------- -----------
Net income (loss) 11,555 31,329
Net (income) loss attributable to
noncontrolling interests in
consolidated ventures 220 55
----------- -----------
Net income (loss) attributable to
Class A common shareholders $ 11,775 $ 31,384
=========== ===========
Earnings per share:
Basic $ 0.09 $ 0.25
Diluted $ 0.09 $ 0.25
Weighted average shares outstanding:
Basic 125,628,951 125,549,113
Diluted 126,279,680 125,870,042
Dividends per share of Class A common
stock $ 0.23 $ 0.23
Non-GAAP Financial Measures
The Company utilizes distributable earnings, distributable EPS, and after-tax distributable return on average equity ("ROAE"), non-GAAP financial measures, as supplemental measures of our operating performance. We believe distributable earnings, distributable EPS and after-tax distributable ROAE assist investors in comparing our operating performance and our ability to pay dividends across reporting periods on a more relevant and consistent basis by excluding from GAAP measures certain non-cash expenses and unrealized results as well as eliminating timing differences related to conduit securitization gains and changes in the values of assets and derivatives. In addition, we use distributable earnings, distributable EPS and after-tax distributable ROAE: (i) to evaluate our earnings from operations because management believes that they may be useful performance measures; and (ii) because our board of directors considers distributable earnings in determining the amount of quarterly dividends. Distributable EPS is defined as after-tax distributable earnings divided by the weighted average diluted shares outstanding during the period. In addition, we believe it is useful to present distributable earnings and distributable EPS prior to charge-offs of allowance for credit losses to reflect our direct operating results and help existing and potential future holders of our class A common stock assess the performance of our business excluding such charge-offs. Distributable earnings prior to charge-offs of allowance for credit losses is used as an additional performance metric to consider when declaring our dividends. Distributable EPS prior to charge-offs of allowance for credit losses is defined as after-tax distributable earnings prior to charge-offs of allowance for credit losses divided by the weighted average diluted shares outstanding during the period.
We define distributable earnings as income before taxes adjusted for: (i) net (income) loss attributable to noncontrolling interests in consolidated ventures; (ii) our share of real estate depreciation, amortization and gain adjustments and (earnings) loss from investments in unconsolidated ventures in excess of distributions received; (iii) the impact of derivative gains and losses related to hedging fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk as of the end of the specified accounting period; (iv) economic gains or losses on loan sales, certain of which may not be recognized under GAAP accounting in consolidation for which risk has substantially transferred during the period, as well as the exclusion of the related GAAP economics in subsequent periods; (v) unrealized gains or losses related to our investments in securities recorded at fair value in current period earnings; (vi) unrealized and realized provision for loan losses and real estate impairment; (vii) non-cash stock-based compensation; and (viii) certain non-recurring transactional items.
We exclude the effects of our share of real estate depreciation and amortization. Given GAAP gains and losses on sales of real estate include the effects of previously-recognized real estate depreciation and amortization, our adjustment eliminates the portion of the GAAP gain or loss that is derived from depreciation and amortization.
Our derivative instruments do not qualify for hedge accounting under GAAP and, therefore, any net payments under, or fluctuations in the fair value of derivatives are recognized currently in our income statement. The Company utilizes derivative instruments to hedge exposure to interest rate risk associated with fixed rate mortgage loans, fixed rate securities, and/or overall portfolio market risks. Distributable earnings excludes the GAAP results from derivative activity until the associated mortgage loan or security for which the derivative position is hedging is sold or paid off, or the hedge position for overall portfolio market risk is closed, at which point any gain or loss is recognized in distributable earnings in that period. For derivative activity associated with securities or mortgage loans held for investment, any hedging gain or loss is amortized over the expected life of the underlying asset for distributable earnings. We believe that adjusting for these specifically identified gains and losses associated with hedging positions adjusts for timing differences between when we recognize the gains or losses associated with our assets and the gains and losses associated with derivatives used to hedge such assets.
We originate conduit loans, which are first mortgage loans on stabilized, income producing commercial real estate properties that we intend to sell into third-party CMBS securitizations. Mortgage loans receivable held for sale are recorded at the lower of cost or market under GAAP. For purposes of distributable earnings, we exclude the impact of unrealized lower of cost or market adjustments on conduit loans held for sale and include the realized gains or losses in distributable earnings in the period when the loan is sold. Our conduit business includes mortgage loans made to third parties and may also include mortgage loans secured by real estate owned in our real estate segment. Such mortgage loans receivable secured by real estate owned in our real estate segment are eliminated in consolidation within our GAAP financial statements until the loans are sold in a third-party securitization. Upon the sale of a loan to a third-party securitization trust (for cash), the related mortgage note payable is recognized on our GAAP financial statements. For purposes of distributable earnings, we include adjustments for economic gains and losses related to the sale of these inter-segment loans for which risk has substantially transferred during the period and exclude the resultant GAAP recognition of amortization of any related premium/discount on such mortgage loans payable recognized in interest expense during the subsequent periods. This adjustment is reflected in distributable earnings when there is a true risk transfer on the mortgage loan sale and settlement. Conversely, if the economic risk was not substantially transferred, no adjustments to net income would be made relating to those transactions for distributable earnings purposes. Management believes recognizing these amounts for distributable earnings purposes in the period of transfer of economic risk is a useful supplemental measure of our performance.
We invest in certain securities that are recorded at fair value with changes in fair value recorded in current period earnings. For purposes of distributable earnings, we exclude the impact of unrealized gains and losses associated with these securities and include realized gains or losses in connection with any disposition of securities. Distributable earnings includes declines in fair value deemed to be an impairment for GAAP purposes if the decline is determined to be non-recoverable and the loss to be nearly certain to be eventually realized. In those cases, an impairment is included in distributable earnings for the period in which such determination was made.
We include adjustments for unrealized provision for loan losses and real estate impairment. For purposes of distributable earnings, management recognizes realized losses on loans and real estate in the period in which the asset is sold or when the Company determines such amounts are no longer realizable and deemed non-recoverable.
Set forth below is an unaudited reconciliation of income (loss) before taxes to distributable earnings, and an unaudited computation of distributable EPS (in thousands, except per share data):
Three Months Ended
---------------------------
March 31, December 31,
2025 2024
--------- ----------------
Income (loss) before taxes $ 10,717 $ 33,040
Net (income) loss attributable to
noncontrolling interests in consolidated
ventures 220 55
Our share of real estate depreciation,
amortization and gain adjustments (1) 4,503 (2,225)
Adjustments for derivative results and loan
sale activity (2) (435) (474)
Unrealized (gain) loss on fair value
securities (687) 903
Adjustment for impairment (81) 47
Non-cash stock-based compensation 11,215 2,237
------- ---------
Distributable earnings $ 25,452 $ 33,583
======= =========
Estimated corporate tax (expense) benefit
(3) (206) 478
------- ---------
After-tax distributable earnings $ 25,246 $ 34,061
Weighted average diluted shares outstanding 126,280 125,870
------- ---------
Distributable EPS $ 0.20 $ 0.27
======= =========
__________________________
(1) The following is an unaudited reconciliation of GAAP depreciation and
amortization to our share of real estate depreciation, amortization and
gain adjustments and (earnings) loss from investment in unconsolidated
ventures in excess of distributions received ($ in thousands):
Three Months Ended
------------------------------
March 31, December 31,
2025 2024
------------ ----------------
Total GAAP depreciation and amortization $ 7,336 $ 7,466
Depreciation and amortization related to
non-rental property fixed assets (108) (110)
Non-controlling interests in consolidated
ventures' share of depreciation and
amortization (119) (115)
Our share of operating lease income from
above/below market lease intangible
amortization (402) (413)
--- ------ ---------
Our share of real estate depreciation and
amortization 6,707 6,828
--- ------ ---------
Accumulated depreciation and amortization
on real estate sold (a) (2,936) (9,121)
Adjustment for (earnings) loss from
investments in unconsolidated ventures in
excess of distributions received 732 68
--- ------ ---------
Our share of real estate depreciation,
amortization and gain adjustments $ 4,503 $ (2,225)
=== ====== =========
(a) GAAP gains/losses on sales of real estate include the effects of
previously-recognized real estate depreciation and amortization. For
purposes of distributable earnings, our share of real estate
depreciation and amortization is eliminated and, accordingly, the
resultant gains/losses also must be adjusted. The following is an
unaudited reconciliation of the related consolidated GAAP amounts to
the amounts reflected in distributable earnings ($ in thousands):
Three Months Ended
------------------------------
March 31, December 31,
2025 2024
------------ ----------------
GAAP realized gain/loss on sale of real
estate, net $ 3,807 $ 12,419
Adjusted (gain)/loss on sale of real
estate for purposes of distributable
earnings (871) (3,298)
--- ------ ---------
Accumulated depreciation and amortization
on real estate sold $ 2,936 $ 9,121
=== ====== =========
(2) The following is an unaudited reconciliation of GAAP net results from
derivative transactions to our adjustments for derivative results and
loan sale activity within distributable earnings ($ in thousands):
Three Months Ended
------------------------------
March 31, December 31,
2025 2024
------------ ----------------
GAAP net results from derivative
transactions $ (323) $ (1,549)
Unrealized lower of cost or market
adjustments related to loans held for
sale (162) 608
Amortization of (premium)/discount on
mortgage loan financing included in
interest expense (178) (209)
Recognized derivative results 228 676
--- ------ ---------
Adjustments for derivative results and
loan sale activity $ (435) $ (474)
=== ====== =========
(3) Estimated corporate tax benefit (expense) is based on an effective tax
rate applied to distributable earnings generated by the activity within
our taxable REIT subsidiaries.
After-tax distributable ROAE is presented on an annualized basis and is defined as after-tax distributable earnings divided by the average total shareholders' equity during the period. Set forth below is an unaudited computation of after-tax distributable ROAE ($ in thousands):
Three Months Ended
------------------------------
March 31, December 31,
2025 2024
--------- ---------
After-tax distributable earnings $ 25,246 $ 34,061
Average shareholders' equity 1,525,849 1,533,826
--------- ---------
After-tax distributable ROAE 6.6% 8.9%
========= =========
Non-GAAP Measures - Limitations
Our non-GAAP financial measures have limitations as analytical tools. Some of these limitations are:
-- distributable earnings, distributable EPS, after-tax distributable ROAE
and distributable earnings and distributable EPS prior to charge-off of
allowance for credit losses do not reflect the impact of certain cash
charges resulting from matters we consider not to be indicative of our
ongoing operations and are not necessarily indicative of cash necessary
to fund cash needs;
-- distributable EPS, distributable EPS prior to charge-off of allowance for
credit losses, and after-tax distributable ROAE are based on a non-GAAP
estimate of our effective tax rate, including the impact of
Unincorporated Business Tax and the impact of our election to be taxed as
a REIT effective January 1, 2015. Our actual tax rate may differ
materially from this estimate; and
-- other companies in our industry may calculate non-GAAP financial measures
differently than we do, limiting their usefulness as comparative
measures.
Because of these limitations, our non-GAAP financial measures should not be considered in isolation or as a substitute for net income (loss) attributable to shareholders, earnings per share or book value per share, or any other performance measures calculated in accordance with GAAP. Our non-GAAP financial measures should not be considered an alternative to cash flows from operations as a measure of our liquidity.
In addition, distributable earnings should not be considered to be the equivalent to REIT taxable income calculated to determine the minimum amount of dividends the Company is required to distribute to shareholders to maintain REIT status. In order for the Company to maintain its qualification as a REIT under the Internal Revenue Code, we must annually distribute at least 90% of our REIT taxable income. The Company has declared, and intends to continue declaring, regular quarterly distributions to its shareholders in an amount approximating the REIT's net taxable income.
In the future, we may incur gains and losses that are the same as or similar to some of the adjustments in this presentation. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250423045607/en/
CONTACT: Investor Contact
Ladder Investor Relations
(917) 369-3207
investor.relations@laddercapital.com
(END) Dow Jones Newswires
April 24, 2025 08:30 ET (12:30 GMT)
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