Ladder Capital ((LADR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Ladder Capital’s recent earnings call exuded a positive sentiment, underscored by strong performance in loan originations, a successful bond issuance, and stable credit metrics. The company’s strategic positioning and liquidity are highlighted as solid foundations for future growth, although challenges in managing securities holdings and maintaining reserves for potential loan losses persist.
Record Loan Originations
Ladder Capital achieved a remarkable $511 million in new loan originations across 17 transactions, marking the highest quarterly origination volume in over three years. This achievement underscores the company’s robust origination capabilities and strategic focus on multifamily and industrial assets.
Successful Investment-Grade Bond Offering
The company successfully closed its inaugural $500 million 5-year investment-grade unsecured bond offering at a rate of 5.5%. This offering was met with strong demand and tighter trading spreads in the secondary market, reflecting investor confidence in Ladder’s financial health.
Strong Credit Performance
Ladder maintained stable credit performance, with only three loans on non-accrual status totaling $123 million, or 2.6% of total assets. Importantly, no new loans were added to non-accrual in the third quarter, indicating effective credit management.
Increased Liquidity and Strong Balance Sheet
The company reported $879 million in liquidity, with 75% of its debt in unsecured corporate bonds and 84% of balance sheet assets unencumbered. This strong liquidity position supports Ladder’s strategic initiatives and financial flexibility.
Positive Market Positioning and Outlook
Ladder is well-positioned for continued growth, with expectations for fourth-quarter loan originations to surpass third-quarter production. The company plans to capitalize on investment-grade market opportunities, leveraging its strategic positioning.
Reduced Securities Holdings
Ladder experienced a modest net reduction in securities holdings due to paydowns and sales exceeding purchases. This reflects a disciplined capital allocation approach amid market volatility, ensuring efficient use of resources.
Non-Accrual Loans and CECL Reserve
Despite stable credit performance, Ladder maintains a $52 million CECL reserve, highlighting ongoing caution regarding potential loan portfolio losses. This reserve underscores the company’s prudent risk management practices.
Forward-Looking Guidance
During the third quarter of 2025, Ladder Capital Corp. reported distributable earnings of $32.1 million or $0.25 per share, achieving a return on equity of 8.3% and maintaining adjusted leverage of 1.7x. The company’s strategic positioning and robust origination platform are expected to support continued earnings growth and shareholder returns, with a focus on reducing office loan exposure and capitalizing on investment opportunities.
In summary, Ladder Capital’s earnings call highlighted a positive sentiment with strong loan origination performance, successful bond issuance, and stable credit metrics. The company’s strategic positioning and liquidity are poised to support future growth, despite challenges in securities holdings and potential loan losses. Investors can expect continued robust performance and strategic capital allocation from Ladder Capital.