Ladder Capital Corp (NYSE:LADR) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 05:00 pm ET


Ladder Capital Corp (NYSE:LADR) Q2 2020 Earnings Conference Call - Final Transcript


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Greetings, and welcome to the Ladder Capital Corp Second Quarter 2020 Earnings Call. [Operator Instructions]

I would now like to turn the conference over to your host Ms. Michelle Wallach, Chief Compliance Officer, Senior Regulatory Counsel for Ladder Capital Corp. Thank you. You may begin.

Michelle Wallach

Thank you. And good afternoon, everyone. Before we begin Ladder Capital Corp's earnings call for the second quarter 2020, as the pandemic persists, we continue to wish that all of you listening tonight and your families are well and remain safe.

Turning to our earnings call, with me this afternoon are Brian Harris, our Company's Chief Executive Officer; Pamela McCormack, our President; and Marc Fox, our Chief Financial Officer. Brian, Pamela and Marc will share their comments about the second quarter, what they're currently seeing in the second quarter and then we'll open up the call to questions.

This afternoon, we released our financial results for the three- and six-months quarter June 30, 2020. The earnings release is available in the Investor Relations section of the company's website and our quarterly report on Form 10-Q will be filed with the SEC later this week.

Before the call begins, I'd like to remind everyone that this call may include forward-looking statements. Actual results may differ materially from those expressed or implied on this call, and we do not undertake any duty to update these statements. I refer you to our most recent Form 10-K and Form 10-Q for description of some of the risks that may affect our results. We'll also refer to certain non-GAAP measures on this call. Additional information including a reconciliation of these non-GAAP measures to the most comparable GAAP measures is available on our website and in our earnings release.

With that, I'll turn the call over to our President, Pamela McCormack.

Pamela McCormack

Thank you, Michelle and good afternoon, everyone.

For the second quarter Ladder produced core earnings of $12.8 million or $0.12 per share. As Marc will elaborate on further, these amounts exclude a $16.9 million COVID-related adjustment. Our undepreciated book value per share increased by $0.16 from the prior quarter to $14.17 per share.

Since the onset of COVID-19, our primary focus has been on strengthening our balance sheet by increasing liquidity and reducing leverage. Our access to the unsecured debt markets allowed us to finance a large portion of our capital base with long-term flexible capital and limit our use of the shorter term secured funding most commonly used in our industry.

During the second quarter, we reduced mark-to-market debt by $1.1 billion or 39%. On a net basis, we reduced our total debt outstanding by $727 million, while increasing our liquidity and unrestricted cash balance by $468 million. Liquidity is an asset we value and we have a lot of it. While we will continue to be prudent and thoughtful about the current economic climate, we look forward to redeploying our substantial cash holdings.

The strength and flexibility of our multi-cylinder business model will be evident as we commence