Earnings Call Transcript - LADR Q4 2024

Operator, Operator

Good morning and welcome to Ladder Capital Corp's Earnings Call for the Fourth Quarter of 2024. As a reminder, today's call is being recorded. This morning, Ladder released its financial results for the quarter and year ended December 31st, 2024. Before the call begins, I'd like to call your attention to the customary Safe Harbor disclosure in our earnings release regarding forward-looking statements. Today's call may include forward-looking statements and projections and we refer you to our most recent Form 10-K for important factors that could cause actual results to differ materially from these statements and projections. We do not undertake any obligation to update our forward-looking statements or projections unless required by law. In addition, Ladder will discuss certain non-GAAP financial measures on this call, which management believes are relevant to assessing the company's financial performance. 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. These measures are reconciled to GAAP figures in our earnings supplement presentation, which is available in the Investor Relations' section of our website. We also refer you to our Form 10-K and earnings supplement presentation for definitions of certain metrics, which we may cite on today's call. At this time, I'd like to turn the call over to Ladder's President, Pamela McCormack.

Pamela McCormack, President

Good morning. We are pleased with Ladder's performance in the fourth quarter and full year of 2024. During the fourth quarter, Ladder generated distributable earnings of $33.6 million or $0.27 per share, achieving a return on equity of 8.9%. For the full year, distributable earnings totaled $153.9 million, delivering a 9.9% return on equity, while maintaining low leverage, robust liquidity, and stable book value. In 2024, Ladder's conservative business model reinforced its position as a leading middle market focused commercial real estate finance REIT, supported by the highest credit ratings in the sector. Our disciplined credit underwriting delivered strong results despite a challenging macroeconomic environment. In addition, we believe the proactive steps we took to enhance our capital structure over the course of the year should position Ladder well for potential investment-grade ratings. Our key achievements in 2024 include strong financial performance. In 2024, we delivered strong earnings, attractive net interest margins, healthy loan repayments, and consistent net operating income from our real estate portfolio. Additionally, our credit underwriting expertise and conservative investment approach enabled us to maintain steady book value, setting us apart in the commercial mortgage REIT space. Despite a period of rapidly rising interest rates, we successfully navigated the challenges and resumed originating loans by year-end as the Fed began lowering interest rates and transaction volumes began to pick up. Enhanced liquidity and credit capacity. As Paul will cover in more detail, we recently extended and upsized our unsecured corporate revolving credit facility from $324 million to $850 million and secured an accordion to further upsize the facility to $1.25 billion, all at a reduced cost. This transaction marks a key milestone in Ladder's ongoing efforts to streamline our balance sheet and transition to primarily using unsecured debt to finance our operations. As of December 31, 2024, Ladder had $2.2 billion in liquidity, including $1.3 billion or approximately 27% of total assets comprised of cash and cash equivalents. Adjusted leverage remained modest at 1.4 times with 77% of our asset base unencumbered and 65% of Ladder's debt comprised of unsecured corporate bonds. Enhanced credit ratings. In conjunction with the $500 million unsecured bond issuance completed in July of 2024, Ladder received a positive outlook from both Moody's and Fitch, who rate Ladder just one notch below investment grade, while S&P upgraded our credit rating by one notch. These achievements should move us closer to our goal of becoming an investment-grade company, which we expect will strengthen our market position, lower funding costs, and attract a broader base of investors. Loan portfolio overview. As of December 31, 2024, our loan portfolio stood at $1.6 billion, representing 33% of total assets with a weighted average yield of 9.3% and minimal future funding commitments of only $35 million. In the fourth quarter, our loan portfolio continued to pay down as we received $575 million in loan payoffs, including the full payoff of 11 loans. For the full year 2024, Ladder received $1.7 billion in proceeds from loan payoffs across 61 loan positions. This represents the highest annual payoffs in Ladder's history, underscoring the strength and consistency of the middle market lending strategy. In Q4, we originated six loans totaling $129 million, primarily focusing on multifamily and industrial properties. Since quarter end, our pipeline has continued to build to over $250 million with an ongoing focus on new acquisitions with basis resets, along with select refinancing and recapitalization transactions for newer vintage properties and lease-up. Our in-house asset management capabilities enabled us to continue to drive value through strategic sales and capital investments. In 2024, we opportunistically divested owned real estate. We sold four multifamily properties acquired through foreclosure, realizing $2.7 million in aggregate gains, including a multifamily property in Texas we sold during the fourth quarter for a $1.3 million gain above our $9.7 million carry fair value. Consistent carry income from our real estate portfolio. Our $904 million real estate portfolio generated $13.2 million in net rental income during the fourth quarter and $56.3 million for the full year 2024. The portfolio primarily consists of net lease properties with long-term leases to investment-grade rated tenants. In addition, we sold five net lease properties, generating $2 million in gains to distributable earnings. Growing securities portfolio. During the fourth quarter, we purchased $295 million of AAA-rated securities at a weighted average unlevered yield of 6.2%. By year-end, our portfolio totaled $1.1 billion with a weighted average unlevered yield of 6%, primarily comprised of AAA-rated securities. This unlevered portfolio provides Ladder with enhanced liquidity and stability without mark-to-market exposure. 2025 outlook. In conclusion, 2024 showcased the strength of Ladder's conservative approach and differentiated capital structure. As transaction volumes rebound, valuation clarity improves, and commercial real estate markets stabilize, we are well positioned to deploy our substantial liquidity prudently. Entering 2025 with optimism, we're prepared to capitalize on opportunities in a recovering market while maintaining our disciplined approach to risk and growth. With that, I'll turn the call over to Paul.

Paul Miceli, CFO

Thank you, Pamela. In the fourth quarter of 2024, Ladder generated $33.6 million of distributable earnings or $0.27 per share of distributable EPS, achieving a return on average equity of 8.9%. For 2024, distributable earnings totaled $153.9 million or $1.21 per share of distributable EPS, achieving a 9.9% return on average equity. Our 2024 earnings were driven by net interest income on loans, securities, and cash alongside stable net operating income from our real estate portfolio, delivering a strong return on equity. This performance was achieved while delevering our balance sheet, maintaining steady book value and dividend coverage and preserving a significant cash balance, allowing us to adopt an offensive strategy by the fourth quarter of 2024. As of December 31, 2024, Ladder's balance sheet was comprised of 27% cash and cash equivalents totaling $1.3 billion with $2.2 billion of total liquidity. As Pamela discussed, we further fortified Ladder's balance sheet through the upsize of our unsecured revolver to $850 million, an over 2.6 times increase, including a reduced interest rate to SOFR plus 170 basis points with a further reduction to SOFR plus 125 basis points upon achieving an investment-grade credit rating from 2 rating agencies. We are pleased with this outcome and deeply appreciate the strong support from our 10 bank syndicate. We extend our gratitude to our banking partners. As of December 31, 2024, our adjusted leverage ratio was 1.4 times with a total gross leverage ratio of 2.0 times, with a trending down as we delever our balance sheet. Overall, in 2024, we paid down over $1.1 billion in secured debt and issued $500 million in unsecured corporate bonds due in 2031. As of December 31, 2024, 65% of our debt was comprised of unsecured corporate bonds with a weighted average remaining maturity of 3.7 years at an attractive weighted average fixed rate coupon of 5.2%. In the fourth quarter of 2024, we repurchased $26 million in principal value of our 2025 bonds, which mature in October, of which $296 million in principal remains outstanding. In 2024, both Moody's and Fitch placed Ladder on positive outlook, and Moody's upgraded and unnotched the rating on our bonds to Ba1, aligning our bonds with our corporate credit rating, one notch from investment grade. S&P upgraded our credit rating in 2024 as well. We believe the rating agencies recognize Ladder's long track record as a disciplined and prudent manager of capital, demonstrated since the inception of our business and specifically since we received our first credit rating over 12 years ago. We believe Ladder's business model is an internally managed company with an unwavering focus on three investment strategies within commercial real estate, coupled with our focus on financing with unsecured debt at modest leverage levels, position us well for achieving our long-held strategic goal of becoming an investment-grade credit. We continue to believe that an investment-grade credit rating will open Ladder up to broader opportunities for growth, along with access to the investment-grade capital markets with the goal of achieving a more attractive cost of capital and enhanced return on equity to shareholders over time. As Pamela discussed, our three segments performed well in 2024. Our loan portfolio paid down meaningfully in 2024 and closed the year with a $1.6 billion balance with a 9.3% yield. Ladder's mid-market lending focus and flexible balance sheet helped us achieve a 50% reduction of our loan portfolio through paydowns, generating meaningful liquidity and allowing for us to pivot to focus on origination in the bridge and conduit lending space. In 2024, Ladder originated $145 million of loans across seven positions, the majority of which was originated in the fourth quarter. We're hopeful originations will outpace payoffs in the coming quarters. As of December 31, 2024, we had two loans totaling $77 million on non-accrual, including the addition of a $16 million loan in the fourth quarter, collateralized by two residential and retail mixed-use properties in New York City. No specific impairments were identified in the fourth quarter, and our general CECL reserve remained at $52 million, unchanged from the prior quarter. We continue to hold this level of reserve given the continued macroeconomic shifts that persist in the global economy. We believe this reserve level is adequate to cover any potential loss in our loan portfolio. As of December 31, 2024, the carrying value of our securities portfolio was $1.1 billion. In 2024, we rotated capital into AAA securities and more than doubled our holdings as our loan book continued to pay off at par, and we geared up for new lending opportunities by the fourth quarter. As of December 31, 2024, 98% of the securities portfolio was investment-grade rated with 91% being AAA rated. The entire portfolio of predominantly AAA securities is unlevered and readily financeable, providing additional source of potential liquidity, complementing the $2.2 billion of same-day liquidity we maintain. Our $904 million Real Estate segment continued to generate stable net operating income in 2024. The portfolio includes 150 net lease properties, primarily investment-grade credits committed to long-term leases with an average remaining lease term of 7.6 years. As Pamela discussed, in 2024, we executed the sale of four multifamily assets previously foreclosed on the sales proceeds of $43.6 million, generating a net gain of $2.7 million for distributable earnings. Further, we sold six net lease properties in 2024 for $57.4 million of proceeds, generating $6.8 million of gains for distributable earnings and $22.3 million of net gain for GAAP, which includes the recapture of previously recorded depreciation and amortization expense. As of December 31, 2024, our unencumbered asset pool stood at $3.8 billion or 77% of total assets. 81% of this unencumbered asset pool is comprised of first mortgage loans, securities, and unrestricted cash and cash equivalents. Overall, we believe our significant liquidity position, which includes our recently upsized revolving credit facility, large pool of high-quality unencumbered assets and best-in-class capital structure, one notch from investment-grade, positions Ladder with strong financial flexibility and ready access to capital as we focus on deployment within our three segments in 2025. As of December 31, 2024, Ladder's undepreciated book value per share was $13.88, which is net of the $0.41 per share CECL general reserve established. In the fourth quarter of 2024, we repurchased $6 million or 532,000 shares of our common stock at a weighted average price of $11.27 per share. For the year ended December 31, 2024, we repurchased $8 million of our common stock or 711,000 shares at a weighted average price of $11.31 per share. As of December 31, 2024, $67.6 million remains outstanding on Ladder's current stock repurchase program. Finally, in 2024, our dividend remained well covered. And in the fourth quarter, Ladder declared a $0.23 per share dividend, which was paid on January 15, 2025. For details on our fourth quarter and full year 2024 operating results, please refer to our earnings supplement, which is available on our website, and Ladder's annual report on Form 10-K, which we expect to file in the coming days. With that, I will turn the call over to Brian.

Brian Harris, CRO

Thanks, Paul. We believe Ladder's middle market by design lending model was on full display during 2024. Smaller loan sizes enabled us to diversify our sponsor and geographic exposure and enabled our borrowers to have a relatively easier time refinancing loans coming due last year. We also took some big steps to further strengthen our liability set, having issued a $500 million unsecured corporate bond that closed in July, followed by an upsizing of our revolver to $850 million in December. These events in a generally difficult year for commercial real estate investors enabled Ladder to be a bright spot as our liquidity position soared throughout the year as loans paid off while we were very modestly levered throughout the year. After March of 2023, when the regional bank funding model was disrupted and pushed to the breaking point for certain banks that failed, we heard the expression stay alive until 2025 as it became harder for sponsors to refinance loans coming due. By early 2024, the industry seemed to think the Fed was going to cut short-term interest rates six to eight times in response to a slowing economy and tame inflation figures, except the Fed never went beyond 100 basis points of rate cuts during all of 2024. I bring up these past events to highlight that most of our sponsors on loans coming due in 2024 did not see the need to stay alive until 2025, and they paid off $1.7 billion of our loans with $1.1 billion of the total received in the second half of the year. As cash proceeds from loan payoffs outpaced new originations, we purchased $911 million of AAA-rated securities over the last seven months, including January of 2025 at a weighted average unlevered yield of 6.48%. We believe these yields are attractive from a historical perspective and also added to interest income the day after we acquired most of them. It takes 60 to 90 days to close a loan after we receive an application. And while our pipeline of loans under application currently stands at just over $250 million, it is growing at a rapid rate, and we believe that new loan originations will soon outpace loans paying off. To fund new loan investments, we will first move cash out of our T-bills earning an average of 4.32%. Additionally, we have the option to sell or finance some of our securities, which could provide up to $1 billion of additional liquidity to support continued loan growth in our pipeline. While we expect our loan inventory to build throughout 2025, this will take some time, but we expect it to be readily observable from the second quarter on. While the lag from application to loan closing takes a while, there are plenty of good alternatives available to us, including additional securities to manage the lag from the loan origination process. Overall, we plan to migrate our capital into higher concentrations of balance sheet loans and out of short-term T-bills and securities. We intend to accomplish all of this while maintaining low leverage with high amounts of liquidity and investing in the highest quality assets we can find that we believe present optimal risk/reward relationships for our shareholders. We look forward to replenishing our asset base with higher interest rates in place. We have limited upcoming loan maturities with plenty of room to add new investments and grow our balance sheet. Ladder has a differentiated business model with a long track record of allocating investment dollars among securities loans and real estate and primarily funded by longer-term unsecured corporate and non-mark-to-market debt with low leverage. As Paul discussed, we have been buying back stock and paying down debt with excess liquidity, and we plan to continue this strategy when market conditions present us with opportunities to enhance shareholder value. We've waited a long time to be in the position we are in today, armed with large amounts of liquidity and low leverage in a relatively high interest rate environment. We are, therefore, optimistic that 2025 will be a very strong year for Ladder. I'd like to take this time now to thank everybody for tuning in on this call and to thank our employees for 2024 and the effort they put forth. I'll turn it back over to the operator.

Operator, Operator

Thank you. Our first question is from Jade Rahmani with KBW. Please proceed.

Jade Rahmani, Analyst

Thank you, very much. I wanted to ask about the CMBS conduit business. For the market, CMBS issuance was up about 100% in 2024. Ladder competes probably more than most mortgage REITs with regional banks. Therefore, do you see an opportunity to increase CMBS conduit originations meaningfully, as banks still have been pulling back and yet are more willing to let loans come to maturity now?

Brian Harris, CRO

Thanks, Jade. It's Brian. Yes, I think there is a shortage of fixed income investments, leading to a significant tightening in credit spreads almost everywhere. The conduit and securitization business functions better when the yield curve is steeper. While we are no longer experiencing an inverted yield curve after several years, there is improvement, but we are not fully there yet. When we evaluate the breakevens for loans we could offer on a 5 or 10-year fixed-rate basis, the attractiveness isn’t very high. It's not completely unattractive but compared to other investments, they seem to provide a better return for our capital allocation. Therefore, I wouldn't anticipate a strong rebound in this area in the short term. However, as the yield curve steepens, we will likely become more involved.

Jade Rahmani, Analyst

Thank you, very much. And then just on the CECL reserve, in dollars, it was unchanged. There was no new provisioning, which means that the reserve level increased quite meaningfully. Are you planning to maintain it at that level? Or do you see the potential for releasing some of those reserves with the significant repayments that have been received?

Brian Harris, CRO

I believe that currently we have a higher percentage, and we have maintained it due to the various potential issues that may require reserves. These issues are still present, and they do not involve the loans that have been paid off. Although the loans that have paid off have reduced the denominator, I feel confident that we are adequately covered. I do not anticipate exhausting that figure in the loss column. It's difficult to predict when changes might occur, but I don't expect an increase in reserves unless unexpected economic developments or inventory issues arise. It seems more probable that we will eventually begin to release reserves rather than see the number go up.

Operator, Operator

Our next question is from Tom Catherwood with BTIG. Please proceed.

Tom Catherwood, Analyst

Thank you and good morning everybody. Brian, I appreciate the detail on originations and the lag between applications and closings. On the origination front, we're hearing of yields tightening somewhat, especially for multifamily. Kind of 2 parts. A, are you seeing that as well? And then b, how is it impacting your pipeline and the types of properties that you're willing to lend on?

Brian Harris, CRO

Credit spreads are tightening, but I don't believe interest rates are. The rates on loans that borrowers are paying are around 7%, which isn't particularly low compared to recent trends. We need to be cautious when discussing the tightening of credit spreads alongside prevailing interest rates in the mortgage market. The borrowing community hopes that with the new administration and statements from the Treasury Secretary, rates on the 10-year might decrease. However, I don't foresee this happening due to the current deficit situation in the US and the necessity of issuing debt to cover interest expenses. Regarding property types, multifamily clearly remains the tightest and safest sector, as people always need housing. That said, we don’t typically avoid lending based on anything except high crime areas, which can be challenging to recover from in terms of reputation. We appear to be writing more multifamily and industrial loans, but this reflects stability rather than a preference. If a retail or office property comes along that interests us, we will consider it without compromising on credit. We are open to lending on assets that are adjusted for today’s market conditions. However, I don't see office spreads tightening significantly, and I question the feasibility of refinancing office buildings. They are somewhat of an outlier right now, although there are significant SASB deals being completed, like Bryant Park and the MetLife Building, which is encouraging. There is improvement, and I anticipate we will begin to explore other property types more thoroughly. Nevertheless, we remain cautious about large cities experiencing capital flight and high crime rates. Therefore, we will continue to avoid areas like downtown LA and will focus on lending in what I refer to as the flyover states, where the local economies are performing well.

Tom Catherwood, Analyst

I appreciate those thoughts, Brian. And maybe sticking with the borrower profiles in your pipeline, are you seeing borrowers that maybe last year would have likely done five-year fixed-rate loans now looking for transitional floating-rate loans to provide more flexibility? Or is that not a trend that you've seen crop up yet?

Brian Harris, CRO

We have noticed that borrowers, particularly those who have owned real estate for a long time, are experiencing some challenges. This is especially true for generational wealth families who are now needing to refinance and deal with higher operating expenses, which they haven't faced in recent decades. The issue isn't solely related to interest rate spreads; rather, many are leaning towards floating-rate and five-year options because they intend to sell their properties, rather than expecting a decrease in interest rates. They may have reached a stage where they can secure a short extension from a bank. That said, we have quoted and currently hold some one- and two-year fixed-rate loans on our balance sheet that are fully pre-payable. We offer these at slightly higher rates than conduit or floating-rate loans, but there are no prepayment penalties or lockouts. This allows us to earn the coupon along with the fees associated with originating the loan. I believe we will see more of this trend in the upcoming year.

Operator, Operator

Our next question is from Steve Delaney with Citizens JMP. Please proceed.

Steve Delaney, Analyst

Thanks. Good morning everyone. Congratulations on a successful close to 2024. Reflecting on the past two years, despite the market's volatility, I find it impressive that you've managed to keep a book value per share around $13.70. I believe few peers have achieved that. It stands out as a significant accomplishment. Now, as we enter 2025, I notice that your loan book has decreased from approximately $3.9 billion at the end of 2022 to about $1.6 billion, indicating a substantial reduction in direct lending. I see direct lending as the core competency of commercial mortgage REITs. Looking ahead to 2025, do you think you can grow your loan book by $1 billion net? Additionally, Brian, what do you anticipate your average return on equity will be on those loans in 2025? So, can you accomplish $1 billion net, and what earnings do you expect from that? Thank you.

Brian Harris, CRO

Thank you, Steve. We have seen the book value and are actually proud of it. Pamela shared a chart illustrating our position, showing that we received repayments at a better rate than many others. However, this comes with a trade-off, as our loan portfolio has decreased significantly. To break that down, we've dropped from $3.9 billion to $1.6 billion, meaning we are among the most unlevered companies in our sector. This is also reflected in our dividend, which is one of the lowest in the industry. Currently, with SOFR at 4.3%, adding 300 basis points would give us a 7.3% unlevered return. Even considering fees, our target unlevered return falls between 7% to 8.25%. Most loans we write are around 275 basis points, and while spreads will tighten if rates rise, they can widen if rates drop. We're targeting an unlevered yield close to 8.5%. When we receive $1 billion in repayments from loans yielding 9%, placing that money in a money market fund would yield around 4%, leading to a 500 basis point loss in net interest margin by holding cash. Our approach involves taking the time needed to close loans, and we are currently investing in T-bills and AAA floating-rate securities, with $228 million purchased just this January. The average spread on those purchases is 140 basis points with an average yield of 5.78%. This is noteworthy as we are trying to write loans at a spread of about 300, which is substantially more than what AAA securities yield. To date, we've acquired approximately $950 million in securities with an average yield of 6.46%. This implies a gradual drop in our net interest margin from 9% to 6.5%, rather than a sudden decline. We plan to transition out of securities and T-bills into loans. I anticipate adding $1 billion in loans, following the $128 million we originated in the fourth quarter of last year. Moving forward, I expect we will surpass that figure significantly. Currently, we have $250 million under application, which could double shortly as brokers and borrowers recognize Ladder's strong capital position and flexible balance sheet. We are not reliant on the securitization or repo markets and have some CLOs that are maturing quickly. By the end of February, we may reduce some interest expenses and continue acquiring securities while focusing on adding bridge loans at the 275 basis points range, with 300 being the ideal target. Cash flow management involves harvesting the loan portfolio and moving into securities to ensure we don’t earn zero while sourcing new loans, all while upholding rigorous credit standards. Our ability to ensure principal repayment will keep us ahead of most competitors. We're comfortable with this strategy and are not worried about the speed of its execution. We need to ensure that our loans can perform over the next two to three years. We have access to various debt markets, some of which are currently affordable. While we could borrow more, we do not need additional cash at this time. We have upcoming corporate bond obligations covered, and with an expanded revolver, maintaining cash reserves is no longer essential. We're aiming for full deployment and anticipate significant growth by adding $3 billion to our balance sheet at a 200 basis point net spread, which will yield noteworthy results going forward.

Steve Delaney, Analyst

Thanks for the information. Just to clarify, the 8% yield from the bridge loan would increase to the low double digits when leverage is applied, depending on the type of leverage, correct?

Brian Harris, CRO

That's correct. I'd like to point out that the $950 million worth of securities we purchased are currently AAA rated with an almost 6.5% yield. If we apply leverage to that, it could rise to 11 and is easily financeable. Therefore, selling them might not be our only option. The spreads are tightening, with AAAs priced at 140, which is where we've been acquiring them for 2025, and they still appear attractive. Although they are not as wide as in 2022, when CLOs were being issued at 225 on AAAs, they remain appealing. I anticipate that the AAA spread on CLOs could potentially decrease to around 115 to 125.

Operator, Operator

Our final question is a follow-up from Jade Rahmani with KBW. Please proceed.

Jade Rahmani, Analyst

Thank you very much. I wanted to ask a strategic question given the high cash balance. When you look at the commercial mortgage REIT space, the three names that have traded at material premiums to book value were Starwood due to its diversification, BXMT due to its scale, and Arbor, which is due to the agency servicing business. And I was wondering on the agency servicing business, which is in multifamily, do you see any opportunity to partner with a dut lender, say, a Walker & Dunlop. There could be a lot of potential value creation if Ladder were to co-originate loans and participate in the downstream servicing economics. BXMT has established a relationship with M&T. Curious if that's something you think is reasonable to pursue?

Brian Harris, CRO

It's reasonable to consider pursuing that type of opportunity. At the moment, we don't have any arrangements in progress. I've noticed some activity similar to what M&T did recently, with several partnerships forming a few months back, although there haven't been many developments lately. However, I believe there's significant capital flowing into the private capital market right now, and much of that movement isn't coming from the big banks, which are primarily serving as intermediaries and allowing the market to determine borrower rates through rating agencies. We have been approached by parties who have substantial cash and see potential in real estate, although it's challenging to assemble a top team when there are numerous losses in various areas currently. We're attracting some interest from people who likely want us to manage funds in a partnership where we both share ownership. I think this interest will likely come from the insurance sector rather than servicing. We're open to ideas, and while we may seem less engaged than expected in this aspect—considering it's a significant income source within a REIT—right now, given our capital situation, we are primarily focused on opportunities that would greatly benefit our shares and shareholders. If we reach around $2 billion in new originations, this could become a more appealing option. Currently, we appreciate the investment landscape and are fortunate to have considerable capital. We prefer not to deploy our expertise or capital to third parties at this moment, but I could see us working with an insurance firm similar to some competitors like Apollo or Benefit Street. We're open to that possibility, though we aren't in any discussions about it right now.

Jade Rahmani, Analyst

Thanks a lot.

Operator, Operator

We have reached the end of our question-and-answer session. I would like to turn the call back over to Brian Harris for closing remarks.

Brian Harris, CRO

Just thanks for listening in. It's been a while since we've spoken to our investors on the equity side. And we look forward to the year ahead. We're already coming out of the chute in very good order. And I think that these numbers of origination that we're looking at will go up dramatically in the year ahead. So, get on the train with us, and we appreciate having you, and thanks again for a fruitful 2024.

Operator, Operator

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.