Ladder Capital Corp was formed as a Delaware corporation on May 21, 2013. The Company conducted an initial public offering (“IPO”) which closed on February 11, 2014. The Company used the net proceeds from the IPO to purchase newly issued limited partnership units (“LP Units”) from LCFH. In connection with the IPO, Ladder Capital Corp also became a holding corporation and the general partner of, and obtained a controlling interest in, LCFH. Ladder Capital Corp’s only business is to act as the general partner of LCFH, and, as such, Ladder Capital Corp indirectly operates and controls all of the business and affairs of LCFH and its subsidiaries through its ability to appoint the LCFH board. The proceeds received by LCFH in connection with the sale of the LP Units have been and will be used for loan origination and related real estate business lines and for general corporate purposes. The IPO transactions described herein are referred to as the “IPO Transactions.”

In anticipation of the Company’s election to be subject to tax as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) beginning with its 2015 taxable year (the “REIT Election”), wethe Company effected an internal realignment as of December 31, ~~2014 that we believe permits us to operate as a REIT, subject to the risk factors described in the Annual Report (see “Risk Factors—Risks Related to Our Taxation as a REIT”).~~2014. As part of this realignment, LCFH and certain of its wholly-owned subsidiaries were serialized in order to segregate our REIT-qualified assets and income from ~~our~~the Company’s non-REIT-qualified assets and income. Pursuant to such serialization, all assets and liabilities of LCFH and each such subsidiary were identified as TRS assets and liabilities (e.g., ~~our~~ conduit securitization and condominium sales businesses) and REIT assets and liabilities (e.g., balance sheet loans, real estate and most securities), and were allocated on ~~our~~the Company’s internal books and records into two pools within LCFH or such subsidiary, Series TRS and Series REIT (collectively, the “Series”), respectively.

~~in order~~Ladder Capital Corp consolidates the financial results of LCFH and its subsidiaries. The ownership interest of certain existing owners of LCFH, who owned LP Units and an equivalent number of shares of Ladder Capital Corp Class B common stock as of the completion of the IPO (the “Continuing LCFH Limited Partners”) and continue to ~~effect the exchange of~~hold equivalent Series Units ~~for shares~~and Ladder Capital Corp Class B common stock, is reflected as a noncontrolling interest in Ladder Capital Corp’s consolidated financial statements.

Pursuant to LCFH’s Third Amended and Restated LLLP Agreement, dated as of December 31, 2014 and as amended from time to time, and subject to the applicable minimum retained ownership requirements and certain other restrictions, including notice requirements, from time to time, Continuing LCFH Limited Partners (or certain transferees thereof)

may from time to time, subject to certain conditions, receive one share of the Company’s Class A common stock ~~of the Company on a one-for-one basis (the “Class A Exchange”), holders are required to surrender~~in exchange for (i) one share of the Company’s Class B common stock, (ii) one Series REIT LP Unit and (iii) either one Series TRS LP Unit or one TRS ~~Share;~~Share, subject to equitable adjustments for stock splits, stock dividends and reclassifications. However, such exchange for shares of Ladder Capital Corp Class A common stock will not affect the exchanging owners’ voting power since the votes represented by the canceled shares of Ladder Capital Corp Class B common stock will be replaced with the votes represented by the shares of Class A common stock for which such Series Units, including TRS Shares as applicable, will be exchanged.

~~Series REIT and Series TRS have separate boards, officers, books and records, bank accounts, and tax identification numbers.~~

As of March 4, 2015, the Company made the necessary TRS and check-the-box elections began to elect to be taxed as a REIT starting with its tax return for the year ended December 31, 2015, filed in September 2016.

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented in this report reflects all normal and recurring adjustments necessary for a fair statement of results of operations, financial position and cash flows. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2016,~~2017, which are included in the Company’s Annual Report, as certain disclosures would substantially duplicate those contained in the audited consolidated financial statements have not been included in this interim report. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. The interim consolidated financial statements have been prepared, without audit, and do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations and cash flows in accordance with GAAP.

The consolidated financial statements include the Company’s accounts and those of its subsidiaries which are majority-owned and/or controlled by the Company and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. All significant intercompany transactions and balances have been eliminated.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. See Note 3 for further information on the Company’s consolidated variable interest entities.

Noncontrolling interests in consolidated subsidiaries are defined as “the portion of the equity (net assets) in the subsidiaries not attributable, directly or indirectly, to a parent.” Noncontrolling interests are presented as a separate component of capital in the consolidated balance sheets. In addition, the presentation of net income attributes earnings to shareholders/unitholders (controlling interest) and noncontrolling interests.

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the balance sheets and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of resulting changes are reflected in the consolidated financial statements in the period the changes are deemed to be necessary. Significant estimates made in the accompanying consolidated financial statements include, but are not limited to the following:

The Company considers all investments with original maturities of three months or less, at the time of acquisition, to be cash equivalents. The Company maintains cash accounts at several financial institutions, which are insured up to a maximum of $250,000 per account as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016.~~2017. At ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, and at various times during the years, the balances exceeded the insured limits.

Restricted cash is comprised of accounts the Company maintains with brokers to facilitate financial derivative and repurchase agreement transactions in support of its loan and securities investments and risk management activities. Based on the value of the positions in these accounts and the associated margin requirements, the Company may be required to deposit additional cash into these broker accounts. The cash collateral held by broker is considered restricted cash. Restricted cash also includes tenant security deposits, deposits related to real estate sales and acquisitions and required escrow balances on credit facilities. Prior to January 1, 2017, these amounts were previously recorded in other assets on the Company’s consolidated balance sheets. ~~Prior period amounts have been reclassified to conform to current period presentation.~~

During the first quarter of 2017, the Company recorded an out-of-period adjustment to reduce depreciation expense of $0.8 million related to prior periods. The Company has concluded that this adjustment is not material to the financial position or results of operations for the three months ended March 31, 2017 or any prior periods; accordingly, the Company recorded the related adjustment in the three month period ended March 31, 2017.

During the first quarter of ~~2016,~~2018, the Company ~~had~~ recorded an out-of-period adjustment to increase tenant real estate tax recoveries on a net lease property by $1.1 million, which was not billed until the following out-of-period adjustments to correct errors from prior periods: (i) additional deferred financing cost amortization of $0.5 million relating to 2015; (ii) additional taxes of $1.2 million representing additional state taxes relating to 2015 and (iii) additional return on equity of ~~$0.9 million~~ ~~from the Company’s investment in an unconsolidated joint venture predominately relating~~three month period ended March 31, 2018, but related to prior ~~years.~~periods. The Company has concluded that ~~these adjustments were~~this adjustment is not material to the financial position or results of operations for the ~~current period~~three months ended March 31, 2018 or any prior ~~periods,~~periods; accordingly, the Company recorded the related ~~adjustments~~adjustment in the three month period ended March 31, ~~2016.~~2018.

As more fully described in Note 4, on June 29, 2017, the Company completed its first sponsored securitization transaction whereby it transferred $625.7 million of loans to LCCM 2017-LC26 securitization trust. The Company initially concluded that the transfer restrictions placed on the Third Party Purchaser (“TPP”) of the risk retention securities, imposed by the risk retention rules of the Dodd-Frank Act, precluded sale accounting under ASC 860 and, accordingly, the Company originally accounted for the transaction as a financing in its interim financial statements for the periods ended June 30, 2017 and September 30, 2017. As a result of industry discussions, in November 2017 the staff of the Securities and Exchange Commission (the “SEC staff”) indicated that, despite such restrictions, they would not take exception to a registrant treating such transfers as sales if they otherwise met all the criteria for sale accounting. The Company believes treatment of such transfers as sales is more consistent with the substance of such transaction and, accordingly, changed its accounting principle to treat such transfers as sales in the quarter ended December 31, 2017. In accordance with generally accepted accounting principles, the Company reflected this change in accounting principle retrospectively to prior interim periods within 2017. The retrospective changes for the three and six months ended June 30, 2017 are reflected in this Quarterly Report. The retrospective changes for the three and nine months ended September 30, 2017 will be reflected in the Company’s quarterly report for the quarter ended September 30, 2018. Refer to Note 20, Quarterly Financial Data (Unaudited) in the Company’s December 31, 2017 Annual Report for a summary of these changes.

Certain prior period amounts have been reclassified to conform to the current period presentation.

~~In October 2016, the FASB issued ASU 2016-17,~~ ~~Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control~~ (“ASU 2016-17”). ASU 2016-17 changes how a reporting entity that is a decision maker should consider indirect interests in a VIE held through an entity under common control. If a decision maker must evaluate whether it is the primary beneficiary of a VIE, it will only need to consider its proportionate indirect interest in the VIE held through a common control party. ASU 2016-17 amends ASU 2015-02, which the Company adopted on January 1, 2016, and which currently directs the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. ASU 2016-17 is effective for public business entities in fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this update in the quarter ended March 31, 2017. The adoption did not have a material effect on the Company’s consolidated financial statements.

Under the full retrospective method, a company will apply the rules to contracts in all reporting periods presented, subject to certain allowable exceptions. Under the modified retrospective method, a company will apply the rules to all contracts existing as of January 1, 2018, recognizing in beginning retained earnings an adjustment for the cumulative effect of the change and providing additional disclosures comparing results to previous rules. The Company ~~expects to adopt the standard using the modified retrospective method. The Company~~ believes the effects on its existing accounting policies will be associated with its non-leasing revenue components, specifically the amount, timing and presentation of tenant expense reimbursements revenue. The Company ~~continues to evaluate other areas of~~adopted the standard ~~and is currently assessing~~using the ~~impact~~modified retrospective approach on ~~its consolidated financial statements. The Company expects to adopt this update beginning~~ January 1, ~~2018.~~

~~In March 2016, the FASB issued ASU 2016-08,~~ ~~Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)~~ (“ASU 2016-08”). This update provides clarifying guidance regarding the application of ASU 2014-09 when another party, along with the reporting entity, is involved in providing a good or a service to a customer. In these circumstances, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). In April 2016, the FASB issued ASU 2016-10, ~~Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing~~ ~~(“ASU 2016-10”), which clarifies the identification of performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU 2016-11,~~ Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 Emerging Issues Task Force (“EITF”) Meeting (SEC Update) (“ASU 2016-11”), which rescinds SEC paragraphs pursuant to SEC staff announcements. These rescissions include changes to topics pertaining to accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. In May 2016, the FASB issued ASU 2016-12, ~~Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients~~ (“ASU 2016-12”), which provides clarifying guidance in certain narrow areas and adds some practical expedients. The effective dates for these ASUs are the same as the effective date for ASU No. 2014-09, for annual and interim periods beginning after December 15, 2017. The Company is reviewing its policies and processes to ensure compliance with the requirements in these updates.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), (“ASU 2017-09”). The ASU provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. ASU 2017-09 does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is ~~permitted as~~a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of ~~the~~this ASU are effective for reporting periods beginning ~~of the fiscal year of~~after December 15, 2017, with early adoption ~~under certain restrictions.~~permitted. The Company ~~is required to apply~~adopted the guidance ~~by means~~effective January 1, 2018. The adoption of ASU 2017-09 did not have a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The guidance related to equity securities without readily determinable fair values should be applied prospectively to equity investments that exist at the date of adoption. The Company anticipates adopting this update in the quarter ending March 31, 2018 and is currently evaluating thematerial impact on the Company’s consolidated financial statements.

In May 2018, FASB issued ASU No. 2018-06, Codification Improvements to Topic 942, Depository and Lending—Income Taxes, (“ASU 2018-06”). The amendments in ASU 2018-06 supersede the guidance within Subtopic 942-741 that has been rescinded by the Office of the Comptroller of the Currency and is no longer relevant. A cross-reference between Subtopic 740-30, Income Taxes—Other Considerations or Special Areas, and Subtopic 942-740 is being added to the remaining guidance in Subtopic 740-30 to improve the usefulness of the codification. The amendments in ASU 2018-06 are effective upon issuance, as no accounting requirements are affected. The amendments in ASU 2018-06 do not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("“ASU ~~2016-02"~~2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sale-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous lease standard, Leases (Topic 840). ~~The~~In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases) (“ASU 2018-10”), which provides narrow amendments to clarify how to apply certain aspects of the new leasing standard. In July 2018, the FASB also issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which provides a new transition method at the adoption date through a cumulative-effect adjustment to the opening balance of retained earnings; prior periods will not require restatement. ASU 2018-11 also provides a new practical expedient for lessors adopting the new lease standard. Lessors have the option to aggregate nonlease components with the related lease component upon adoption of the new standard isif the following conditions are met: (1) the timing and pattern of transfer for the nonlease component and the related lease component are the same and (2) the stand-alone lease component would be classified as an operating lease if accounted for separately. Each of the standards are effective for the Company on January 1, 2019, with an early adoption permitted. The Company continues to evaluate the effect the adoption of ASU 2016-02, ASU 2018-10 and ASU 2018-11 will have on the ~~Company's~~Company’s financial position and/or results of operations. The Company currently believes that the adoption of ASU 2016-02 will not have a material impact for operating leases where it is a lessor and will continue to record revenues from rental properties for its operating leases on a straight-line basis. However, for leases where the Company is the lessee, primarily for the ~~Company's~~Company’s corporate headquarters, ~~and regional offices,~~ the Company ~~will measure~~expects to record a lease liability and a right of use asset on its consolidated financial statements at fair value upon adoption. The lease liability and right-of-use asset are to be carried at the present value of ~~the~~remaining expected future lease ~~payments and recognize a right-of-use asset and corresponding lease liability on its balance sheet.~~

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, (“ASU 2016-13”). The guidance changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company must apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently assessing the impact of this standard on the consolidated financial statements. In general, the allowance for credit losses is expected to increase when changing from an incurred loss to expected loss methodology. The models and methodologies that are currently used in estimating the allowance for credit losses are being evaluated to identify the changes necessary to meet the requirements of the new standard.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~ (“ASU 2016-15”). ASU 2016-15 clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows to reduce diversity in practice with respect to (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. For a public company, ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted in any interim or annual period. The Company is currently assessing the impact that this guidance will have on its combined consolidated financial statements when adopted.

~~In February 2017, the FASB issued ASU 2017-05,~~ ~~Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)~~ (“ASU 2017-05”). Subtopic 610-20 was issued as part of the new revenue standard. It provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with non-customers. The new guidance defines “in substance nonfinancial assets,” unifies guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing sales of real estate, removes exceptions to the financial asset derecognition model, and clarifies the accounting for contributions of nonfinancial assets to joint ventures. The amendments are effective for annual periods beginning after December 15, 2017 with early adoption permitted. Transition can use either the full retrospective approach or the modified retrospective approach. The Company expects to adopt the standard using the modified retrospective method. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements when adopted.

In January 2018, the FASB issued ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842, (“ASU 2018-01”). This ASU provides an optional transition practical expedient that, if elected, would not require companies to reconsider their accounting for existing or expired land easements before adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. This ASU will be effective January 1, 2019, and early adoption is permitted. The Company is currently assessing the potential impact of adopting ASU 2018-01 on its financial statements and related disclosures.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), (“ASU 2018-02”). This ASU allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 from accumulated other comprehensive income into retained earnings. This ASU will be effective January 1, 2019, and early adoption is permitted. The Company is does not expect the adoption of ASU 2018-02 to have a material impact on its financial statements and related disclosures.

In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), (“ASU 2018-05”), which included amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”). The pronouncement addresses certain circumstances that may arise for registrants in accounting for the income tax effects of the Tax Cuts and Jobs Act, including when certain income tax effects of the Tax Cuts and Jobs Act are incomplete by the time financial statements are issued. The Company has complied with the amendments related to SAB 118, as discussed further in Note 16.

In July 2018, the FASB issued ASU 2018-09, Codification Improvements, (“ASU 2018-09”). This standard does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

Any new accounting standards not disclosed above that have been issued or proposed by FASB and that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

FASB Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The Operating Partnership is a VIE and as such, substantially all of the consolidated balance sheet is a consolidated VIE. In addition, the Operating Partnership consolidates two collateralized loan obligation (“CLO”) VIEs with the following aggregate balance sheets ($ in thousands):

~~September~~June 30, ~~2017~~ 2018 ($ in thousands)

As of December 31, ~~2016, $205.4~~2017, $723.7 million, or ~~10.3%~~22.0%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at fixed interest rates and ~~$1.8~~$2.6 billion, or ~~89.7%~~78.0%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at variable interest rates, linked to LIBOR, some of which include interest rate floors. As of December 31, ~~2016, $360.5~~2017, $230.2 million, or 100%, of the carrying value of our mortgage loan receivables held for sale were at fixed interest rates.

The following table summarizes mortgage loan receivables by loan type ($ in thousands):

September 30, 2017 December 31, 2016

Outstanding
Face Amount

Carrying
Value

Outstanding
Face Amount

Carrying
Value

Mortgage loan receivables held for investment, net, at amortized cost:

First mortgage loans $ 2,703,936
$ 2,688,845
$ 1,843,006
$ 1,832,626
Mezzanine loans 158,803
158,095
168,303
167,469
Mortgage loans transferred but not considered sold(1)(2) 600,222
598,525
—
—
Mortgage loan receivables held for investment, net, at amortized cost 3,462,961
3,445,465
2,011,309
2,000,095
Mortgage loan receivables held for sale

First mortgage loans 526,085
522,961
360,518
357,882
Total mortgage loan receivables held for sale 526,085
522,961
360,518
357,882

Provision for loan losses N/A
(4,000 ) N/A
(4,000 )
Total $ 3,989,046
$ 3,964,426
$ 2,371,827
$ 2,353,977



	June 30, 2018					December 31, 2017
	Outstanding Face Amount		Carrying Value			Outstanding Face Amount		Carrying Value

Mortgage loan receivables held for investment, net, at amortized cost:
First mortgage loans	$	3,630,000	$	3,606,248		$	3,140,788	$	3,123,268
Mezzanine loans	158,546		157,924			159,921		159,194
Mortgage loan receivables held for investment, net, at amortized cost	3,788,546		3,764,172			3,300,709		3,282,462
Mortgage loan receivables held for sale
First mortgage loans	108,340		107,744			232,527		230,180
Total mortgage loan receivables held for sale	108,340		107,744			232,527		230,180

Provision for loan losses	N/A		(7,300		)	N/A		(4,000		)
Total	$	3,896,886	$	3,864,616		$	3,533,236	$	3,508,642

For the six months ended June 30, 2018 and 2017, the activity in our loan portfolio was as follows ($ in thousands):



	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans held by consolidated subsidiaries			Provision for loan losses			Mortgage loan receivables held for sale

Balance, December 31, 2016	$	2,000,095		$	(4,000	)	$	357,882
Origination of mortgage loan receivables	563,392			—			564,492
Purchases of mortgage loan receivables	94,079			—			—
Repayment of mortgage loan receivables	(155,325		)	—			(1,184		)
Proceeds from sales of mortgage loan receivables	—			—			(563,929		)
Realized gain on sale of mortgage loan receivables(1)	—			—			24,905
Transfer between held for investment and held for sale(2)	119,952			—			(119,952		)
Accretion/amortization of discount, premium and other fees	4,539			—			—
Balance, June 30, 2017	$	2,626,732		$	(4,000	)	$	262,214

During the six months ended June 30, 2018, the transfers of financial assets via sales of loans were treated as sales under ASC Topic 860 — Transfers and Servicing.

At ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, there was ~~$2.3 million~~$25.3 thousand and ~~$0.6~~$0.2 million, respectively, of unamortized discounts included in our mortgage loan receivables held for investment, at amortized cost, on our consolidated balance sheets.

The Company evaluates each of its loans for potential losses at least quarterly. Its loans are typically collateralized by real estate directly or indirectly. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, as well as the financial and operating capability of the borrower. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash flow from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan at maturity, and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data.

As a result of this analysis, the Company has concluded that none of its loans, other than the two loans discussed below, are individually impaired as of ~~September~~June 30, ~~2017~~2018 and none of its loans are individually impaired as of December 31, ~~2016.~~

As of ~~September~~June 30, ~~2017,~~2018, two of the Company’s loans, which were originated simultaneously as part of a single transaction and had a carrying value of $26.9 million, were in default. ~~The borrower~~These loans are directly and indirectly secured by the same property and are considered collateral dependent because repayment is ~~currently in bankruptcy court; however,~~expected to be provided solely by the ~~Company determined that no impairment was necessary because~~underlying collateral. At the time of the ~~loans’ liquidation value, however,~~initial loan funding in July 2015, the borrowers faced an uncertain situation as the parent company of the sole tenant of the underlying retail property had just filed for bankruptcy protection. The tenant subsequently vacated the property and the original lease was terminated by the tenant as part of the bankruptcy proceedings. In response to a default by the borrowers, the loans were accelerated in March 2016. Subsequently, in August 2016, the borrowers filed for bankruptcy protection, which imposed an automatic stay upon the lenders’ ability to, among other things, collect payments due under the loans. In September 2017, the bankruptcy court approved a replacement lease with a new tenant as proposed by the mortgage borrower for the property. The new tenant commenced paying rent in September 2017, retroactive to August 2017 as ordered by the bankruptcy court.

The Company ~~has~~ placed ~~the~~these loans on non-accrual status in July 2017. In assessing these collateral dependent loans for collectability, the most significant consideration is the fair value of the underlying real estate collateral, which includes an in-place long-dated retail lease. The value of such properties is most significantly affected by the contractual lease payments and the appropriate market capitalization rates, which are driven by the property’s market strength, the general interest rate environment and the retail tenant’s creditworthiness. In view of this, the Company uses a direct capitalization rate valuation methodology to calculate the fair value of the underlying real estate collateral. These non-recurring fair values are considered Level 3 measurements in the fair value hierarchy. Through December 31, 2017, the Company believed no loss provision was necessary as the estimated fair value of the property less the cost to foreclose and sell the property exceeded the combined carrying value of the loans. The Company utilized direct capitalization rates of 4.35% to 4.65% at December 31, 2017.

During the three months ended March 31, 2018, based on the status of the on-going bankruptcy proceedings, rising interest rates and the retail tenant’s creditworthiness, the Company utilized direct capitalization rates of 4.70% to 5.00% which resulted in a decline in the estimated value of the collateral. Accordingly, the Company recorded a provision for loss on these loans of $2.7 million to reduce the carrying value of these loans to the fair value of the property less the cost to foreclose and sell the property.

During the three months ended June 30, 2018, the Company believed no additional loss provision was necessary as the estimated fair value of the property less the cost to foreclose and sell the property exceeded the combined carrying value of the loans. The Company has continued to utilize direct capitalization rates of 4.70% to 5.00% as of ~~July 1, 2017.~~June 30, 2018 based on the status of the on-going bankruptcy proceedings, interest rates and the retail tenant’s creditworthiness. The Company continues to pursue all of its legal remedies on these loans.

As of ~~September~~June 30, ~~2017, accrued but unpaid interest totaled $4.8 million, which included $3.5 million of default interest. As of~~2018 and December 31, 2016, the same two loans mentioned above were in default. As of December 31, 2016, accrued but unpaid interest totaled $3.5 million, which included $2.2 million of default interest. These loans were placed on non-accrual status as of July 1, 2017. As of September 30, 2017 there were no other loans on non-accrual status. ~~As of December 31, 2016 there were no loans on non-accrual status.~~

Provision for Loan Losses ($ in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016		2018		2017		2018		2017

Provision for loan losses at beginning of period	$	4,000	$	4,000	$	4,000	$	3,700	$	7,000	$	4,000	$	4,000	$	4,000
Provision for loan losses	—		—		—		300		300		—		3,300		—
Provision for loan losses at end of period	$	4,000	$	4,000	$	4,000	$	4,000	$	7,300	$	4,000	$	7,300	$	4,000

Commercial mortgage backed securities (“CMBS”), CMBS interest-only securities, Agency securities, Government National Mortgage Association (“GNMA”) construction securities and Government National Mortgage Association (“GNMA”) permanent securities are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income. GNMA and Federal Home Loan Mortgage Corp (“FHLMC”) securities (collectively, “Agency interest-only securities”) are recorded at fair value with changes in fair value recorded in current period earnings. The following is a summary of the Company’s securities at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 ($ in thousands):

~~September~~June 30, ~~2017~~2018

Gross Unrealized Weighted Average
Asset Type
Outstanding
Face Amount

Amortized
Cost Basis
Gains Losses
Carrying
Value

# of
Securities
Rating (1) Coupon % Yield %
Remaining
Duration
(years)

CMBS(2) $ 934,559
$ 946,231
$ 6,195
$ (2,397 ) $ 950,029
89
AAA 3.24 % 2.73 % 2.85
CMBS interest-only(2) 3,308,063
(3) 102,986
1,542
(45 ) 104,483
27
AAA 0.75 % 3.14 % 2.88
GNMA interest-only(4) 279,567
(3) 9,138
188
(1,327 ) 7,999
16
AA+ 0.60 % 5.99 % 4.36
Agency securities(2) 731
754
—
(12 ) 742
2
AA+ 2.84 % 1.82 % 3.08
GNMA permanent securities(2) 34,014
34,675
790
(247 ) 35,218
6
AA+ 3.98 % 3.63 % 5.82
Total $ 4,556,934
$ 1,093,784
$ 8,715
$ (4,028 ) $ 1,098,471
140
1.28 % 2.82 % 2.96

December 31, 2017



					Gross Unrealized									Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis		Gains		Losses			Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)

CMBS(2)	$	945,167	$	954,397	$	2,748	$	(3,646	)	$	953,499	(3)	96	AAA	3.28	%	2.79	%	2.89
CMBS interest-only(2)(4)	3,140,297		112,609		796		(334		)	113,071		(5)	25	AAA	0.81	%	3.16	%	3.08
GNMA interest-only(4)(6)	172,916		5,245		157		(925		)	4,477			13	AA+	0.58	%	6.70	%	4.18
Agency securities(2)	720		743		—		(15		)	728			2	AA+	2.82	%	1.80	%	2.94
GNMA permanent securities(2)	33,745		34,386		595		(239		)	34,742			6	AA+	3.98	%	3.62	%	5.66
Total	$	4,292,845	$	1,107,380	$	4,296	$	(5,159	)	$	1,106,517		142		1.37	%	2.87	%	3.00

The following is a breakdown of the carrying value of the Company’s securities by remaining maturity based upon expected cash flows at ~~September~~June 30, ~~2017~~2018 and ~~2016~~December 31, 2017 ($ in thousands):

~~September~~June 30, ~~2017~~2018

December 31, ~~2016~~2017

During the three and six months ended June 30, 2018, the Company realized a gain on sale of equity securities of $72.0 thousand which is included in fee and other income on the Company’s consolidated statements of income.

There were ~~$0.2~~$0.6 million ~~unrealized~~of realized losses on securities recorded as other than temporary impairments for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~no unrealized losses on securities recorded as other than temporary impairments for the three months ended September 30, 2016.~~2017. There were ~~$1.2~~$1.6 million and ~~$0.6~~$1.0 million of realized losses on securities recorded as other than temporary impairments for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively. The determination of whether a security is other-than-temporarily impaired involves judgments and assumptions based on subjective and objective factors. Consideration is given to (i) the length of time and the extent to which the fair value has been less than amortized cost, (ii) the financial condition and near-term prospects of recovery in fair value of the security, and (iii) the Company’s intent to sell the security and whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. The Company has no intention to sell the securities before recovery of its amortized cost basis. For cash flow statement purposes, all receipts of interest from interest-only real estate securities are treated as part of cash flows from operations.

The following tables present additional detail related to our real estate portfolio ($ in thousands):

The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):

The Company’s intangible assets are comprised of in-place leases, favorable leases compared to market leases and other intangibles. At ~~September~~June 30, ~~2017,~~2018, gross intangible assets totaled ~~$188.7~~$182.9 million with total accumulated amortization of ~~$57.5~~$63.1 million, resulting in net intangible assets of ~~$131.1~~$119.8 million, including ~~$9.2~~$5.9 million of unamortized favorable lease intangibles which are included in real estate and related lease intangibles, net on the consolidated balance sheets. At December 31, ~~2016,~~2017, gross intangible assets totaled ~~$154.7~~$189.5 million with total accumulated amortization of ~~$48.1~~$60.9 million, resulting in net intangible assets of ~~$106.6~~$128.6 million, including ~~$7.0~~$8.9 million of unamortized favorable lease intangibles which are included in real estate and related lease intangibles, net on the consolidated balance sheets. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, the Company recorded a net ~~reduction~~increase (reduction) in operating lease income of ~~$0.3~~$(0.2) million and ~~$0.8~~$(0.4) million, respectively, for amortization of above market lease intangibles acquired, compared to ~~$0.7~~$(0.2) million and ~~$1.0~~$(0.5) million, respectively, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, respectively.~~2017. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, the Company recorded a net increase (reduction) in operating lease income of ~~$0.6~~$0.7 million and $1.3 million, respectively, for amortization of below market lease intangibles acquired, compared to $0.4 million and ~~$1.2~~$0.7 million, respectively, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, respectively.~~2017.

The following table presents expected amortization expense during the next five years and thereafter related to the acquired in-place lease intangibles for property owned as of ~~September~~June 30, ~~2017~~2018 ($ in thousands):

Period Ending December 31, Amount

2017 (last 3 months) $ 4,272
2018 16,649
2019 16,323
2020 16,323
2021 16,120
Thereafter 89,619
Total $ 159,306



Period Ending December 31,	Amount

2018 (last 6 months)	$	5,717
2019	10,675
2020	9,265
2021	8,662
2022	6,384
Thereafter	73,167
Total	$	113,870

There were ~~$0.5~~$0.8 million and ~~$0.7~~$0.9 million of unbilled rent receivables included in other assets on the consolidated balance sheets as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

There was unencumbered real estate of ~~$179.3~~$72.1 million and ~~$70.3~~$128.7 million as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases or rent escalations under other leases from tenants) at ~~September~~June 30, ~~2017~~2018 ($ in thousands):

Period Ending December 31, Amount

2017 (last 3 months) $ 24,751
2018 88,129
2019 81,456
2020 79,628
2021 74,920
Thereafter 1,321,150
Total $ 1,670,034

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, the Company acquired the following ~~properties~~property ($ in thousands):

On October 1, 2016, the Company early adopted ~~Accounting Standards Update (“ASU”)~~ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). As a result of this adoption, acquisitions of real estate may not meet the revised definition of a business and may be treated as asset acquisitions rather than business combinations. The measurement of assets and liabilities acquired will no longer be recorded at fair value and the Company will now allocate purchase consideration based on relative fair values. Real estate acquisition costs which are no longer expensed as incurred, will be capitalized as a component of the cost of the assets acquired. During the ~~nine~~six months ended ~~September~~June 30, 2018 and 2017, all acquisitions were determined to be asset acquisitions.

The purchase prices were allocated to the ~~net assets acquired, which also include~~ asset acquisitions ~~occurring after October 1, 2016,~~ during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, as follows ($ in thousands):

During the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, the Company acquired the following properties ($ in thousands):

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2017, as follows ($ in thousands):

The Company sold the following properties during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2018 ($ in thousands):

6.The Company sold the following properties during the six months ended June 30, 2017 ($ in thousands):

As of ~~September~~June 30, ~~2017,~~2018, the Company had an aggregate investment of ~~$35.0~~$35.3 million in its equity method joint ventures with unaffiliated third parties.

The following is a summary of the Company’s investments in unconsolidated joint ventures, which we account for using the equity method, as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 ($ in thousands):

Entity September 30, 2017 December 31, 2016

Grace Lake JV, LLC $ 4,614
$ 3,719
24 Second Avenue Holdings LLC 30,393
30,306
Investment in unconsolidated joint ventures $ 35,007
$ 34,025



Entity	June 30, 2018		December 31, 2017

Grace Lake JV, LLC	$	4,192	$	4,908
24 Second Avenue Holdings LLC	31,110		30,533
Investment in unconsolidated joint ventures	$	35,302	$	35,441

The following is a summary of the Company’s allocated earnings (losses) based on its ownership interests from investment in unconsolidated joint ventures for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 ($ in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
Entity 2017 2016 2017 2016

Ladder Capital Realty Income Partnership I LP $ —
$ —
$ —
$ 892
Grace Lake JV, LLC 387
230
895
690
24 Second Avenue Holdings LLC (260 ) (371 ) (831 ) (1,097 )
Earnings (loss) from investment in unconsolidated joint ventures $ 127
$ (141 ) $ 64
$ 485

In connection with the origination of a loan in April 2012, the Company received a 25% equity kicker with the right to convert upon a capital event. On March 22, 2013, the loan was refinanced, and the Company converted its interest into a ~~25%~~19% limited liability company membership interest in Grace Lake JV, LLC (“Grace Lake LLC”), which holds an investment in an office building complex. After taking into account the preferred return of 8.25% and the return of all equity remaining in the property to the Company’s operating partner, the Company is entitled to 25% of the distribution of all excess cash flows and all disposition proceeds upon any sale. The Company is not legally required to provide any future funding to Grace Lake JV. The Company accounts for its interest in Grace Lake JV using the equity method of accounting, as it has a ~~25%~~19% investment, compared to the ~~75%~~81% investment of its operating partner and does not control the entity.

The Company’s investment in Grace Lake LLC is an unconsolidated joint venture, which is a VIE for which the Company is not the primary beneficiary. This joint venture was deemed to be a VIE primarily based on the fact there are disproportionate voting and economic rights within the joint venture. The Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company has a passive investment and no control of this entity and therefore does not have controlling financial interests in this VIE. The Company’s maximum exposure to loss is limited to its investment in the VIE. The Company has not provided financial support to this VIE that it was not previously contractually required to provide.

During the six months ended June 30, 2018, the Company received a $1.3 million distribution from its investment in Grace Lake JV, LLC.

On August 7, 2015, the Company entered into a joint venture, 24 Second Avenue Holdings LLC (“24 Second Avenue”), with an operating partner to invest in a ground-up condominium construction and development project located at 24 Second Avenue, New York, NY. The Company accounts for its interest in 24 Second Avenue using the equity method of accounting as its joint venture partner is the managing member of 24 Second Avenue and has substantive participating rights. The Company contributed $31.1 million for a 73.8% interest, with the operating partner holding the remaining 26.2% interest. The Company is entitled to income allocations and distributions based upon its membership interest of 73.8% until the Company achieves a 1.70x profit multiple, after which, income is allocated and distributed 50% to the Company and 50% to the operating partner.

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, the Company recorded $0.3 million and ~~$0.8~~$0.5 million, respectively, in expenses, which is recorded in earnings (loss) from investment in unconsolidated joint ventures in the consolidated statements of income. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017, the Company recorded ~~$0.4~~$0.3 million and ~~$1.1~~$0.6 million, respectively, in expenses, which is recorded in earnings (loss) from investment in unconsolidated joint ventures in the consolidated statements of income. The Company capitalizes interest related to the cost of its investment, as 24 Second Avenue has activities in progress necessary to construct and ultimately sell condominium units. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, the Company capitalized $0.4 million and ~~$0.9~~$0.7 million, respectively, of interest expense, using a weighted average interest rate, which is recorded in investment in unconsolidated joint ventures in the consolidated balance sheets. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, the Company capitalized ~~$0.2~~$0.3 million and $0.6 million, respectively, of interest expense, using a weighted average interest rate, which is recorded in investment in unconsolidated joint ventures in the consolidated balance sheets.

As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, 24 Second Avenue had ~~$32.3~~$43.7 million and ~~$21.6~~$36.5 million, respectively, of loans ~~payable.~~payable to third party lenders. As of ~~September 30, 2017,~~December 31, 2016, the previously existing building ~~has~~had been demolished and the site was cleared with all supportive excavation work completed, and we are anticipating completion of the new construction in 2018. ~~Our~~24 Second Avenue consists of 31 residential condominium units and one commercial condominium unit. As of June 30, 2018, 15 residential condominium units were under contract for sale for $38.3 million in sales proceeds. As of June 30, 2018, the Company is holding a 10.0% deposit on each sales contract. The Company expects to start closing on the existing sales contracts during the quarter ended December 31, 2018. The Company’s operating partner entered into a construction loan in the amount of $50.5 million to fund the completion of the project. As of ~~September~~June 30, ~~2017,~~2018, draws of ~~$32.3~~$43.7 million have been taken against the construction loan. The Company has no remaining capital commitment to our operating partner.

The Company’s investment in 24 Second Avenue is an unconsolidated joint venture, which is a VIE for which the Company is not the primary beneficiary. This joint venture was deemed to be a VIE primarily based on the fact there are disproportionate voting and economic rights within the joint venture. The Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company has shared control of this entity along with the entity’s partner and therefore does not have controlling financial interests in this VIE. The Company’s maximum exposure to loss is limited to its investment in the VIE. The Company has not provided financial support to this VIE that it was not previously contractually required to provide. In general, future costs of development not financed through a third party will be funded with capital contributions from the Company and its outside partner in accordance with their respective ownership percentages.

The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 ($ in thousands):

The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 ($ in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016

Total revenues $ 5,199
$ 4,463
$ 13,942
$ 12,678
Total expenses 3,709
4,030
11,193
11,943
Net income (loss) $ 1,490
$ 433
$ 2,749
$ 735



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017

Total revenues	$	4,972	$	4,953	$	9,321	$	8,743
Total expenses	2,801		1,686		6,373		7,484
Net income (loss)	$	2,171	$	3,267	$	2,948	$	1,259

The details of the Company’s debt obligations at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 are as follows ($ in thousands):

The Company has entered into multiple committed master repurchase agreements in order to finance its lending activities. The Company has entered into five committed master repurchase agreements, as outlined in the ~~September~~June 30, ~~2017~~2018 table above, totaling $1.7 billion of credit capacity. Assets pledged as collateral under these facilities are limited to whole mortgage loans or participation interests in mortgage loans collateralized by first liens on commercial properties and mezzanine debt. The Company also has a term master repurchase agreement with a major U.S. bank to finance CMBS totaling $400.0 million. The Company’s repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, maximum leverage ratios, and minimum fixed charge coverage ratios. The Company believes it was in compliance with all covenants as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016.~~2017.

The Company has the option to extend some of the current facilities subject to a number of conditions, including satisfaction of certain notice requirements, no event of default exists, and no margin deficit exists, all as defined in the repurchase facility agreements. The lenders have sole discretion with respect to the inclusion of collateral in these facilities, to determine the market value of the collateral on a daily basis, to be exercised on a good faith basis, and have the right in certain cases to require additional collateral, a full and/or partial repayment of the facilities (margin call), or a reduction in unused availability under the facilities, sufficient to rebalance the facilities if the estimated market value of the included collateral declines.

On March 1, 2017, the Company executed an amendment and extension of one of its credit facilities with a major banking institution, providing for, among other things, the extension of the maximum term of the facility to February 28, 2022 and increasing the maximum funding capacity to $200.0 million.

On May 1, 2017, the Company executed an amendment to one of its credit facilities with a major banking institution to, among other things, extend the maximum term by an additional year to May 24, 2021.

On September 29, 2017, the Company executed an amendment to its committed securities repurchase facility with a major banking institution, providing for, among other things, the extension of the maximum term of the facility to September 30, 2019.

Effective September 30, 2017, the Company executed an amendment of one of its committed loan repurchase facilities with a major banking institution, providing for, among other things, the extension of the maximum term of the facility to October 1, 2022, inclusive of two 12-month extension options, and to extend of the final date to obtain new advances under the facility to October 1, 2020.

On January 4, 2018, the Company executed an amendment to its committed loan repurchase facility with a major banking institution, providing for, among other things, the extension of the maximum term of the facility to April 7, 2019.

On April 3, 2018, the Company exercised its option to extend one of its credit facilities with a major banking institution for a term of one year and agreed with such banking institution to decrease the maximum funding capacity under such facility from $450 million to $350 million together with other related modifications, all of which will be memorialized in definitive documentation.

On May 7, 2018, the Company executed an amendment of one of its committed loan repurchase facilities with a major banking institution, providing for, among other things, the extension of the maximum term of the facility to May 6, 2023 and increasing the maximum funding capacity to $300.0 million.

As of ~~September~~June 30, ~~2017,~~2018, we had repurchase agreements with eight counterparties, with total debt obligations outstanding of ~~$0.9 billion.~~$820.0 million. As of ~~September~~June 30, ~~2017,~~2018, three counterparties, Deutsche Bank, ~~J.P.~~JP Morgan and Wells Fargo, held collateral that exceeded the amounts borrowed under the related repurchase agreements by more than ~~$73.3~~$75.6 million, or 5% of our total equity. As of ~~September~~June 30, ~~2017,~~2018, the weighted average haircut, or the percent of collateral value in excess of the loan amount, under our repurchase agreements was ~~34.3%~~32.8%. There have been no significant fluctuations in haircuts across asset classes on our repurchase facilities.

On February 11, 2014, the Company entered into a revolving credit facility (the “Revolving Credit Facility”), which was subsequently amended on February 26, 2016, March 1, 2017, March 23, 2017, ~~and~~ September 29, 2017 and October 27, 2017, to add additional banks to our syndicate, add two additional one-year extension options and increase its maximum funding capacity. The Revolving Credit Facility provides for an aggregate maximum borrowing amount of ~~$215.5~~$241.4 million, including a $25.0 million sublimit for the issuance of letters of credit. The Revolving Credit Facility is available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. The Revolving Credit Facility has a maturity date of February 11, ~~2018,~~2019, which may be extended by ~~three~~two 12-month periods subject to the satisfaction of customary conditions, including the absence of default. Interest on the Revolving Credit Facility is one-month LIBOR plus 3.50% per annum payable monthly in arrears.

The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries. The Revolving Credit Facility is secured by a pledge of the shares of (or other ownership or equity interests in) certain subsidiaries to the extent the pledge is not restricted under existing regulations, law or contractual obligations.

LCFH is subject to customary affirmative covenants and negative covenants, including limitations on the incurrence of additional debt, liens, restricted payments, sales of assets and affiliate transactions. In addition, under the Revolving Credit Facility, LCFH is required to comply with financial covenants relating to minimum net worth, maximum leverage, minimum liquidity, and minimum fixed charge coverage, consistent with our other credit facilities. The Company’s ability to borrow under the Revolving Credit Facility is dependent on, among other things, LCFH’s compliance with the financial covenants. The Revolving Credit Facility contains customary events of default, including non-payment of principal or interest, fees or other amounts, failure to perform or observe covenants, cross-default to other indebtedness, the rendering of judgments against the Company or certain of our subsidiaries to pay certain amounts of money and certain events of bankruptcy or insolvency.

As discussed in Note 2, Significant Accounting Policies in the Annual Report, the Company considers its committed loan master repurchase facilities and Revolving Credit Facility to be revolving debt arrangements. As such, the Company continues to defer and present costs associated with these facilities as an asset, subsequently amortizing those costs ratably over the term of each revolving debt arrangement. As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, the amount of unamortized costs relating to such facilities are ~~$5.1~~$7.7 million and ~~$4.9~~$7.8 million, respectively, and are included in other assets in the consolidated balance sheets.

The Company has also entered into multiple master repurchase agreements with several counterparties collateralized by real estate securities. The borrowings under these agreements have typical advance rates between ~~70%~~75% and 95% of the fair value of collateral.

During the ~~nine~~six months ended ~~September~~June 30, 2018 and 2017, the Company executed noeight and 23 term debt agreements, ~~to finance properties in its real estate portfolio. During the nine months ended September 30, 2016, the Company executed 10 term debt agreements~~respectively, to finance properties in its real estate portfolio. These non-recourse debt agreements provide for fixed rate financing at rates, ranging from 4.25% to 6.75%, maturing between ~~2018~~2020 - ~~2026~~2028 as of ~~September~~June 30, ~~2017.~~2018. These loans have carrying amounts of ~~$587.5~~$770.9 million and ~~$590.1~~$692.7 million, net of unamortized premiums of ~~$4.9~~$6.1 million and ~~$5.6~~$6.6 million at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively, representing proceeds received upon financing greater than the contractual amounts due under these agreements. The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. The Company recorded $0.2 million and ~~$0.7~~$0.5 million of premium amortization, which decreased interest expense, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, respectively. The Company recorded $0.2 million and ~~$0.7~~$0.5 million of premium amortization, which decreased interest expense, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, respectively. The loans are collateralized by real estate and related lease intangibles, net, of ~~$736.1~~$999.3 million and ~~$757.5~~$911.0 million as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

The Company completed its inaugural CLO issuances in the two transactions described below. As of June 30, 2018 and December 31, 2017, the Company had a total of $685.4 million and $688.5 million, respectively, of floating rate, non-recourse CLO debt included in debt obligations on its consolidated balance sheets. Unamortized debt issuance costs of $4.5 million and $6.0 million are included in CLO Debt as of June 30, 2018 and December 31, 2017, respectively. As of June 30, 2018, the CLO debt has interest rates of 2.95% to 5.67% (with a weighted average of 3.95%). As of June 30, 2018, collateral for the CLO debt comprised $861.2 million of first mortgage commercial mortgage real estate loans.

On October 17, 2017, a consolidated subsidiary of the Company consummated a securitization of floating-rate commercial mortgage loans through a static CLO structure. Over $456.9 million of balance sheet loans (“Contributed Loans”) were contributed into the CLO. Certain of the Contributed Loans have future funding components that were not contributed to the CLO and that are retained by a consolidated subsidiary of the Company in the form of a participation interest or separate note. However, for a limited period of time, to the extent loans in the CLO are repaid, the CLO may acquire portions of the future fundings from the Company’s consolidated subsidiary. A consolidated subsidiary of the Company retained an approximately 18.5% interest in the CLO by retaining the most subordinate classes of notes issued by the CLO, retains control over major decisions made with respect to the administration of the Contributed Loans and appoints the special servicer under the CLO. The CLO is a VIE and the Company is the primary beneficiary and, therefore, consolidates the VIE - See Note 3.

On December 21, 2017, a subsidiary of the Company consummated a securitization of fixed and floating-rate commercial mortgage loans through a static CLO structure. Over $431.5 million of Contributed Loans were contributed into the CLO. Certain of the Contributed Loans have future funding components that were not contributed to the CLO and that are retained by a consolidated subsidiary of the Company in the form of a participation interest or separate note. However, for a limited period of time, to the extent loans in the CLO are repaid, the CLO may acquire portions of the future fundings from the Company’s consolidated subsidiary. A consolidated subsidiary of the Company retained an approximately 25% interest in the CLO by retaining the most subordinate classes of notes issued by the CLO, retains control over major decisions made with respect to the administration of the Contributed Loans and appoints the special servicer under the CLO. The CLO is a VIE and the Company is the primary beneficiary and, therefore, consolidates the VIE - See Note 3.

During the ~~nine~~three months ended ~~September 30,~~March 2017, the Company sold a participating interest in a first mortgage loan receivable to a third party. The sales proceeds of $4.0 million are considered non-recourse secured borrowings and are recognized in debt obligations on the Company’s consolidated balance ~~sheets.~~sheets with $2.6 million and $3.1 million outstanding as of June 30, 2018 and December 31, 2017, respectively. The Company recorded ~~$0.2~~$0.1 million and ~~$0.4~~$0.2 million of interest expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, respectively. The Company recorded $0.2 million of interest expense for the three and six months ended June 30, 2017.

On July 11, 2012, Tuebor Captive Insurance Company LLC (“Tuebor”), a consolidated subsidiary of the Company, became a member of the FHLB and subsequently drew its first secured funding advances from the FHLB. On ~~January 13,~~December 6, 2017, Tuebor’s advance limit was updated by the FHLB to the lowest of ~~$2.0 billion,~~a Set Dollar Limit ($2.0 billion), 40% of Tuebor’s total assets or 150% of the Company’s total equity. Beginning April 1, 2020 through December 31, 2020, the Set Dollar Limit will be $1.5 billion. Beginning January 1, 2021 through February 19, 2021, the Set Dollar Limit will be $750.0 million. Tuebor is well-positioned to meet its obligations and pay down its advances in accordance with the scheduled reduction in the Set Dollar Limit, which remains subject to revision by the FHLB or as a result of any future changes in applicable regulations.

As of ~~September~~June 30, ~~2017,~~2018, Tuebor had ~~$1.5~~$1.3 billion of borrowings outstanding (with an additional ~~$536.0~~$663.5 million of committed term financing available from the FHLB), with terms of overnight to ~~seven~~six years (with a weighted average of 2.4 years), interest rates of 1.02% to 2.74% (with a weighted average of 2.07%), and advance rates of 59.3% to 95.2% of the collateral. As of June 30, 2018, collateral for the borrowings was comprised of $787.8 million of CMBS and U.S. Agency Securities and $944.6 million of first mortgage commercial real estate loans.

As of December 31, 2017, Tuebor had $1.4 billion of borrowings outstanding (with an additional $630.0 million of committed term financing available from the FHLB), with terms of overnight to six years (with a weighted average of 2.5 years), interest rates of 0.87% to 2.74% (with a weighted average of ~~1.50%~~1.61%), and advance rates of ~~57.8%~~49.6% to ~~95.2%~~100% of the collateral. As of ~~September 30,~~December 31, 2017, collateral for the borrowings was comprised of ~~$866.6~~$861.7 million of CMBS and U.S. Agency Securities and ~~$1.1 billion of first mortgage commercial real estate loans.~~

Tuebor is subject to state regulations which require that dividends (including dividends to the Company as its parent) may only be made with regulatory approval. However, there can be no assurance that we would obtain such approval if sought. Largely as a result of this restriction, approximately ~~$336.2 million~~$1.3 billion of the member’s capital was restricted from transfer via dividend to Tuebor’s parent without prior approval of state insurance regulators at ~~September~~June 30, ~~2017.~~

Effective February 19, 2016, the Federal Housing Finance Agency (the “FHFA’’), regulator of the FHLB, adopted a final rule amending its regulation regarding the eligibility of captive insurance companies for FHLB membership. According to the final rule, Ladder’s captive insurance company subsidiary, Tuebor may remain as a member of the FHLB through February 19, 2021 (the “Transition Period”). During the Transition Period, Tuebor is eligible to continue to draw new additional advances, extend the maturities of existing advances, and pay off outstanding advances on the same terms as non-captive insurance company FHLB members with the following two exceptions:

Tuebor has executed new advances since the effective date of the new rule in the ordinary course of business.

FHLB advances amounted to ~~30.3%~~27.0% of the Company’s outstanding debt obligations as of ~~September~~June 30, ~~2017.~~2018. The Company does not anticipate that the FHFA’s final regulation will materially impact its operations as it will continue to access FHLB advances during the five-year Transition Period.

There is no assurance that the FHFA or the FHLB will not take actions that could adversely impact Tuebor’s membership in the FHLB and continuing access to new or existing advances prior to February 19, 2021.

LCFH issued the 2025 Notes, the 2022 Notes, the 2021 Notes and the 2017 Notes (each as defined below, and collectively, the “Notes”) with Ladder Capital Finance Corporation (“LCFC”), as co-issuers on a joint and several basis. LCFC is a 100% owned finance subsidiary of Series TRS of LCFH with no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Notes. The Company and certain subsidiaries of LCFH currently guarantee the obligations under the Notes and the indenture. The Company is the general partner of LCFH and, through LCFH and its subsidiaries, operates the Ladder Capital business. As of ~~September~~June 30, ~~2017,~~2018, the Company has a ~~77.7%~~88.0% economic and voting interest in LCFH and controls the management of LCFH as a result of its ability to appoint board members. Accordingly, the Company consolidates the financial results of LCFH and records noncontrolling interest for the economic interest in LCFH held by the Continuing LCFH Limited Partners. In addition, the Company, through certain subsidiaries which are treated as TRSs, is indirectly subject to U.S. federal, state and local income taxes. Other than the noncontrolling interest in the Operating Partnership and federal, state and local income taxes, there are no material differences between the Company’s consolidated financial statements and LCFH’s consolidated financial statements. The Company believes it was in compliance with all covenants of the Notes as of June 30, 2018 and December 31, 2017.

Unamortized debt issuance costs of ~~$13.6~~$12.7 million and ~~$4.0~~$14.1 million are included in senior unsecured notes as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively, in accordance with GAAP.

On September 19, 2012, LCFH issued $325.0 million in aggregate principal amount of 7.375% senior notes due October 1, 2017 (the “2017 Notes”). The 2017 Notes required interest payments semi-annually in cash in arrears on April 1 and October 1 of each year, beginning on September 19, 2012. The 2017 Notes were unsecured and subject to incurrence-based covenants, including limitations on the incurrence of additional debt, restricted payments, liens, sales of assets, affiliate transactions and other covenants typical for financings of this type. At any time on or after April 1, 2017, the 2017 Notes were redeemable at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days’ notice, without penalty. On November 5, 2014, the board of directors authorized the Company to make up to $325.0 million in repurchases of the 2017 Notes from time to time without further approval.

On December 17, 2014, the Company retired $5.4 million of principal of the 2017 Notes for a repurchase price of $5.6 million recognizing a $0.2 million loss on extinguishment of debt. During the year ended December 31, 2016, the Company retired $21.9 million of principal of the 2017 Notes for a repurchase price of $21.4 million, recognizing a $0.3 million net gain on extinguishment of debt after recognizing $(0.2) million of unamortized debt issuance costs associated with the retired debt. During the six months ended June 30, 2017, the Company retired the remaining $297.7 million of principal of the 2017 Notes for a repurchase price of $297.7 million, recognizing a $53,547 net loss on extinguishment of debt after recognizing $(22,847) of unamortized debt issuance costs associated with the retired debt.

On March 1, 2017, the Company delivered a notice of conditional full redemption to holders of the 2017 Notes, pursuant to which the Company redeemed all outstanding 2017 Notes at 100% of the principal amount thereof (plus any accrued and unpaid interest to the redemption date) as of April 1, 2017. The redemption was conditional on the completion by the Company of a senior notes offering with gross proceeds of not less than $500 million. The Company’s offering of the 2022 Notes, described below, satisfied this condition. On April 3, 2017, the Company ~~repaid~~retired the remaining ~~aggregate~~$297.7 million of principal ~~amount~~ of the 2017 Notes ~~outstanding (including accrued and unpaid interest as~~for a repurchase price of ~~that date).~~$297.7 million, recognizing a $53.5 thousand net loss on extinguishment of debt after recognizing $(22.8) thousand of unamortized debt issuance costs associated with the retired debt.

On August 1, 2014, LCFH issued $300.0 million in aggregate principal amount of 5.875% senior notes due August 1, 2021 (the “2021 Notes”). The 2021 Notes require interest payments semi-annually in cash in arrears on February 1 and August 1 of each year, beginning on February 1, 2015. The 2021 Notes will mature on August 1, 2021. The 2021 Notes are unsecured and are subject to incurrence-based covenants, including limitations on the incurrence of additional debt, restricted payments, liens, sales of assets, affiliate transactions and other covenants typical for financings of this type. At any time on or after August 1, 2020, the 2021 Notes are redeemable at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days’ notice, without penalty. On February 24, 2016, the board of directors authorized the Company to make up to $100.0 million in repurchases of the 2021 Notes from time to time without further approval. On May 2, 2018, the board of the directors authorized the Company to repurchase any or all of the 2021 Notes from time to time without further approval.

During the year ended December 31, 2016, the Company retired $33.8 million of principal of the 2021 Notes for a repurchase price of $28.2 million, recognizing a $5.1 million net gain on extinguishment of debt after recognizing $(0.4) million of unamortized debt issuance costs associated with the retired debt. As of ~~September~~June 30, ~~2017,~~2018, the remaining $266.2 million in aggregate principal amount of the 2021 Notes is due August 1, 2021.

On March 16, 2017, LCFH issued $500.0 million in aggregate principal amount of 5.250% senior notes due March 15, 2022 (the “2022 Notes”). The 2022 Notes require interest payments semi-annually in cash in arrears on March 15 and September 15 of each year, beginning on September 15, 2017. The 2022 Notes will mature on March 15, 2022. The 2022 Notes are unsecured and are subject to an unencumbered assets to unsecured debt covenant. At any time on or after September 15, 2021, the 2022 Notes are redeemable at the option of the Company, in whole or in part, upon not less than 15 nor more than 60 days’ notice, without penalty. On May 2, 2018, the board of the directors authorized the Company to repurchase any or all of the 2022 Notes from time to time without further approval.

On September 25, 2017, LCFH issued $400.0 million in aggregate principal amount of 5.250% senior notes due October 1, 2025 (the “2025 Notes”). The 2025 Notes require interest payments semi-annually in cash in arrears on April 1 and October 1 of each year, beginning on April 1, 2018. The 2025 Notes will mature on October 1, 2025. The 2025 Notes are unsecured and are subject to an unencumbered assets to unsecured debt covenant. The Company may redeem the 2025 Notes, in whole, at any time, or from time to time, prior to their stated maturity. The 2025 Notes are redeemable at the option of the Company, in whole or in part, upon not less than 15 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the 2025 Notes plus the Applicable Premium (as defined in the indenture governing the 2025 Notes) as of, and accrued and unpaid interest, if any, to the redemption date.

The following schedule reflects the Company’s contractual payments under all borrowings by maturity ($ in thousands):

The Company’s debt facilities are subject to covenants which require the Company to maintain a minimum level of total equity. Largely as a result of this restriction, approximately $780.0 million of the total equity is restricted from payment as a dividend by the Company at ~~September~~June 30, ~~2017.~~

Fair value is based upon market quotations, broker quotations, counterparty quotations or pricing services quotations, which provide valuation estimates based upon reasonable market order indications and are subject to significant variability based on market conditions, such as interest rates, credit spreads and market liquidity. The fair value of the mortgage loan receivables held for sale is based upon a securitization model utilizing market data from recent securitization spreads and pricing.

The carrying values and estimated fair values of the Company’s financial instruments, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 are as follows ($ in thousands):

~~September~~June 30, ~~2017~~2018

Weighted Average

Outstanding
Face Amount

Amortized
Cost Basis
Fair Value Fair Value Method
Yield
%

Remaining
Maturity/Duration (years)
Assets:

CMBS(1) $ 934,559
$ 946,231
$ 950,029
Internal model, third-party inputs 2.73 % 2.85
CMBS interest-only(1) 3,308,063
(2) 102,986
104,483
Internal model, third-party inputs 3.14 % 2.88
GNMA interest-only(3) 279,567
(2) 9,138
7,999
Internal model, third-party inputs 5.99 % 4.36
Agency securities(1) 731
754
742
Internal model, third-party inputs 1.82 % 3.08
GNMA permanent securities(1) 34,014
34,675
35,218
Internal model, third-party inputs 3.63 % 5.82
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost 2,862,739
2,846,940
2,853,389
Discounted Cash Flow(4) 7.06 % 1.71
Mortgage loans transferred but not considered sold 600,222
598,525
610,829
Discounted Cash Flow(4) 4.92 % 8.38
Provision for loan losses N/A
(4,000 ) (4,000 ) (5) N/A
N/A
Mortgage loan receivables held for sale 526,085
522,961
540,510
Internal model, third-party inputs(6) 4.79 % 8.63
FHLB stock(7) 77,915
77,915
77,915
(7) 4.25 % N/A
Nonhedge derivatives(1)(8) 616,200
N/A
568
Counterparty quotations N/A
0.28

Liabilities:

Repurchase agreements - short-term 549,899
549,899
549,899
Discounted Cash Flow(9) 2.67 % 0.53
Repurchase agreements - long-term 363,238
363,238
363,238
Discounted Cash Flow(10) 2.98 % 2.64
Revolving credit facility 76,000
76,000
76,000
Discounted Cash Flow(11) 5.68 % 0.75
Mortgage loan financing 589,152
587,490
595,106
Discounted Cash Flow(10) 4.85 % 6.40
Participation Financing - Mortgage Loan Receivable 3,368
3,368
3,368
Discounted Cash Flow(12) 17.00 % 0.18
Borrowings from the FHLB 1,464,000
1,464,000
1,465,922
Discounted Cash Flow 1.50 % 2.52
Senior unsecured notes 1,166,201
1,152,552
787,191
Broker quotations, pricing services 5.39 % 5.53
Liability for transfers not considered sales 636,256
631,480
631,480
Discounted Cash Flow(13) 4.37 % 8.38
Nonhedge derivatives(1)(8) 88,700
N/A
2,711
Counterparty quotations N/A
2.76

December 31, 2017



											Weighted Average
	Outstanding Face Amount			Amortized Cost Basis			Fair Value			Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	945,167		$	954,397		$	953,499		Internal model, third-party inputs	2.79	%	2.89
CMBS interest-only(1)	3,140,297		(2)	112,609			113,071			Internal model, third-party inputs	3.16	%	3.08
GNMA interest-only(3)	172,916		(2)	5,245			4,477			Internal model, third-party inputs	6.70	%	4.18
Agency securities(1)	720			743			728			Internal model, third-party inputs	1.80	%	2.94
GNMA permanent securities(1)	33,745			34,386			34,742			Internal model, third-party inputs	3.62	%	5.66
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost	3,300,709			3,282,462			3,292,035			Discounted Cash Flow(4)	7.18	%	1.61
Provision for loan losses	N/A			(4,000		)	(4,000		)	(5)	N/A		N/A
Mortgage loan receivables held for sale	232,527			230,180			236,428			Internal model, third-party inputs(6)	4.88	%	8.17
FHLB stock(7)	77,915			77,915			77,915			(7)	4.25	%	N/A
Nonhedge derivatives(1)(8)	594,140			N/A			888			Counterparty quotations	N/A		0.24

Liabilities:
Repurchase agreements - short-term	371,427			371,427			371,427			Discounted Cash Flow(9)	3.19	%	0.35
Repurchase agreements - long-term	101,983			101,983			101,983			Discounted Cash Flow(10)	2.62	%	2.64
Mortgage loan financing	692,394			692,696			693,055			Discounted Cash Flow(10)	4.91	%	6.81
CLO debt	688,479			688,479			688,479			Discounted Cash Flow(9)	3.40	%	10.77
Participation Financing - Mortgage Loan Receivable	3,107			3,107			3,107			Discounted Cash Flow(11)	17.00	%	0.43
Borrowings from the FHLB	1,370,000			1,370,000			1,369,544			Discounted Cash Flow	1.61	%	2.49
Senior unsecured notes	1,166,201			1,152,134			1,187,187			Broker quotations, pricing services	5.39	%	5.28
Nonhedge derivatives(1)(8)	54,160			N/A			2,606			Counterparty quotations	N/A		2.44

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 ~~September~~June 30, ~~2017~~2018 and ~~2016~~December 31, 2017 ($ in thousands):

~~September~~June 30, ~~2017~~2018

December 31, 2017



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

Assets:
CMBS(1)	$	945,167		$	—	$	—	$	953,499		$	953,499
CMBS interest-only(1)	3,140,297		(2)	—		—		113,071			113,071
GNMA interest-only(3)	172,916		(2)	—		—		4,477			4,477
Agency securities(1)	720			—		—		728			728
GNMA permanent securities(1)	33,745			—		—		34,742			34,742
Nonhedge derivatives(4)	594,140			—		888		—			888
				$	—	$	888	$	1,106,517		$	1,107,405
Liabilities:
Nonhedge derivatives(4)	$	54,160		$	—	$	2,606	$	—		$	2,606


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

Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	$	3,300,709		$	—	$	—	$	3,292,035		$	3,292,035
Provision for loan losses	N/A			—		—		(4,000		)	(4,000		)
Mortgage loan receivables held for sale	232,527			—		—		236,428			236,428
FHLB stock	77,915			—		—		77,915			77,915
				$	—	$	—	$	3,602,378		$	3,602,378
Liabilities:											0
Repurchase agreements - short-term	371,427			$	—	$	—	$	371,427		$	371,427
Repurchase agreements - long-term	101,983			—		—		101,983			101,983
Revolving credit facility	—			—		—		—			—
Mortgage loan financing	692,394			—		—		693,055			693,055
Participation Financing - Mortgage Loan Receivable	688,479			—		—		688,479			688,479
Liability for transfers not considered sales	3,107			—		—		3,107			3,107
Borrowings from the FHLB	1,370,000			—		—		1,369,544			1,369,544
Senior unsecured notes	1,166,201			—		—		1,187,187			1,187,187
				$	—	$	—	$	4,414,782		$	4,414,782

The following table summarizes changes in Level 3 financial instruments reported at fair value on the consolidated statements of financial condition for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 ($ in thousands):

The following is quantitative information about significant unobservable inputs in our Level 3 measurements for those assets and liabilities measured at fair value on a recurring basis ($ in thousands):

The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 ($ in thousands):

~~September~~June 30, ~~2017~~2018

Fair Value
Remaining
Maturity
(years)
Contract Type Notional Asset(1) Liability(1)

Futures

5-year Swap $ 260,700
$ 2,715
$ —
0.25
10-year Swap 338,000
6,799
2
0.25
5-year U.S. Treasury Note 12,000
86
—
0.25
10-year U.S. Treasury Note Ultra 700
9
—
0.25
Variation Margin —
(9,110 ) (2 )
Total futures 611,400
499
—

Swaps

3 Month LIBOR(2) 50,000
—
2,343
3.00
Credit derivatives

CMBX 10,000
69
—
4.42
CDX 33,500
—
368
1.23
Total credit derivatives 43,500
69
368

Total derivatives $ 704,900
$ 568
$ 2,711



			Fair Value				Remaining Maturity (years)
Contract Type	Notional		Asset(1)		Liability(1)		Remaining Maturity (years)

Caps
1MO LIB	$	96,471	$	—	$	—	1.85
Futures
5-year Swap	$	299,600	$	341	$	—	0.25
10-year Swap	271,800		310		—		0.25
5-year U.S. Treasury Note	8,400		9		—		0.25
Total futures	579,800		660		—
Total derivatives	$	676,271	$	660	$	—

(1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

~~(2) The Company is paying fixed interest rates on these swaps.~~

(1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

(2) The Company is paying fixed interest rates on these swaps.

The following table indicates the net realized gains (losses) and unrealized appreciation (depreciation) on derivatives, by primary underlying risk exposure, as included in net result from derivatives transactions in the consolidated statements of operations for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 ($ in thousands):

The Company’s counterparties held ~~$12.2~~$5.8 million and ~~$11.3~~$9.6 million of cash margin as collateral for derivatives as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively, which is included in restricted cash in the consolidated balance sheets.

Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a Futures Commission Merchant. Interest rate futures that are governed by an ISDA agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or substantially the same collateral, if agreed to by us, as the market value of the interest rate futures change.

The Company is required to post initial margin and daily variation margin for our interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Effective January 3, 2017, CME amended their rulebooks to legally characterize daily variation margin payments for centrally cleared interest rate futures as settlement rather than collateral. As a result of this rule change, variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

The Company has agreements with certain of its derivative counterparties that contain a provision whereby, if the Company defaults on certain of its indebtedness, the Company could also be declared in default on its derivatives, resulting in an acceleration of payment under the derivatives. As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company was in compliance with these requirements and not in default on its indebtedness. As of ~~September~~June 30, ~~2017 and~~2018, there was no cash collateral held by the derivative counterparties for these derivatives. As of December 31, ~~2016,~~2017, there was ~~$4.5 million and $6.2~~$4.1 million of cash collateral held by the derivative counterparties for these derivatives, ~~respectively,~~ included in restricted cash in the consolidated statements of financial condition. No additional cash would be required to be posted if the acceleration of payment under the derivatives was triggered.

The following tables present both gross information and net information about derivatives and other instruments eligible for offset in the statement of financial position as of ~~September~~June 30, ~~2017~~2018 and ~~December 31, 2016.~~2017. The Company’s accounting policy is to record derivative asset and liability positions on a gross basis, therefore, the following tables present the gross derivative asset and liability positions recorded on the balance sheets, while also disclosing the eligible amounts of financial instruments and cash collateral to the extent those amounts could offset the gross amount of derivative asset and liability positions. The actual amounts of collateral posted by or received from counterparties may be in excess of the amounts disclosed in the following tables as the following only disclose amounts eligible to be offset to the extent of the recorded gross derivative positions.

As of ~~September~~June 30, ~~2017~~2018

($ in thousands)

Description
Gross amounts of
recognized assets

Gross amounts
offset in the
balance sheet

Net amounts of
assets presented
in the balance
sheet

Gross amounts not offset in the
balance sheet
Net amount

Financial
instruments

Cash collateral
received/(posted)(1)

Derivatives $ 568
$ —
$ 568
$ —
$ —
$ 568
Total $ 568
$ —
$ 568
$ —
$ —
$ 568



Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Financial instruments		Cash collateral received/(posted)(1)		Net amount

Derivatives	$	660	$	—	$	660	$	—	$	—	$	660
Total	$	660	$	—	$	660	$	—	$	—	$	660

(1) Included in restricted cash on consolidated balance sheets.

As of ~~September~~June 30, ~~2017~~2018

($ in thousands)


Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet			Net amounts of liabilities presented in the balance sheet			Gross amounts not offset in the balance sheet						Net amount				Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet			Net amounts of liabilities presented in the balance sheet				Gross amounts not offset in the balance sheet								Net amount
Description	Gross amounts of recognized liabilities				Financial instruments collateral				Cash collateral posted/(received)(1)						Net amount			Financial instruments collateral			Gross amounts offset in the balance sheet		Cash collateral posted/(received)(1)													Net amount
			Gross amounts offset in the balance sheet
Derivatives	$	2,711	$	—		Net amounts of liabilities presented in the balance sheet	$	2,711		$	—		$	2,711		$	—		Gross amounts of recognized liabilities
Repurchase agreements	913,137		—			913,137			913,137			—			—				$	819,963	$	—		Net amounts of liabilities presented in the balance sheet		$	819,963			$	819,963			$	—			$	—
Total	$	915,848	$	—		$	915,848		$	913,137		$	2,711		$	—			$	819,963	$	—		$	819,963			$	819,963			$	—			$	—

(1) Included in restricted cash on consolidated balance sheets.

As of December 31, ~~2016~~2017

($ in thousands)

Description
Gross amounts of
recognized assets

Gross amounts
offset in the
balance sheet

Net amounts of
assets presented
in the balance
sheet

Gross amounts not offset in the
balance sheet
Net amount

Financial
instruments

Cash collateral
received/(posted)(1)

Derivatives $ 5,018
$ —
$ 5,018
$ —
$ —
$ 5,018
Total $ 5,018
$ —
$ 5,018
$ —
$ —
$ 5,018



Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Financial instruments		Cash collateral received/(posted)(1)		Net amount

Derivatives	$	888	$	—	$	888	$	—	$	—	$	888
Total	$	888	$	—	$	888	$	—	$	—	$	888

(1) Included in restricted cash on consolidated balance sheets.

As of December 31, ~~2016~~2017

($ in thousands)

(1) Included in restricted cash on consolidated balance sheets.

Master netting agreements that the Company has entered into with its derivative and repurchase agreement counterparties allow for netting of the same transaction, in the same currency, on the same date. Assets, liabilities, and collateral subject to master netting agreements as of ~~September~~June 30, ~~2017~~2018 and ~~December 31, 2016~~2017 are disclosed in the tables above. The Company does not present its derivative and repurchase agreements net on the consolidated financial statements as it has elected gross presentation.

The Company has two classes of common stock, Class A and Class B, which are described as follows:

Holders of shares of Class A common stock are entitled to one vote per share on all matters to be voted upon by the shareholders. The holders of Class A common stock do not have cumulative voting rights in the election of directors.

Subject to the rights of the holders of any preferred stock that may be outstanding and any contractual or statutory restrictions, holders of Class A common stock are entitled to receive equally and ratably, share for share, dividends as may be declared by the board of directors out of funds legally available to pay dividends. Dividends upon Class A common stock may be declared by the board of directors at any regular or special meeting and may be paid in cash, in property, or in shares of capital stock. Before payment of any dividend, there may be set aside out of any funds available for dividends, such sums as the board of directors deems proper as reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any of the Company’s property, or for any proper purpose, and the board of directors may modify or abolish any such reserve.

Upon liquidation, dissolution, distribution of assets or other winding up, the holders of Class A common stock are entitled to receive ratably the assets available for distribution to the shareholders after payment of liabilities and the liquidation preference of any outstanding shares of preferred stock.

The shares of Class A common stock have no preemptive or conversion rights and are not subject to further calls or assessment by the Company. There are no redemption or sinking fund provisions applicable to the Class A common stock. All outstanding shares of Class A common stock are fully paid and non-assessable.

Income and losses are allocated among the shareholders based upon the number of shares outstanding.

Holders of shares of Class B common stock are entitled to one vote for each share held of record by such holder and all matters submitted to a vote of shareholders. Holders of shares of our Class A common stock and Class B common stock vote together as a single class on all matters presented to our shareholders for their vote or approval, except as otherwise required by applicable law.

Holders of Class B common stock do not have any right to receive dividends or to receive a distribution upon a liquidation or winding up of Ladder Capital Corp.

~~As part of the REIT Structuring Transactions described in Note 1, and pursuant~~Pursuant to the Third Amended and Restated LLLP Agreement of LCFH, the Continuing LCFH Limited Partners may from time to time, subject to certain conditions, receive one share of the Company’s Class A common stock in exchange for (i) one share of the Company’s Class B common stock, (ii) one Series REIT LP Unit and (iii) either one Series TRS LP Unit or one TRS Share, subject to equitable adjustments for stock splits, stock dividends and reclassifications.

During the ~~nine~~six months ended ~~September~~June 30, 2018, 4,349,832 Series REIT LP Units and 4,349,832 Series TRS LP Units were collectively exchanged for 4,349,832 shares of Class A common stock and 4,349,832 shares of Class B common stock were canceled. We received no other consideration in connection with these exchanges.

During the six months ended June 30, 2017, 13,737,365 Series REIT LP Units and 13,737,365 Series TRS LP Units were collectively exchanged for 13,737,365 shares of Class A common ~~stock~~stock; and 13,737,365 shares of Class B common stock were canceled. We received no other consideration in connection with these exchanges.

On October 30, 2014, the board of directors authorized the Company to repurchase up to $50.0 million of the Company’s Class A common stock from time to time without further approval. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. During the ~~nine~~six months ended ~~September~~June 30, 2018 and 2017, the Company repurchased no shares of Class A common stock. ~~During the nine months ended September 30, 2016, the Company repurchased 424,317 shares of Class A common stock at an average of $10.96 per share for a total aggregate purchase price of $4.7 million.~~ All repurchased shares are recorded in treasury stock at cost. As of ~~September~~June 30, ~~2017,~~2018, the Company has a remaining amount available for repurchase of ~~$44.4~~$41.8 million, which represents ~~3.7%~~2.7% in the aggregate of its outstanding Class A common stock, based on the closing price of ~~$13.78~~$15.62 per share on such date.

In order for the Company to maintain its qualification as a REIT under the Code, it must annually distribute at least 90% of its taxable income. The Company has paid and in the future intends to declare regular quarterly distributions to its shareholders in an amount approximating the REIT’s net taxable income.

Consistent with IRS guidance, the ~~Company’s Private Letter Ruling, it~~Company may, subject to a cash/stock election by its shareholders, pay a portion of its dividends in stock, to provide for meaningful capital retention; however, the REIT distribution requirements limit its ability to retain earnings and thereby replenish or increase capital for operations. The timing and amount of future distributions is based on a number of factors, including, among other things, the Company’s future operations and earnings, capital requirements and surplus, general financial condition and contractual restrictions. All dividend declarations are subject to the approval of the Company’s board of directors. Generally, the Company expects its distributions to be taxable as ordinary dividends to its shareholders, whether paid in cash or a combination of cash and common stock, and not as a tax-free return of capital or a capital ~~gain.~~gain (although for taxable years beginning after December 31, 2017 and before January 1, 2026, generally stockholders that are individuals, trusts or estates may deduct 20% of the aggregate amount of ordinary dividends distributed by us, subject to certain limitations). The Company believes that its significant capital resources and access to financing will provide the financial flexibility at levels sufficient to meet current and anticipated capital requirements, including funding new investment opportunities, paying distributions to its shareholders and servicing our debt obligations.

Pursuant to ASC 810, Consolidation, on the accounting and reporting for noncontrolling interests and changes in ownership interests of a subsidiary, changes in a parent’s ownership interest (and transactions with noncontrolling interest unitholders in the subsidiary), while the parent retains its controlling interest in its subsidiary, should be accounted for as equity transactions. The carrying amount of the noncontrolling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent. Accordingly, as a result of LP unit exchanges which caused changes in ownership percentages between the Company’s Class A shareholders and the noncontrolling interests in the Operating Partnership that occurred during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, the Company has increased noncontrolling interests in the Operating Partnership and decreased additional paid-in capital and accumulated other comprehensive income in the Company’s shareholders’ equity by ~~$3.9~~$0.7 million as of ~~September~~June 30, ~~2017.~~2018. Upon the adoption of ASU 2015-02, which amended ASC 810, Consolidation, in the quarter ended March 31, 2016, the Operating Partnership is now determined to be a VIE, however, since the Company was previously consolidating the Operating Partnership, the adoption of ASU 2015-02 had no material impact on the Company’s consolidated financial statements.

There are two main types of noncontrolling interest reflected in the Company’s consolidated financial statements (i) noncontrolling interest in the operating partnership and (ii) noncontrolling interest in consolidated joint ventures.

As more fully described in Note 1, certain of the predecessor equity owners continue to own interests in the operating partnership as modified by the IPO Transactions. These interests were subsequently further modified by the REIT Structuring Transactions (also described in Note 1). These interests, along with the Class B shares held by these investors, are exchangeable for Class A shares of the Company. The roll-forward of the Operating Partnership’s LP Units follow the Class B common stock of the Company as disclosed in the consolidated statements of changes in equity.

Notwithstanding the foregoing, subject to any restrictions in applicable debt financing agreements and available liquidity as determined by the board of directors of each of Series REIT of LCFH and Series TRS of LCFH, each Series must use commercially reasonable efforts to make quarterly distributions to each of its partners (including the Company) at least equal to such partner’s “Quarterly Estimated Tax Amount,” which shall be computed (as more fully described in LCFH’s Third Amended and Restated LLLP Agreement) for each partner as the product of (x) the U.S. federal taxable income (or alternative minimum taxable income, if higher) allocated by such Series to such partner in respect of the Series REIT LP Units and Series TRS LP Units held by such partner and (y) the highest marginal blended U.S. federal, state and local income tax rate (or alternative minimum taxable rate, as applicable) applicable to an individual residing in New York, NY, taking into account, for U.S. federal income tax purposes, the deductibility of state and local taxes; provided that Series TRS of LCFH may take into account, in determining the amount of tax distributions to holders of Series TRS LP Units, the amount of any distributions each such holder received from Series REIT of LCFH in excess of tax distributions. In addition, to the extent the Company requires an additional distribution from the Series of LCFH in excess of its quarterly tax distribution in order to pay its quarterly cash dividend, the Series of LCFH will be required to make a corresponding distribution of cash to each of their partners (other than the Company) on a pro-rata basis.

Income and losses and comprehensive income are allocated among the partners in a manner to reflect as closely as possible the amount each partner would be distributed under the Third Amended and Restated LLLP Agreement upon liquidation of the Operating Partnership’s assets.

The Company consolidates ~~nine~~10 ventures in which there are other noncontrolling investors, which own between 1.2% - ~~30.0%~~29.4% of such ventures. These ventures hold investments in 26a 40 property student housing portfolio, 25 office buildings, one ~~warehouse,~~industrial property and one ~~mobile home community and a condominium project.~~apartment complex. The Company makes distributions and allocates income from these ventures to the noncontrolling interests in accordance with the terms of the respective governing agreements.

The Company’s net income (loss) and weighted average shares outstanding for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 consist of the following:

($ in thousands except share amounts) For the Three Months Ended September 30, 2017 For the Three Months Ended September 30, 2016 For the Nine Months Ended September 30, 2017 For the Nine Months Ended September 30, 2016

Basic Net income (loss) available for Class A common shareholders $ 24,039
$ 27,608
$ 48,172
$ 24,871
Diluted Net income (loss) available for Class A common shareholders $ 24,039
$ 27,608
$ 65,275
$ 24,871
Weighted average shares outstanding

Basic 85,135,685
62,148,362
79,416,957
60,976,046
Diluted 85,476,266
63,347,690
109,857,679
61,875,010



($ in thousands except share amounts)	For the Three Months Ended June 30, 2018		For the Three Months Ended June 30, 2017		For the Six Months Ended June 30, 2018		For the Six Months Ended June 30, 2017

Basic Net income (loss) available for Class A common shareholders	$	38,406	$	22,113	$	89,281	$	35,584
Diluted Net income (loss) available for Class A common shareholders	$	38,406	$	28,967	$	89,281	$	49,004
Weighted average shares outstanding
Basic	96,810,266		80,108,431		96,003,151		76,510,201
Diluted	97,165,899		110,055,308		96,276,824		109,693,706

The calculation of basic and diluted net income (loss) per share amounts for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 are described and presented below.

Numerator: utilizes net income (loss) available for Class A common shareholders for the three and ~~nine~~six months ended ~~September~~June 30, 2018 and 2017, ~~and 2016,~~ respectively.

Denominator: utilizes the weighted average shares of Class A common stock for the three and ~~nine~~six months ended ~~September~~June 30, 2018 and 2017, ~~and 2016,~~ respectively.

Numerator: utilizes net income (loss) available for Class A common shareholders for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, for the basic net income (loss) per share calculation described above, adding net income (loss) amounts attributable to the noncontrolling interest in the Operating Partnership using the as-if converted method for the Class B common shareholders while adjusting for additional corporate income tax expense (benefit) for the described net income (loss) add-back.

Denominator: utilizes the weighted average number of shares of Class A common stock for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, for the basic net income (loss) per share calculation described above adding the dilutive effect of shares issuable relating to Operating Partnership exchangeable interests and the incremental shares of unvested Class A restricted stock using the treasury method.

(In thousands except share amounts) For the Three Months Ended September 30, 2017 For the Three Months Ended September 30, 2016 For the Nine Months Ended September 30, 2017 For the Nine Months Ended September 30, 2016

Basic Net Income (Loss) Per Share of Class A Common Stock

Numerator:

Net income (loss) attributable to Class A common shareholders $ 24,039
$ 27,608
$ 48,172
$ 24,871
Denominator:

Weighted average number of shares of Class A common stock outstanding 85,135,685
62,148,362
79,416,957
60,976,046
Basic net income (loss) per share of Class A common stock $ 0.28
$ 0.44
$ 0.61
$ 0.41

Diluted Net Income (Loss) Per Share of Class A Common Stock

Numerator:

Net income (loss) attributable to Class A common shareholders $ 24,039
$ 27,608
$ 48,172
$ 24,871
Add (deduct) - dilutive effect of:

Amounts attributable to operating partnership’s share of Ladder Capital Corp net income (loss) —
—
15,210
—
Additional corporate tax (expense) benefit —
—
1,893
—
Diluted net income (loss) attributable to Class A common shareholders $ 24,039
$ 27,608
$ 65,275
$ 24,871
Denominator:

Basic weighted average number of shares of Class A common stock outstanding 85,135,685
62,148,362
79,416,957
60,976,046
Add - dilutive effect of:

Shares issuable relating to converted Class B common shareholders —
—
30,211,137
—
Incremental shares of unvested Class A restricted stock 340,581
1,199,328
229,585
898,964
Diluted weighted average number of shares of Class A common stock outstanding 85,476,266
63,347,690
109,857,679
61,875,010
Diluted net income (loss) per share of Class A common stock $ 0.28
$ 0.44
$ 0.59
$ 0.40



(In thousands except share amounts)	For the Three Months Ended June 30, 2018(1)		For the Three Months Ended June 30, 2017			For the Six Months Ended June 30, 2018(1)		For the Six Months Ended June 30, 2017

Basic Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	38,406	$	22,113		$	89,281	$	35,584
Denominator:
Weighted average number of shares of Class A common stock outstanding	96,810,266		80,108,431			96,003,151		76,510,201
Basic net income (loss) per share of Class A common stock	$	0.40	$	0.28		$	0.93	$	0.47

Diluted Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	38,406	$	22,113		$	89,281	$	35,584
Add (deduct) - dilutive effect of:
Amounts attributable to operating partnership’s share of Ladder Capital Corp net income (loss)	—		8,868			—		14,706
Additional corporate tax (expense) benefit	—		(2,014		)	—		(1,286		)
Diluted net income (loss) attributable to Class A common shareholders	$	38,406	$	28,967		$	89,281	$	49,004
Denominator:
Basic weighted average number of shares of Class A common stock outstanding	96,810,266		80,108,431			96,003,151		76,510,201
Add - dilutive effect of:
Shares issuable relating to converted Class B common shareholders	—		29,723,350			—		33,013,753
Incremental shares of unvested Class A restricted stock	355,633		223,527			273,673		169,752
Diluted weighted average number of shares of Class A common stock outstanding	97,165,899		110,055,308			96,276,824		109,693,706
Diluted net income (loss) per share of Class A common stock	$	0.40	$	0.26		$	0.93	$	0.45

The shares of Class B common stock do not share in the earnings of Ladder Capital Corp and are, therefore, not participating securities. Accordingly, basic and diluted net income (loss) per share of Class B common stock has not been presented, although the assumed conversion of Class B common stock has been included in the presented diluted net income (loss) per share of Class A common stock.

The following table summarizes the impact on the consolidated statement of operations of the various stock based compensation plans described in this note ($ in thousands):

In connection with the IPO Transactions, the 2014 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2014 Omnibus Incentive Plan”) was adopted by the board of directors on February 11, 2014, and provides certain members of management, employees and directors of the Company or its affiliates with additional incentives including grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards.

Members of management ~~are~~were eligible to receive annual restricted stock awards (the “Annual Restricted Stock Awards”) and annual option awards (the “Annual Option Awards”) based on the performance of the Company. OnFebruary 18, ~~2015,~~2016, Annual Restricted Stock Awards were granted to ~~our executive officers (each, a “Management Grantee”)~~Management Grantees with an aggregate value of ~~$12.6~~$9.1 million which represents ~~688,400~~793,598 shares of restricted Class A common stock in connection with ~~2014~~2015 compensation. Fifty percent of each restricted stock award granted is subject to time-based vesting criteria, and the remaining 50% of each restricted stock award is subject to attainment of the Performance Target for the applicable years. The time-vesting restricted stock granted to the Management Grantees will generally vest in three installments on each of the first three anniversaries of the date of grant, subject to continued employment on the applicable vesting dates. The performance-vesting restricted stock will vest in three equal installments upon the compensation committee’s confirmation that the Company achieves a return on equity, based on ~~Core Earnings~~core earnings divided by the Company’s average book value of equity, equal to or greater than 8% for such year (the “Performance Target”) for those years. If the Company misses the Performance Target during either the first or second calendar year but meets the Performance Target for a subsequent year during the three-year performance period and the Company’s return on equity for such subsequent year and any years for which it missed its Performance Target equals or exceeds the compounded return on equity of 8%, based on ~~Core Earnings~~core earnings divided by the Company’s average book value of equity, the performance-vesting restricted stock which failed to vest because the Company previously missed its Performance Target will vest on the last day of such subsequent year (the “Catch-Up Provision”). If the term ~~“Core Earnings”~~“core earnings” is no longer used in the Company’s SEC filings and approved by the compensation committee, then the Performance Target will be calculated using such other pre-tax performance measurement defined in the Company’s SEC filings, as determined by the compensation committee. The Company met the Performance Target for the years ended December 31, ~~2016~~2017 and ~~2015.~~2016.

The Company has elected to recognize the compensation expense related to the time-based vesting ~~portion~~ of the Annual Restricted Stock Awards for the entire award on a straight-line basis over the requisite service period. As such, the compensation expense related to the February 18, ~~2015~~2016 Annual Restricted Stock Awards to Management Grantees ~~shall be~~is recognized as follows:

Accruals of compensation cost for an award with a performance condition shall be based on the probable outcome of that performance condition. Therefore, compensation cost shall be accrued if it is probable that the performance condition will be achieved and shall not be accrued if it is not probable that the performance condition will be achieved.

On February 18, ~~2015,~~2016, certain members of the board of directors each received Annual Restricted Stock Awards with a grant date fair value of $0.1 million, representing ~~7,962~~12,636 shares of restricted Class A common stock, which ~~vested~~will vest in full on the first anniversary of the date of grant, subject to continued service on the board of directors. Compensation expense for restricted stock subject to time-based vesting criteria granted to directors will be expensed in full on an annual basis following such grant.

Upon a change in control (as defined in the respective award agreements), all restricted stock and option awards will become fully vested, if (1) the Management Grantee continues to be employed through the closing of the change in control or (2) after the signing of definitive documentation related to the change in control, but prior to its closing, the Management Grantee’s employment is terminated without ~~Cause~~cause or due to death or disability or the Management Grantee resigns for Good Reason. The compensation committee retains the right, in its sole discretion, to provide for the accelerated vesting (in whole or in part) of the restricted stock and option awards granted.

On February 11, 2017 (the “Harris Retirement Eligibility Date”), all outstanding Annual Restricted Stock Awards, including the time-vesting portion and the performance-vesting portion, and all outstanding Annual Option Awards granted to Mr. Harris became fully vested, and any Annual Restricted Stock Awards and Annual Option Awards granted after the Harris Retirement Eligibility Date will be fully vested at grant. The Executive Retirement Eligibility Date for Pamela McCormack is December 8, 2019 (the “McCormack Retirement Eligibility Date”). For Management Grantees other than Harris and McCormack, the Executive Retirement Eligibility Date is February 11, 2019, the time-vesting portion of the Annual Restricted Stock Awards and the Annual Option Awards will become fully vested, and the time-vesting portion of any Annual Restricted Stock Awards and Annual Option Awards granted after the Executive Retirement Eligibility Date will be fully vested at grant. Upon the occurrence of the Executive Retirement Eligibility Date, the performance-vesting portion of such Management Grantee’s Annual Restricted Stock Awards will remain outstanding for the performance period and will vest to the extent we meet the Performance Target, including via the Catch-Up Provision described above, regardless of continued employment with us our subsidiaries following the Executive Retirement Eligibility Date.

On February 18, 2017, Management Grantees received cash of $1.0 million and a Stock Award with a grant date fair value of $48,475, representing 3,500 shares of Class A common stock, intended to represent dividends in type and amount that the 2015 stock option grant to management would have received had such options had dividend equivalent rights since grant. This grant also provides for future dividend equivalents that vest according to the vesting schedule of the 2015 stock option grant. Compensation expense shall be recognized on a straight-line basis over the requisite service period.

In connection with Mr. Mazzei’s retirement as President, Ladder Capital Finance LLC, a subsidiary of Ladder, and Mr. Mazzei entered into a separation agreement, dated June 22, 2017 (the “Separation Agreement”). Pursuant to the Separation Agreement, Mr. Mazzei was appointed as a Class III director of Ladder and, subject to certain exceptions, Mr. Mazzei’s unvested stock and stock options will continue to vest as they would have had he continued to be employed with Ladder as long as he continues to serve on the Board of Directors. Such unvested stock and stock options will not be subject to the original retirement eligibility date provided for in his employment agreement. On June 22, 2017, in connection with his appointment to the board of directors, Mr. Mazzei received a Restricted Stock Award with a grant date fair value of $0.1 million, representing 5,346 shares of restricted Class A common stock, which will vest in three equal installments on each of the first three anniversaries of the date of grant, subject to continued service on the board of directors. Compensation expense for restricted stock subject to time-based vesting criteria granted to the director will be expensed 1/3 each year, for three years on an annual basis following such grant.

A summary of the grants is presented below ($ in thousands):

The table below presents the number of unvested shares and outstanding stock options at ~~September~~June 30, ~~2017~~2018 and changes during ~~2017~~2018 of the ~~(i)~~ Class A Common stock and Stock Options of Ladder Capital Corp granted under the 2014 Omnibus Incentive Plan:

At ~~September~~June 30, ~~2017~~2018 there was ~~$7.4~~$10.3 million of total unrecognized compensation cost related to certain share-based compensation awards that is expected to be recognized over a period of up to 34 months, with a weighted-average remaining vesting period of ~~21.7~~23.1 months.

The table below presents the number of unvested shares and outstanding stock options at ~~September~~June 30, ~~2016~~2017 and changes during ~~2016~~2017 of the ~~(i)~~ Class A Common stock and Stock Options of Ladder Capital Corp granted under the 2014 Omnibus Incentive ~~Plan and (ii) Series B Participating Preferred Units of LCFH granted under the 2008 Plan, which were subsequently converted to LP Units of LCFH in connection with the IPO:~~Plan:

As of ~~September~~June 30, ~~2016~~2017 there was ~~$10.7~~$9.2 million of total unrecognized compensation cost related to certain share-based compensation awards that is expected to be recognized over a period of up to 2937 months, with a weighted-average remaining vesting period of ~~20.2~~24.0 months.

The final payment, which closed the liability under the Phantom Equity Plan, was made on January 5, 2018. As of ~~September 30,~~December 31, 2017, there ~~are 279,935~~were 42,270 phantom units ~~outstanding, all of which are vested,~~that have been withdrawn from the plan, resulting in a liability of $3.9 million, which is included in accrued expenses on the consolidated balance sheets. As of December 31, 2016, there are 373,871 phantom units outstanding, all of which are vested, resulting in a liability of $6.1$1.0 million, which is included in accrued expenses on the consolidated balance sheets.

On July 3, 2014, the Company adopted a ~~new,~~ nonqualified deferred compensation plan, which was amended and restated on March 17, 2015 (the “2014 Deferred Compensation Plan”), in which certain eligible employees participate. On February 22, 2018, the Board of Directors froze the 2014 Deferred Compensation Plan. Pursuant to the 2014 Deferred Compensation Plan, participants ~~may elect,~~elected, or in some cases non-management participants ~~may be~~were required, to defer all or a portion of their annual cash performance-based bonuses into the 2014 Deferred Compensation Plan. Generally, if a participant’s total compensation iswas in excess of a certain threshold, a portion of a participant’s performance-based annual bonus iswas required to be deferred into the 2014 Deferred Compensation Plan. Otherwise, a portion of the participant’s annual bonus ~~may be~~could have been deferred into the 2014 Deferred Compensation Plan at the election of the participant, so long as such elections ~~are~~were timely made in accordance with the terms and procedures of the 2014 Deferred Compensation Plan.

In the event that a participant ~~elects~~elected to (or iswas required to) defer a portion of his or her compensation pursuant to the 2014 Deferred Compensation Plan, such amount iswas not paid to the participant and iswas instead credited to such participant’s notional account under the 2014 Deferred Compensation Plan. Such amounts ~~are~~were then invested on a phantom basis in Class A common stock of the Company, or the phantom units, and a participant’s account is credited with any dividends or other distributions received by holders of Class A common stock of the Company, which are subject to the same vesting and payment conditions as the applicable contributions. Elective contributions ~~are~~were immediately vested upon contribution. Mandatory contributions are subject to one-third vesting over a three-year period on a straight-line basis following the applicable year in which the related compensation was ~~earned.~~

If a participant’s employment with the Company is terminated by the Company other than for cause and such termination is within six months following a change in control (each, as defined in the 2014 Deferred Compensation Plan), then the participant will fully vest in his or her unvested account balances. Furthermore, the unvested account balances will fully vest in the event of the participant’s death, disability, retirement (as defined in the 2014 Deferred Compensation Plan) or in the event of certain hostile takeovers of the board of directors of the Company. In the event that a participant’s employment is terminated by the Company other than for cause, the participant will vest in the portion of the participant’s account that would have vested had the participant remained employed through the end of the year in which such termination occurs, subject to, in such case or in the case of retirement, the participant’s timely execution of a general release of claims in favor of the Company. Unvested amounts are otherwise generally forfeited upon the participant’s resignation or termination of employment, and vested mandatory contributions are generally forfeited upon the participant’s termination for cause.

As of ~~September~~June 30, ~~2017,~~2018, there are ~~343,933~~362,967 phantom units outstanding, of which ~~221,723~~238,807 are unvested and 13,722 phantom units which have been withdrawn from the plan, resulting in a liability of ~~$4.7~~$5.9 million, which is included in accrued expenses on the consolidated balance sheets. As of December 31, ~~2016,~~2017, there ~~are 273,709~~were 321,476 phantom units outstanding, of which ~~134,281~~182,983 are unvested, resulting in a liability of ~~$3.6~~$3.8 million, which is included in accrued expenses on the consolidated balance sheets.

On December 19, 2017, the board of directors of Ladder Capital Corp approved 2017 bonus payments to employees, including officers, totaling $49.3 million, which included $15.5 million of equity based compensation, which was granted on December 21, 2017. Cash bonuses of $17.1 million were paid on December 29, 2017. The remaining $16.8 million of cash bonuses were accrued for as of December 31, 2017 and paid to employees in full on January 5, 2018. On February 8, 2017, the board of directors of Ladder Capital Corp approved ~~2017~~2016 bonus payments to employees, including officers, totaling $39.5 million, which included $10.2 million of equity based compensation. The bonuses were accrued for as of December 31, ~~2017~~2016 and paid to employees in full on February 21, 2017. On February 10, 2016, the board of directors of Ladder Capital Corp approved 2016 bonus payments to employees, including officers, totaling $46.8 million, which included $10.3 million of equity based compensation. The bonuses were accrued for as of December 31, 2016 and paid to employees in full on February 17, 2016. During the three and ~~nine~~six months ended ~~September~~June 30, 2018, the Company recorded compensation expense of $7.8 million and $17.6 million, respectively, related to 2018 bonuses. During the three and six months ended June 30, 2017, the Company recorded compensation expense of ~~$7.4~~$9.3 million and ~~$19.9~~$12.4 million, respectively, related to 2017 bonuses. ~~During the three and nine months ended September 30, 2016, the Company recorded compensation expense of $8.3 million and $17.6 million, respectively, related to 2016 bonuses.~~

The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2015. As such, the Company’s income is generally not subject to U.S. Federal, state and local corporate income taxes other than as described below.

Certain of the Company’s subsidiaries have elected to be treated as TRSs. TRSs permit the Company to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, the Company will continue to maintain its qualification as a REIT. The Company’s TRSs are not consolidated for U.S. federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in TRSs. ~~Current~~

There were $0.7 million and $2.6 million. corporate taxes payable (receivable) as of June 30, 2018 and December 31, 2017, respectively. There were $0.5 million NYC UBT taxes payable (receivable) at June 30, 2018 and December 31, 2017. Prepaid corporate taxes as of June 30, 2018 and December 31, 2017 were $13.7 million and $12.4 million, respectively.

As part of the recently enacted Tax Cuts and Jobs Act, the federal income tax ~~expense (benefit) was $1.5 million and $3.3 million for~~rate applicable to TRS activities has been reduced. The Company has adjusted its deferred tax positions at the ~~three and nine months ended September 30,~~TRSs (including those resulting from the TRA) to reflect the reduced tax rate as part of its 2017 ~~respectively. Current income~~ tax ~~expense (benefit) was $8.3 million and $11.8 million for the three and nine months ended September 30, 2016, respectively.~~

As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company’s net deferred tax assets (liabilities) were ~~$6.7~~$(6.9) million and ~~$2.1~~$(5.7) million, respectively, and are included in other assets (liabilities) in the Company’s consolidated balance sheets. Deferred income tax expense (benefit) included within the provision for income taxes was $(1.9) million and $(6.6) million for the three and nine months ended September 30, 2017, respectively. Deferred income tax expense (benefit) included within the provision for income taxes was $0.4 million and $(6.3) million for the three and nine months ended September 30, 2016, respectively. The Company believes it is more likely than not that the net deferred tax assets (liabilities) will be realized in the future. Realization of the net deferred tax assets (liabilities) is dependent upon our generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences. The amount of net deferred tax assets (liabilities) considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

As of ~~September~~June 30, 2018 and December 31, 2017, the Company has a deferred tax asset of ~~$10.2~~$0.4 million and $5.8 million, respectively, relating to capital losses which it may only use to offset capital gains. These tax attributes will expire if unused in 2020. As the realization of these assets are not more likely than not before their expiration, the Company has provided a full valuation allowance against this deferred tax asset.

The Company’s tax returns are subject to audit by taxing authorities. Generally, as of ~~September~~June 30, ~~2017,~~2018, the tax years ~~2013,~~ 2014, 2015, 2016 and ~~2016~~2017 remain open to examination by the major taxing jurisdictions in which the Company is subject to taxes. The Company acquired certain corporate entities at the time of its IPO. The related acquisition agreements provided an indemnification to the Company by the transferor of any amounts due for any potential tax liabilities owed by these entities for tax years prior to their acquisition. During the three months ended September 30, 2016, management proposed a settlement pertaining to a New York State tax audit for these corporate entities for the years 2010-2012 (which are now wholly owned). As a result of the settlement, management recorded income tax expense in the amount of $3.3 million and a corresponding payable to the State of New York. The settlement was finalized during the three months ended December 31, 2016. Pursuant to the indemnification, Management expected to recover such amounts and, accordingly, recorded fee and other income in the amount of $3.3 million as well as a corresponding receivable from the indemnity counterparties. As of September 30, 2017, the Company had recovered all amounts owed by the indemnity counterparties related to the 2010-2012 audit. The IRS and New York State have recently begun routine audits of the Company’s U.S. federal and state income tax returns for tax year 2014 and 2013-2015 respectively. The Company does not expect the ~~audit~~audits to result in any material changes to the Company’s financial position. The Company does not expect tax expense to have an impact on either short or long-term liquidity or capital needs.

Under U.S. GAAP, a tax benefit related to an income tax position may be recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized upon settlement. As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company’s unrecognized tax benefit is a liability for $0.8 million and is included in the accrued expenses in the Company’s consolidated balance sheets. This unrecognized tax benefit, if recognized, would have a favorable impact on our effective income tax rate in future periods. As of ~~September~~June 30, ~~2017,~~2018, the Company has not recognized a significant amount of any interest or penalties related to uncertain tax positions. In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.

Upon consummation of the IPO, the Company entered into a Tax Receivable Agreement with the Continuing LCFH Limited ~~Partners.~~Partners (the “TRA Members”). Under the Tax Receivable Agreement the Company generally is required to pay to ~~those Continuing LCFH Limited Partners~~the TRA Members that exchange their interests in LCFH and Class B shares of the Company for Class A shares of the Company, 85% of the applicable cash savings, if any, in U.S. federal, state and local income tax that the Company realizes (or is deemed to realize in certain circumstances) as a result of (i) the increase in tax basis in its proportionate share of LCFH’s assets that is attributable to the Company as a result of the exchanges and (ii) payments under the Tax Receivable Agreement, including any tax benefits related to imputed interest deemed to be paid by the Company as a result of such agreement. The Company may make future payments under the Tax Receivable Agreement if the tax benefits are realized. We would then benefit from the remaining 15% of cash savings in income tax that we realize. For purposes of the Tax Receivable Agreement, cash savings in income tax will be computed by comparing our actual income tax liability to the amount of such taxes that we would have been required to pay had there been no increase to the tax basis of the assets of LCFH as a result of the exchanges and had we not entered into the Tax Receivable Agreement.

Payments to a ~~Continuing LCFH Limited Partner~~TRA Member under the Tax Receivable Agreement are triggered by each exchange and are payable annually commencing following the Company’s filing of its income tax return for the year of such exchange. The timing of the payments may be subject to certain contingencies, including the Company having sufficient taxable income to utilize all of the tax benefits defined in the Tax Receivable Agreement.

As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, pursuant to the Tax Receivable Agreement, the Company recorded a liability of ~~$2.4~~$1.6 million and ~~$2.5~~$1.7 million, respectively, included in amount payable pursuant to tax receivable agreement in the consolidated balance sheets for ~~Continuing LCFH Limited Partners.~~TRA Members. The amount and timing of any payments may vary based on a number of factors, including the absence of any material change in the relevant tax law, the Company continuing to earn sufficient taxable income to realize all tax benefits, and assuming no additional exchanges that are subject to the Tax Receivable Agreement. Depending upon the outcome of these factors, the Company may be obligated to make substantial payments pursuant to the Tax Receivable Agreement. The actual payment amounts may differ from these estimated amounts, as the liability will reflect changes in prevailing tax rates, the actual benefit the Company realizes on its annual income tax returns, and any additional exchanges.

To determine the current amount of the payments due, the Company estimates the amount of the Tax Receivable Agreement payments that will be made within twelve months of the balance sheet date. As described in Note 1 above, the Tax Receivable Agreement was amended and restated in connection with ~~our~~the Company’s REIT Election, effective as of December 31, 2014 (the “TRA Amendment”), in order to preserve a portion of the potential tax benefits currently existing under the Tax Receivable Agreement that would otherwise be reduced in connection with our REIT Election. The purpose of the TRA Amendment was to preserve the benefits of the Tax Receivable Agreement to the extent possible in a REIT, although, as a result, the amount of payments made to the TRA Members under the TRA Amendment is expected to be less than the amount that would have been paid under the original Tax Receivable Agreement. The TRA Amendment continues to share such benefits in the same proportions and otherwise has substantially the same terms and provisions as the prior Tax Receivable Agreement.

On October 18, 2016, Ladder Capital Asset Management LLC (“LCAM”), a subsidiary of the Company and a registered investment adviser, launched the Ladder Select Bond Fund (the “Fund”), a mutual fund. In addition, on October 18, 2016, the Company made a $10.0 million investment in the Fund, which is included in other assets in the consolidated balance sheets. As of ~~September~~June 30, ~~2017, current~~2018, members of senior management have ~~also invested~~ $0.9 million ~~in aggregate~~invested in the ~~Fund, since inception.~~Fund. LCAM earns a 0.75% fee on assets under management, which may be reduced for expenses incurred in excess of the Fund’s expense cap of 0.95%.

From time to time, the Company may provide commercial real estate loans to entities affiliated with certain of our directors, officers or large shareholders who are, as part of their ordinary course of business, commercial real estate investors. These loans are made in the ordinary course of the Company’s business on the same terms and conditions as would be offered to any other borrower of similar type and standing on a similar property.

On March 13, 2017, Related Reserve IV LLC, an affiliate of Related Fund Management LLC (the “B Participation Holder”), purchased a $4.0 million subordinate participation interest (the “B Participation Interest”) in the up to $136.5 million mortgage loan (the “Loan”) secured by the Conrad hotels and condominiums in Fort Lauderdale, Florida from a subsidiary of the Company. The B Participation Interest earns interest at an annual rate of 17%, with the Company’s participation interest (the “A Participation Interest”) receiving the balance of all interest paid under the Loan. Upon an event of default under the Loan, all receipts will be applied to the payment of interest and principal on the Company’s share of the principal balance before the B Participation Holder receives any sums. The Company retains all control over the administration and servicing of the whole loan, except that upon the occurrence of certain Loan defaults and other events, the B Participation Holder will have the option to trigger a buy-sell option, whereupon the Company shall have the right to either repurchase the B Participation Interest at par or sell the A Participation Interest to the B Participation Holder at par plus exit fees that would have been payable upon a borrower repayment. Because the participation interest was not pari passu and effective control continued to reside with the retained portions of the loans the transfers of any portion of this loan asset is considered a non-recourse secured borrowing in which the full loan asset remains on the Company’s consolidated balance sheets in mortgage loan receivables held for investment, net, at amortized cost and the sale proceeds are reported as debt obligations. ~~For~~The Company recorded $0.1 million and $0.2 million of interest expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, the Company incurred $0.2 million and $0.4 million,~~2018, respectively, ~~in interest expense related to this loan~~ which is included in accrued expenses on the ~~Company’s~~consolidated balance sheets. The Company recorded $0.2 million of interest expense for the three and six months ended June 30, 2017, which is included in accrued expenses on the consolidated balance sheets.

On July 6, 2017, Ladder provided a $21.0 million first mortgage loan to a borrower affiliated with The Related Companies to facilitate the acquisition of two commercial condominium units in the Brickell Heights mixed use development in Miami, Florida. The borrowing entity, Brickell Heights Commercial LLC, is 80% owned by a joint venture between Related Special Assets LLC, a personal investment vehicle for certain principals of The Related Companies, and another investor, with the remaining 20% interest belonging to an affiliate of The Related Group of Florida. ~~For the three and nine months ended September 30, 2017, the Company earned $0.2 million in interest income related~~This loan was sold to ~~this loan.~~

In 2011, the Company entered into a lease for its primary office space, which commenced on October 1, 2011 and expires on January 31, 2022 with no extension option. In 2012, the Company entered into a lease for secondary office space. The lease commenced on May 15, 2012 and would have expired on May 14, 2015 with no extension option. This lease was amended, however, on October 2, 2014, extending the expiration date from May 14, 2015 to May 14, 2018. The Company recorded $0.3 million and ~~$0.8~~$0.6 million of rental expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, respectively, which is included in operating expenses in the consolidated statements of income. The Company recorded $0.3 million and ~~$0.9~~$0.6 million, of rental expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, respectively, which is included in operating expenses in the consolidated statements of income.

The following is a schedule of future minimum rental payments required under the above operating leases ($ in thousands):

As of ~~September~~June 30, ~~2017,~~2018, the Company’s off-balance sheet arrangements consisted of ~~$145.8~~$243.4 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing, at rates to be determined at the time of ~~funding, which consisted of $145.8 million to provide additional first mortgage loan financing.~~funding. As of December 31, ~~2016,~~2017, the Company’s off-balance sheet arrangements consisted of ~~$147.7~~$157.0 million of unfunded commitments of mortgage loan receivables held for investment to provide additional first mortgage loan financing, at rates to be determined at the time of ~~funding, which was composed of $146.3 million to provide additional first mortgage loan financing and $1.4 million to provide additional mezzanine loan financing.~~funding. Such commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. These commitments are not reflected on the consolidated balance sheets.

The Company has determined that it has three reportable segments based on how the chief operating decision maker reviews and manages the business. These reportable segments include loans, securities, and real estate. The loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans). The securities segment is composed of all of the Company’s activities related to commercial real estate securities, which include investments in CMBS and U.S. Agency Securities. ~~As more fully described in Note 3, the securities segment does not include securities not recognized for accounting purposes that were acquired in connection with loan transfers not considered sales.~~ The real estate segment includes net leased properties, office buildings, a mobile home community, a warehouse, a shopping center and condominium units. Corporate/other includes the Company’s investments in joint ventures, other asset management activities and operating expenses.

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

The Company has evaluated subsequent events through the issuance date of the financial statements and determined that the following disclosure is necessary:

On ~~October 17, 2017,~~July 20, 2018, the Company executed an amendment of one of its committed loan repurchase facilities with a ~~subsidiary~~major banking institution, providing for, among other things, the extension of the ~~Company consummated a securitization~~maximum term of short-term floating-rate loans through a static collateralized loan obligation (“CLO”) structure. Over $456.9 million worth of balance sheet loans (the “Contributed Loans”) were contributed into the CLO. Certain of the Contributed Loans have future funding components that were not contributed to the CLO and that are retained by a subsidiary of the Company in the form of a participation interest or separate note. However, for a limited period of time, to the extent loans in the CLO are repaid, the CLO may acquire portions of the future fundings from the Company’s affiliate. An affiliate of the Company retained an approximately 18.5% interest in the CLO by retaining the most subordinate classes of notes issued by the CLO, retains control over decisions made with respect to the administration of the Contributed Loans and appoints and controls the special servicer under the CLO.



Delaware (State or other jurisdiction of incorporation or organization)		80-0925494 (IRS Employer Identification No.)

345 Park Avenue, New York (Address of principal executive offices)		10154 (Zip Code)



Large accelerated filer oý		Accelerated filer ýo

Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o
		Emerging growth company ýo



Class		Outstanding at ~~October 31, 2017~~August 1, 2018
Class A Common Stock, $0.001 par value		~~88,925,736~~97,942,513
Class B Common Stock, $0.001 par value		~~21,822,238~~13,317,419



Index			Page
PART I - FINANCIAL INFORMATION			5
Item 1.	Financial Statements (Unaudited)		5
		Consolidated Balance Sheets	6
		Consolidated Statements of Income	7
		Consolidated Statements of Comprehensive Income	9
		Consolidated Statements of Changes in Equity	10
		Consolidated Statements of Cash Flows	12
		Notes to Consolidated Financial Statements	15
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		8283
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		~~121~~
~~Item 4.~~	~~Controls and Procedures~~		124
Item 4.	Controls and Procedures		126
PART II - OTHER INFORMATION			~~124~~
~~Item 1.~~	~~Legal Proceedings~~		~~124~~
~~Item 1A.~~	~~Risk Factors~~		~~124~~
~~Item 2.~~	~~Unregistered Sales of Securities~~		127
Item 3.1.	~~Defaults Upon Senior Securities~~Legal Proceedings		127
Item 4.1A.	~~Mine Safety Disclosures~~Risk Factors		127
Item 5.2.	~~Other Information~~Unregistered Sales of Securities and Use of Proceeds		127
Item 6.3.	Defaults Upon Senior Securities		127
Item 4.	Mine Safety Disclosures		127
Item 5.	Other Information		127
Item 6.	Exhibits ~~and Financial Statement Schedules~~		128
SIGNATURES			129



Consolidated Balance Sheets		6
Consolidated Statements of Income		7
Consolidated Statements of Comprehensive Income		9
Consolidated Statements of Changes in Equity		10
Consolidated Statements of Cash Flows		12
Notes to Consolidated Financial Statements		15
	Note 1. Organization and Operations	15
	Note 2. Significant Accounting Policies	1716
	Note 3. ~~Mortgage Loan Receivables~~Consolidated Variable Interest Entities	2422
	Note 4. ~~Real Estate Securities~~Mortgage Loan Receivables	2923
	Note 5. Real Estate Securities	28
	Note 6. Real Estate and Related Lease Intangibles, Net	31
	Note 6.7. Investment in Unconsolidated Joint Ventures	3635
	Note 7.8. Debt Obligations, Net	3938
	Note 8.9. Fair Value of Financial Instruments	4847
	Note 9.10. Derivative Instruments	5453
	Note ~~10.~~11. Offsetting Assets and Liabilities	56
	Note ~~11.~~12. Equity Structure and Accounts	5758
	Note ~~12.~~13. Noncontrolling Interests	61
	Note 14. Earnings Per Share	62
	Note ~~13. Earnings Per Share~~15. Stock Based and Other Compensation Plans	6364
	Note ~~14. Stock Based Compensation Plans~~	65
	~~Note 15.~~16. Income Taxes	72
	~~Note 16. Related Party Transactions~~	74
	Note 17. ~~Commitments and Contingencies~~Related Party Transactions	76
	Note 18. ~~Segment Reporting~~Commitments and Contingencies	77
	Note 19. ~~Subsequent Events~~Segment Reporting	8178
	Note 20. Subsequent Events	82


	September 30, 2017			December 31, 2016			June 30, 2018(1)			December 31, 2017(1)
	(Unaudited)						(Unaudited)
Assets
Cash and cash equivalents	$	48,894		$	44,615		$	51,918		$	76,674
Restricted cash	48,483			44,813			42,821			106,009
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	2,846,940			2,000,095			3,764,172			3,282,462
Mortgage loans transferred but not considered sold	598,525			—
Provision for loan losses	(4,000		)	(4,000		)	(7,300		)	(4,000		)
Mortgage loan receivables held for sale	522,961			357,882			107,744			230,180
Real estate securities, available-for-sale	1,098,471			2,100,947
Real estate securities							1,106,358			1,106,517
Real estate and related lease intangibles, net	1,041,901			822,338			1,060,243			1,032,041
Investments in unconsolidated joint ventures	35,007			34,025			35,302			35,441
FHLB stock	77,915			77,915			77,915			77,915
Derivative instruments	568			5,018			660			888
Due from brokers	12,526			10
Accrued interest receivable	26,426			24,439			27,632			25,875
Other assets	57,423			70,240			121,949			55,613
Total assets	$	6,412,040		$	5,578,337		$	6,389,414		$	6,025,615
Liabilities and Equity
Liabilities
Debt obligations, net:
Secured and unsecured debt obligations	$	4,196,547		$	3,942,138		$	4,702,449		$	4,379,826
Liability for transfers not considered sales	631,480			—
Due to brokers	432			394			44,800			14
Derivative instruments	2,711			3,446			—			2,606
Amount payable pursuant to tax receivable agreement	2,438			2,520			1,570			1,656
Dividends payable	1,988			24,682			1,582			30,528
Accrued expenses	52,679			66,597			60,294			59,619
Other liabilities	58,246			29,006			66,257			63,220
Total liabilities	4,946,521			4,068,783			4,876,952			4,537,469
Commitments and contingencies (Note 17)	—			—
Commitments and contingencies (Note 18)							—			—
Equity
Class A common stock, par value $0.001 per share, 600,000,000 shares authorized; 88,091,272 and 72,681,218 shares issued and 86,050,681 and 71,586,170 shares outstanding	87			72
Class B common stock, par value $0.001 per share, 100,000,000 shares authorized; 24,697,293 and 38,002,344 shares issued and outstanding	25			38
Class A common stock, par value $0.001 per share, 600,000,000 shares authorized; 100,637,615 and 96,258,847 shares issued and 97,937,793 and 93,641,260 shares outstanding							99			94
Class B common stock, par value $0.001 per share, 100,000,000 shares authorized; 13,317,419 and 17,667,251 shares issued and outstanding							13			18
Additional paid-in capital	1,201,402			992,307			1,370,092			1,306,136
Treasury stock, 2,040,591 and 1,095,048 shares, at cost	(24,501		)	(11,244		)
Retained Earnings/(Dividends in Excess of Earnings)	(57,052		)	(11,148		)
Treasury stock, 2,699,822 and 2,617,587 shares, at cost							(32,793		)	(31,956		)
Dividends in Excess of Earnings							(12,106		)	(39,112		)
Accumulated other comprehensive income (loss)	4,398			1,365			(9,855		)	(212		)
Total shareholders’ equity	1,124,359			971,390			1,315,450			1,234,968
Noncontrolling interest in operating partnership	329,372			533,246			185,158			240,861
Noncontrolling interest in consolidated joint ventures	11,788			4,918			11,854			12,317
Total equity	1,465,519			1,509,554			1,512,462			1,488,146

Total liabilities and equity	$	6,412,040		$	5,578,337		$	6,389,414		$	6,025,615


(1)	Includes amounts relating to consolidated variable interest entities. See Note 3.


	Shareholders’ Equity																																	Shareholders’ Equity
	_{Class A Common Stock}					_{Class B Common Stock}					_{Additional Paid-} _in-Capital			_{Treasury Stock}			_{Retained Earnings/(Dividends in Excess of Earnings)}				_Accumulated _Other _{Comprehensive} _{Income (Loss)}			_{Noncontrolling Interests}							_{Total Shareholders’} _{Equity/Partners} _Capital			_{Class A Common Stock}				_{Class B Common Stock}					_{Additional Paid-} _in-Capital			_{Treasury Stock}				_{Retained Earnings/(Dividends in Excess of Earnings)}				_Accumulated _Other _{Comprehensive} _{Income (Loss)}				_{Noncontrolling Interests}						_{Total Shareholders’} _{Equity/Partners} _Capital
	_Shares		_Par			_Shares		_Par						_{Treasury Stock}						_Operating _Partnership				_Consolidated _{Joint Ventures}			_Shares			_Par					_Shares		_Par					_Operating _Partnership				_{Treasury Stock}			_Consolidated _{Joint Ventures}					_Accumulated _Other _{Comprehensive} _{Income (Loss)}										_{Total Shareholders’} _{Equity/Partners} _Capital
											_{Additional Paid-} _in-Capital						_{Retained Earnings/(Dividends in Excess of Earnings)}				_Accumulated _Other _{Comprehensive} _{Income (Loss)}										_{Total Shareholders’} _{Equity/Partners} _Capital												_{Additional Paid-} _in-Capital
Balance, December 31, 2016	71,586		$	72		38,003		$	38		$	992,307		$	(11,244	)	$	(11,148	)		$	1,365		$	533,246		$	4,918			$	1,509,554
Balance, December 31, 2017																																		93,641		$	94	17,668		$	18		$	1,306,136		$	(31,956	)		_{Retained Earnings/(Dividends in Excess of Earnings)}	$	(39,112	)		$	(212	)		$	240,861		$	12,317		$	1,488,146
Contributions	—		—			—		—			—			—			—				—			—			6,935				6,935			—		—		—		—			—			—				—				—				—			5,040			5,040
Distributions	—		—			—		—			—			—			—				—			(36,372		)	(198		)		(36,570		)	—		—		—		—			—			—				—				—				(8,899		)	(13,792		)	(22,691		)
Equity based compensation	—		—			—		—			10,482			—			—				—			—			—				10,482			—		—		—		—			4,505			—				—				—				—			—			4,505
Grants of restricted stock	859		1			—		—			(1		)	—			—				—			—			—				—			29		—		—		—			—			—				—				—				—			—			—
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(936	)	(1		)	—		—			—			(13,257		)	—				—			—			—				(13,258		)	(56	)	—		—		—			—			(837		)		—				—				—			—			(837		)
Forfeitures	(10	)	—			—		—			—			—			—				—			—			—				—			(26	)	—		—		—			—			—				—				—				—			—			—
Dividends declared	—		—			—		—			—			—			(76,757		)		—			—			—				(76,757		)	—		—		—		—			—			—				(62,275		)		—				—			—			(62,275		)
Stock dividends	814		1			432		1			17,317			—			(17,319		)		—			—			—				—
Exchange of noncontrolling interest for common stock	13,738		14			(13,738	)	(14		)	185,002			—			—				1,422			(188,507		)	—				(2,083		)	4,350		5		(4,350	)	(5		)	60,110			—				—				(143		)		(59,654		)	—			313
Net income (loss)	—		—			—		—			—			—			48,172				—			15,210			133				63,515			—		—		—		—			—			—				89,281				—				13,795			8,289			111,365
Other comprehensive income (loss)	—		—			—		—			—			—			—				1,854			1,847			—				3,701			—		—		—		—			—			—				—				(9,506		)		(1,598		)	—			(11,104		)
Rebalancing of ownership percentage between Company and Operating Partnership	—		—			—		—			(3,705		)	—			—				(243		)	3,948			—				—			—		—		—		—			(659		)	—				—				6				653			—			—
Balance, September 30, 2017	86,051		$	87		24,697		$	25		$	1,201,402		$	(24,501	)	$	(57,052	)		$	4,398		$	329,372		$	11,788			$	1,465,519
Balance, June 30, 2018																																		97,938		$	99	13,318		$	13		$	1,370,092		$	(32,793	)		$	(12,106	)		$	(9,855	)		$	185,158		$	11,854		$	1,512,462


(1)	Includes cash proceeds received in the current year that relate to prior year sales of loans of $0.5 million.


	September 30, 2017		September 30, 2016		December 31, 2016		June 30, 2018		June 30, 2017		December 31, 2017

Cash and cash equivalents	$	48,894	$	59,693	$	44,615	$	51,918	$	58,225	$	76,674
Restricted cash	48,483		62,997		44,813		42,821		97,260		106,009
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	97,377	$	122,690	$	89,428	$	94,739	$	155,485	$	182,683



	June 30, 2018		December 31, 2017
	Notes 4 & 8		Notes 4 & 8

Mortgage loan receivables held for investment, net, at amortized cost	$	861,209	880,385
Accrued interest receivable	4,360		4,252
Other assets	21,860		—
Total assets	$	887,429	$	884,637

Senior and unsecured debt obligations	$	691,312	$	689,961
Accrued expenses	1,463		794
Other liabilities	2		—
Total liabilities	692,777		690,755

Net equity in VIEs (eliminated in consolidation)	194,653		193,882
Total equity	194,653		193,882

Total liabilities and equity	$	887,430	$	884,637


	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)		Remaining Maturity (years)	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)		Remaining Maturity (years)

Mortgage loans held by consolidated subsidiaries(2)	$	2,862,739	$	2,846,940		7.06	%	1.71	$	3,788,546	$	3,764,172		7.70	%	1.48
Mortgage loans transferred but not considered sold(2)	600,222		598,525			4.92	%	8.38
Provision for loan losses	N/A		(4,000		)				N/A		(7,300		)
Mortgage loan receivables held for investment, net, at amortized cost	3,462,961		3,441,465						3,788,546		3,756,872
Mortgage loan receivables held for sale	526,085		522,961			4.79	%	8.63	108,340		107,744			5.24	%	9.79
Total	$	3,989,046	$	3,964,426		5.70	%	3.63	$	3,896,886	$	3,864,616		7.65	%	1.71


(1)	June 30, 2018 London Interbank Offered Rate (“LIBOR”) rates are used to calculate weighted average yield for floating rate loans.


(1)	December 31, ~~2016~~2017 LIBOR rates are used to calculate weighted average yield for floating rate loans.


(1)	Includes $0.5 million of realized losses on loans related to lower of cost or market adjustments for the six months ended June 30, 2018.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017

Net interest income
Interest income	$	72,763		$	60,284		$	196,410		$	175,650		$	85,230		$	65,970		$	163,437		$	123,482
Interest expense	42,607			30,685			109,625			88,622			48,417			35,661			93,130			67,076
Net interest income	30,156			29,599			86,785			87,028			36,813			30,309			70,307			56,406
Provision for loan losses	—			—			—			300			300			—			3,300			—
Net interest income after provision for loan losses	30,156			29,599			86,785			86,728			36,513			30,309			67,007			56,406

Other income
Operating lease income	22,924			19,466			64,741			57,845			24,258			22,187			48,818			41,816
Tenant recoveries	2,382			1,185			5,121			3,844			1,913			1,159			5,492			2,739
Sale of loans, net	(775		)	19,640			(1,774		)	30,265			6,144			25,904			11,032			24,905
Realized gain (loss) on securities	6,688			7,126			19,182			9,524			(1,243		)	7,132			(2,342		)	12,494
Unrealized gain (loss) on Agency interest-only securities	577			(47		)	1,034			29			110			299			313			457
Realized gain on sale of real estate, net	3,228			4,649			7,790			15,616			1,628			2,232			32,637			4,563
Fee and other income	4,338			8,101			13,378			17,258			6,477			4,574			12,728			9,039
Net result from derivative transactions	(348		)	9,356			(18,352		)	(66,148		)	7,081			(16,022		)	22,040			(18,003		)
Earnings (loss) from investment in unconsolidated joint ventures	127			(141		)	64			485			13			10			65			(63		)
Gain (loss) on extinguishment of debt	—			—			(54		)	5,382			—			—			(69		)	(54		)
Total other income	39,141			69,335			91,130			74,100			46,381			47,475			130,714			77,893
Costs and expenses
Salaries and employee benefits	13,255			17,296			43,786			43,343			13,866			14,489			30,962			30,531
Operating expenses	4,790			4,391			16,098			15,399			5,597			5,829			11,144			11,308
Real estate operating expenses	9,351			8,392			24,861			23,244			7,836			8,056			16,654			15,510
Fee expense	1,242			803			3,556			2,407			799			1,621			1,641			2,314
Depreciation and amortization	10,606			9,733			29,323			28,789			10,656			10,125			21,479			18,717
Total costs and expenses	39,244			40,615			117,624			113,182			38,754			40,120			81,880			78,380
Income (loss) before taxes	30,053			58,319			60,291			47,646			44,140			37,664			115,841			55,919
Income tax expense (benefit)	(400		)	8,721			(3,224		)	5,547			573			6,606			4,476			5,231
Net income (loss)	30,453			49,598			63,515			42,099			43,567			31,058			111,365			50,688
Net (income) loss attributable to noncontrolling interest in consolidated joint ventures	265			439			(133		)	436			133			(77		)	(8,289		)	(398		)
Net (income) loss attributable to noncontrolling interest in operating partnership	(6,679		)	(22,429		)	(15,210		)	(17,664		)	(5,294		)	(8,868		)	(13,795		)	(14,706		)
Net income (loss) attributable to Class A common shareholders	$	24,039		$	27,608		$	48,172		$	24,871		$	38,406		$	22,113		$	89,281		$	35,584

The accompanying notes are an integral part of these consolidated financial statements.



	Mortgage loan receivables held for investment, net, at amortized cost (1)			Mortgage loan receivables held for sale

Balance, December 31, 2016	$	1,996,095		$	357,882
Origination of mortgage loan receivables	869,981			887,978
Purchases of mortgage loan receivables	94,079			—
Repayment of mortgage loan receivables	(246,060		)	(1,655		)
Proceeds from sales of mortgage loan receivables	—			(5		)
Realized gain on sale of mortgage loan receivables(2)	—			(1,774		)
Transfer between held for investment and held for sale(3)(4)	719,465			(719,465		)
Accretion/amortization of discount, premium and other fees	7,905			—
Balance, September 30, 2017	$	3,441,465		$	522,961



	Mortgage loan receivables held for investment, net, at amortized cost (1)			Mortgage loan receivables held for sale

Balance, December 31, 2015	$	1,738,645		$	571,764
Origination of mortgage loan receivables	531,000			887,164
Repayment of mortgage loan receivables	(632,825		)	(1,161		)
Proceeds from sales of mortgage loan receivables	—			(703,846		)
Realized gain on sale of mortgage loan receivables	—			30,265
Accretion/amortization of discount, premium and other fees	6,515			—
Loan loss provision	(300		)	—
Balance, September 30, 2016	$	1,643,035		$	784,186


~~(1)~~	Includes ~~provision for loan losses of $4.0 million as of each of September 30, 2017 and 2016.~~


~~(2)~~	~~Includes $1.8~~$1.0 million of realized losses on loans related to lower of cost or market adjustments for the ~~nine~~six months ended ~~September~~June 30, 2017.


(2)	CMBS, CMBS interest-only securities, Agency securities, and GNMA permanent securities are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.


(4)	The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.


(3)	As more fully described in Note 4, certain securities which were purchased from the LCCM LC-26 securitization trust are designated as risk retention securities under the Dodd-Frank Act which are subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost. Includes $11.7 million of such restricted securities.


Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total		Within 1 year		1-5 years		5-10 years		After 10 years		Total

CMBS(1)	$	72,958	$	770,559	$	106,512	$	—	$	950,029	$	330,768	$	479,270	$	182,201	$	2,058	$	994,297
CMBS interest-only(1)	737		103,746		—		—		104,483		1,378		73,168		—		—		74,546
GNMA interest-only(2)	101		7,368		516		14		7,999		58		2,738		394		6		3,196
Agency securities(1)	—		742		—		—		742		—		686		—		—		686
GNMA permanent securities(1)	—		1,881		33,337		—		35,218		—		1,632		32,001		—		33,633
Total	$	73,796	$	884,296	$	140,365	$	14	$	1,098,471	$	332,204	$	557,494	$	214,596	$	2,064	$	1,106,358


(2)	Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.



	September 30, 2017			December 31, 2016

Land	$	213,402		$	143,286
Building	790,454			646,372
In-place leases and other intangibles	188,666			154,687
Less: Accumulated depreciation and amortization	(150,621		)	(122,007		)
Real estate and related lease intangibles, net	$	1,041,901		$	822,338

Below market lease intangibles, net (other liabilities)	$	(42,984	)	$	(16,506	)



Period Ending December 31,	Amount

2017 (last 3 months)	$	4,272
2018	16,649
2019	16,323
2020	16,323
2021	16,120
Thereafter	89,619
Total	$	159,306



Acquisition Date	Type	Primary Location(s)	Purchase Price		Ownership Interest (1)

February 2017	Net Lease	Carmi, IL	$	1,411	100.0%
February 2017	Net Lease	Peoria, IL	1,183		100.0%
March 2017	Net Lease	Ridgedale, MO	1,298		100.0%
April 2017	Net Lease	Hanna City, IL	1,141		100.0%
April 2017	Other(2)	El Monte, CA	54,110		70.0%
May 2017	Net Lease	Jessup, IA	1,163		100.0%
May 2017	Net Lease	Shelbyville, IL	1,132		100.0%
May 2017	Other	Jacksonville, FL	115,641		100.0%
May 2017	Net Lease	Wabasha, MN	1,280		100.0%
May 2017	Net Lease	Port O'Connor, TX	1,255		100.0%
May 2017	Net Lease	Denver, IA	1,183		100.0%
June 2017	Net Lease	Jefferson City, MO	1,241		100.0%
August 2017	Other(3)	Miami, FL	38,145		80.0%
September 2017	Net Lease	Milford, IA	1,298		100.0%
September 2017	Other	Crum Lynne, PA	9,196		100.0%

Total			$	230,677


~~(2)~~	~~Joint venture partner contributed~~ ~~$5.3 million~~ ~~to partnership.~~


~~(3)~~	~~Joint venture partner contributed $1.6 million to the partnership.~~


	Purchase Price Allocation			Purchase Price Allocation

Land	$	76,342		$	24,466
Building	151,396			87,389
Intangibles	30,686			3,459
Below Market Lease Intangibles	(27,747		)	(1,130		)
Total purchase price	$	230,677		$	114,184



	Purchase Price Allocation

Land	$	6,407
Building	34,396
Intangibles	11,364
Below Market Lease Intangibles	(1,915		)
Total purchase price	$	50,252



Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)(1)		Properties	Units Sold	Units Remaining

Various	Condominium	Las Vegas, NV	$	14,568	$	7,943	$	6,625	—	37	22
Various	Condominium	Miami, FL	6,104		4,789		1,315		—	21	67
Totals			$	20,672	$	12,732	$	7,940


(1)	~~Realized gain on~~Properties were consolidated as of acquisition date.


(2)	Joint venture partner contributed $5.3 million to the ~~sale of real estate, net on the consolidated statements of income also includes $150 thousand of realized loss on the disposal of fixed assets for the nine months ended September 30, 2017.~~partnership.



	Purchase Price Allocation

Land	$	56,451
Building	120,567
Intangibles	31,322
Below Market Lease Intangibles	(26,302		)
Total purchase price	$	182,038