Greetings. Welcome to Ladder Capital Corp. Fourth Quarter 2020 Earnings Call. At this time all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Ladder's Chief Compliance Officer - I'm sorry, Senior Regulatory Counsel, Ms. Michelle Wallach. Please go ahead, Ms. Wattach.

Thank you. And good afternoon, everyone. I'd like to welcome you to Ladder Capital Corp. earnings call for the fourth quarter and year ended December 31, 2020. With me this afternoon are Brian Harris, the company's Chief Executive Officer; Pamela McCormack, the company's President; Marc Fox, the company's Chief Financial Officer; and Paul Miceli, the company's Director of Finance and Chief Financial Officer commencing on March 1 2021. This afternoon, we released our financial results for the quarter and year ended December 31, 2020. The earnings release is available in the investors section of the company's website. And our annual report on form 10-K will be filed this week with the FCC. 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. 2020 form 10 k for 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 financial information presented in accordance with GAAP. Reconciliation to these non-GAAP financial measures to the most comparable measures preparing according to GAAP are contained in our earnings release. With that, I'll turn the call over to our President, Pamela McCormack.

Thank you, Michelle. And good afternoon, everyone. 2020 was an unforgettable year. All of us including those in the financial markets faced unprecedented challenges. LADR met those challenges with quick and decisive actions, and the company is now well positioned to the opportunities we expect 2021 to bring. My remarks today will focus on the key actions we have taken since the onset of COVID. First, we quickly raised liquidity and reduced leverage. Next, we turned our attention to proactively managing our balance sheet in order to protect book value. And finally, we went back to originating new business and are pleased to share that we currently have over $200 million of new loans, both conduit and balance sheet under application and indeed with due diligence. Our deep enhanced origination team is fully engaged in actively pursuing compelling opportunities, and our multi-cylinder business model allows us to pivot quickly to take advantage of the best available risk adjusted returns. Before I begin, I'm excited to confirm our appointment of Paul J. Miceli, as Chief Financial Officer effective March 1, 2021. Paul will succeed Marc Fox whom after 12.5 years will be moving on, but will remain with us through the beginning of May to help ensure an orderly transition. As many of you know, Paul joined Ladder nearly two years ago and is currently Ladder's Director of Finance. Since then, Paul has been working closely with Marc and the senior management team as part of Ladder's long-term succession plan. On a personal note, I want to thank Marc for being a great partner and a great friend to both Ladder and me personally and let him know how much we all value the contributions he has made for Ladder's success. Looking back at 2020, I'll start with a look at…

Thank you, Pamela. Before turning this presentation over to Paul, I want to thank Brian, Pamela, the Board of Directors, the investment community, and most of all my colleagues at Ladder for their support over the past 12.5 years. I felt very fortunate to be offered the opportunity to serve as Ladder’s CFO in 2008. Accepting the role was a major step in my career taking in the most uncertain of times with no guarantees from anyone. Together, we encountered a lot of challenges, and the results indicate a record of success along the way. I'd like to believe that those who decided I deserved this chance more than a decade ago now look back on that decision with satisfaction and pride, as that was always my goal. Based on my personal observations, going forward, I am confident that the investment community will see at least the same level of commitment, skill, and professionalism from Paul Miceli as they have seen from the rest of the Ladder team from day one. I too will miss working with the most talented team of professionals in this industry, and leave confident that despite all of our achievements to date, Ladder's best days lie ahead. With that, I will turn the discussion over to Ladder's new Chief Financial Officer, Paul Miceli.

Thanks, Marc. As noted in today's earnings released Ladder's replaced its two primary non-GAAP measures of earnings. Based on informal guidance from the SEC staff, core earnings has been replaced by distributable earnings and core EPS has been replaced by distributable EPS. The definitions of distributable earnings and distributable EPS at Ladder are very similar to those of core earnings and core EPS. The one exception is related to the timing of asset impairment recognition. Going forward in computing distributable earnings, Ladder will recognize assets specific loan and real estate impairment charges upon realization, which will occur at the time an impairment is determined to be non-recoverable. With the change to distributable earnings or non-GAAP performance measurable more closely aligned with the computation of non-GAAP performance measures used by a public company commercial mortgage rate peers. For the fourth quarter Ladder produced distributable earnings of $4.9 million or $0.05 per share. For the full year 2020, Ladder produced distributable earnings of $68.3 million or $0.60 per share. Continuing with a measured approach to risk management in the fourth quarter Ladder did not newly originate or securitize any loans and only acquired one small net leased property. Loan repayments continued at a strong pace during the quarter with $286 million of loan payoffs at par. In addition, Ladder reduced its balance of non-accrual loans by 35%, mainly by selling forward defaulted loans at near par value. We sold two defaulted loans in bankruptcy in Austin, Texas, with an outstanding principal balance of $101 million. We also contemporaneously foreclosed on and sold a residence in South Bend, Indiana [ph] and a hotel in Miami, Florida, with an outstanding principal - with outstanding principal balances of $4.1 million and $45 million respectively. These sales resulted in the disposition of $150 million of defaulted…

Thanks, Paul. 2020 delta is a very different type of market disruption at the end of the first quarter, while we've never seen such a rapid and severe downturn in the economy. Our decades of experience managing through harsh recessions and strong recoveries provided us with the template we've learned to follow in times of extreme volatility. Job number one in the spring of 2020 was to ensure we had enough liquidity to weather what looked to be some very rough times ahead, as 33 million jobs were lost in the United States in just 30 days, as the government essentially turned off the economy to stem the spread of the virus. I won't repeat the details of the steps we took. But as with most negative surprises, it helps to be prepared, and we were having just issued 750 million of corporate bonds only six weeks prior to the pandemic beginning. Fast forwarding to today we presently have over $1.3 billion of unrestricted cash. And keep in mind that after we reduce debt by $1.9 billion over the last 11 months. Building up a liquidity cushion of that size was made possible by our ownership of high quality investments going into the downturn. We were very pleased to see that many of our loans coming due over the last year were able to pay us off at maturity in full. When we sold some of our investments at what was probably not the best time to do so in order to raise additional liquidity, we were still able to achieve sales prices near our basis during the worst of market times, while de leveraging the company overall. We took appropriate steps to conserve cash during the remainder of 2020, always anticipating that in 2021, the health emergency the country…

[Operator Instructions] Our first question is from Tim Hayes, BTIG. Please proceed with your question.

Hey, good evening, everyone. Hope you're doing well. My first question, you know, happy to see that you guys hit that inflection point where you're starting to play some offense now. If we could just touch on the pipeline here, what are the levered returns that you're seeing across your asset classes? You know, what's - where do you expect most of your capital deployment to go? And if you could just touch on the asset types and any other color from the pipeline that can be helpful?

Sure, happy to help with that. We opened up [early] applications just a few weeks ago, and already I think Pamela mentioned we're a little over $200 million, I actually think we're approaching $300 million as we checked this right before we got on the phone. I'd imagine most of our allocation for new investments is going to come in the form of bridge loans and conduit loans. The conduit, I probably would have answered that with a little bit more of a 50-50 attach to it, you know, five hours ago, but with the 10-year moving up rather briskly today, then, you know, I think that there will be a very attractive conduit business, but I have to suspect we're going to see a little pause here, and in all likelihood because a lot of people who were refinancing have done the pull forward. So sometimes that takes a few, 60, 90 days for it to really set in, although I certainly wouldn't call a 1.6%, 10-year high rate either. So, you know, we'll see, but I think - we'll we're always on the lookout for equity investments. We've seen a few that we like, we haven't gone under contract with any of them yet, but I think the lion’s share of what we're going to do is going to be involved with the bridge loan portfolio of the balance sheet and securities will continue to come down.

Okay. So, securities will be a provider of capital then to you guys going forward. So, on the bridge portfolio, can you just again talk about the types of assets that are in the pipeline? How that has, I guess compares to how the pipeline has fared in the past? And maybe how lever returns, because Brian you mentioned that the shift to offense, somewhat, or largely is because of the returns you're now seeing there. And, you know, your liquidity position has been pretty strong for a couple quarters now. So, I'm just wondering if, if you've seen returns, and I guess spreads widen on certain loans that even from six months ago, or, you know, what, what does cause the shift?

Sure, well, I think it's really come about because I think you've had a situation here where the Fed has been on TV. I think the banks are, you know, cleaning up their balance sheets, I think that everybody was -- all lenders, I think were pretty much tolerant of the need for forbearance agreements, you know, when the initial pandemic hit, and some of the borrowers are now in their second, you know, forbearance agreement, I think it's hitting the point where it's either going to get straightened out or they'll sell the note, and then we have seen that too. So we've seen -- definitely seen some bank sales of notes where people are acquiring things or where the sponsor finally woke up and said, “Wow, my bank sold my note, the guy who bought it probably wants to take it over. So I need to refinance this quickly and pay all the – just the penalty interest.” When a sponsor is in that mode, that's usually a great place to step in, because you're no longer competing with your competitors, you're competing with his default interest. And you have to try to close as quickly as possible. So there's definitely been a shift, I would say it's in the last 30 days, and it's a little bifurcated, I would say, I think that the market because the CLO market has kind of rebounded, and there have been a few new CLOs issued. And, you know, just a few weeks ago, there was no alternative for any yield at all. So, you know, new CLO, AAA's, were trading well inside of 100 over. I think the weighted average financing cost of a call it a 90 over AAA deal was probably about 120, 125 over LIBOR. So you…

Yeah, that's a good way of putting it. But, yeah, that was going to be the part B that question was going to be on the financing side. So it sounds like you're interested in maybe testing the waters with CREs, CLO. Is there any timing around that? I mean, do you need to kind of build the portfolio back a little bit before you look to do that or, you know, any color on that would be helpful.

We could one rather quickly, we have over $2 billion worth of loans. But I think it you know, if I had to fast forward and think what's the best way to do this, I suspect probably out around June or July, we'll probably do a, I think a CLO is so far looks a little bit easier than bank repo lines. So let's assume nothing changes there will probably stick to the CLO. And my suspicion is it'll work better if we go with all loans that are originated after the pandemic.

Okay, got it. That's helpful. And just one follow up to that, I'll hop back in the queue, but just in terms of your funding costs, you know, have you seen costs come down on your warehouse lines with your repo counterparties? You know, our banks - are they and we've heard this anecdotally, are they feeling kind of pressure to compete with the CLO market now that it's so hot, and you're seeing issuance pick up there and just curious if that, in the form of cost or leverage is benefited you guys?

Well, the securities repo market has fully recovered to where it was pre-pandemic, in fact, it might even be through where it was. So there's plenty of leverage if you want to be in the securities business. However, the yield is quite low. So even levered returns are 3%. So that's one of the reasons we've drastically cut down in our holdings of securities at this point, I suspect, we'll continue to do that even though very attractive financing terms, at the end of the day, we'd rather have the capital deliver the company through the repo line, and then get unlevered 6% returns and then, you know, use the CLO market to amp that number up a little bit. The banks are not, I wouldn't say they're very comfortable yet, because we are still in, you know, a difficult time in the economy. And there's plenty of headwinds, that you certainly don't want to look at too many hotels, apartments, you can do, and I think the healthier banks, and we won't get into who they are, but the healthier banks are more apt to be reasonable about financing. You know, their rates haven't gone up necessarily from before. But the - what they will accept has gotten narrower. And the advanced rate has maybe dropped about 10%, which is fine. Yeah, I think that's an appropriate situation. I think that you know, real estate in general has been pushed a little here. And the CLO market keeps the risk in the hands of the originators. And that's probably the way it should be handled. So, you know, and you can do a managed CLO deal or you can do a static CLO deal. We have the luxury of probably doing either, but I suspect we'll wait until we get about $6 or $800 million of new loan originations.

Got it. No, that's good color. Appreciate it. Brian. I'll hop in the queue. But again, thanks for taking my questions.

Sure.

And our next question is from Randy Binner with B. Riley. Please proceed with your question.

Good evening. Thanks. Thanks. That was really interesting. I guess. I'd like to go back, though. You mentioned $2 to 300 million of new loans, you know, under application this year post pandemic, and I heard in there, multifamily is a little tight for your preference on spread, which makes sense. But then it was all the way back out to hotels again, and I know that you've gotten smaller and hospitality. So I just - I guess I'd like to maybe ask the question, you know, of the 2 to 300, can you give us rough buckets of where you're actually writing it. And if it is, hotels, again, you know, maybe a little bit more color on how those make sense, you know, occupancy, location, that sort of thing?

Of the - I'm going to say closer to $300 million at this point, because I've got a pretty good sense of what came in even in the last day, very little that is hotel, I think there is one on there for about $18 million. And the one that is on there, the sponsor of the hotel has, it's a very brand new hotel, and he's putting in more capital to refinance his construction loan. So he's going pay down that principal. And while we know, we're operating on a dollars per unit basis, because there really is no underwriting for the new hotel, I suspect that, you know, we're going to be able to generate that we're comfortable enough, given the rest of the hotels, we know in the area there, densely populated area. And so I don't know if we'll get there either, by the way, these are just under wrap at this point. And - but I wouldn't want you to think that because they said we're going to get about a 6% unlevered return that we're loading up hotels, that would be the furthest thing from the truth.

That's why I wanted to clarify it….

For all hotels it would be 9% or 10%.

That's fair enough. But yeah, I just wanted to clarify that so what are the categories that you're mostly looking to go into if it's not apartments, and it's not as much hotels?

Well, we have some apartments, and most of ours are north of 400 over, but we're losing plenty of them at 350. We have some offers, and we have some conversion, you know, industrial is changing into something else. Some of it is land, you know, land deals or are traveling at a fraction of the basis, they were traveling at, you know, two years ago, and most land loans, you're right alone with a double-digit rate with a 50% of acquisition cost. And oftentimes with recourse. So, again, we don't want to make a career out of writing land loans, but, you know, if you're pretty comfortable with the basis, that's another place you can get a good deal. And what I like in particular about it is if we're concerned about our ability to finance a bridge loan, say, an office building with one of our line lenders, try to imagine how a land loan is getting financed with the same banks, it's, it's very difficult. So well, you know, I would say there is a little bit of a bifurcation going on, you know, there are some cash flowing assets that are simply coming off construction loans, and they're going to be out for a year. And then there's others that, you know, they're just being acquired. But the one thing, we're spending more time on is acquisitions of new assets now, and oftentimes, there's a seller selling because he has to, not because he wants to. And that's always helpful. And typically, people who are acquiring assets at this point with no real history, they're usually very deep with capital and have been waiting for these opportunities. So we're pretty comfortable with that. If there is a situation where there's a bridge loan coming due, and it's CLO, and somebody asks us to refinance that that's, that's what we look at as a bridge-to-bridge financing. That's kind of a dangerous animal, because you have to think that the previous lender probably could keep it if he wants to do and he's decided not to. So we understand that they know more about that loan than we do. So we're trying to avoid that in many ways.

The only follow up I have is just on the on the size of the loans and this new batch of nearly 300. Does it conform to your normal distribution of loan sizes that average around $20 million? Or is there is there a change?

I'm going to let - Pamela has the list in front of her.

Yeah, I can jump in just by way of just to go back, the answer is it's the same business plan and the same strategy with an average loan size of about $20 million or so. And we're focused on all the asset groups, most of what signed up is a combination of multi asset and a lot of multi with some office necessity-based products. So it does not look very different from what we've done historically, both in terms of product type and asset size.

All right, great. I'll leave it there. Thanks a lot.

And our next question is from Charlie Arestia with JPMorgan. Please proceed with your question.

Hey, good evening, everyone. Thanks for taking the questions. Marc, by the way, I just want to say it's been a pleasure working with you best of luck in your new chapter. And, Paul, I look forward to, you know, continuing our discussion. You guys have built up, obviously, a sizable pool of capital here. Tremendous amount of cash on the balance sheets, you know $1.3 billion or more? How do you think about the cadence of deploying that throughout the year? And how should we really think about, you know, the economics of those new investments flowing through to, you know, generating distributable earnings growth above the dividend?

It's really a several part question there. Because we also have to gauge if you notice that we actually take quite a few payoffs every quarter also. So the good part is as it's a pretty good statement as to what our portfolio of underwriting - underwritten loans look like. I think, you know, we mentioned that we sold some non-performing loans this quarter and got almost par for all of them. So we're pretty comfortable that our underwriting has withheld and held its mud throughout the pandemic. The question is, what is the pace at which we're going to originate loans? Versus what is the pace at which we're going to get payoffs and, in the portfolio, which tend to be pretty high rate anyway, I think we had I don't know what our floor is now, but I'm sure it's in one of our documents, but it probably begins with a six anyway. And what is the pace at which we decide to delever our securities portfolio so and this dispose of that, as I mentioned, in the call, I think we sold $680 million of securities in the last couple of months. And we didn't do that because they weren't making money. We do that because we saw this pipeline building. And rather than go to repo lenders, and hang on to assets that were only yielding 3%. We decided let's get rid of the 3% yield. Let's get the leverage down. And I think Pamela mentioned I think we're at 0.8 leverage if you get rid of our securities and cash. So we do use corporate bonds on secured would probably use them more than most in the business that we're going to try to do another corporate bond deal, hopefully will be welcomed in that…

Appreciate, Brian, thanks so much.

Our next question is from Jade Rahmani with KBW. Please proceed with your question.

Thank you very much good to speak with everyone, wanted to start off by asking if there's any credit items of note that took place during the quarter. Noting the remarks he made about the forward defaulted loans that were sold. So hopefully you could give the dollar amount and percentage of loans that are either in defaults or on non-accrual at this point?

I think Pamela probably has a better handle on that than anybody. If you have that Pamela available?

I can do that. Our non-accrual, I think Paul mentioned in the script was at $201 million is now down to $130 million as of today, and the end of - Paul, that's 2Q 4. But I think it's accurate as of today.

Correct. Yeah, with the resolution of the hotel loan that we exited in 2021 our non-accrual loan book is down to $131 million.

And when you ask about the credit, quality Jade, I think we feel really good. I think that's one of the things that justice distinguishes us. You know, we have short duration loans that turn very quickly, we have not kicked the can on anything at all. I don't know how others are treating their books. But I can tell you, we've been really proactive. And we've moved literally almost every large problematic loan off our balance sheet to free up liquidity, as Brian said, we're excited about the opportunity ahead of us. And we wanted to free up more capital to do that. And we feel like we have a really strong balance sheet right now. And that's reflected both in our CECL reserve and in our non-accrual status.

Thanks, that's good to hear. And $131 million is a pretty low statistic relative to total assets of close to $6 billion, and even the loan portfolio at around $2.3 billion at 12/31. I think there is a myth about Ladder that the reason you're sitting on such a high liquidity position is that there's some you know, some outside risks some things you're worrying about in the loan portfolio that could cause issues from a credit perspective. So I guess when you think of Ladder versus peers, why is it that the company has such an outsized currency cash position of $1.3 billion I mean, Star Woods got a market cap of close to $7 billion and they, you know, they have about liquidity of $700 million at this point. So how would you answer that?

Well, I try not to figure out what other people are doing. But I know internally at our end of things, it's not a surprise I think we're probably getting more payoffs than anybody else. And one of the - there's two reasons for that. One is we have very high floors, and we deal with smaller loans. And so our loans are readily financeable by lots of people, as opposed to people who can write $100 million loans. Secondly, we have short maturity dates, you know, we don't usually use the CLO market, which tends to default to a three plus one plus one, you know, with a LIBOR floor, you know, we write two-year loans with a one-year extension. And if you're not doing well, after two years, then one year extension isn't there. So as a result, we get right on top of, you know, problems very quickly. And I learned a long time ago, it's better to get on top of things when there's a lot of liquidity around. And banks are not taking losses. And you know, of course, you always want to pressure test your portfolio, and by being able to move $100 million loan in bankruptcy in Texas for $100 million, and moving a hotel in Miami, I think it was a $45 million loan, we sold it for just under $44 million, you know, slight loss there. And probably we could have done something with that asset. But given the damage, I think we can do right now with a lot of capital, I think it's much easier, it's we're trying to run a low friction business, we're not trying to run a big real estate operation. But we are seeing, you know, some pretty good opportunities here. And I would say…

I'm not talking of lapping. Because Brian, you covered a lot of it. But at the end there, but I think what I was going to say is just at the end of the day, I watched this same movie back when we opened the doors in 2008. We exercise led by Brian enormous patience. Yes, we have a lot of capital, yes, we could deploy quickly. Yes, our originators were out there looking and anxious to redeploy months ago, and you heard what happened, you know, to returns in the last 90 days, we waited because we thought there would be a better opportunity and there was, and when any, you know, I just I'm laughing because people speculating about cash, if you just listen, we have $2.7 billion of unencumbered assets, half of lattice assets are unencumbered, we have a securities portfolio of $800 million, with very little leverage against it, it could be it could be sold with selling it at par as opportunities come in, we could sell it all tomorrow, at the end of the day, our balance sheet loan, we have $2 billion dollars of loans, we've turned the portfolio with almost no losses. When we have low maturities coming up, I think we've probably taken more payoffs than anyone, especially if you look at our size. And when you look at, we have like $240 million of loan repo on our balance sheet. So if we needed to raise liquidity, notwithstanding everything Brian just said, I just gave you buckets of liquidity across the board. And our triple net lease portfolio is outperforming the market, it's 100% collections. It's a necessity base. And it's, you know, one of the strongest assets on the street that I just think is overlooked. So I just - as Brian said, we can't help what people think. But we've been as transparent as we can be through this process. And I think the thing that gets overlooked a little bit, is we turned our balance sheet and took off. And I hope over time this will be seen, really all the problem assets. And we are moving into this new origination opportunity with a very strong clean balance sheet, and tons of capital to deploy.

Thank you for that. Two follow ups. Firstly, share repurchases, does that fit into your capital deployment plan? How much of the $1.3 billion in cash would you allocate to share purchases, it just stands to reason that as an internally managed commercial mortgage REIT is the value of control of these entities is worth about 15%. So just apples to apples, Ladders retrieved 15% higher than a [indiscernible] mortgage REIT that would suggest relative to 80% of book value, you know, more than 30% upside versus unlevered yield at 6%. So how does have the share repurchase factor into your calculation?

You know, we - I said last time, I thought our stock was very, very cheap. And I thought we'd go out and buy and as soon as we got off the phone, you know, I let the period go by that has to go by before you can buy stock. And we went right into the market and began buying it. And I think the stock was down around 695 or seven. And it very quickly went to eight and I can give for all the credit I get as a trader. Let me tell you I was pretty off on this one. I thought the stock would come back to me It never did. It just kept going up. So it went from eight then I went to nine then it went to 10 then it went to 11. So I was slow. And so I wouldn't hire me to be a stock repurchases If I were you but because I've been a little bit slow on that I do a little better on the bonds when it when they're really low. But I think if that is the next the best alternative investment we've got, then that's what we'll do, but to separate us from capital in this kind of a market is going to be difficult although I certainly can understand the benefits of buying our stock at 80% of book value.

Okay, and then last question and I get this from a lot investors in my view, there's probably a decent cohort of very high quality institutional investors, evaluating Ladder, but they look at the dividend. And that keeps them on the sidelines because you could buy the S&P [indiscernible] even, you know, something like ARI at a much higher dividend yield. And those companies seem to have convinced the market for now that their dividends are not going to be cut, they're sustainable, look at Ladders, $0.80 cent dividend, relative to its undepreciated book value of 1394, acknowledging book value did take a hit a little bit of a hit due to the COCS [ph] exercise their option, nevertheless, the current dividend is a 5.75% yield on that book value, historically, Ladder generated and 11% to 12% ROE and I remember Brian, you saying you don't go to work every day to generate, you know, a 10% to 12% ROI, you'd shoot for something much higher. So that would suggest if you can just get back to the 11% ROE and do an 80% payout ratio. Yeah, there should be about 50% potential upside to the dividend. It's just about the timing of deploying this capital. So you validate the idea that the dividend is going to be once capital gets deployed on a growth path, Ladder, we'll be back to raising the dividend, you know, at a measured pace. But that's basically what investors should be expecting.

A whole lot of forecasting, but a lot of what you said there is kind of the business plan. And it gets a lot easier in a rising rate environment. And I am hoping I know that most mortgage guys don't say that, but I kind of like bright, smart rising. And - they, you know, will be as patient as we need to be. And we're kind of at that part of the juncture. I think we're - the recession isn't over. I mean, there's still high unemployment. Yeah, 33 million jobs got lost. And maybe now it's only 10 million, but that's how many jobs were lost in the great recession or so. So we're not done here. And I wouldn't tell you we're done, you know, having discussions, you know, with borrowers that are having a tough time. But I think what we've proven out now, by getting to some of our larger, most illiquid, and like most elastic, non-performers, like hotels and land loans and loans in bankruptcy, is it's kind of proven to us all that we do know how to underwrite and this pandemic has been a shock to the system. And in the teeth of the worst recession I've ever seen in my life, we've been able to sell securities, home loans, hotels, land, you know, defaulted loans, bankrupt loans, and all of them with a 98-ish type number, you know, across the board. So I don't think that's going to change with the next roster of loans that are coming due at ladder. So I'm going speculate a little bit there that, you know, we have some, some legacy that's coming due that we think is fine, we're getting paid off on a lot of loans, but we still have some wood…

Great. Well hope hopefully that happens and maybe even faster than you anticipate considering Ladders high ROE track record. And thanks so much for taking the questions.

We have reached the end of the question-and-answer session. And I'll now turn the call over to CEO, Brian Harris for closing remarks.

All right. Well, thank you everybody for listening. And sorry about my dogs. They have a few questions too. But I guess as we end here, I want to welcome Paul as our new CFO and Marc, I can't grab you on a zoom call, but he knows I'll kiss him right in front of anyone. So I if I were around, I'd give you a hug right now. So thank you for all your help. And I appreciate all your time with our investors and our patients. I know it's been a difficult year but we look - we look forward to better times ahead. So thank you.

This concludes today's conference, and you may disconnect your line. Thank you for your participation.