Ladder Capital Corp

Good morning and welcome to Ladder Capital Corp's earnings call for the fourth quarter of 2025. As a reminder, today's call is being recorded. This morning, Ladder released its financial results for the quarter and year ended December 31st, 2025. Before the call begins, I'd like to call your attention to the customary safe harbor 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 or 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, LADRR will discuss certain non-GAAP financial measures on this call which management believes are relevant to the assessing of companies' financial performance. 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 McCormick.

Good morning, and thank you for joining us today. I'm pleased to report Ladder Capital's fourth quarter and year-end results for 2025. This past year marked a significant milestone for our company. We became the only investment-grade rated commercial mortgage rate, underscoring our strong balance sheet management and conservative approach to leverage. Our robust positioning enables us to enter 2026 with a dedicated focus on driving earnings growth. Earnings and financial strength. During the fourth quarter, Ladder generated distributable earnings of $21.4 million, or 17 cents per share. Adjusting for a $5 million realized loan loss that had previously been reserved for, the fourth quarter earnings were $26.4 million, or 21 cents per share. For the full year, Ladder generated distributable earnings of $109.9 million, delivering a 7.1% return on equity. With adjusted leverage at a modest 2.0 times, stable book value and robust liquidity. These results reflect a solid year of solid performance and financial strength. Positioning for long-term growth. Achieving investment grade status in 2025 with ratings from Moody's and Fitch significantly enhanced letters of access to deeper and more stable capital markets. This achievement lowered our cost of funds and strengthened our liquidity profile. Building on this momentum, We are pleased to see S&P upgrade ladder to double B plus just one grade. Our $850 million unsecured revolving credit facility remains a cornerstone of our funding strategy, complementing our unsecured bond issuances by providing same-day liquidity at a highly competitive rate. This facility includes an accordion feature that allows for expansion up to $1.25 billion. We are pleased to share that we recently secured $400 million of additional commitments to exercise the accordion, with closing anticipated later in the quarter. Together, these funding sources enable Ladder to maintain a predominantly unsecured capital structure, operating independently of repo and CLO markets, and position us to capitalize on future opportunities with confidence. Investment and loan portfolio activity. In 2025, we originated $1.4 billion in new loans our highest annual volume since 2021. The second half of the year was particularly strong with nearly $950 million in new loan originations, representing our best two-quarter performance in over three years. During the fourth quarter alone, we made over $870 million in new investments, including over $400 million in securities, a $25.8 million equity investment, and more than $430 million in new loans at a weighted average spread of 340 basis points. At year end, our loan portfolio totaled $2.2 billion, representing 42% of total assets. Our investment strategy remains focused on stable income-reducing collateral, primarily multifamily and industrial properties, with no drift on credit quality. Notably, office loan exposure declined from 14% to 11% of total assets by year end. While we have reduced overall office exposure, we've selectively pursued new investments as capital returns to the sector. In 2025, we made three new loans totaling $68 million, collateralized by recently acquired office properties. Additionally, and as previously mentioned, we made a $25.8 million investment for a 20% non-controlling interest alongside a strong operating partner to acquire a 667,000 square foot Manhattan office property located just less than one block away from Grand Central Terminal. Momentum has carried into 2026 as acquisition activity improves in the commercial real estate market. We've already closed over $250 million in new loans with more than $450 million under application and in closing. Securities portfolio. During the fourth quarter, we acquired $413 million of primarily AAA-rated commercial real estate securities. As of year end, the securities portfolio totaled $2.1 billion, representing 39% of total assets. Real estate portfolio. Our $966 million real estate portfolio delivered consistent performance in 2025, generating $14.8 million of net operating income in the fourth quarter and $57.3 million for the full year. This steady income was supported by active leasing and proactive asset management, which improved both occupancy and overall portfolio stability throughout the year. Capital structure and liquidity. In 2025, we issued our inaugural $500 million investment-grade unsecured bond at a fixed rate of 5.5%, with pricing tightening from 200 basis points over treasuries to 167 basis points at issuance. Since then, our bonds have tightened by over 60 basis points to approximately 100 basis points over treasuries, outpacing comparably rated equity REIT bonds by nearly two times and distinguishing us from higher leverage mortgage REITs and property REITs with first loss exposure. Historically, commercial mortgage REITs face skepticism from bondholders and shareholders of traditional equity REITs due to concerns over leverage composition, external management, and limited insider ownership. The latter stands apart. We offer a differentiated investment proposition, an investment grade, internally managed company with management in the board owning over 11% of the public company, a portfolio comprised of senior secured assets and a capital structure anchored by unsecured debt with conservative leverage of two to three times. As of year end, 71% of our debt was unsecured and 81% of our assets were unencumbered. We maintained $608 million in liquidity, including $570 million of undrawn capacity on our unsecured revolver. Having now converted traditional equity bondholders We believe we offer a meaningful alternative to traditional equity-rich shareholders as well by providing a clear and compelling value proposition for investors seeking stability, alignment, and attractive risk-adjusted returns. Building on our momentum, our focus now shifts to loan origination and earnings growth as the primary catalyst driving our story forward. With this stronger narrative, we aim to attract high-quality equity-rich shareholders, aligning our valuation with equity-rich peers to further reduce our cost of capital. In closing, 2025 is a landmark year for Ladder. We achieved investment grade ratings, enhanced our capital structure, and delivered consistent performance across our portfolio. In 2026, we plan to drive growth by increasing loan originations to enhance returns, support dividend growth, and create shareholder value, all while maintaining the balance sheet discipline that defines Ladder. Thank you to our investors for your continued support and to our team for their dedication throughout this transformative year. With that, I'll turn the call over to Paul.

Good morning and thank you, Pamela. Expanding on the topics Pamela highlighted, I'll be providing additional detail on our operating performance and strategic positioning as 2026 begins. During the fourth quarter, LATA generated distributable earnings of 21.4 million or 17 cents per share, excluding a realized low loss previously reserved for our fourth quarter earnings were 21 cents per share. In 2025, we achieved our longstanding goal of attaining investment grade credit ratings as Moody's upgraded ladder to be a three and fetched a triple B minus with S&P upgrading ladder to double B plus in January subsequent to year end. Well, I was now the only investment grade rated mortgage rate, a distinction that underscores our disciplined approach to balance sheet and credit management, prudent leverage and the durability of our diversified commercial real estate platform. These ratings enhance our access to investment-grade capital at tighter spreads, validate our commitment to the use of unsecured debt to finance our balance sheet, and overall further solidify Ladder's industry leadership. In July of 2025, we issued $500 million of senior unsecured notes maturing in 2030 at a 5.5% coupon, representing a 167 basis points spread over the benchmark treasury. This transaction was oversubscribed by more than five and a half times with orders exceeding $3.5 billion, executing at the tightest spread in Ladder's history. This transaction firmly established Ladder in the investment-grade bond market, expanding our access to a deeper, more stable pool of capital. As Pamela mentioned, but is worth repeating, the bond has continued to perform well in the secondary market, trading as tight as 100 basis points over Treasury since closing. As of year end, our adjusted leverage ratio was 2.0 times, and we maintained a robust liquidity of $608 million, including $570 million of revolver capacity. Our unencumbered asset pool represented 81% of total assets as of December 31st, 2025, of which 87% was comprised of first mortgage loans, investment grade securities, and unrestricted cash and cash equivalents, providing a significant balance sheet flexibility. As of December 31st, 2025, Ladder's underappreciated book value per share was $13.69, which is net of 37 cents per share of CECL Reserve established. In the fourth quarter of 2025, we repurchased $928,000 of common stock, or 88,000 shares. at a weighted average share price of $10.57. And in total in 2025, we would purchase $10.2 million of common stock, or 965,000 shares, at a weighted average share price of $10.60. As of December 31st, 2025, $90.6 million remains outstanding on ladder stock or purchase program. In the fourth quarter, Lattery declared a 23 cent per share dividend, which was paid on January 15, 2026. For the full year, we achieved 96% dividend coverage, excluding the loan write-off, while simultaneously allowing our loan portfolio to grow following a record year of paydowns in 2024. Our dividend remains stable, reflecting the strength of our balance sheet and our ability to grow earnings as our asset-based transitions into newly originated loans and reaches full capacity. Furthermore, as our investment grade story continues to gain traction, we see potential for our dividend yield to tighten relative to other investment grade REITs with comparable credit ratings, further underscoring the value of our differentiated model. Building on Pamela's overview of our performance, I will highlight a few additional insights into how each of our segments fared for the fourth quarter. As of December 31st, 2025, our loan portfolio totaled $2.2 billion with a weighted average yield of 7.8%. As of year end, four loans totaling $129.7 million or 2.5% of total assets were on non-accrual, including one loan added in the fourth quarter collateralized by an office property in Portland, Oregon, the Weatherly Building. The loan has a carrying value of $5.8 million or $88 per square foot, which is net of a $5 million loan loss reserve realized in the fourth quarter. Subsequent to year end, we resolved one non-accrual loan with a $61 million carrying value through foreclosure. The loan is collateralized by a three property, 158 unit multifamily portfolio in the Harlem neighborhood of New York City with 60 parking spaces built and built between 2017 and 2020. The properties are currently 87% occupied and generate healthy net operating income. Our CISO reserve otherwise remains steady at $47 million or 37 cents per share. Taking into consideration a continued ongoing macroeconomic shift in the U.S. and global economy, we believe this reserve level is sufficient to cover any potential losses in our loan portfolio. The latter CISO reserve level has been and we believe will continue to be the result of a disciplined approach to credit risk management, allowing us to remain well positioned to navigate market challenges while protecting shareholder value. As of December 31st, 2025, our securities portfolio totaled $2.1 billion, with a weighted average yield of 5.3%. Notably, 99% of the portfolio was investment grade rated, and 97% was AAA rated, underscoring its high credit quality. As of year end, approximately 66% or 1.4 billion of our securities portfolio remained unencumbered, providing an additional source of liquidity for ladder. complementing our same-day liquidity of $608 million and reinforcing our strong balance sheet and ability to focus on offense. In 2025, our $966 million real estate segment continued to generate stable net operating income. The portfolio includes 149 net lease properties comprised of primarily investment-grade credits committed to long-term leases with an average lease term of 6.7 years. or further details of our fourth quarter and full year 2025 operating results, please refer to our earnings supplement presentation available on our website and our annual report on Form 10-K, which we expect to file in the coming days. With that, I will turn the call over to Brian.