# Dear Fellow Stockholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/real-estate-reit-mortgage/NYSE_LADR_2017/NYSE_LADR_2017.mmd` · pages 3-9_

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Dear Fellow Stockholders,

Ladder Capital continued to be a formidable force in commercial real estate finance in 2017.

For the year ended December 31, 2017, Ladder earned \(178.8 million of core earnings \( ^{*} \) , a non-GAAP measure, or \)1.54 of core EPS \( ^{*} \) , generating a pre-tax core return on average equity \( ^{*} \)  of 12.1% and after-tax core return on average equity \( ^{*} \)  of 11.5%. We originated \(2.9 billion of commercial mortgage loans, composed of \)1.5 billion of mortgage loans held for sale and $1.4 billion of mortgage loans held for investment. We also acquired $236.9 million of real estate equity during the year.

As of December 31, 2017, we had \(6.0 billion in total assets and \)1.5 billion of total book equity. Our assets included \(3.5 billion of loans, \)1.1 billion of securities, and \(1.0 billion of real estate equity. Book value per share at December 31, 2017 was \)13.19 per share on a GAAP basis and $14.60 per share on an undepreciated basis*.

We continued to allocate capital to investments that generate recurring income in the form of net interest margin and net cash flow from real estate equity investments, with 78% of our 2017 earnings attributable to those sources. As a result, in the fourth quarter of 2017, we increased the quarterly cash dividend rate for the third time in three years to \(0.315/share of Class A common stock to reflect the ongoing growth trends in recurring interest and operating lease income.

Ladder also contributed \(1.5 billion of loans to 7 securitization transactions in 2017, including a Ladder-only multi-borrower securitization from Ladder's CMBS shelf in June 2017. The profitable capital recycling as a result of securitization enhances Ladder's returns, with \)286.9 million of cumulative core gains on securitized loans from IPO through December 31, 2017.

During the year, Ladder received a credit ratings upgrade from S&P and credit outlook upgrade to "positive" from Moody's. Ladder continued to strengthen and diversify its liability structure, with the upsizing of our corporate revolving credit facility to \(241 million and two senior unsecured note offerings totaling \)900 million. With these offerings, we expanded our unsecured corporate bond financing from \(564 million at the beginning of the year to \)1.17 billion as of December 31, 2017, and extended maturities substantially with no bonds coming due over the next three years.

2017 was also a pivotal year for the liquidity of Ladder's stock. Due to the concentrated ownership of pre-IPO investors, Ladder's average daily trading volume for the first 24 months after being public was a mere 148,913 shares. Ladder's 3-month trailing average daily trading volume was 1.43 million shares as of April 25, 2018, as pre-IPO investors exited the stock and provided others with opportunities for investment. Management and directors continue to own in excess of $185 million of Ladder Capital stock (based on LADR's closing stock price of $13.87 on April 24, 2018), equal to 12.1% of total equity market capitalization.

Looking into 2018, the firm is highly active. I expect Ladder to continue to benefit from our deep commercial real estate credit expertise, our unique, full-service commercial real estate platform, and our robust origination team.

On behalf of everyone at Ladder, I would like to thank you for investing alongside us. We look forward to your sharing in our continued success.

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Sincerely,

![](images/4_0.jpg)

Brian Harris
Chief Executive Officer
Ladder Capital Corp