Good afternoon. My name is Kyle and I'll be your conference operator today. At this time I'd like to welcome everyone to the Ladder Capital Corp. second quarter fiscal 2014 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session. (Operator instructions.) I will now turn the call over to Ladder Capital Corp's Chief Strategy Officer and General Counsel, Ms. Pamela McCormack. You may begin.

Thank you, and good evening everyone. I’d like to welcome you to Ladder Capital’s earnings call for the second quarter of 2014. With me this evening are Brian Harris, the Company’s Chief Executive Officer; and Marc Fox, the Company’s Chief Financial Officer. This afternoon we released our financial results for the quarter ended June 30, 2014. The earnings release is available in the Investor Relations section of the company’s website and our quarterly report will be filed with the SEC shortly. Before the call begins, I’d like to remind everyone that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. I refer you to Ladder Capital Corp's Form- 10-K for the year ended December 31, 2013 for a more detailed discussion of the risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements. The company undertakes no duty to update any forward-looking statements that may be made during the course of this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call. The Company’s presentation of this information is not intended to be considered in isolation or as a substitute for the financial performance presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP, are contained in our earnings release. With that I’ll turn the call over to our Chief Executive Officer, Brian Harris.

Thanks, Pamela and thanks to all of you for spending your time with us today as e detail our earnings for the second quarter of 2014. I’ll briefly catch upon the highlights of the second quarter and then try to overlay those results against the overall backdrop of the market in general. I’ll also attempt to fit these data points into an illustration of how Ladder’s business plan is being executed as we go from quarter to quarter. Before turning you over to our CFO, Marc Fox, I’ll briefly outline some recent corporate activities and hopefully provide you with some insight into what we are trying to accomplish. After Marc, provides you with a more detailed summary of the quarterly figures, we’ll take some questions. For the second quarter of 2014 Ladder generated core earnings of $62.3 million or $0.38 per share. Core earnings are not a GAAP measure. On a GAAP basis, earnings in the quarter were $0.26 per share. The primary driver of earnings in the second quarter was our loan origination to securitization business. We contributed a total of $886 million worth of loans into three securitizations in the quarter, generating a profit of $39.9 million. Note that one of these three securitizations was comprised of a single asset, a $350 million loan that closed in April of this year. The other two securitizations were multi-borrower, multi-asset pools, often times referred to as conduit transactions. The Securitization business throughout the first half of 2014 at Ladder has earned pretax profits of $76.5 million gained from the sales of $1.658 billion of loans in five separate transactions. During the second quarter, loan originations at Ladder reached a total of $1.256 billion compared to $611 million in the first quarter. The breakout of the $1.256 billion in loans originated…

Thank you, Brian. I will now review Ladder Capital’s financial results for the quarter ended June 30, 2014. The $62.3 million of core earnings for the second quarter represents the second highest performance by this measure in the company’s history. A year ago, core earnings were $40.9 million in the second quarter. For the first six months of the year, core earnings were $119.1 million. Based on an average shareholders’ equity balance of approximately $1.4 billion, this result reflects a 17.55% year to date return on average equity. GAAP net income was $30.2 million and $48.6 million for the three and six months ended June 30, 2014 respectively. This compares to$59.8 million and $147.8 million for the comparable periods in 2013 respectively. The largest GAAP to core earnings adjustments related to the adjustment of the timing of the recognition of hedge results to coincide with the realization of gains and losses on the disposition of hedged assets and real estate appreciation. During the second quarter, Ladder’s investment activities focused on loan originations and securitization. During the three months ended June 30, 2014 we originated $1.256 billion dollars of loans, split approximately two thirds of commercial mortgage loans held for sale and one third were commercial mortgages loans held for investment. The relatively low balance of commercial mortgage loans held for sale at the end of the quarter was attributable to a securitization of $886 million of loans in three transactions all of which settled in June. Securities transactions during the quarter included purchases of $326 million, offset by $171.6 million of security sales and $76.1 million of proceeds from the repayments of securities, resulting in an increase in our securities portfolio to $1.8 billion at the end of the quarter. As Brian noted, real estate activity during the quarter include…

(Operator Instructions) Your first question comes from the line Steve DeLaney. Your line is open. Steve DeLaney – JMP Securities: Thank you. Good evening everyone and congratulations on a very solid quarter. We noted the increase in the portfolio loans are much larger than we had expected at $428 million. Brian, I wondering if you could just comment on what percentage of those were senior bridge loans versus mezz or subordinate and maybe just give us a little color about the range of pricing over LIBOR in the average LTV. Thanks.

Sure Steve, thanks. Actually I’m going to ask Marc to help me out a little bit here on the component, but I will tell you the vast majority of them were first mortgage loans. I know that we did pick up a small mezzanine piece. So Marc, can you detail the [bridge] loan component versus the mezzanine?

Sure. Between them -- during the second quarter in terms of our conduit loan inventory went from $162 million to $103.7 million. The balance sheet loans, the first mortgage balance sheet loans went from $532.3 million to $911.3 million. And the mezzanine and other loans actually went down from $142.6 million to $114.8 million.

Right, exactly, right. And then when you look at our origination activity, our actual activity what you saw was $827.9 million were held for sale as Brian said. But the breakdown between mezzanine and first mortgage loans was $404.2 million of first mortgage balance sheet loans and $23.5 million of mezzanine loan production during the quarter. Steve DeLaney – JMP Securities: Great, so moistly bridge loans. And anything, Marc that you could add as far as a range of all these like LIBOR floaters. We keep hearing competition, competition and I’m just curious if you are still seeing margins over LIBOR and LTVs that are in line with what you’ve been doing over the last year.

Yeah. I think that when we look at the average coupons on loans, on the conduit loans, they averaged out to 4.5%. We had a couple of large loans that brought that down. Without those couple of large loans, we were already at 5% was the average coupon during the quarter. And then with regard to the balance sheet loans, and this is including the mezzanine, we were at 601 basis points over LIBOR was the average – this is the newly originated loans during the quarter. We had very large balance sheet loan that was in that group that was relatively low-priced. And if we exclude that particular loan, we’re at 738 basis points over LIBOR on average for the production during the quarter. Steve DeLaney – JMP Securities: Okay. Excellent. Okay, thanks. And then maybe just shifting to a bigger picture, kind of strategic issue, Brian, I think back in the IPO there was a lot of chatter about you’re a C Corp, so you’re not paying a dividend at the outset, but that could be something once you were kind of up and had a little track record that maybe the board would consider. I just wondered, is there any discussion or view towards the merits of establishing some sort of a modest dividend policy given how well the company is operating?

Sure. We’ve had – it’s certainly been a topic in the boardroom. And we considered ourselves coming out as a growth company and I think demonstrated that with 17% plus pretax ROE over a short period of time there on an annualized basis. So I know that we’ve had a discussion, I think probably the bigger discussion would fall into should we decide to make any changes to corporate structure in an overall sense, which would possibly out of requirement require a dividend payment to be made. So as of now, I would tell you that I don’t anticipate the C Corp naming a dividend payment. However, I do believe very possibly we could announce something by yearend where the shareholders might find their way to a dividend payment. Steve DeLaney – JMP Securities: Got it. I think I understand exactly what you’re saying, and thanks for the color.

Your next question comes from the line of Charles Nabhan from Wells Fargo. Your line is open. Charles Nabhan – Wells Fargo: Hi guys. Thanks for taking my question. If you look at the balance sheet portfolio, the average loan size increased to $26 million from $19 million. I know you mentioned that there was a lager loan originated during the quarter. Is the increase attributable to that larger loan? Or should we expect a migration towards – or a strategic shift towards larger balance sheet loan originations going forward?

I think that when we did the IPO, one of the goals was to have enough capital to comfortably be able to access the single-asset securitization market through large loans. We’re certainly capable of doing it. We’ve done it through many, many years in other institutions. And we weren’t quite big enough to really comfortably handle one or two of those – more than one or two of those at the time. I feel like we can do that now, and would anticipate us doing more of them in the future. The large loan market is different and it had not really been an addressable part of the market share for Ladder for a period of time. And our new size with new capital base, we feel pretty comfortable that you will see more of that and we will migrate more towards that. The larger loans tend to be more conservatively underwritten and with lower LTVs and basically owned by REITS and family type companies. So while we are writing larger loans on average across the board, I think that the numbers are skewed a bit when you write a $350 million or a $200 million loan especially in an organization of this size. We hope to smooth that out over time though so it's not nearly as skewing. Charles Nabhan – Wells Fargo: Okay, great. And switching to expenses, I saw that salaries rose about 30% linked quarter. Is there anything unusual in that line item? Or should we look at that – I know there’s been some hires over the past since the IPO. Should we look at that as a run rate going forward?

I think to look at the second quarter as a run rate is more representative than the first quarter. The first quarter – in the middle of first quarter, we had the IPO. And so what the IPO came the change in the compensation arrangements that we’ve detailed previously. So the second quarter is a full quarter reflecting that. That’s what you really see. Charles Nabhan – Wells Fargo: Okay. And if I could sneak in one quick one, what did you upsize the FHLB facility to?

We upsized it to $1.9 billion or one third of our total assets at Ladder.

(Operator Instructions) Your next question comes from the line of Jade Rahmani from KBW. Your line is open. Jade Rahmani – KBW: Great, thanks very much. I was wondering can you address the competitive environment and where you think things are interesting to continue to originate and where there’s the greatest amount of pressure? Whether that be product type or features of individual loans such as structure or fees, whether some lenders are willing to compromise on exit fees or prepayment fees for example?

Sure. It’s a longer answer than maybe you’ll want, but the market is competitive. It is more competitive in the securitized businesses. We try to do something’s that allow us to take advantage of securitizable products in a less than competitive fashion. And we cross sell our products either through equity or mezzanine or through our bridge loan book to acquire assets that might not be as readily available to us if we didn’t provide those other products. I will say for the first time, I know I’ve historically said in talking to you that most of the credit underwriting we are seeing, really any lack of discipline we had been witnessing was really not so much in the actual credit underwriting, but really in the what the profit margins were that people were willing to work for. I’ve often thought of that as an unintended consequence of the way some regulated institutions compensate their people. And so it’s so much about making money profits. It’s more about keeping things safe, but being in the business of securitization. I will say for the first time in the second quarter we are seeing what I would consider to be a sharp deterioration in credit underwriting standards. And I think that that is a natural outcome of an unnatural amount of demand that took place in the quarter because you really could see all credit spreads tightening from really New Year’s right through the end of June. And I don’t think it’s unique to commercial real estate. I think it was involved in the high yield market as well as government market. So supply and demand economics do take over and people are willing to take more chances. And as long as the market is acquiring those assets without any penalty, then…

The win rate I won’t comment on. I feel pretty comfortable with our volume, but really we are not necessarily measuring volume all the time. I know a lot of people like to talk about market share. We like to talk about profitability. From our perspective our profits feel comfortable. I do, I would tell you that spreads as I said haven’t widened in the last couple of weeks here. But what we try to do really is do the smart things when the markets are very competitive. And that’s actually one of the reasons we did a corporate bond issuance just last week where really we can get ourselves in a position to take advantage of any interruption that we feel may be coming. And we have felt that things were getting just a bit tight. And so on the other hand what we tend to do rather than calculate win rates and why we’re losing, we tend to shift product focus. So I know for several quarters now we’ve told you we haven’t purchased any real estate. But when interest rates were down and credit spreads were very tight, I couldn’t tell you we’ll probably see some real estate coming on to the balance sheet in the next quarter because rather than become a lender all day into markets that appear to be getting very aggressive and tight and not pricing profits, correctly we switched to the borrower side of the world. And so we would anticipate finding some more real estate transactions and some more bridge loans by far less competitive in those markets than the typical securitized conduit loan. So I hope that answered you. Jade Rahmani – KBW: Yes, that does. I really appreciate your thoughts. Just lastly on the securitization side, beyond the conduit market, do you think that issuing floating rate CMBS or CLOs that have flexible features like reinvestment periods, would that ever be something you'd consider, or do you think that the drawbacks are too significant?

Having managed these types of businesses through a couple of decades, I will tell you that I have never participated in those. Never is a long time though going forward. So I do see some CLO activity taking place right now that looks attractive. And actually they can look attractive from the investor standpoint also. So not only might we become a borrower in a CLO, we might become a lender in a CLO also because a lot of these have very fast prepay structures and they deleverage very quickly as a liquidating trust. So I would say we will keep an eye on it and it’s something that I wouldn’t say we would never do. But we’ll always try to keep our liability scenarios very diverse and strong. So I don’t see it in the near future, but I wouldn’t rule it out completely.

There are no further questions at this time. I’ll now turn the call back over to Mr. Brian Harris.

I’d just thank you all for spending the afternoon with us here and as always we’ll try to communicate with you in the most transparent way possible. So thanks again for your attention to us and we’ll talk to you again soon. Thanks. Bye.

This concludes todays’ conference call. You may now disconnect.