# Dear Fellow Stockholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/real-estate-reit-mortgage/NYSE_LADR_2020/NYSE_LADR_2020.mmd` · pages 2-8_

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Dear Fellow Stockholders,

I write this letter after what was one of the most unique and disruptive years for the commercial real estate industry, the economy, and our society overall. While we have never seen such a rapid and severe downturn in the economy, our decades of experience managing through harsh recessions and strong recoveries provided us with the template we have learned to follow in times of extreme volatility. The pandemic provided a stress test for Ladder and the industry but I am pleased to report our core themes of disciplined underwriting, conservative capitalization, and significant liquidity enabled Ladder to perform throughout the crisis, while positioning us to take advantage of the attractive opportunities we expect 2021 to bring.

Job number one in the spring of 2020 was to ensure we had enough liquidity to weather what looked to be some very rough times ahead. During 2020, Ladder continued to lengthen and strengthen its capital structure while also materially reducing overall leverage. We ended 2020 with a 2.5x adjusted leverage ratio \( ^{*} \)  and a 1.7x adjusted leverage ratio net of cash \( ^{*} \) , after reducing total debt outstanding by over 650 million during the year. Ladder issued 750 million of 7-year unsecured corporate bonds at a 4.25% interest rate in January 2020, our lowest rate on an unsecured bond issuance to date. We also increased our sources of non-recourse, non-mark-to-market financing in 2020, and extended the terms of several secured funding facilities during the year. At December 31, 2020, we had 1.6 billion of unsecured corporate bonds outstanding with a weighted-average remaining maturity of 3.9 years on these bonds. We ended the year with approximately 1.3 billion of unrestricted cash as of December 31, 2020.

Building up a liquidity cushion of that size also was made possible by our ownership of high quality investments going into the downturn and our proactive management of our portfolio. By staying on top of our inventory and working with our borrowers, we were able to monetize many of our investments during the year through strong collections, payoffs and sales. Since the onset of COVID-19 through year-end, we achieved a 99% collection rate of interest and rents across our portfolio of loan and real estate assets, including 100% collections from our net leased portfolio. In addition, we were very pleased to see that many of our loans coming due over the last year were able to pay us off in full. Even when we sold some of our investments, we were still able to achieve sale prices near our basis during the worst of market times, while deleveraging the Company overall.

For the year ended December 31, 2020, Ladder generated \(68.3 million of distributable earnings \( ^{*} \) , or \)0.60 of distributable EPS \( ^{*} \) , generating an after-tax distributable return on average equity \( ^{*} \)  of 4.7%. While the defensive actions described above had the effect of temporarily reducing earnings during 2020 and into 2021, we felt that fortifying our balance sheet and liquidity profile was the appropriate course of action to take in the face of such unprecedented market uncertainty.

As of December 31, 2020, we had \(5.9 billion in total assets and \)1.5 billion of total equity. Our assets at year-end included \(2.3 billion of loans, \)1.1 billion of securities, and $985 million of real estate investments. Book value per share at December 31, 2020 was $12.21 per share on a GAAP basis and $13.94 per share on an undepreciated basis*.

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. In fact, management waived our contractual right to cash bonuses for 2020, instead agreeing to receive only equity-based incentive compensation, further increasing the management's alignment with Ladder's stockholders.

Our uniquely-positioned, internally-managed platform has emerged from the pandemic with our tested business model intact, allowing us to now focus on the path forward. Our strengthened capital base and solid liquidity position provide

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a strong foundation for Ladder as we ramp-up investing activity in 2021. We began issuing new loan applications in January of this year and have built up a robust pipeline as we head into the middle portion of 2021.

On behalf of everyone at Ladder, I would like to thank you for investing alongside us. We hope you and your loved ones have remained safe and healthy, and we greatly appreciate your support.

Sincerely,

![](images/3_0.jpg)

Brian Harris

Chief Executive Officer

Ladder Capital Corp