GAAP disclosures for the first quarter:
-
GAAP income before taxes of $21.7 million and diluted EPS of $0.21
compared to $71.7 million and $0.53 in the first quarter of 2018 -
After-tax GAAP return on average equity of 6.1% compared to 16.0%
in the first quarter of 2018 -
GAAP book value per share of $13.59 at March 31, 2019 compared to
$13.90 at December 31, 2018
Core (non-GAAP) disclosures for the first quarter:
-
Core earnings of $46.9 million compared to $63.8 million in the
first quarter of 2018 - Core EPS of $0.40 compared to $0.55 in the first quarter of 2018
-
After-tax core return on average equity of 11.6% compared to 16.3%
in the first quarter of 2018 -
Undepreciated book value per share of $15.09 at March 31, 2019
compared to $15.34 at December 31, 2018
Operating and financing statistics for the first quarter:
-
Declared a first quarter dividend of $0.34/share of Class A common
stock paid on April 1, 2019 -
Originated a total of $456.4 million of commercial mortgage loans,
including $281.1 million of mortgage loans held for investment and
$175.3 million of mortgage loans held for sale - Contributed $169.7 million of loans to 1 securitization transaction
NEW YORK–(BUSINESS WIRE)–Ladder Capital Corp (NYSE: LADR) (“we,” “Ladder,” or the “Company”)
today announced operating results for the quarter ended March 31, 2019.
GAAP income before taxes for the three months ended March 31, 2019 was
$21.7 million compared to $71.7 million for the three months ended
March 31, 2018. Diluted EPS for the three months ended March 31, 2019
was $0.21 compared to $0.53 for the three months ended March 31, 2018.
After-tax GAAP return on average equity was 6.1% in the first quarter of
2019.
Core earnings, a non-GAAP financial measure, was $46.9 million for the
first quarter of 2019, compared to $63.8 million in the first quarter of
2018. Core EPS, a non-GAAP financial measure, was $0.40 for the first
quarter of 2019 compared to $0.55 for the three months ended March 31,
2018. We believe core earnings and core EPS are useful in evaluating our
earnings from operations across reporting periods as discussed in the
Non-GAAP Financial Measures section of this earnings release.
The year over year variance in earnings was primarily attributable to
property sales in the first quarter of 2018, which resulted in $31.0
million of GAAP realized gain on sales of real estate and contributed
$18.4 million to core earnings. GAAP income before taxes also reflects
the unfavorable impact of declining interest rates during the first
quarter of 2019 on the value of interest rate hedges, partially offset
by higher gains on sales of loans and securities.
Portfolio Overview
The following table summarizes the book value of our investment
portfolio as of the dates indicated below ($ in thousands):
| March 31, 2019 | December 31, 2018 | ||||||||||||||||||||
| Loans | |||||||||||||||||||||
| Balance sheet loans: | |||||||||||||||||||||
| Balance sheet first mortgage loans | $ | 3,159,154 | 48.4 | % | $ | 3,170,788 | 50.5 | % | |||||||||||||
| Other commercial real estate-related loans | 143,599 | 2.2 | % | 147,602 | 2.4 | % | |||||||||||||||
| Mortgage loans transferred but not considered sold | 15,504 | 0.2 | % |
– |
– |
% | |||||||||||||||
| Provision for loan losses | (18,200 | ) | (0.3 | )% | (17,900 | ) | (0.3 | )% | |||||||||||||
| Total balance sheet loans | 3,300,057 | 50.5 | % | 3,300,490 | 52.6 | % | |||||||||||||||
| Conduit first mortgage loans | 189,525 | 2.9 | % | 182,439 | 2.9 | % | |||||||||||||||
| Total loans | 3,489,582 | 53.4 | % | 3,482,929 | 55.5 | % | |||||||||||||||
| Securities | |||||||||||||||||||||
| CMBS investments | 1,535,210 | 23.6 | % | 1,308,331 | 20.8 | % | |||||||||||||||
| U.S. Agency Securities investments | 36,158 | 0.6 | % | 36,374 | 0.6 | % | |||||||||||||||
| Corporate bonds | 36,609 | 0.6 | % | 53,871 | 0.9 | % | |||||||||||||||
| Equity securities | 11,151 | 0.2 | % | 11,550 | 0.2 | % | |||||||||||||||
| Total securities | 1,619,128 | 25.0 | % | 1,410,126 | 22.5 | % | |||||||||||||||
| Real Estate | |||||||||||||||||||||
| Real estate and related lease intangibles, net | 1,005,997 | 15.4 | % | 998,022 | 15.9 | % | |||||||||||||||
| Total real estate | 1,005,997 | 15.4 | % | 998,022 | 15.9 | % | |||||||||||||||
| Other Investments | |||||||||||||||||||||
| Investments in unconsolidated joint ventures | 93,841 | 1.4 | % | 40,354 | 0.6 | % | |||||||||||||||
| FHLB stock | 61,619 | 0.9 | % | 57,915 | 0.9 | % | |||||||||||||||
| Total other investments | 155,460 | 2.3 | % | 98,269 | 1.5 | % | |||||||||||||||
| Total investments | 6,270,167 | 96.1 | % | 5,989,346 | 95.4 | % | |||||||||||||||
| Cash, cash equivalents and restricted cash | 125,233 | 1.9 | % | 98,450 | 1.6 | % | |||||||||||||||
| Other assets | 130,019 | 2.0 | % | 185,076 | 3.0 | % | |||||||||||||||
| Total assets | $ | 6,525,419 | 100.0 | % | $ | 6,272,872 | 100.0 | % | |||||||||||||
|
Note: Securities are carried at fair value. |
|||||||||||||||||||||
Liquidity and Capital Resources
On February 26, 2019, we amended of one of our committed loan repurchase
facilities to extend the initial term of the facility from October 1,
2020 to February 24, 2022. We maintained two additional 12-month
extension periods at our option. No new advances are permitted after the
initial maturity date.
On March 4, 2019, we executed an amendment of our committed securities
repurchase facility to extend the initial term of the facility to March
4, 2021.
The following table summarizes our debt obligations as of the following
dates ($ in thousands):
| March 31, 2019 | December 31, 2018 | |||||||||
| Committed loan repurchase facilities | $ | 611,406 | $ | 497,531 | ||||||
| Committed securities repurchase facility | 93,849 | — | ||||||||
| Uncommitted securities repurchase facilities | 324,827 | 166,154 | ||||||||
| Total repurchase facilities | 1,030,082 | 663,685 | ||||||||
| Mortgage loan financing(1) | 739,500 | 743,902 | ||||||||
| CLO debt(2) | 497,334 | 601,543 | ||||||||
| Participation financing – mortgage loan receivable | 2,393 | 2,453 | ||||||||
| Borrowings from the FHLB | 1,291,449 | 1,286,000 | ||||||||
| Senior unsecured notes(3) | 1,155,692 | 1,154,991 | ||||||||
| Total secured and unsecured debt obligations | 4,716,450 | 4,452,574 | ||||||||
| Liability for transfers not considered sales | 15,840 | — | ||||||||
| Total debt obligations, net | $ | 4,732,290 | $ | 4,452,574 | ||||||
| (1) |
Presented net of unamortized debt issuance costs of $0.6 million and $0.7 million as of March 31, 2019 and December 31, 2018, respectively. |
|
| (2) |
Presented net of unamortized debt issuance costs of $1.9 million and $2.6 million as of March 31, 2019 and December 31, 2018, respectively. |
|
| (3) |
Presented net of unamortized debt issuance costs of $10.5 million and $11.2 million at March 31, 2019 and December 31, 2018, respectively. |
Conference Call and Webcast
We will host a conference call on Tuesday, May 7, 2019 at 5:00 p.m.
Eastern Time to discuss first quarter 2019 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 from 8:00 p.m. Eastern Time on Tuesday,
May 7, 2019 through midnight Tuesday, May 21, 2019. To access the
replay, please call (844) 512-2921 domestic or (412) 317-6671
international, access code 13689397. 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.
|
Ladder Capital Corp Consolidated Balance Sheets (Dollars in Thousands) |
||||||||||||
| March 31, 2019(1) | December 31, 2018(1) | |||||||||||
| (Unaudited) | ||||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 45,158 | $ | 67,878 | ||||||||
| Restricted cash | 80,075 | 30,572 | ||||||||||
|
Mortgage loan receivables held for investment, net, at amortized cost: |
||||||||||||
| Mortgage loans held by consolidated subsidiaries | 3,302,753 | 3,318,390 | ||||||||||
| Mortgage loans transferred but not considered sold | 15,504 |
– |
||||||||||
| Provision for loan losses | (18,200 | ) | (17,900 | ) | ||||||||
| Mortgage loan receivables held for sale | 189,525 | 182,439 | ||||||||||
| Real estate securities | 1,619,128 | 1,410,126 | ||||||||||
| Real estate and related lease intangibles, net | 1,005,997 | 998,022 | ||||||||||
| Investments in unconsolidated joint ventures | 93,841 | 40,354 | ||||||||||
| FHLB stock | 61,619 | 57,915 | ||||||||||
| Derivative instruments | 1,632 |
– |
||||||||||
| Due from brokers | 5,514 |
– |
||||||||||
| Accrued interest receivable | 26,627 | 27,214 | ||||||||||
| Other assets | 96,246 | 157,862 | ||||||||||
| Total assets | $ | 6,525,419 | $ | 6,272,872 | ||||||||
| Liabilities and Equity | ||||||||||||
| Liabilities | ||||||||||||
| Debt obligations, net: | ||||||||||||
| Secured and unsecured debt obligations | $ | 4,716,450 | $ | 4,452,574 | ||||||||
|
Liability for transfers not considered sales |
15,840 |
– |
||||||||||
| Due to brokers | 49,766 | 1,301 | ||||||||||
| Derivative instruments |
– |
975 | ||||||||||
| Amount payable pursuant to tax receivable agreement | 1,559 | 1,570 | ||||||||||
| Dividends payable | 1,409 | 37,316 | ||||||||||
| Accrued expenses | 34,330 | 82,425 | ||||||||||
| Other liabilities | 61,822 | 53,076 | ||||||||||
| Total liabilities | 4,881,176 | 4,629,237 | ||||||||||
| Commitments and contingencies |
– |
– |
||||||||||
| Equity | ||||||||||||
|
Class A common stock, par value $0.001 per share, 600,000,000 |
107 | 105 | ||||||||||
|
Class B common stock, par value $0.001 per share, 100,000,000 shares authorized; 13,198,344 and 13,117,419 shares issued and outstanding |
13 | 13 | ||||||||||
| Additional paid-in capital | 1,508,452 | 1,471,157 | ||||||||||
|
Treasury stock, 3,092,504 and 2,701,162 shares, at cost |
(40,799 | ) | (32,815 | ) | ||||||||
| Retained earnings (dividends in excess of earnings) | (26,549 | ) | 11,342 | |||||||||
| Accumulated other comprehensive income (loss) | 7,080 | (4,649 | ) | |||||||||
| Total shareholders’ equity | 1,448,304 | 1,445,153 | ||||||||||
| Noncontrolling interest in operating partnership | 186,310 | 188,427 | ||||||||||
| Noncontrolling interest in consolidated joint ventures | 9,629 | 10,055 | ||||||||||
| Total equity | 1,644,243 | 1,643,635 | ||||||||||
| Total liabilities and equity | $ | 6,525,419 | $ | 6,272,872 | ||||||||
|
_________________________ |
||||||||||||
|
(1) Includes amounts relating to consolidated variable interest |
||||||||||||
|
Ladder Capital Corp Consolidated Statements of Income (Dollars in Thousands, Except Per Share and Dividend Data) (Unaudited) |
||||||||||
| Three Months Ended March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Net interest income | ||||||||||
| Interest income | $ | 86,466 | $ | 78,206 | ||||||
| Interest expense | 51,248 | 44,713 | ||||||||
| Net interest income | 35,218 | 33,493 | ||||||||
| Provision for loan losses | 300 | 3,000 | ||||||||
| Net interest income after provision for loan losses | 34,918 | 30,493 | ||||||||
| Other income (loss) | ||||||||||
| Operating lease income | 28,921 | 28,137 | ||||||||
| Sale of loans, net | 7,079 | 4,888 | ||||||||
| Realized gain (loss) on securities | 2,865 | (1,099 | ) | |||||||
| Unrealized gain (loss) on equity securities | 2,078 | — | ||||||||
| Unrealized gain (loss) on Agency interest-only securities | 11 | 204 | ||||||||
| Realized gain on sale of real estate, net | 4 | 31,010 | ||||||||
| Impairment of real estate | (1,350 | ) | — | |||||||
| Fee and other income | 4,685 | 6,252 | ||||||||
| Net result from derivative transactions | (11,034 | ) | 14,959 | |||||||
| Earnings (loss) from investment in unconsolidated joint ventures | 959 | 52 | ||||||||
| Gain (loss) on extinguishment/defeasance of debt | (1,070 | ) | (69 | ) | ||||||
| Total other income (loss) | 33,148 | 84,334 | ||||||||
| Costs and expenses | ||||||||||
| Salaries and employee benefits | 23,574 | 17,096 | ||||||||
| Operating expenses | 5,403 | 5,548 | ||||||||
| Real estate operating expenses | 5,474 | 8,817 | ||||||||
| Fee expense | 1,712 | 843 | ||||||||
| Depreciation and amortization | 10,227 | 10,823 | ||||||||
| Total costs and expenses | 46,390 | 43,127 | ||||||||
| Income (loss) before taxes | 21,676 | 71,700 | ||||||||
| Income tax expense (benefit) | (2,854 | ) | 3,902 | |||||||
| Net income (loss) | 24,530 | 67,798 | ||||||||
|
Net (income) loss attributable to noncontrolling interest in consolidated joint ventures |
447 |
(8,422 | ) | |||||||
|
Net (income) loss attributable to noncontrolling interest in operating partnership |
(2,802 | ) | (8,501 | ) | ||||||
| Net income (loss) attributable to Class A common shareholders | $ |
22,175 |
$ | 50,875 | ||||||
| Earnings per share: | ||||||||||
| Basic | $ | 0.21 | $ | 0.53 | ||||||
| Diluted | $ | 0.21 | $ | 0.53 | ||||||
| Weighted average shares outstanding: | ||||||||||
| Basic | 104,259,549 | 95,187,316 | ||||||||
| Diluted | 105,006,315 | 95,389,219 | ||||||||
| Dividends per share of Class A common stock: | $ | 0.340 | $ | 0.315 | ||||||
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. 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. In addition, core earnings is used
as a factor in determining the annual incentive compensation of our
senior managers and other employees.
We consider the Class A common shareholders of the Company and limited
partners of Ladder Capital Finance Holdings LLLP other than Ladder
Capital Corp (“Continuing LCFH Limited Partners”) to have fundamentally
equivalent interests in our pre-tax earnings and net income.
Accordingly, for purposes of computing core earnings, core EPS and
after-tax core ROAE, we start with pre-tax earnings or net income and
adjust for other noncontrolling interest in consolidated joint ventures
but we do not adjust for amounts attributable to noncontrolling interest
held by Continuing LCFH Limited Partners. Similarly, when calculating
undepreciated book value per share we include total shareholders’ equity
and the noncontrolling interest held by Continuing LCFH Limited
Partners, but exclude noncontrolling interest in consolidated joint
ventures.
Core earnings
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 securitization transactions 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) non-cash stock-based compensation and (vi)
certain transactional items.
For core earnings, we include adjustments for economic gains on
securitization transactions not recognized under GAAP accounting for
which risk has substantially transferred during the period and exclusion
of resultant GAAP recognition of the related economics during the
subsequent periods. This adjustment is reflected in core earnings when
there is a true risk transfer on the mortgage loan transfer and
settlement. Historically, this 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 core earnings purposes. Management
believes recognizing these amounts for core 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 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 these hedges from core earnings
until the related asset is sold and the hedge position is considered
“closed,” whereupon they would then be included in core earnings in that
period. These are reflected as “adjustments for unrecognized derivative
results” for purposes of computing core 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 and changes in the fair value of the
derivatives used to hedge such assets.
Core EPS
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.
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 March 31, |
|||||||||||
| 2019 | 2018 | ||||||||||
| Net income (loss) | $ | 24,530 | $ | 67,798 | |||||||
| Income tax expense (benefit) | (2,854 | ) | 3,902 | ||||||||
| Income (loss) before taxes | 21,676 | 71,700 | |||||||||
|
Net (income) loss attributable to noncontrolling interest in consolidated joint ventures and operating partnership (GAAP)(1) |
440 | (8,430 | ) | ||||||||
|
Our share of real estate depreciation, amortization and gain adjustments(2)(3) |
5,667 | 6,058 | |||||||||
| Adjustments for unrecognized derivative results(4) | 9,115 | (8,110 | ) | ||||||||
| Unrealized (gain) loss on fair value securities | (2,089 | ) | (204 | ) | |||||||
|
Adjustment for economic gain on securitization transactions not recognized under GAAP for which risk has been substantially transferred, net of reversal/amortization |
(3 | ) | (291 | ) | |||||||
| Non-cash stock-based compensation | 12,094 | 3,083 | |||||||||
| Core earnings | 46,900 | 63,806 | |||||||||
| Core estimated corporate tax benefit (expense)(5) |
295 |
(3,452 | ) | ||||||||
| After-tax core earnings | $ |
47,195 |
$ | 60,354 | |||||||
| Adjusted weighted average diluted shares outstanding(6) | 118,206 | 110,290 | |||||||||
| Core EPS | $ | 0.40 | $ | 0.55 | |||||||
| (1) |
Includes $8 thousand and $8 thousand of net income attributable to noncontrolling interest in consolidated joint ventures which are included in net (income) loss attributable to noncontrolling interest in operating partnership on the consolidated statements of income for the three months ended March 31, 2019 and 2018, respectively. |
|
| (2) |
The following is a reconciliation of GAAP depreciation and amortization to our share of real estate depreciation, amortization and gain adjustments presented in the computation of core earnings in the preceding table ($ in thousands): |
| Three Months Ended March 31, | ||||||||||||
| 2019 | 2018 | |||||||||||
| Total GAAP depreciation and amortization | $ | 10,227 | $ | 10,823 | ||||||||
|
Less: Depreciation and amortization related to non-rental property fixed assets |
(25 | ) | (19 | ) | ||||||||
|
Less: Non-controlling interest in consolidated joint ventures’ share of accumulated depreciation and amortization and unrecognized passive interest in unconsolidated joint ventures |
(906 | ) | (358 | ) | ||||||||
| Our share of real estate depreciation and amortization | 9,296 | 10,446 | ||||||||||
|
Realized gain from accumulated depreciation and amortization on real estate sold (see below) |
(3,485 | ) | (5,194 | ) | ||||||||
|
Less: Non-controlling interest in consolidated joint ventures’ share of accumulated depreciation and amortization on real estate sold |
— | 1,188 | ||||||||||
|
Our share of accumulated depreciation and amortization on real estate sold |
(3,485 | ) | (4,006 | ) | ||||||||
|
Less: Operating lease income on above/below market lease intangible amortization |
(144 | ) | (382 | ) | ||||||||
|
Our share of real estate depreciation, amortization and gain adjustments |
$ | 5,667 | $ | 6,058 | ||||||||
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 March 31, | ||||||||||||
| 2019 | 2018 | |||||||||||
| GAAP realized gain on sale of real estate, net | $ | 4 | $ | 31,010 | ||||||||
|
Adjusted gain/loss on sale of real estate for purposes of core earnings |
3,481 | (27,004 | ) | |||||||||
|
Our share of accumulated depreciation and amortization on real estate sold |
$ | 3,485 | $ | 4,006 | ||||||||
| (3) |
During the three months ended March 31, 2019 we 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, we recognize the net impact of these events in the period the sale was realized. Accordingly, the $3.3 million net impact of the income and losses discussed above have been excluded from core earnings for the three months ended March 31, 2019 and will be included in core earnings for the three months ended June 30, 2019. |
|
| (4) |
The following is a reconciliation of GAAP net results from derivative transactions to our unrecognized derivative result presented in the computation of core earnings in the preceding table ($ in thousands): |
| Three Months Ended March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Net results from derivative transactions | $ | (11,034 | ) | $ | 14,959 | |||||
| Hedging interest expense | (149 | ) | 2,889 | |||||||
| Hedging realized result | 2,068 | (9,738 | ) | |||||||
| Adjustments for unrecognized derivative results | $ | (9,115 | ) | $ | 8,110 | |||||
| (5) |
Core estimated corporate tax benefit (expense) based on effective tax rate applied to core earnings generated by the activity within our taxable REIT subsidiary. |
|
| (6) |
Set forth below is an unaudited reconciliation of weighted average diluted shares outstanding to adjusted weighted average diluted shares outstanding (in thousands): |
| Three Months Ended March 31, | |||||||
| 2019 | 2018 | ||||||
| Weighted average diluted shares outstanding | 105,006 | 95,389 | |||||
| Weighted average shares issuable to converted Class B shareholders | 13,200 | 14,901 | |||||
| Adjusted weighted average diluted shares outstanding | 118,206 | 110,290 | |||||
After-tax core ROAE
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 March 31, | ||||||||
| 2019 | 2018 | |||||||
| After-tax core earnings | $ |
47,195 |
$ | 60,354 | ||||
| Average shareholders’ equity and NCI in operating partnership | 1,634,098 | 1,484,734 | ||||||
| After-tax core ROAE | 11.6% | 16.3% | ||||||
Income from sales of securitized loans, net of hedging and core gain
on sale of securitized loans
We present income from sales of securitized loans, net of hedging, a
non-GAAP financial measure, as a supplemental measure of the performance
of our loan securitization business. Since our loans sold into
securitizations to date are comprised of long-term fixed-rate loans, the
result of hedging those exposures prior to securitization represents a
substantial portion of our securitization profitability. Therefore, we
view these two components of our profitability together when assessing
the performance of this business activity and find it a meaningful
measure of our performance as a whole. When evaluating the performance
of our sale of loans into securitization business, we generally consider
income from sales of loans, net in conjunction with other income
statement items that are directly related to such securitization
transactions, including portions of the realized net result from
derivative transactions that are specifically related to hedges on the
securitized or sold loans, which we reflect as hedge gain/(loss) related
to loans securitized, a non-GAAP financial measure, in the table below.
Contacts
Investor Contact
Ladder Capital Corp Investor Relations
(917)
369-3207
[email protected]
