Kelly Porcella - Associate General Counsel Brian Harris - Chief Executive Officer Marc Fox - Chief Financial Officer.

Jade Rahmani - Keefe, Bruyette & Woods Daniel Altscher - FBR Capital Markets & Co. Steven DeLaney - JMP Securities Charles Nabhan - Wells Fargo Securities.

Good afternoon and welcome to the Ladder Capital Corporation’s Earnings Call for the First Quarter of 2015. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, today’s call is being recorded.

And at this time, I would like to turn the conference call over to Ladder Associate General Counsel, Ms. Kelly Porcella. Thank you. Kelly, you may now begin..

Thank you and good afternoon everyone. I’d like to welcome you to Ladder Capital Corp’s earnings call for the first quarter of 2015. With me this afternoon 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 March 31, 2015.

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 later this week.

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, 2014 for a more detailed discussion of the risk factors that could cause actual results to differ materially differ from those expressed or implied in any forward-looking statements made today.

Accordingly, you are cautioned not to place undue reliance on any of 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 information 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 will turn the call over to our Chief Executive Officer, Brian Harris..

Thank you, Kelly, and thank you everyone for joining us on our call today. First I would like to review some of our business highlights for the first quarter and I’ll then overlay our financial results with a discussion of market conditions we saw in the quarter and how we are operating under current market conditions.

Then I will turn you over to Marc for a more detailed discussion of our financial results. The first quarter of 2015 marks our first quarter operating as an internally managed REIT. We declared and paid a dividend of $0.25 per share to holders of record on April 6th.

We are pleased to now be operating in a more efficient structure that allows more of our earnings to flow directly to our shareholders. Ladder reported core earnings a pre-tax performance measure of $48.0 million in the first quarter.

Our core earnings per share, an after-tax measure, were $0.48 per share this quarter versus $0.36 per share last year at this time. Our after-tax core earnings as a REIT was $47.3 million up 46% from $32.4 million in 2014.

Our annualized after-tax return on average equity was 12.6% this quarter versus 9.9% in Q1 of last year reflecting the impact of our REIT election.

Now let’s take a look at our product performance in more detail which will help illustrate how we are emphasizing REIT qualified investments while still maintaining a strong presence in the conduit gain on sales securitization business and our condominium sales both of which are housed in our taxable REIT subsidiary.

During the quarter, we contributed $634.4 million worth of loans into two securitizations reporting a profit of $19.6 million in the quarter with profitability trending up on the second transaction with a differential primarily due to month-to-month volatility and interest rates in the first quarter.

As for our condominium sales in the first quarter we sold a total of 25 units in Las Vegas at an average sale per square foot of $521. This earned $5.1 million of core earnings in the quarter and I would like to report that we still have 195 units left per sale as of the end of the quarter.

In Miami, we sold 33 units at an average price per foot of $318 for a core gain of $2.1 million in the quarter. We had 219 units remaining at the end of March. Total core gain for the quarter from condominium sales was $7.2 million.

On REIT qualified investments in the first quarter we purchased $243.9 million of securities and sold $370.3 million at an average gain on sale of 1.4% or $4.6 million in total for the quarter. We also purchased 18 real estate assets for a total purchase price of $106.5 million.

Lastly, we originated a total of $378 million in loans held for investment. The average rate on these loans was LIBOR plus 669. The final statistic I will share with you today is growth in assets. At the end of the first quarter of 2015 Ladder owned a total of $5.84 billion is assets up $2.35 billion or 67% from last year in March of 2014.

Also our debt to equity ratio at quarter end was 2.8 times. Overall we think that this first quarter shows how Ladder plays to its strengths. As noted on previous calls as profit margins narrow as they oftentimes do we get rather selective in our lending for securitization program.

Loans originated must meet our rigorous criteria not only from a credit standpoint, but also in relation to risk return ratios. Margins were rather slim in the beginning of the year, but had improved quite a bit by the end of the quarter.

It is during these times that we rotate capital into investments like securities, real estate and balance sheet loans. We acquired a total of almost $600 million in new requalified assets in the quarter.

For those who maybe concerned about rising rates I would point out that at quarter end we owned over $1.7 billion of balance sheet loans that are mostly LIBOR floaters with fixed floors on their rates.

We also owned over $2.6 billion of highly rated securities with most having very short duration and being match funded at attractive rates with the Federal Home Loan Bank. We feel quite confident that our model is working very well and that we are well positioned for any rate environments that we may be faced with.

As always as the economic cycle evolves we will be relentless in our approach towards credit underwriting. We remain conservatively positioned with a nice balance between growth and dividend and remain ready to take advantage of any dislocations in the market that may come up. With that, I will turn you over to Marc Fox..

Thank you, Brian. I will now review Ladder Capital’s financial results for the quarter ended March 31, 2015. Our first since electing to be taxed as a REIT effective January 1 of this year. For the first quarter of 2015, core earnings were $48 million versus $55.3 million in the same quarter a year ago.

In the next few moments I will be making a couple of pre-tax versus after-tax statistical comparisons to help you quantify the favorable impact of the REIT election.

As Brian noted core earnings is a pre-tax measure of earnings on the other hand core EPS is an after tax measure computed by applying the effective tax rate to core earnings and dividing by the average share count. In Q1 2015, core EPS was $0.48 a share compared to $0.36 a share in Q1 2014.

This reflects the year-over-year decline in effective tax rate from 41.43% in the first quarter of 2014 to 1.43% in this quarter. Likewise the pre and after-tax return on average equity computation reflect a similar year-over-year comparison pattern.

On a pre-tax basis quarterly ROAE was 12.8% in the first quarter of 2015, down from 16.9% in the first quarter of 2014. However, on an after-tax basis the 12.6% after-tax ROAE achieved in this past quarter represents a substantial improvement over the 9.9% after-tax return on average equity in the first quarter of 2014.

GAAP net income was $18 million for the three months ended March 31, 2015 this compares to $18.4 million for the comparable period in 2014.

The largest GAAP to core earnings adjustments related to the timing of the recognition of hedge results that coincide with the realization of gains and losses on the disposition of hedged assets and real estate depreciation.

Overall, these results reflect the impact of a substantial emphasis on the origination of balance sheet loans and the acquisition of income producing, net leased real estate, during a quarter that also saw compressed securitization profit margins.

The large majority of the newly originated balance sheet loans and new acquired real estate is held by REIT subsidiaries providing Ladder with a stronger stream of income to support dividends to its shareholders. During the quarter Ladder originates $770 million of loans, which was 26% higher than the $611.1 million in the first quarter of 2014.

This quarter’s originations included $392 million of commercial mortgage loans held for sale or conduit loans. In addition, Ladder originates $378 million of commercial mortgage loans held for investment in the quarter. The second highest quarterly amount of balance sheet loan originations in our firm’s history.

Ladder’s portfolio loans held for investment stood at almost $1.8 billion at March 31, 2015, up 16.7% from the end of last and more than two half times the size it was one year prior.

During the quarter Ladder acquired 18 net leased properties for a total purchase price of a $106.5 million, we also continued sales of condominium inventory at solid profit margins as Brian noted. Our total real estate portfolio as of March 31, 2015 experience a net increase of $82.4 million or 10.7% to $851.4 million. Our portfolio of CMBS and U.S.

Agency Securities decreased by $191.7 million to $2.6 billion at quarter end as we reallocated capital from securities to loans and real estate. In a review of trends reflected in the first quarter income statement a number of items standout.

Consistent with past quarters, Ladder maintained a steady stream of net interest income totaling $29.6 million in the first quarter, which is 34.5% higher than in the same quarter a year ago.

Reflecting the impact of acquisitions over the preceding year, quarterly operating lease income rose to $19.1 million an increase of 44.9% compared to $13.2 million in the first quarter of 2014. Securitization activity in Q1 resulted in an income statement gains of $30 million from the sale of securitized loans net.

After factoring in related hedging results the sale of servicing income and dealer expenses the net economic benefit was $19.6 million or 3.08% of the $634.1 million of loans contributed.

Quarterly operating expenses totaled $43.4 million, $4.7 million less than in the fourth quarter reflecting a decrease in professional fees related to electing REIT status and lower compensation expense related to shortfalls and actual net revenues and investment production compared to budgeted amounts.

In terms of key balance sheet metrics as of March 31, 2015 total assets were approximately $5.8 billion about even with the end of 2014.

At the end of the period approximately 95% of our debt investment assets were senior secured including first mortgage loans and commercial mortgage-backed securities secured by first mortgage loans which is consistent with the senior secured focus of the company. Our senior secured assets plus cash comprised 77.6% of our total assets.

Total unencumbered assets, including cash were $757.9 million at quarter end, reflecting a 1.2 to 1 ratio to unsecured debt outstanding. Turning to the right side of the balance sheet total equity capital was $1.5 billion at quarter end and the debt equity ratio remained unchanged from December 31, 2014 at 2.8 times.

I will now move to a discussion of our investment activities during the first quarter. We previously referenced our loan production securitization right. In terms of asset yields the average coupon on loans held-for-sale that originated in the first quarter was approximately 4.1% versus 3.9% in the prior quarter.

And as Brian noted the average coupon on the loans held for investment originating the quarter reflected a weighted average spread of 6.69% over one month LIBOR. That is in comparison to a 6.52% spread in the fourth quarter of last year.

The weighted average loan-to-value ratio of the commercial real estate loans on our balance sheet was 65% up from 63% as of December 31, 2014. 79.9% of our security positions were rated AAA over back by agencies with the U.S. government, 98.2% were rated investment grade.

The weighted average duration of [6.6] years as of March 31, slightly lower than the average duration of 4.1 years at the end of the prior quarter.

With regard to financing, we have continued to enhance the maturity profile of our debt, while maintaining a diverse set of funding sources and access to a significant amount of additional financing availability. As of March 31, we had $4.2 billion of debt outstanding and committed financing available of over $1 billion for additional investments.

In the first quarter of 2015, we maintained our FHLB borrowings at $1.6 billion consistent with the end of the prior quarter. As of March 31, 2015 $698 million of the funds borrowed from the Federal Home Loan Bank had remaining terms of over 1 year.

Long-term non-recourse mortgage loan financing increased during the quarter from $447.4 million to $525 million. As a result to the securitization of inter company mortgage loans originated by Ladder during the quarter.

During the quarter, we executed an extension and amendment of one of our loan repurchases facilities which limited the recourse exposure for the company and modify the pricing terms of that facility.

Subsequent to quarter end we executed an extension of a securities repurchase facility as well as an amendment and an expansion of a loan repurchase facilities that increased the maximum funding capacity by $150 million. One final note to aid our investors and to further enhance the transparency of our financial reporting.

We will be posting a statistical supplement to our website when we file our 10-Q which will happen in the next few days.

In conclusion we are pleased to turn in a profitable quarter and which we exercise the firms operating flexibility to rotate between our complementary commercial real estate products to position Ladder for further success in future quarters. With that we will turn to Q&A..

Thank you. At this time we will be conducting the question-and-answer session. [Operator Instructions] And our first question comes from the line of Jade Rahmani with KBW. Please proceed with your question..

Good evening and thanks for taking my questions.

I was wondering, Brian, if you could comment on the competitive environment in commercial real estate and how you look at balancing capital deployment decisions between looks like you're on the equity side are most interested in the net lease space, but also on the on balance sheet loans as well as the conduit..

Sure, Jade, happy to answer. I think - generally I think I probably spoke about this last year too.

Whenever you have generally low interest rates the first quarter gets quite competitive and this generally have to do with banks and Wall Street firms loading up their inventories at a very low cost of funds and they have got a very attractive carry numbers and net interest margin.

So that activity tends to get less aggressive as the year goes on, because they pretty much have 11 months to sell those assets once they put them on. So first quarter can be quite competitive and I think it was certainly.

I think another thing that adds to some difficulty is when you’ve got interest rates falling rapidly with hedged products because you are hedged against interest rates and certainly the first 45 days of the quarter that we did experience that.

However, that that came back pretty quickly in the second half of the quarter from mid-February on and what we are experiencing now is much higher rates as you’ve – you probably been seeing over the last few days - few weeks actually. And oddly enough it tends to get less competitive as interest rates get higher.

Even though there is – in theory there is less supply because people at the margin shouldn’t be borrowing at higher rates. But strangely enough when you have large inventories and interest rates rise that makes people nervous.

So as a result, I can tell you that I think what we’re experiencing so far in the competitive set in the gain on sale market is it was very difficult in the first half of the quarter and it has gotten better as interest rate have risen. Over the long-term I think any mortgage lender would like to see rates lower.

But in the short-term our raising rate market is actually a little bit easier to handle. On the capital deployment side obviously we’ve had a shift in structure. So now operating as a – an internally managed REIT we do focus a little bit more on stability, sustainability and you know just repeatable earnings.

So we did focus a little more on adding equity to our balance sheet as well as bridge loans and securities. These are the REIT eligible, the requalified products so that probably will serve us for years to come as opposed to quarters ahead.

So we did focus a little bit more when the market was quite competitive in the gain-on-sale business we focused a little bit more on equity balance sheet loans and securities, if that answered you..

Yes, and on that - on the on-balance sheet investments, can you give a little color on what you still view as attractive in this competitive environment, what you're staying away from? And also would you be able to address capital availability at this point and whether or what would prompt you to access the market, the equity market in particular?.

Okay. Starting with the products, the balance sheet loan business you have to be careful putting balance sheet loans on your balance sheet, because you have to make sure that the capital markets are healthy enough to refinance you when you come to your maturity date.

So as a result if capital markets are very illiquid and thin you don’t want to have a lot of large loans coming to market because it’s going to be very hard for other parties. So this is where competition is good.

So in the first quarter when we see competitors working very aggressively at very thin margins to lend money rather than join them and cut margins and try to maintain market share we tend to get out in front of that into the transitional loan business because we are more willing to take a little bit more risk on more transitional assets because liquidity pool that can refinance that asset later on is much deeper.

So we always try to seek parts of the capital structure that are less deep. And because at the end of the day we rent money and you are like any other rental operations you are going to be able to get the highest rents, when there is less availability.

So I would say that we focused a little bit more on more transitional assets because we feel the economy has gotten a little bit healthier, the banks are little bit stronger, the regulators are little less aggressive in what they’ll let banks do. So as a result the probability of a payoff for those transitional assets is much higher.

So we feel safer there.

As far as avoidance goes, we all generally avoid products where we are competing with the government backed agency, it’s multi-family products that doesn’t mean we don’t do any, in fact we’ve done several large ones, but usually when you see us in a multi-family products it’s because we’re moving quickly into a closing date as opposed to competing with Fannie Mae or Freddie Mac.

As far as our capital availability I feel with the combination of growth and income where we have right now, we do retain a fair amount of our earnings. I think operating as a finance company, we were retaining roughly 55% of our earnings and as a REIT we are now still retaining about 45% of our earnings because of the way we pay out our dividend.

So I’m pretty comfortable that we will not be returning to the capital markets for equity raises in the near future anyway unless there is something that is transitional. Yes, some large transaction that we are going to do.

Having said that we did look at one of those in the last quarter and we elected not to move forward with it, but we wouldn’t avoid coming to market, but it would certainly only be an accretive manner..

Great. Thanks so much for taking the questions..

Sure..

Thank you. And our next question comes from the line Dan Altscher with FBR Capital Markets. Please proceed with your question..

Thanks, good afternoon everybody. Sticking with the conduit business I think on the last call, Brian I think we kind of guided or thought that maybe this year’s securitization volume that you would contribute to would be kind of equivalent with last year’s number.

So feeling good about that as well and even with our first quarter in the book and what looks to be at least maybe a decent size deal coming in the next week or so?.

I think if I look back on I guess it’s little hard to forecast this stuff because of they are so interest rate sensitive and also competitors factor in here greatly.

I think we’ve chosen a path at least in the last quarter and even the one we are now that we have really gotten a little picky around what we will and won’t lend on as I have indicated I think in my last call cap - credit criteria are slipping a lot.

And so we are seeing some loans that are getting securitized and are selling without too many difficulties, but we are avoiding some of these large cash out refinances on properties that have been restructured or recently purchased. I think we are a little bit less optimistic about the go forward in the economy then a lot of other people are.

But having said that we are still focused in some areas of the economy that banks are not comfortable lending in.

So we will do some hotel lending probably a little bit more than others mainly because there is a lot more equity in those transactions, but as far as our production for the year I would tell we are probably about $200 million to $300 million light in the first quarter versus what we had envisioned in the fall, but we have no objection to that at all.

In addition to that we didn’t do any single asset securitizations although we do have I wouldn’t call them large, but we’ve got some pretty big loans under application right now with the rising interest rate environment you don’t know exactly when they’ll close or if they’ll close, but I am pretty comfortable with our general projections with the understanding that if margins compressed, we will abandon those projections and focus as well we rotate around our model as you know when we think we are not making enough money in the lending business we will become a borrower in that business and I think that’s evidenced in the first quarter, you saw us do it there..

Okay, got. That’s fair. In the net lease acquisition that was done in the quarter, the $105-ish million or so, can you just give a little composition of the portfolio and property type, occupancy, investment grade rating cap rates anything like that..

I’ll give you some color if I can there were 18 assets - 18 assets over $106 million sounds like an average of a relative small number per asset. There were two rather large transactions that we did one was the warehouse, next to headquarters of a company that you’ve heard of.

And another one was a headquarters building and office building those are the two largest ones the others were all relatively small triple net retail names. Grocery we tend to focus on grocery, drug store and some sporting goods stores..

Okay, got it. And just I think maybe just one other quick one, you mentioned you did look at a large transaction, can you kind of - just before Jade's question.

Can you just give us any color maybe what that was perhaps?.

I don’t want to lead you to believe we were looking the bio company we were looking at a large acquisition of real estate..

Okay. Got it, okay that’s helpful. Thanks..

Thank you. [Operator Instructions] and next question comes the from of Steven DeLaney with JMP Securities. Please proceed with your question..

Thanks. Good evening, everyone and congratulations on a good start to 2015. Marc I noticed you have a new line on the balance sheet, real estate held for sale I think about $21 million.

Could you just comment on the nature of that asset, is that something that you had for investment and maybe you feel that it's add a full value and why is that particular property now for sale?.

Yes, that actually is three properties and were acquired on the GAAP to put it in a separate category because they are on contract for sale..

Got it and should we assume I mean these - you guys have not had defaulted loans, so these were opportunistic real estate investments, so would it be reasonable to assume that you're selling it at a gain over and above your carrying value?.

Yes, this is just regular real estate investments that we’ve had..

Okay, very good and I assume that's what you do with the portfolio, you buy some and you sell some and try to actively manage it to create the best returns?.

Sorry I just want to add we keep an eye on our concentration. Sometimes if we acquire 10 properties with one tenant. We might feel like that’s too high maybe we’ll cut it down to seven, just for concentration reasons or else we may not like any geographic area we might want to avoid.

So we look at each asset, we don’t look at the tenant necessarily in a in a vacuum..

Yes. That makes a lot of sense. Understand. I was interested in your comments on multi-family. And then in historical context I know exactly where you're coming from with the cheap money from the GSEs and – kind of why bother, right.

I saw on our call this morning as you know, the $30 billion limit and I've been reading articles that the volume has been so huge earlier in the year that absent some action by the regulator. Their estimates out there that GSEs could be done by June or July.

And I'm just wondering if you're beginning to see any inquiries coming in through loan brokers on the multi-family - is the market showing any nervousness that Freddie and Fannie won't be there. And could that possibly open up additional loans for you in the second half of this year..

Sure. It’s a two part answer, Steve..

Okay..

The first part is we saw a dramatic increase in loan requests largely because of applications that were filed with some of GSEs and often times borrowers were saying we are not even able to get people on the phone because they had such a backup in their supply that they were trying close.

However, I think if you take a quick look around on some of your - some of those types of companies today and recent stock action on the regularity came out with some language regarding raising those caps.

So I think some of the public companies that are primarily levered to production at the GSEs levels, some of those are up dramatically today, because they had –very late in afternoon they were some discussion about it..

Yes, and we had seen some suggestions that and heard on the call last week from a smaller dust lender and program plus lender that they just we're not going to let it dry up. So we, it sounds like something is coming here..

I would expect that inquiry will go back to the normal, it’s either in a hurry or it’s going to the GSEs..

Exactly well appreciate you color on that I do..

Sure..

And apologize if this comes across as sensitive it's not – I have no hidden agenda here, but I for one and disappointed in the way the market is treated Ladder shares year-to-date and I mean down about 12% given your strategic position in your performance knowing that sometimes that can be choppy quarter-to-quarter, but this is a clear beat in the first quarter and you made it up in a lot of ways other than just conduit gain on sale which sometimes people paint you as a one-trick pony, but I think you demonstrated a lot of other diversified revenue.

I guess my question apologize for the long interview ,but, we all like to play often, but sometimes defense might be the better course of action has the board, my question to you Brian is, has the board discuss the value of a stock buyback plan.

And is there some level the stock that you would actually look at your use of capital and say this is ridiculous with the stock here and rather than making new ones.

We're going to buy your stock in and what we think is a accretive level for earnings and just be curious what’s your thoughts on there?.

Well, the board and the company are often times in discussions regarding how to finance ourselves, what are best investments I think you saw us purchase the couple of our bonds maybe in the last quarter or so when the oil belt was making high yield bonds cheap.

Again I want to reiterate, we are not buying our bonds back at $0.50 and a $1 we were simply buying them back at what appear to be pretty good spreads relative to their maturity date.

But I think that again I occasionally get confused by that also, but I think we suffer a little bit by some times the combinations of the things that we do and I think often times some typical holders will look at us as a REIT with a lower dividend than others and the analysis goes no further.

And I think it’s really a question of getting used to who we are and how we perform, we are relatively stable in how we earn money on a regular basis, our balance sheet has doubled in a year.

And we clearly done some of the things we’re supposed to do regarding efficiency and tactics and now we are focusing a little bit more on those balance sheet assets that are more accretive to us.

So I am often time surprise that people look at us so much on that gain on sell model because its actually and I think I said in our last call that it will continue to be less and less of our business.

However, that’s conduit securitization business it has an enormous ROE and when it’s working very comfortably we will pore a lot of capital and effort into that business.

When it gets particularly competitive, the reason that we setup the company in the triangle fashion is so that we don’t have to be a one trick pony that we are able to take advantage of cheap capital as opposed to be in part of the cheap capital.

So yes, we think about these things all the time and I also think the company does suffer a little bit from just slice of our float.

I think we have been always met with a lot of accounts and a lot of accounts kind of get our story, they understand what we are talking about, but when they look at what they would have to do to acquire couple million shares. I think some of them are would like to see a little bit more float before they get into that.

So it’s several things going on, but as far as have I asked for a share buyback mainly because in the first quarter it kind of moved down, but I think that has more to do with interest rates going up then it does to anything specific with Ladder..

Yes, understand I mean we've seen that in the RMC for sure. Thanks for sharing your thoughts on that, appreciate it..

Thank you. And our next question comes from the line of Charles Nabhan with Wells Fargo. Please proceed with your question..

Hey guys, thanks for taking my question. I apologize you touched on this already, but could you comment on the interest rate sensitivity of the portfolio.

Maybe give us a sense for how much of the held for investment portfolio is fixed versus floating?.

Okay. Well, when I think about interest rate sensitivity obviously I think about duration. I think Marc mentioned that the securities book, the CMBS book those are mostly all fixed rate, not all, but almost all. And they are - it’s a four year duration and the reason that we do that is because that works very nicely with the way we finance the company.

The Federal Home Loan Bank offers very attractive financing especially in the 30-day to five-year category, so I don’t consider that $2.6 billion worth of assets to be very volatile at all, because as the curve - as you roll down the curve it’s about 30, 40 basis point a year.

So and less interest rates rise dramatically and this is not dramatic what we are experiencing now. That part of the portfolio wouldn’t really be affected by it.

Our bridge loan portfolio is a LIBOR-based, the mortgagers say they are LIBOR-based, but they all have fixed rate floors, so if interest rates fall precipitously, we simply get a fixed interest rate call it around 7% or so and if interest rate rise rapidly then the portfolio will rise also with it.

So I don’t consider that to be very interest rate sensitive. Our equity portfolio now $800 million invested has probably borrowed about $600 million in fixed rate 10-year financing that’s non-recourse, so that’s locked for years to come, so that’s non-interest rate sensitive.

Probably the only real interest rate sensitive portion of the portfolio is the conduit business, the gain on sale business the 10-year mortgages that we interest rate hedge and that rolls over every 60 days. So I don’t consider us to be very exposed interest rates at all..

Okay, great. Thanks for the color guys..

Sure. End of Q&A.

[Operator Instructions] Thank you, we have no other questions in the queue at this time. I would now like to turn the conference back over to Brian Harris for any closing comments..

Thanks for dialing-in and listening to us and any follow-up questions obviously we’ll be talking to the analysts, but thanks for calling in..

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. And we thank all of you for your participation..