EQUITY STRUCTURE AND ACCOUNTS

6 Months Ended

Jun. 30, 2019

12. EQUITY STRUCTURE AND ACCOUNTS

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

Class A Common Stock

Voting Rights

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

Dividend Rights

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

Liquidation Rights

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

Other Matters

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

Allocation of Income and Loss

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

Class B Common Stock

Voting Rights

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

No Dividend or Liquidation Rights

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

Exchange for Class A Common Stock

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

During the six months ended June 30, 2019, 1,139,411 Series REIT LP Units and 1,139,411 Series TRS LP Units were collectively exchanged for 1,139,411 shares of Class A common stock and 1,139,411 shares of Class B common stock were canceled. We received no other consideration in connection with these exchanges.

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

Stock Repurchases

On October 30, 2014, the board of directors authorized the Company to repurchase up to $50.0 million of the Company’s Class A common stock from time to time without further approval. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. During the six months ended June 30, 2019, the Company repurchased 40,065 shares of Class A common stock. As of June 30, 2019, the Company has a remaining amount available for repurchase of $41.1 million, which represents 2.3% in the aggregate of its outstanding Class A common stock, based on the closing price of $16.61 per share on such date.

The following table is a summary of the Company’s repurchase activity of its Class A common stock during the six months ended June 30, 2019 and 2018 ($ in thousands):



	Shares	Amount(1)

Authorizations remaining as of December 31, 2018		$	41,769
Additional authorizations		—
Repurchases paid	40,065	(637		)
Repurchases unsettled		—
Authorizations remaining as of June 30, 2019		$	41,132

(1) Amount excludes commissions paid associated with share repurchases.



	Shares	Amount(1)

Authorizations remaining as of December 31, 2017		$	41,769
Additional authorizations		—
Repurchases paid	—	—
Repurchases unsettled		—
Authorizations remaining as of June 30, 2018		$	41,769

(1) Amount excludes commissions paid associated with share repurchases.

Dividends

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

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

The following table presents dividends declared (on a per share basis) of Class A common stock for the six months ended June 30, 2019 and 2018:



Declaration Date	Dividend per Share

February 27, 2019	$	0.340
May 30, 2019	0.340
Total	$	0.680

February 27, 2018	$	0.315
May 30, 2018	0.325
Total	$	0.640

Changes in Accumulated Other Comprehensive Income

The following table presents changes in accumulated other comprehensive income related to the cumulative difference between the fair market value and the amortized cost basis of securities classified as available for sale for the six months ended June 30, 2019 and 2018 ($ in thousands):



	Accumulated Other Comprehensive Income (Loss)			Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests			Total Accumulated Other Comprehensive Income (Loss)

December 31, 2018	$	(4,649	)	$	(588	)	$	(5,237	)
Other comprehensive income (loss)	16,738			2,044			18,782
Exchange of noncontrolling interest for common stock	65			(65		)	—
Rebalancing of ownership percentage between Company and Operating Partnership	17			(17		)	—
June 30, 2019	$	12,171		$	1,374		$	13,545



	Accumulated Other Comprehensive Income (Loss)			Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests			Total Accumulated Other Comprehensive Income (Loss)

December 31, 2017	$	(212	)	$	116		$	(96	)
Other comprehensive income (loss)	(9,506		)	(1,598		)	(11,104		)
Exchange of noncontrolling interest for common stock	(143		)	143			—
Rebalancing of ownership percentage between Company and Operating Partnership	6			(6		)	—
June 30, 2018	$	(9,855	)	$	(1,345	)	$	(11,200	)