FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2025

The carrying values and estimated fair values of the Company’s financial instruments, which are both reported at fair value on a recurring basis or amortized cost/par, at June 30, 2025 and December 31, 2024 are as follows ($ in thousands):

June 30, 2025


									Weighted Average
Assets:	Principal Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
CMBS(1)	$	1,966,176		$	1,963,496	$	1,957,762	Internal model	5.90	%	2.38
CMBS interest-only(1)	415,529		(2)	2,101		2,195		Internal model	8.61	%	0.71
GNMA interest-only(3)	29,844		(2)	151		139		Internal model	9.32	%	4.36
Agency securities(1)	6			7		6		Internal model	2.35	%	0.33



Equity securities(3)	N/A			6,527		6,388		Observable market prices	N/A		N/A





Mortgage loan receivables held for investment, net, at amortized cost(4)	1,599,878			1,593,710		1,577,296		Discounted Cash Flow(5)	8.98	%	1.26


Mortgage loan receivables held for sale	31,350			28,347		28,347		Internal model, third-party inputs(6)	4.57	%	6.69

Nonhedge derivatives(1)(10)	115,000			247		247		Counterparty quotations	N/A		0.19

Liabilities:
Repurchase agreements - short-term	357,166			357,166		357,166		Cost plus Accrued Interest (7)	5.14	%	0.07


Mortgage loan financing	419,172			421,900		417,076		Discounted Cash Flow	6.14	%	3.45




Senior unsecured notes	2,018,458			2,004,100		2,017,180		Internal model	5.23	%	3.25

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Balance does not include impact of allowance for current expected credit losses of $52.2 million at June 30, 2025.

(5)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit spreads since origination. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)For repurchase agreements - short term, the value approximates the cost plus accrued interest.

(8)For CLO debt, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(9)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

December 31, 2024


									Weighted Average
Assets:	Principal Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
CMBS(1)	$	1,065,985		$	1,063,835	$	1,058,873	Internal model	6.13	%	2.41
CMBS interest-only(1)	769,724		(2)	3,149		3,244		Internal model	7.81	%	0.87
GNMA interest-only(3)	32,710		(2)	160		155		Internal model	9.38	%	3.64
Agency securities(1)	11			11		11		Internal model	2.60	%	0.58



Equity securities(3)	N/A			19,511		18,575		Observable market prices	N/A		N/A





Mortgage loan receivables held for investment, net, at amortized cost(4)	1,596,277			1,591,322		1,575,911		Discounted Cash Flow(5)	9.36	%	0.86


Mortgage loan receivables held for sale	31,350			26,898		26,898		Internal model, third-party inputs(6)	4.57	%	7.18

Nonhedge derivatives(1)(10)	90,000			437		437		Counterparty quotations	N/A		0.62

Liabilities:
Repurchase agreements - short-term	62,738			62,738		62,738		Cost plus Accrued Interest (7)	6.55	%	0.74


Mortgage loan financing	443,733			446,397		435,048		Discounted Cash Flow	6.09	%	3.36


CLO debt	601,464			601,380		601,430		Discounted Cash Flow(8)	2.01	%	0.98

Senior unsecured notes	2,041,557			2,025,053		2,001,207		Internal model	5.22	%	3.72

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Balance does not include impact of allowance for current expected credit losses of $52.3 million at December 31, 2024.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)For repurchase agreements - short term, the value approximates the cost plus accrued interest.

(9)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

Schedule of Financial Assets and Liabilities, both reported at Fair Value on a Recurring Basis or Amortized Cost/Par

The following table summarizes the Company’s financial assets and liabilities, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at June 30, 2025 and December 31, 2024 ($ in thousands):

June 30, 2025


Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total

Assets:
CMBS(1)	$	1,957,189		$	—	$	1,948,989	$	—	$	1,948,989
CMBS interest-only(1)	407,496		(2)	—		2,037		—		2,037
GNMA interest-only(3)	29,844		(2)	—		139		—		139
Agency securities(1)	6			—		6		—		6



Equity securities	N/A			6,388		—		—		6,388
Nonhedge derivatives(4)	115,000			247		—		—		247
				$	6,635	$	1,951,171	$	—	$	1,957,806






Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total

Assets:

Mortgage loan receivables held for investment, net, at amortized cost(5)	$	1,599,878		$	—	$	—	$	1,577,296	$	1,577,296


Mortgage loan receivable held for sale(6)	31,350			—		—		28,347		28,347
CMBS(7)	8,987			—		8,773		—		8,773
CMBS interest-only(7)	8,033			—		158		—		158



				$	—	$	8,931	$	1,605,643	$	1,614,574
Liabilities:
Repurchase agreements - short-term	$	357,166		$	—	$	357,166	$	—	$	357,166


Mortgage loan financing	419,172			—		—		417,076		417,076





Senior unsecured notes	2,018,458			—		2,017,180		—		2,017,180


				$	—	$	2,374,346	$	417,076	$	2,791,422

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Balance does not include impact of allowance for current expected credit losses of $52.2 million at June 30, 2025.

(6)A lower of cost or market adjustment was recorded as of June 30, 2025.

(7)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, are classified as held-to-maturity and reported at amortized cost.

December 31, 2024


Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total

Assets:
CMBS(1)	$	1,056,844		$	—	$	1,049,986	$	—	$	1,049,986
CMBS interest-only(1)	761,537		(2)	—		3,037		—		3,037
GNMA interest-only(3)	32,710		(2)	—		155		—		155
Agency securities(1)	11			—		11		—		11



Equity securities	N/A			18,575		—		—		18,575
Nonhedge derivatives(4)	90,000			—		437		—		437
				$	18,575	$	1,053,626	$	—	$	1,072,201






Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total

Assets:

Mortgage loan receivables held for investment, net, at amortized cost(5)	$	1,596,277		$	—	$	—	$	1,575,911	$	1,575,911


Mortgage loan receivable held for sale(6)	31,350			—		—		26,898		26,898
CMBS(7)	9,142			—		8,887		—		8,887
CMBS interest-only(7)	8,187			—		207		—		207



				$	—	$	9,094	$	1,602,809	$	1,611,903
Liabilities:
Repurchase agreements - short-term	$	62,738		$	—	$	62,738	$	—	$	62,738


Mortgage loan financing	443,733			—		—		435,048		435,048


CLO debt	601,464			—		601,430		—		601,430


Senior unsecured notes	2,041,557			—		2,001,207		—		2,001,207


				$	—	$	2,665,375	$	435,048	$	3,100,423

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(5)Balance does not include impact of allowance for current expected credit losses of $52.3 million at December 31, 2024.

(6)A lower of cost or market adjustment was recorded as of December 31, 2024.

(8)As of December 31, 2024, the Company determined that $2.0 billion of senior unsecured notes were level 2 based on the Company’s increased observability of the inputs used to internally value the senior unsecured notes.

Ladder Capital Corp 10-Q