# Dear Fellow Stockholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/real-estate-reit-mortgage/NYSE_LADR_2022/NYSE_LADR_2022.mmd` · pages 3-9_

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Dear Fellow Stockholders,

I am pleased to report that our preparation for higher short-term interest rates, coupled with our prudent and proactive risk management, benefited Ladder Capital Corp ("Ladder" or the "Company") during the year ended December 31, 2022. With our strong liquidity position, we are well-positioned for the opportunities we expect to see going forward.

For the year ended December 31, 2022, Ladder generated \(148.4 million of distributable earnings, \( ^{*} \)  or \)1.16 of distributable EPS, \( ^{*} \)  representing a 9.7% after-tax distributable earnings return on equity. \( ^{*} \)  Ladder increased its quarterly dividend by 15% during the year, and the dividend was consistently covered by distributable EPS.

As mentioned in last year's letter, our balance sheet at the end of 2021 prepared us for a potential rising interest rate environment both by way of our large and growing portfolio of floating-rate assets and significant base of fixed-rate liabilities. During 2022, with floating rate loans comprising approximately 90% of Ladder's balance sheet first mortgage loan portfolio, and fixed rate liabilities, anchored by \(1.6 billion of unsecured corporate bonds, comprising nearly 50% of the Company's liabilities, we steadily increased net interest margin through a positive correlation to rising rates.

We originated \(1.3 billion of loans in 2022 and witnessed strong credit performance and loan repayments. 82% of Ladder's balance sheet loan portfolio is comprised of post-Covid loans as of December 31, 2022, which were made on conservatively re-set valuations with newly capitalized business plans and ample reserves in place. After the initial market disruption following the government-mandated shutdown of the U.S. economy, when the Federal Reserve reduced interest rates to near zero, and liquidity was seemingly everywhere, we experienced a robust level of loan payoffs by our sponsors on mortgages that were originated in 2018 and 2019 in a strong economy, with low unemployment. We continue to focus on dollars per foot or "basis" lending on middle market loans – and we believe there is enhanced liquidity for these loans as there are various lending options available to finance loans of this size.

As of December 31, 2022, we had \(6.0 billion in total assets and \)1.5 billion of total equity. Our assets at year-end included \(3.9 billion of loans, \)700 million of real estate investments and $588 million of securities. Book value per share at December 31, 2022 was \(12.12 per share on a GAAP basis and \)13.66 per share on an undepreciated basis*. During the year, we generated \(35.8 million in gains on a distributable earnings basis from real estate sales, generally at premiums to undepreciated book value, demonstrating the embedded value in Ladder's real estate portfolio.

As of December 31, 2022, we had total same-day liquidity of over \(900 million, including \)324 million from our recently upsized, fully undrawn corporate revolver, an adjusted leverage ratio of 1.9x, and an adjusted leverage ratio net of cash of 1.5x. Equity, unsecured bonds, and non-recourse, non-mark-to-market debt make up 82% of our total capitalization. By employing a differentiated approach to our capital structure in the commercial mortgage REIT space with our significant component of unsecured debt, we believe Ladder has made substantial progress on our path towards becoming an investment grade company. We are proud to have among the highest corporate credit ratings in the space, with ratings only one notch away from investment grade from two of the three major rating agencies.

To summarize, our net interest margin continues to benefit from increased interest rates and we have significant liquidity to further deploy into 2023's higher mortgage rate environment. We also expect our unwavering credit discipline and middle market focus to continue to distinguish Ladder and enable us to sustain our positive performance.

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Our management team and our Board of Directors remain committed to optimizing long-term stockholder value and, with our over 10% ownership of Ladder, we remain aligned with our stockholders. We look forward to what lies ahead for us all. On behalf of everyone at Ladder, thank you again for investing alongside us.

Sincerely,

![](images/4_0.jpg)

Brian Harris

Chief Executive Officer

Ladder Capital Corp

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