Business Wire | Oct 29, 2020 04:15PM EDT

Ladder Capital Corp Reports Results for the Quarter Ended September 30, 2020

Oct. 29, 2020

NEW YORK--(BUSINESS WIRE)--Oct. 29, 2020--Ladder Capital Corp (NYSE: LADR) ("we," "Ladder," or the "Company") today announced operating results for the quarter ended September 30, 2020. GAAP income before taxes for the three months ended September 30, 2020 was $21.4 million, and diluted earnings per share was $0.14. Core earnings was $19.7 million, or $0.16 of core EPS.

"We're pleased with our results this quarter, and the strong contribution to core earnings from the sale of three assets in our real estate portfolio," said Brian Harris, Ladder's Chief Executive Officer. "And, as our loan book continues to pay off, our cash levels continue to increase. With such significant incremental earnings power on hand, we feel well-positioned to take advantage of the opportunities that we expect to arise in the coming quarters."

Supplemental

The Company issued a supplemental presentation detailing its third quarter 2020 operating results, which can be viewed at http://ir.laddercapital.com/.

Conference Call and Webcast

We will host a conference call on Thursday, October 29, 2020 at 5:00 p.m. Eastern Time to discuss third quarter 2020 results. The conference call can be accessed by dialing (855) 327-6837 domestic or (631) 891-4304 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 from 8:00 p.m. Eastern Time on Thursday, October 29, 2020 through midnight Thursday, November 12, 2020. To access the replay, please call (844) 512-2921 domestic or (412) 317-6671 international, access code 10011371. 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 over $6 billion of assets. 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) investing in investment grade securities secured by first mortgage loans on commercial real estate; and (iii) owning and operating commercial real estate, including net leased commercial properties.

Founded in 2008, and led by Brian Harris, the Company's Chief Executive Officer, 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 10% of the Company's equity.

Forward-Looking Statements & Coronavirus Risk

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, including the impact of the COVID-19 pandemic 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, 2019 and Quarterly Report on Form 10-Q for the period ended June 30, 2020, 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)

September 30, December 31, 2020(1) 2019(1)

(Unaudited)

Assets

Cash and cash equivalents $ 875,839 $ 58,171

Restricted cash 41,897 297,575

Mortgage loan receivables held for investment, net, at amortized cost:

Mortgage loans held by consolidated subsidiaries 2,731,254 3,257,036

Allowance for credit losses (47,084) (20,500)

Mortgage loan receivables held for sale 30,553 122,325

Real estate securities 1,447,625 1,721,305

Real estate and related lease intangibles, net 990,583 1,048,081

Investments in and advances to unconsolidated 49,155 48,433 joint ventures

FHLB stock 61,619 61,619

Derivative instruments 449 693

Accrued interest receivable 18,259 21,066

Other assets 159,314 53,348

Total assets $ 6,359,463 $ 6,669,152

Liabilities and Equity

Liabilities

Debt obligations, net $ 4,714,510 $ 4,859,873

Dividends payable 26,236 38,696

Accrued expenses 36,179 72,397

Other liabilities 60,744 59,209

Total liabilities 4,837,669 5,030,175

Commitments and contingencies - -

Equity

Class A common stock, par value $0.001 per share,600,000,000 shares authorized; 122,852,765 and 120 108 110,693,832 shares issued and 120,267,457 and107,509,563 shares outstanding

Class B common stock, par value $0.001 per share,100,000,000 shares authorized; zero and - 12 12,158,933 shares issued and outstanding

Additional paid-in capital 1,726,339 1,532,384

Treasury stock, 2,585,308 and 3,184,269 shares, (54,543) (42,699) at cost

Retained earnings (dividends in excess of (126,965) (35,746) earnings)

Accumulated other comprehensive income (loss) (28,448) 4,218

Total shareholders' equity 1,516,503 1,458,277

Noncontrolling interest in operating partnership - 172,054

Noncontrolling interest in consolidated joint 5,291 8,646 ventures

Total equity 1,521,794 1,638,977



Total liabilities and equity $ 6,359,463 $ 6,669,152

(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)

(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 September Nine Months Ended September 30, 30,

2020 2019 2020 2019



Net interest income

Interest income $ 54,621 $ 82,251 $ 189,306 $ 254,040

Interest expense 56,398 51,397 176,225 155,015

Net interest (1,777) 30,854 13,081 99,025 income

Provision for/(release of) loan (2,512) - 23,340 600 loss reserves

Net interestincome (expense) 735 30,854 (10,259) 98,425 after provisionfor/(release of)loan losses

Other income (loss)

Operating lease 25,464 24,405 75,565 81,106 income

Sale of loans, 1,127 11,247 1,387 38,589 net

Realized gain(loss) on (303) 3,396 (12,089) 10,726 securities

Unrealized gain(loss) on equity - 254 (132) 1,341 securities

Unrealized gain(loss) on Agency 9 16 183 38 interest-onlysecurities

Realized gain(loss) on sale of 21,588 2,082 32,116 963 real estate, net

Impairment of - - - (1,350) real estate

Fee and other 3,051 5,166 8,075 17,047 income

Net result fromderivative 260 (9,465) (15,988) (35,956) transactions

Earnings (loss)from investment 447 1,094 1,359 3,617 in unconsolidatedjoint ventures

Gain (loss) onextinguishment/ 1,167 - 22,244 (1,070) defeasance ofdebt

Total other 52,810 38,195 112,720 115,051 income (loss)

Costs and expenses

Salaries and 7,858 14,319 31,880 52,800 employee benefits

Operating 3,938 5,314 15,957 16,727 expenses

Real estateoperating 8,060 6,270 22,041 17,776 expenses

Fee expense 2,476 2,056 5,892 4,951

Depreciation and 9,817 9,030 29,642 29,192 amortization

Total costs and 32,149 36,989 105,412 121,446 expenses

Income (loss) 21,396 32,060 (2,951) 92,030 before taxes

Income tax 14 1,112 (5,078) 478 expense (benefit)

Net income (loss) 21,382 30,948 2,127 91,552

Net (income) lossattributable tononcontrolling (4,149) (64) (5,417) 691 interest inconsolidatedjoint ventures

Net (income) lossattributable tononcontrolling (45) (3,308) 561 (10,247) interest inoperatingpartnership

Net income (loss)attributable to $ 17,188 $ 27,576 $ (2,729) $ 81,996 Class A commonshareholders



Earnings per share:

Basic $ 0.15 $ 0.26 $ (0.02) $ 0.78

Diluted $ 0.14 $ 0.26 $ (0.02) $ 0.77



Weighted averageshares outstanding:

Basic 117,481,812 106,004,152 110,233,748 105,264,752

Diluted 118,791,927 106,603,713 110,233,748 106,232,581



Dividends pershare of Class A $ 0.200 $ 0.340 $ 0.740 $ 1.020 common stock

Non-GAAP Financial Measures

We present core earnings, core EPS, and after-tax core return on average equity ("after-tax core ROAE"), which are non-GAAP financial measures, as supplemental measures of our performance. We believe core earnings, core EPS and after-tax core ROAE assist investors in comparing our performance across reporting periods on a more relevant and consistent basis by excluding certain non-cash expenses and unrecognized results as well as eliminating timing differences related to securitization gains and changes in the values of assets and derivatives. In addition, we use core earnings, core EPS and after-tax core ROAE: (i) to evaluate our earnings from operations and (ii) because management believes that they may be useful performance measures for us. Core earnings is also used as a factor in determining the annual incentive compensation of our senior managers and other employees.

We define core 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 joint 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) adjustment for CECL reserves, (vi) non-cash stock-based compensation, and (vii) certain transactional items.

Core EPS is defined as after-tax core earnings divided by the adjusted weighted average diluted shares outstanding during the period. The adjusted weighted average diluted shares outstanding is defined as the GAAP weighted average diluted shares outstanding, adjusted for shares issuable upon conversion of all Class B shares, if excluded from the GAAP measure because they would have an anti-dilutive effect. The inclusion of shares issuable upon conversion of Class B shares is consistent with the inclusion of income attributable to noncontrolling interest in operating partnership in core earnings and after-tax core earnings.

Our results of operations were significantly impacted by the actions we took to generate liquidity and pay down mark-to-market debt in direct response to the unfavorable market conditions that occurred near the onset of the COVID-19 pandemic. The actions taken by management had multiple impacts on core earnings, core EPS and after-tax core ROAE for the three months ended June 30, 2020. Management believes the actions taken were prompted by the unusual market conditions and therefore outside of Ladder's core operations. Management believes adjusting for certain transactional charges/gains related to the impact of COVID-19 on its performance measures provides a more useful guide to assess the ongoing core operations of the Company.

Set forth below is an unaudited reconciliation of net income to after-tax core earnings, and an unaudited computation of core EPS (in thousands, except per share data):

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019



Net income (loss) $ 21,382 $ 30,948 $ 2,127 $ 91,552

Income tax expense (benefit) 14 1,112 (5,078) 478

Income (loss) before taxes 21,396 32,060 (2,951) 92,030

Net (income) lossattributable tononcontrolling interest in (4,153) (71) (5,429) 667 consolidated joint ventures(GAAP)(1)

Our share of real estatedepreciation, amortization 4,534 6,741 14,782 18,999 and gain adjustments(2)(3)

Adjustments for unrecognized (4,222) 1,889 4,737 13,191 derivative results(4)

Unrealized (gain) loss on (9) (248) (146) (1,475) fair value securities

Adjustment for economic gainon loan sales not recognizedunder GAAP for which risk 547 (168) 502 (817) has been substantiallytransferred, net of reversal/amortization

Adjustment for CECL reserves (2,512) - 15,340 -

Non-cash stock-based 4,125 3,918 19,557 19,383 compensation

Transactional adjustments - - 16,939 - (response to COVID-19)(5)

Core earnings 19,706 44,121 63,331 141,978

Core estimated corporate tax (520) 446 1,811 767 benefit (expense)(6)

After-tax core earnings $ 19,186 $ 44,567 $ 65,142 $ 142,745

Adjusted weighted averagediluted shares outstanding 118,792 118,763 119,226 118,906 (7)

Core EPS $ 0.16 $ 0.38 $ 0.55 $ 1.20

(1)

Includes $4 thousand and $12 thousand of net income which are included in net (income) loss attributable to noncontrolling interest in operating partnership on the consolidated statements of income for the three and nine months ended September 30, 2020, respectively. Includes $7 thousand and $24 thousand of net income which are included in net (income) loss attributable to noncontrolling interest in operating partnership on the consolidated statements of income for the three and nine months ended September 30, 2019, respectively.

Includes $4 thousand and $12 thousand of net income which are included in net (income) loss attributable to noncontrolling interest in operating partnership on the consolidated statements of income for the three and nine(1) months ended September 30, 2020, respectively. Includes $7 thousand and $24 thousand of net income which are included in net (income) loss attributable to noncontrolling interest in operating partnership on the consolidated statements of income for the three and nine months ended September 30, 2019, respectively.

The following is a reconciliation of GAAP depreciation and amortization to(2) our share of real estate depreciation, amortization and gain adjustments presented in the computation of core earnings in the preceding table ($ in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Total GAAP depreciation and amortization

$

9,817

$

9,030

$

29,642

$

29,192

Less: Depreciation and amortization related to non-rental property fixed assets

(25)

(25)

(74)

(74)

Less: Non-controlling interest in consolidated joint ventures' share of accumulated depreciation and amortization and unrecognized passive interest in unconsolidated joint ventures

(348)

(417)

(1,290)

(2,392)

Our share of real estate depreciation and amortization

9,444

8,588

28,278

26,726

Realized gain from accumulated depreciation and amortization on real estate sold (see below)

(4,897)

(1,418)

(14,576)

(6,839)

Less: Non-controlling interest in consolidated joint ventures' share of accumulated depreciation and amortization on real estate sold

520

41

2,667

83

Our share of accumulated depreciation and amortization on real estate sold

(4,377)

(1,377)

(11,909)

(6,756)

Less: Operating lease income on above/below market lease intangible amortization

(533)

(470)

(1,587)

(971)

Our share of real estate depreciation, amortization and gain adjustments

$

4,534

$

6,741

$

14,782

$

18,999

GAAP gains/losses on sales of real estate include the effects of previously recognized real estate depreciation and amortization. For purposes of core earnings, our share of real estate depreciation and amortization is eliminated and, accordingly, the resultant gains/losses also must be adjusted. Following is a reconciliation of the related consolidated GAAP amounts to the amounts reflected in core earnings ($ in thousands):

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019



Total GAAP depreciation and $ 9,817 $ 9,030 $ 29,642 $ 29,192 amortization

Less: Depreciation and amortization related to (25) (25) (74) (74) non-rental property fixed assets

Less: Non-controlling interest in consolidated joint ventures' share of accumulated depreciation and (348) (417) (1,290) (2,392) amortization and unrecognized passive interest in unconsolidated joint ventures

Our share of real estate 9,444 8,588 28,278 26,726 depreciation and amortization



Realized gain from accumulated depreciation and (4,897) (1,418) (14,576) (6,839) amortization on real estate sold (see below)

Less: Non-controlling interest in consolidated joint ventures' share of 520 41 2,667 83 accumulated depreciation and amortization on real estate sold

Our share of accumulated depreciation and amortization (4,377) (1,377) (11,909) (6,756) on real estate sold



Less: Operating lease income on above/below market lease (533) (470) (1,587) (971) intangible amortization



Our share of real estate depreciation, amortization $ 4,534 $ 6,741 $ 14,782 $ 18,999 and gain adjustments

GAAP gains/losses on sales of real estate include the effects of previously recognized real estate depreciation and amortization. For purposes of core earnings, our share of real estate depreciation and amortization is eliminated and, accordingly, the resultant gains/losses also must be adjusted. Following is a reconciliation of the related consolidated GAAP amounts to the amounts reflected in core earnings ($ in thousands):

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019



GAAP realized gain (loss) on $ 21,588 $ 2,082 $ 32,116 $ 963 sale of real estate, net

Adjusted gain/loss on sale of real estate for purposes of (17,211) (705) (20,207) 5,793 core earnings

Our share of accumulated depreciation and amortization $ 4,377 $ 1,377 $ 11,909 $ 6,756 on real estate sold

(3)

For the three months ended March 31, 2019, the Company recognized $5.7 million of operating lease income from prepayment of a lease, a $1.1 million loss on extinguishment of debt and a $1.4 million impairment of real estate related to a single-tenant two-story office building in Wayne, NJ. This property was sold on May 1, 2019. For core earnings, the Company recognized the net impact of these events in the period the sale was realized. Accordingly, the $3.3 million net impact of the income and losses discussed above were excluded from core earnings for the three months ended March 31, 2019 and are included in core earnings for the nine months ended September 30, 2019.

For the three months ended March 31, 2019, the Company recognized $5.7 million of operating lease income from prepayment of a lease, a $1.1 million loss on extinguishment of debt and a $1.4 million impairment of real estate related to a single-tenant two-story office building in Wayne,(3) NJ. This property was sold on May 1, 2019. For core earnings, the Company recognized the net impact of these events in the period the sale was realized. Accordingly, the $3.3 million net impact of the income and losses discussed above were excluded from core earnings for the three months ended March 31, 2019 and are included in core earnings for the nine months ended September 30, 2019.

The following is a reconciliation of GAAP net results from derivative(4) transactions to our unrecognized derivative result presented in the computation of core earnings in the preceding table ($ in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Net results from derivative transactions

$

260

$

(9,465)

$

(15,988)

$

(35,956)

Hedging interest expense

1,346

436

1,028

1,927

Hedging realized result

2,616

7,140

10,223

20,838

Adjustments for unrecognized derivative results

$

4,222

$

(1,889)

$

(4,737)

$

(13,191)

Three Months Ended Nine Months Ended September September 30, 30,

2020 2019 2020 2019



Net results from $ 260 $ (9,465) $ (15,988) $ (35,956) derivative transactions

Hedging interest 1,346 436 1,028 1,927 expense

Hedging realized result 2,616 7,140 10,223 20,838

Adjustments for unrecognized derivative $ 4,222 $ (1,889) $ (4,737) $ (13,191) results

(5)

The impact from COVID-19 included adjustments related to the unusual market conditions and actions taken by management including: (a) $6.7 million of losses from sales of performing first mortgage loans included in sale of loans, net, (b) $15.4 million of losses from sales of CMBS, (c) $3.7 million of loss from conduit loan sales, (d) $6.5 million of prepayment penalties related to paydowns of mark-to-market debt included in interest expense, (e) $2.1 million of professional fee expenses included in operating expenses and (f) $0.2 million of severance costs included in salaries and employee benefits. The $34.5 million total of the preceding amounts was partially offset by (g) $19.0 million of gains from the repurchase of and extinguishment of unsecured corporate bond debt at a discount from par net of (h) $1.5 million of accelerated premium amortization included in interest expense. Set forth below is a reconciliation of certain of the above COVID-19 losses to the most comparable GAAP financial measure ($ in thousands):

The impact from COVID-19 included adjustments related to the unusual market conditions and actions taken by management including: (a) $6.7 million of losses from sales of performing first mortgage loans included in sale of loans, net, (b) $15.4 million of losses from sales of CMBS, (c) $3.7 million of loss from conduit loan sales, (d) $6.5 million of prepayment penalties related to paydowns of mark-to-market debt included in interest expense, (e) $2.1 million of professional fee expenses included in(5) operating expenses and (f) $0.2 million of severance costs included in salaries and employee benefits. The $34.5 million total of the preceding amounts was partially offset by (g) $19.0 million of gains from the repurchase of and extinguishment of unsecured corporate bond debt at a discount from par net of (h) $1.5 million of accelerated premium amortization included in interest expense. Set forth below is a reconciliation of certain of the above COVID-19 losses to the most comparable GAAP financial measure ($ in thousands):

Nine months ended

September 30, 2020

(b) Losses from sales of CMBS

Loss on sale of securities - COVID-19 related

$

(14,670)

Hedge (loss) related to sale of securities, included in net results from derivative transactions

(698)

Losses from sales of CMBS

$

(15,368)

(c) Losses from conduit loan sales

Income from sales of loans, net - COVID-19 related

$

(1,680)

Hedge (loss) related to sales of loans, included in net results from derivative transactions

(1,994)

Losses from conduit loan sales

$

(3,674)

Nine months ended

September 30, 2020

(b) Losses from sales of CMBS

Loss on sale of securities - COVID-19 related $ (14,670)

Hedge (loss) related to sale of securities, included in net (698) results from derivative transactions

Losses from sales of CMBS $ (15,368)



(c) Losses from conduit loan sales

Income from sales of loans, net - COVID-19 related $ (1,680)

Hedge (loss) related to sales of loans, included in net results (1,994) from derivative transactions

Losses from conduit loan sales $ (3,674)

(6)

Core estimated corporate tax benefit (expense) based on effective tax rate applied to core earnings generated by the activity within our taxable REIT subsidiary.

Core estimated corporate tax benefit (expense) based on effective tax rate(6) applied to core earnings generated by the activity within our taxable REIT subsidiary.

Set forth below is an unaudited reconciliation of weighted average diluted(7) shares outstanding to adjusted weighted average diluted shares outstanding (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Weighted average diluted shares outstanding

118,792

106,604

110,234

106,233

Weighted average shares issuable to converted Class B shareholders

-

12,159

8,992

12,673

Adjusted weighted average diluted shares outstanding

118,792

118,763

119,226

118,906

After-tax core ROAE is presented on an annualized basis and is defined as after-tax core earnings divided by the average total shareholders' equity and noncontrolling interest in operating partnership during the period. The inclusion of noncontrolling interest in operating partnership is consistent with the inclusion of income attributable to noncontrolling interest in operating partnership in after-tax core earnings. Set forth below is an unaudited computation of after-tax core ROAE ($ in thousands):

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019



Weighted average diluted shares 118,792 106,604 110,234 106,233 outstanding

Weighted average shares issuable to converted Class B - 12,159 8,992 12,673 shareholders

Adjusted weighted average 118,792 118,763 119,226 118,906 diluted shares outstanding

After-tax core ROAE is presented on an annualized basis and is defined as after-tax core earnings divided by the average total shareholders' equity and noncontrolling interest in operating partnership during the period. The inclusion of noncontrolling interest in operating partnership is consistent with the inclusion of income attributable to noncontrolling interest in operating partnership in after-tax core earnings. Set forth below is an unaudited computation of after-tax core ROAE ($ in thousands):

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019



After-tax core earnings $ 19,186 $ 44,567 $ 65,142 $ 142,745

Average shareholders'equity and NCI in 1,508,990 1,634,623 1,522,850 1,635,150 operating partnership

After-tax core ROAE 5.1 % 10.9 % 5.7 % 11.6 %

Non-GAAP Measures - Limitations

Our non-GAAP financial measures have limitations as analytical tools. Some of these limitations are:

* core earnings, core EPS and after-tax core 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; * core EPS and after-tax core 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, assuming the conversion of all shares of Class B common stock into shares of Class A common stock. 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 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.

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CONTACT: Investor Contact Ladder Capital Corp Investor Relations (917) 369-3207 investor.relations@laddercapital.com