Ladder Capital Corp

Good morning and welcome to Ladder Capital Corp's earnings call for the third quarter of 2025. As a reminder, today's call is being recorded. This morning, Ladder released its financial results for the quarter ended September 30, 2025. Before the call begins, I'd like to call your attention to the customary safe harbour disclosure in our earnings release regarding forward-looking statements. Today's call may include forward-looking statements and projections And we refer you to our most recent form 10 K for important factors that could cause actual results to differ materially from these statements and projections. We do not undertake any obligation to update our forward looking statements or projections unless required by law. In addition, ladder will discuss certain non gap financial measures on this call which management believes are relevant to assessing the company's financial performance. The company's presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. These measures are reconciled to GAAP figures in our earnings supplement presentation, which is available in the investor relations section of our website. We also refer you to our Form 10-K and earnings supplement presentation for definitions of certain metrics, which we may cite on today's call. At this time, I'd like to turn the call over to Ladder's President, Pamela McCormack.

Good morning. During the third quarter, Ladder generated distributable earnings of $32.1 million, or 25 cents per share, delivering a return on equity of 8.3%, with modest adjusted leverage of 1.7 times. Credit performance remained stable, and the quarter was marked by three notable developments. A significant acceleration in loan originations, continued progress in reducing office loan exposure and the successful closing of our inaugural investment grade bond offering. These results reflect our disciplined business model and conservative balance sheet philosophy positioning ladder for continued earnings growth and greater capacity to capitalize on investment opportunities across market cycles. Loan portfolio activity. Origination activity accelerated in the third quarter with $511 million of new loans across 17 transactions, at a weighted average spread of 279 basis points, our highest quarterly origination volume in over three years. The spread reflects the mix of assets originated, which were predominantly multifamily and industrial, consistent with our focus on stable income producing collateral. Net of $129 million in paydowns, the loan portfolio grew by approximately $354 million to $1.9 billion, now representing 40% of total assets. Year to date, we originated over a billion dollars in new loans with an additional $500 million under application and in closing. Notably, the full payoff of our third largest office loan, a $63 million loan secured by an office property in Birmingham, Alabama, reduced office loan exposure to $652 million, or 14% of total assets. Approximately 50% of the remaining office loan portfolio consists of two well-performing loans, secured by the Citigroup Tower in downtown Miami and the Aventura Corporate Senate in Aventura, Florida. Securities portfolio. As of September 30th, our securities portfolio totaled $1.9 billion, representing 40% of total assets. During the quarter, we acquired $365 million in AAA-rated securities, received $164 million in paydowns through amortization, and sold $257 million of securities generating a $2 million net gain. Paydowns and sales exceeded purchases, resulting in a modest net reduction in securities holdings this quarter. This reflects our disciplined approach to capital allocation, as we did not replace certain securities that ran off, consistent with our view that spreads may widen in the mortgage market given recent volatility and the Federal Reserve's ongoing runoff of mortgage-backed securities. Consistent carry income from our real estate portfolio. Our $960 million real estate portfolio generated $15.1 million in net operating income during the third quarter. The portfolio primarily consists of net lease properties with long-term leases to investment-grade rated tenants and continues to deliver stable, predictable income. Capital structure and liquidity. During the third quarter, we closed our inaugural $500 million five-year investment-grade unsecured bond offering at a rate of 5.5% representing 167 basis points spread over the benchmark treasury, the tightest new issuance spread in Ladder's history. The offering was met with strong demand and the bonds have since traded tighter in the secondary market, reaching spreads as low as 120 basis points. This transaction validates the strength of our conservative balance sheet philosophy and disciplined business model. As one of our premier debt capital markets bankers noted, it also firmly planted Ladder's flag in the investment grade market. The continued tightening of our bonds positions us for lower borrowing costs, stronger execution, and improved shareholder returns. As of quarter end, 75% of Lattice debt consisted of unsecured corporate bonds, and 84% of our balance sheet assets remain unencumbered. We maintain $879 million in liquidity, including $49 million in cash, and $830 million of undrawn capacity on our unsecured revolver, which provides same-day liquidity at highly competitive rates. outlook. Lattice's unique investment grade balance sheet, disciplined use of unsecured debt, and robust origination platform positions us to capitalize on investment opportunities while maintaining credit risk management. We expect fourth quarter loan originations to exceed third quarter production. Recent credit rating upgrades and our successful inaugural investment grade bond issuance have lowered our cost of debt and expanded our access to a deeper, more stable capital base that remains consistently available across market cycles. Over time, we expect our strong balance sheet, modest leverage, and reliable funding profile to position ladder alongside a broader set of high-quality peers, including equity REITs, rather than solely within the commercial mortgage REIT space. As investors increasingly recognize the strength of our senior secured investment strategy and conservative capital structure, we believe our equity valuation will reflect this alignment. Combined with our disciplined credit risk management and ability to deploy capital with speed and certainty, these attributes reinforce our capacity to deliver strong, stable returns for shareholders across market cycles. With that, I'll turn the call over to Paul.

Thank you, Pamela. The 3rd quarter of 2025 ladder generated 32.1Million of distributed learnings or 25 cents per share, achieving a return on average equity of 8.3%. The 3rd quarter, we closed our inaugural investment grade bond offering a 500Million dollar 5 year bonds at 5 and a half percent. The proceeds were partially used to call the remaining 285Million dollars of bonds that were returning in October and fund loan loan originations. As of quarter end, 2.2 billion or 75% of our debt is comprised of unsecured corporate bonds across four issuances with a weighted average remaining term of four years and a weighted average coupon of 5.3%. Our next corporate bond maturity is now in 2027. The offering strengthened our balance sheet and affirmed our commitment to the investment grade bond market as our primary source of capital. We're encouraged by the bond's strong trading performance in the secondary market and believe our bonds offer attractive relative value to fixed income investors with meat on the bones to tighten further as the market continues to recognize Ladder's distinct, longstanding investment strategy anchored by conservative lending attachment points, AAA rated securities, high quality real estate equity investments. As of September 30th, 2025, Ladder's liquidity was $879 million, comprised of cash and cash equivalents and our undrawn capacity of $850 million on Secure Revolver. Total growth leverage was 2.0 times as a quarter ends below our target leverage range. Overall, our balance sheet remains strong and primed for continued growth as our investment pipeline continues to build. As of September 30th, 2025, our unencumbered asset pool stood at $3.9 billion, or 84% of total assets. 88% of this unencumbered asset pool is comprised of first more results, investment grade securities, non-restricted cash and cash As of September 30, 2025, Lattice's undepreciated book value per share was $13.71, which is net of a $0.41 per share of CISO reserves established. In the third quarter of 2025, we repurchased $1.9 million of common stock for 171,000 shares at a weighted average price of $11.04 per share. The year to date in 2025, we have repurchased $9.3 million of common stock, or 877,000 shares, at a weighted average price of $10.60 per share. As of September 30, 2025, $91.5 million remains outstanding on LATA's stock repurchase program. In the third quarter, LATA declared a $0.23 per share dividend, which was paid on October 15, 2025. As of today, our dividend yield is approximately 8.5%, with a stock price that we believe has been pulled down by the broader market concerns around private credit. We'll note that our dividend remains stable, and our asset base continues to turn over into freshly originated loans, AAA securities, high-quality real estate equity investments. With a stable earnings base complemented by our investment-grade capital structure, we believe there's ample room for our dividend yield to tighten. specifically when compared to other investment-grade REITs with similar credit ratings to the latter. We continue to expand our investor outreach efforts now as an investment-grade company, and we look forward to further educating the market on our stories. Building on Pamela's overview of our performance, I'll highlight a few additional insights about each of our segments shared in the third quarter. As of September 30, 2025, our loan portfolio totaled $1.9 billion, with a weighted average yield of approximately 8.2%. As a quarter end, we have three loans on non-accrual, totally $123 million, or 2.6% total assets. In the third quarter, we resolved two non-accrual loans, first through the payoff at par of a $16 million loan through the sale by a sponsor of two mixed-use properties in New York City, and the second via foreclosure of a loan collateralized by an office property in Maryland with a carrying value of $22.7 million. No new loans were added to non-accrual in the third quarter. Our fiscal reserve remains steady at $52 million, or $0.41 per share. We believe this reserve is adequate to cover any potential losses in our loan portfolio, including consideration of the ongoing macroeconomic shifts in the U.S. and global economy. As of September 30, 2025, our securities portfolio totaled $1.9 billion, with a rated average yield of 5.7%, of which 99% was investment grade and 96% was AAA rated, underscoring the portfolio's high credit quality. As a quarter end, approximately 80% of the portfolio of almost entirely AAA securities are unencumbered and readily financeable, providing an additional source of liquidity, complementing our same-day liquidity of $879 million. In the third quarter, our $960 million real estate segments continue to generate stable net operating income. The portfolio includes 149 net lease properties, primarily investment-grade credits committed to long-term leases with an average lease term of seven years remaining. For further information on Lattice third quarter 2025 operating results, refer to our earnings supplement presentation, which is available on our website, and our quarterly report on Form 10-Q, which we expect to file in the coming days. With that, I will turn the call over to Brian.