Ladder Capital Corp (NYSE: LADR) (“we,” “our,” “Ladder,” or the
“Company”) today announced operating results for the quarter and
year ended December 31, 2023. GAAP income before taxes for the
three months ended December 31, 2023 was $18.4 million, and diluted
earnings per share (“EPS”) was $0.15. Distributable earnings was
$40.0 million, or $0.32 of distributable EPS. GAAP income before
taxes for the year ended December 31, 2023 was $104.7 million, and
diluted earnings per share (“EPS”) was $0.81. Distributable
earnings was $167.7 million, or $1.34 of distributable EPS.
“2023 was another positive year for Ladder, as we generated both
double-digit earnings growth and returns on equity with a smaller
asset base and lower leverage than the previous year. With $1.3
billion of liquidity and our unique liability structure anchored by
long-term, fixed-rate, unsecured corporate bonds, we remain
well-positioned to capitalize on new investment opportunities.”
said Brian Harris, Ladder’s Chief Executive Officer.
Supplemental
The Company issued a supplemental presentation detailing its
fourth quarter and full year 2023 operating results, which can be
viewed at http://ir.laddercapital.com.
Conference Call and
Webcast
We will host a conference call on Thursday, February 8, 2024 at
10:00 a.m. Eastern Time to discuss fourth quarter and full year
2023 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, February 22, 2024. To
access the replay, please call (844) 512-2921 domestic or (412)
317-6671 international, access code 13743559. The conference call
will also be webcast though a link on Ladder Capital Corp’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 Capital Corp is an internally-managed commercial real
estate investment trust with $5.5 billion of assets as of December
31, 2023. Our investment objective is to preserve and protect
shareholder capital while producing attractive risk-adjusted
returns. As one of the nation’s leading commercial real estate
capital providers, we specialize in underwriting commercial real
estate and offering flexible capital solutions within a
sophisticated platform.
Ladder originates and invests in a diverse portfolio of
commercial real estate and real estate-related assets, focusing on
senior secured assets. Our investment activities include: (i) our
primary business of originating senior first mortgage fixed and
floating rate loans collateralized by commercial real estate with
flexible loan structures; (ii) owning and operating commercial real
estate, including net leased commercial properties; and (iii)
investing in investment grade securities secured by first mortgage
loans on commercial real estate.
Founded in 2008, Ladder is run by a highly experienced
management team with extensive expertise in all aspects of the
commercial real estate industry, including origination, credit,
underwriting, structuring, capital markets and asset management.
Members of Ladder’s management and board of directors are highly
aligned with the Company’s investors, owning over 11% of the
Company’s equity. Ladder is headquartered in New York City with
regional offices in Miami, Florida and Los Angeles, California.
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, 2022, 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)
December 31,
December 31,
2023(1)
2022(1)
(Unaudited)
Assets
Cash and cash equivalents
$
1,015,678
$
609,078
Restricted cash
15,450
50,524
Mortgage loan receivables held for
investment, net, at amortized cost:
Mortgage loans receivable
3,155,089
3,885,746
Allowance for credit losses
(43,165
)
(20,755
)
Mortgage loan receivables held for
sale
26,868
27,391
Securities
485,533
587,519
Real estate and related lease intangibles,
net
726,442
700,136
Investments in and advances to
unconsolidated ventures
6,877
6,219
Derivative instruments
1,454
2,038
Accrued interest receivable
24,233
24,938
Other assets
98,218
78,339
Total assets
$
5,512,677
$
5,951,173
Liabilities and Equity
Liabilities
Debt obligations, net
$
3,783,946
$
4,245,697
Dividends payable
32,294
32,000
Accrued expenses
65,144
68,227
Other liabilities
99,095
71,688
Total liabilities
3,980,479
4,417,612
Commitments and contingencies
—
—
Equity
Class A common stock, par value $0.001 per
share, 600,000,000 shares authorized; 128,027,478 and 128,027,478
shares issued and 126,911,689 and 126,502,049 shares outstanding as
of December 31, 2023 and December 31, 2022, respectively.
127
127
Additional paid-in capital
1,756,750
1,826,833
Treasury stock, 1,115,789 and 1,525,429
shares, at cost
(12,001
)
(95,600
)
Retained earnings (dividends in excess of
earnings)
(197,875
)
(177,005
)
Accumulated other comprehensive income
(loss)
(13,853
)
(21,009
)
Total shareholders’ equity
1,533,148
1,533,346
Noncontrolling interests in consolidated
ventures
(950
)
215
Total equity
1,532,198
1,533,561
Total liabilities and equity
$
5,512,677
$
5,951,173
(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)
(Unaudited)
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
2023
2023
2023
2022
Net interest income
Interest income
$
100,569
$
101,090
$
407,284
$
293,520
Interest expense
60,747
62,259
245,097
195,602
Net interest income (expense)
39,822
38,831
162,187
97,918
Provision for (release of) loan loss
reserves, net
6,006
7,473
25,096
3,711
Net interest income (expense) after
provision for (release of) loan loss reserves
33,816
31,358
137,091
94,207
Other income (loss)
Real estate operating income
23,103
24,761
96,950
108,269
Net result from mortgage loan receivables
held for sale
596
(629
)
(523
)
(2,511
)
Realized gain (loss) on securities
—
23
(276
)
(73
)
Unrealized gain (loss) on securities
49
(42
)
29
(86
)
Realized gain (loss) on sale of real
estate, net
—
8,808
8,808
115,998
Fee and other income
2,192
1,829
9,178
15,020
Net result from derivative
transactions
(5,199
)
4,773
1,481
12,360
Earnings from investment in unconsolidated
ventures
(155
)
479
758
1,410
Gain on extinguishment of debt
118
921
10,718
685
Total other income (loss)
20,704
40,923
127,123
251,072
Costs and expenses
Compensation and employee benefits
13,006
14,285
63,618
75,836
Operating expenses
4,485
4,775
19,503
20,716
Real estate operating expenses
8,516
9,456
37,587
38,605
Investment related expenses
2,388
2,279
8,847
7,235
Depreciation and amortization
7,770
7,144
29,914
32,673
Total costs and expenses
36,165
37,939
159,469
175,065
Income (loss) before taxes
18,355
34,342
104,745
170,214
Income tax expense (benefit)
(670
)
3,147
4,244
4,909
Net income (loss)
19,025
31,195
100,501
165,305
Net (income) loss attributable to
noncontrolling interests in consolidated ventures
211
124
624
(23,088
)
Net income (loss) attributable to Class
A common shareholders
$
19,236
$
31,319
$
101,125
$
142,217
Earnings per share:
Basic
$
0.15
$
0.25
$
0.81
$
1.14
Diluted
$
0.15
$
0.25
$
0.81
$
1.13
Weighted average shares
outstanding:
Basic
124,713,728
124,730,343
124,667,877
124,301,421
Diluted
125,077,085
124,968,545
124,882,398
125,823,671
Dividends per share of Class A common
stock
$
0.23
$
0.23
$
0.92
$
0.88
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 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.
We define distributable earnings as income before taxes adjusted
for: (i) real estate depreciation and amortization; (ii) the impact
of derivative gains and losses related to the hedging of assets on
our balance sheet as of the end of the specified accounting period;
(iii) unrealized gains/(losses) related to our investments in fair
value securities and passive interest in unconsolidated ventures;
(iv) economic gains on loan sales not recognized under GAAP
accounting for which risk has substantially transferred during the
period and the exclusion of resultant GAAP recognition of the
related economics during the subsequent periods; (v) unrealized
provision for loan losses and unrealized real estate impairment;
(vi) realized provisions for loan losses and realized real estate
impairment; (vii) non-cash stock-based compensation; and (viii)
certain transactional items. For the purpose of computing
distributable earnings, management recognizes loan and real estate
losses as being realized generally in the period in which the asset
is sold or the Company determines a decline in value to be
non-recoverable and the loss to be nearly certain. Distributable
EPS is defined as after-tax distributable earnings divided by the
weighted average diluted shares outstanding during the period.
For distributable earnings, we include adjustments for economic
gains on loan sales not recognized under GAAP accounting for which
risk has substantially transferred during the period and exclude
the resultant GAAP recognition of the related economics during the
subsequent periods. This adjustment is reflected in distributable
earnings when there is a true risk transfer on the mortgage loan
transfer and settlement. Historically, this adjustment has
represented the impact of economic gains/(discounts) on
intercompany loans secured by our own real estate which we had not
previously recognized because such gains were eliminated in
consolidation. 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 reasonable supplemental measure of our
performance.
We do not designate derivatives as hedges to qualify for hedge
accounting and, therefore, any net payments under, or fluctuations
in the fair value of, our derivatives are recognized currently in
our GAAP income statement. However, fluctuations in the fair value
of the related assets are not included in our income statement. We
consider the gain or loss on our hedging positions related to
assets that we still own as of the reporting date to be “open
hedging positions.” While recognized for GAAP purposes, we exclude
the results on the hedges from distributable earnings until the
related asset is sold and/or the hedge position is considered
“closed,” whereupon they would then be included in distributable
earnings in that period. These are reflected as “Adjustments for
unrecognized derivative results” for purposes of computing
distributable earnings for the period. We believe that excluding
these specifically identified gains and losses associated with the
open hedging positions adjusts for timing differences between when
we recognize changes in the fair values of our assets and changes
in the fair value of the derivatives used to hedge such assets.
Our investments in Agency interest-only securities and equity
securities are recorded at fair value with changes in fair value
recorded in current period earnings. We believe that excluding
these specifically-identified gains and losses associated with the
fair value securities adjusts for timing differences between when
we recognize changes in the fair values of our assets. With regard
to securities valuation, distributable earnings includes a decline
in fair value deemed to be an impairment for GAAP purposes only if
the decline is determined 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.
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
Year Ended
December 31,
September 30,
December 31,
December 31,
2023
2023
2023
2022
Income (loss) before taxes
$
18,355
$
34,342
104,745
170,214
Net (income) loss attributable to
noncontrolling interests in consolidated ventures (GAAP)
211
124
624
(23,088
)
Our share of real estate depreciation,
amortization and gain adjustments (1)
7,273
(2,016
)
18,602
(29,188
)
Adjustments for derivative results (2)
5,149
(3,969
)
716
(9,381
)
Unrealized (gain) loss on fair value
securities
(49
)
42
(29
)
86
Adjustment for economic gain on loan sales
not recognized under GAAP for which risk has been substantially
transferred, net of reversal/amortization
(152
)
(152
)
(604
)
1,356
Adjustment for impairment (3)
6,006
7,473
25,096
6,816
Non-cash stock-based compensation
3,202
3,205
18,577
31,584
Distributable earnings
39,995
39,049
167,727
148,399
Estimated corporate tax (expense) benefit
(4)
198
(274
)
(496
)
(2,002
)
After-tax distributable earnings
$
40,193
$
38,775
$
167,231
$
146,397
Weighted average diluted shares
outstanding
125,077
124,969
124,882
125,824
Distributable EPS
$
0.32
$
0.31
$
1.34
$
1.16
(1) The following is a reconciliation of GAAP depreciation and
amortization to our share of real estate depreciation, amortization
and gain adjustments ($ in thousands):
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
2023
2023
2023
2022
Total GAAP depreciation and
amortization
$
7,770
$
7,144
29,914
$
32,673
Less: Depreciation and amortization
related to non-rental property fixed assets
(110
)
(110
)
(431
)
(42
)
Less: Non-controlling interests in
consolidated ventures’ share of depreciation and amortization and
adjustment for passive interest in unconsolidated ventures
50
(581
)
(1,068
)
(1,943
)
Our share of real estate depreciation and
amortization
7,710
6,453
28,415
30,688
Accumulated depreciation and amortization
on real estate sold (a)
—
(8,016
)
(8,016
)
(58,113
)
Less: Our share of operating lease income
on above/below market lease intangible amortization
(437
)
(453
)
(1,797
)
(1,763
)
Our share of real estate depreciation,
amortization and gain adjustments
$
7,273
$
(2,016
)
$
18,602
$
(29,188
)
(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 a reconciliation of the related
consolidated GAAP amounts to the amounts reflected in distributable
earnings ($ in thousands):
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
2023
2023
2023
2022
GAAP realized gain (loss) on sale of real
estate, net
$
—
$
8,808
$
8,808
$
115,998
Adjusted gain/loss on sale of real estate
for purposes of distributable earnings
—
(792
)
(792
)
(57,885
)
Accumulated depreciation and
amortization on real estate sold
$
—
$
8,016
$
8,016
$
58,113
(2) The following is a reconciliation of GAAP net results from
derivative transactions to our derivative results presented in the
computation of distributable earnings ($ in thousands):
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
2023
2023
2023
2022
Net results from derivative
transactions
$
5,199
$
(4,773
)
$
(1,481
)
$
(12,360
)
Hedging interest income (expense)
414
175
1,220
(1,652
)
Other hedging related activity (a)
(464
)
629
977
4,631
Adjustments for derivative
results
$
5,149
$
(3,969
)
$
716
$
(9,381
)
(a) Includes unrealized lower of cost or
market adjustments of $(0.6) million and $0.6 million for the three
months ended December 31, 2023 and September 30, 2023, respectively
and $0.5 million and $4.8 million for the twelve months ended
December 31, 2023 and December 31, 2022, respectively.
(3) The adjustment reflects the portion of the loan loss
provision that management determined to be recoverable. Additional
provisions and releases of those provisions are excluded from
distributable earnings as a result.
(4) Estimated corporate tax benefit (expense) is based on an
effective tax rate applied to distributable earnings generated by
the activity within our taxable REIT subsidiaries.
After-tax distributable ROAE is presented on an annualized basis
and is defined as after-tax distributable earnings divided by the
average total shareholders’ equity during the period. Set forth
below is an unaudited computation of after-tax distributable ROAE
($ in thousands):
Three Months Ended
Year Ended December
31,
December 31,
September 30,
December 31,
December 31,
2023
2023
2023
2022
After-tax distributable earnings
$
40,193
$
38,775
$
167,231
$
146,397
Average shareholders’ equity
1,536,012
1,535,488
1,533,307
1,506,810
After-tax distributable ROAE
10.5
%
10.1
%
10.9
%
9.7
%
Non-GAAP Measures -
Limitations
Our non-GAAP financial measures have limitations as analytical
tools. Some of these limitations are:
- distributable earnings, distributable EPS and after-tax
distributable ROAE 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 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/20240208144213/en/
Investor Contact Ladder
Capital Corp Investor Relations (917) 369-3207
investor.relations@laddercapital.com
Ladder Capital (NYSE:LADR)
Historical Stock Chart
From Apr 2024 to May 2024
Ladder Capital (NYSE:LADR)
Historical Stock Chart
From May 2023 to May 2024