Waterfall Asset Management Provides $127 Million Refinancing for Chesterbrook Office Campus Accessibility StatementSkip NavigationNEW YORK, March 17, 2026 /PRNewswire/ -- Waterfall Asset Management ("Waterfall"), an alternative investment manager focused on specialty finance opportunities within asset-backed credit, whole loans, and real assets, announced that its commercial real estate lending platform has closed, on behalf of its funds, a $127 million refinancing of Chesterbrook Campus. The property is a ...

Core Insights - The article discusses the recent financial performance of a leading technology company, highlighting a significant increase in revenue and net income compared to the previous year [1] Financial Performance - The company reported a revenue of $50 billion for the last quarter, representing a 20% increase year-over-year [1] - Net income reached $10 billion, which is a 25% increase compared to the same quarter last year [1] - Earnings per share (EPS) rose to $5, up from $4 in the previous year, indicating strong profitability growth [1] Market Position - The company has strengthened its market position, capturing an additional 5% market share in the technology sector [1] - Increased demand for its products and services has been attributed to the rise in remote work and digital transformation trends [1] Future Outlook - Analysts project continued growth, with expected revenue of $60 billion for the next quarter, driven by new product launches and expansion into emerging markets [1] - The company plans to invest $2 billion in research and development to enhance its product offerings and maintain competitive advantage [1]

Core Points - Ready Capital Corporation declared a quarterly cash dividend of $0.01 per share of common stock and Operating Partnership unit for the quarter ended March 31, 2026, payable on April 30, 2026, to shareholders of record as of March 31, 2026 [1] - The Company also declared a dividend of $0.390625 per share of its 6.25% Series C Cumulative Convertible Preferred Stock, payable on April 15, 2026, to Series C Preferred stockholders of record as of March 31, 2026 [2] - Additionally, a dividend of $0.40625 per share of its 6.50% Series E Cumulative Redeemable Preferred Stock was declared, payable on April 30, 2026, to Series E Preferred stockholders of record as of March 31, 2026 [3] Company Overview - Ready Capital Corporation is a multi-strategy real estate finance company that originates, acquires, finances, and services lower-to-middle-market investor and owner-occupied commercial real estate loans [4] - The Company specializes in loans backed by commercial real estate, including agency multifamily, investor, construction, and bridge loans, as well as U.S. Small Business Administration loans under its Section 7(a) program and government-guaranteed loans focused on the United States Department of Agriculture [4] - Headquartered in New York, the Company employs approximately 450 professionals nationwide [4]

Liquidity and Debt Risks - The company has approximately $550 million of senior secured notes and corporate debt maturing in 2026, which could negatively impact liquidity and results of operations [11]. - The company faces liquidity risk due to potential difficulties in funding acquisition and origination activities, as well as the risk of having to liquidate positions at unfavorable prices [515]. - The company is exposed to capital market risks, affecting its ability to raise capital through equity or debt instruments [525]. - Off-balance sheet risks may result in potential losses exceeding reported amounts due to changes in interest rates or market values [526]. Investment and Credit Risks - A significant portion of investments is anticipated to be in lower-to-middle-market (LMM) loans, which are subject to credit risks, particularly from self-employed borrowers [11]. - The company is subject to various market risks, including credit risk associated with LMM loans and market volatility due to geopolitical tensions and economic disruptions [506]. - The company is exposed to prepayment risk, which can affect the return on investments as principal is repaid at different rates than anticipated [516]. - The allowance for loan losses is reviewed quarterly, considering credit quality indicators and utilizing forecasting models for estimating expected lifetime credit losses [536]. Interest Rate and Market Risks - Interest rate fluctuations could adversely affect net income and the value of assets, with a projected impact on net interest income sensitivity profiles indicating a potential decrease of up to $484,000 with a 25 basis point increase in rates [514]. - The estimated fair value of fixed-rate investments is expected to decrease in a rising interest rate environment, impacting overall asset valuation [519]. - The company utilizes interest rate swaps to mitigate exposure to changes in interest rates, involving variable-rate payments from counterparties [521]. - The company has entered into over-the-counter interest rate swap agreements, exposing it to counterparty performance risks [522]. Financial Performance and Position - Total assets decreased from $10,141,921 thousand in 2024 to $7,769,796 thousand in 2025, a decline of approximately 23.4% [548]. - Net interest income before provision for loan losses fell to $55,041 thousand in 2025 from $200,520 thousand in 2024, a decrease of 72.6% [549]. - Provision for loan losses increased significantly to $87,038 thousand in 2025 compared to $292,759 thousand in 2024, indicating a focus on risk management [549]. - Net income (loss) from continuing operations was $(215,853) thousand in 2025, a reduction from $(411,999) thousand in 2024, showing an improvement in operational performance [549]. - The company reported a net loss attributable to Ready Capital Corporation of $(236,911) thousand in 2025, compared to $(443,751) thousand in 2024, reflecting a narrowing loss [549]. - Total stockholders' equity decreased from $1,935,742 thousand in 2024 to $1,643,267 thousand in 2025, a decline of approximately 15.1% [548]. - Comprehensive loss attributable to Ready Capital Corporation was $(234,485) thousand in 2025, compared to $(436,327) thousand in 2024, indicating a reduction in overall losses [550]. Dividends and Shareholder Value - The company declared dividends of $0.385 per share in 2025, down from $1.10 per share in 2024, reflecting a strategic adjustment in capital distribution [549]. - The weighted-average shares outstanding for basic shares decreased from 169,107,477 in 2024 to 164,544,350 in 2025, indicating a reduction in share count [549]. - The company may seek to sell one of its business segments to maximize shareholder value, which could adversely affect its reputation and financial position [12]. Acquisitions and Growth - The company acquired Funding Circle USA, Inc. for approximately $41.2 million in cash, integrating its loan origination platform with the company's existing services [561]. - The acquisition of Madison One Capital was completed for an initial purchase price of approximately $32.9 million, with additional contingent payments based on performance metrics over four years [562][563]. - The Company acquired UDF IV for a preliminary purchase price allocation of $80.0 million, with a bargain purchase gain of $102.5 million primarily due to market valuation discounts [670][675]. - The Company acquired Funding Circle, an online lending platform, with the purchase price allocated based on fair value assessments [676]. Loan Portfolio and Delinquency - The total loan portfolio as of December 31, 2025, was $5,905,304,000, with a carrying value of $3,500,298,000 [688]. - The unpaid principal balance (UPB) for loans held for investment was $3,760,441,000 as of December 31, 2025 [688]. - The company reported gross write-offs of $202,510,000 for loans originated prior to 2021 [691]. - Delinquency rates are monitored as a primary credit quality indicator, with loans 30 days or more past due being a key focus [689]. - The delinquency rate for loans 30-59 days past due was 7.5%, while loans 60+ days past due accounted for 10.2% of total loans as of December 31, 2025 [694]. - Non-accrual loans as of December 31, 2025, totaled $1,327,124,000, representing 25.5% of total loans [694]. - The company’s construction loans totaled $388,042,000 as of December 31, 2025, with a delinquency rate of 11.1% [694]. Regulatory and Compliance - The company’s ability to maintain its qualification as a real estate investment trust (REIT) may limit its operations and investment opportunities [11]. - The company maintains its REIT status by distributing at least 90% of its taxable income as dividends to shareholders [564]. - The company is externally managed by Waterfall Asset Management, LLC, which is registered with the SEC [558]. - The company consolidates its operating partnership, owning approximately 99.8% of it as of December 31, 2025 [559].

Group 1 - The Conservative Income Portfolio aims to target value stocks with high margins of safety while reducing volatility through well-priced options [1][2] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1] - Trapping Value, with over 40 years of combined experience, focuses on generating options income and capital preservation through its Conservative Income Portfolio [2] Group 2 - The investing group features two income-generating portfolios and a bond ladder, with a focus on lower volatility income investing [2] - The Covered Calls Portfolio aims to provide income while preserving capital, while the fixed income portfolio targets securities with high income potential and significant undervaluation [2]

Core Viewpoint - Ready Capital is implementing a comprehensive balance sheet repositioning strategy aimed at generating over $850 million in free cash flow and reducing its legacy commercial real estate (CRE) portfolio by 60% to approximately $2 billion [1][6]. Financial Performance - In Q4, Ready Capital reported a GAAP loss of $1.46 per share and a distributable loss of $0.43 per share, with book value declining to $8.79 from $10.28 due to a $173 million increase in valuation allowances and CECL reserves [5][14][15]. - Loans on nonaccrual rose to 27% at year-end, reflecting a strategic decision rather than broad-based credit deterioration [18]. Strategic Initiatives - The company's plan focuses on three priorities: strengthening liquidity, selling underperforming CRE assets, and positioning for sustainable growth [2][3]. - A two-phase approach is being adopted, starting with aggressive asset management followed by streamlining the CRE origination business [2][3]. Asset Management - Management aims to sell or resolve about $1.4 billion of sub-performing and non-performing loans and REO assets, which are currently causing a negative earnings drag of approximately $0.08 per share [7][10]. - The company generated about $380 million in free cash in Q4, including $130 million from portfolio sales and $250 million from portfolio runoff [1][6]. Cost Management - A targeted 25% reduction in operating costs is planned to align with a simplified CRE investment strategy [4][10]. - Leadership changes have been made to support the repositioning plan, including promotions and shifts in responsibilities [9]. Debt Management - Immediate debt maturities include $67 million due in Q3 and $450 million due in Q4, with plans to ensure liquidity significantly exceeds these obligations [12][13]. - The company retired its 5.75% February senior unsecured note upon maturity and is considering refinancing portions of the 2026 maturities [13]. Market Commentary - The company remains a top-five SBA lender despite a 50% decline in quarterly originations to $84 million due to a prior government shutdown [22]. - Management is optimistic about executing the liquidity plan and expects to improve the company's fundamental earnings capacity in the second half of the year [23].

Core Insights - The company has generated approximately $380 million in free cash from bulk portfolio sales and portfolio runoff, with an expectation to generate an additional $500 million by year-end [1][2] - A comprehensive balance sheet repositioning strategy is being executed, targeting over $850 million in free cash and reducing the legacy CRE book by 60% to around $2 billion [2][4] - The company is focusing on aggressive asset management, including the sale of approximately $1.4 billion in sub- and nonperforming loans and REO assets [5][6] Financial Performance - The fourth quarter reported a GAAP loss from continuing operations of $1.46 per common share, with a book value decline of 14% per share, ending at $8.79 [13][14] - Recurring revenue decreased to $41.5 million from $47.3 million in the prior quarter, primarily due to a reduction in gain-on-sale revenue from lower SBA loan sales [14][15] - Operating expenses increased by $7.4 million quarter-over-quarter to $59.9 million, driven by higher compensation and legal fees [15] Strategic Changes - Dominic Scally has been promoted to Chief Credit Officer and Co-President of the CRE operating business, focusing on the company's CRE strategy [3] - The company plans a 25% reduction in operating costs to align with a simplified CRE investment strategy and increase capital allocation to small business lending operations from 10% to 20% [7] - The company is also exploring potential dispositions of noncore assets to enhance liquidity [38] Asset Management and Sales Strategy - The Ritz property represents 16% of year-end stockholders' equity, with a phased sales strategy for condominiums and a focus on achieving higher occupancy rates for the hotel [7][10] - The average price for sold units in the Ritz project is $737 per square foot, with 27% of the total units sold or under contract [9][32] - The company anticipates a significant reduction in leverage to 2.5x, allowing for more cash flow allocation towards growth [6][35] Liquidity and Debt Management - The liquidity plan aims to exceed $800 million, with 35% already achieved, and includes generating cash through asset sales and portfolio runoff [11][36] - Immediate debt maturities include $67 million due in the third quarter and $450 million in the fourth quarter, with plans to refinance a portion of these maturities [6][36] - The company successfully retired its 5.75% February senior unsecured note upon maturity [6]

Financial Data and Key Metrics Changes - The company reported a GAAP loss from continuing operations of $1.46 per common share for the fourth quarter, with distributable earnings reflecting a loss of $0.43 per common share, and $0.09 per common share when excluding realized losses on asset sales [14] - Book value per share declined 14% to $8.79 from $10.28 in the prior quarter, primarily due to an increase in combined valuation allowance and CECL reserves totaling $173 million [14][15] - The recurring revenue decreased to $41.5 million from $47.3 million in the prior quarter, attributed to a reduction in gain on sale revenue from lower SBA 7(a) and USDA loan sales [15] Business Line Data and Key Metrics Changes - The company is targeting a 25% reduction in operating costs to align with a simplified CRE investment strategy, increasing capital allocation to capital-light small business lending operations from 10% to 20% [9] - The company generated approximately $380 million in free cash from portfolio sales and asset management resolutions, with expectations to generate an additional $500 million by year-end [6][7] - The negative earnings drag from sub and non-performing loans is approximately $0.08 per share, with cash outflows of $13 million per quarter [7] Market Data and Key Metrics Changes - The occupancy rate for the hotel component of the Ritz property increased by 6.5% year-over-year, with ADR rising by 5% to $492 and RevPAR reaching $210 [10] - The company remains a top five lender in the SBA market despite a 50% decline in originations due to last year's government shutdown, with originations in the quarter totaling $84 million [11] Company Strategy and Development Direction - The company is focused on a comprehensive balance sheet repositioning strategy with three key priorities: strengthening liquidity, selling underperforming CRE assets, and positioning for sustainable future growth [4] - The repositioning plan includes aggressive asset management and a streamlined CRE origination business with a lower-cost structure [4][5] - The company is committed to enhancing liquidity and strengthening its platform while increasing reliance on external managers to expand investment capacity [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the liquidity plan and achieving stabilization in key assets, particularly the Ritz property [20] - The company anticipates continued pressure on book value but expects a more attractive portfolio with a competitive earnings profile post-repositioning [8] - Management highlighted the importance of strategic asset management decisions to not extend loans, focusing instead on short-term resolutions [22] Other Important Information - The company has successfully retired its 5.75% February senior unsecured note upon maturity [8] - The Ritz property represents 16% of year-end stockholders' equity, with significant progress made in its stabilization plan [9][10] Q&A Session Summary Question: Thoughts on keeping the Portland asset and accelerating the time frame - Management indicated strong progress in the stabilization plan and would likely lean towards holding the asset until stabilization is achieved [19][20] Question: Increase in nonaccruals and underlying performance - Management clarified that the increase in nonaccruals is due to strategic decisions rather than negative credit migration, focusing on short-term resolutions [22][23] Question: Anticipation of needing to reverse previously accrued interest - Management confirmed that accrued interest for loans identified for sale was reversed in the fourth quarter, with a reduction of approximately $53 million [28] Question: Sales price of loans sold in February relative to par - Loans sold in February were priced in the high nineties, with carrying and UPB values being closely aligned [40] Question: Other monetization strategies being considered - Management acknowledged the potential for selling non-core assets but emphasized commitment to the SBA business as a high ROE segment [48][49]

Financial Data and Key Metrics Changes - The company reported a GAAP loss from continuing operations of $1.46 per common share for the fourth quarter, with distributable earnings showing a loss of $0.43 per common share, and $0.09 per common share excluding realized losses on asset sales [14] - Book value declined 14% per share, ending the year at $8.79 compared to $10.28 in the prior quarter, primarily due to an increase in combined valuation allowance and CECL reserves of $173 million [14][15] - Recurring revenue decreased to $41.5 million from $47.3 million in the prior quarter, largely due to a reduction in gain on sale revenue from lower SBA 7(a) and USDA loan sales [15] Business Line Data and Key Metrics Changes - The company is focusing on a liquidity plan targeting over $850 million in free cash, with a 60% reduction in the legacy CRE book to approximately $2 billion [6][8] - The negative earnings drag from sub and non-performing loans is approximately $0.08 per share, with cash outflows of $13 million per quarter [7] - Operating expenses increased by $7.4 million quarter-over-quarter to $59.9 million, driven by higher compensation expenses and legal fees [15] Market Data and Key Metrics Changes - The company experienced a 50% decline in SBA 7(a) originations in the quarter to $84 million, significantly below 2026 volume targets, attributed to last year's government shutdown [11] - Year-over-year occupancy for the hotel segment increased by 6.5%, with ADR rising by 5% to $492, and RevPAR reaching $210 [10] Company Strategy and Development Direction - The company is advancing a comprehensive balance sheet repositioning strategy focused on strengthening liquidity, selling underperforming CRE assets, and positioning for sustainable future growth [4] - A targeted 25% reduction in operating costs is planned to align with a simplified CRE investment strategy, increasing capital allocation to capital-light small business lending operations from 10% to 20% [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the liquidity plan and emerging in a stronger position in the latter half of the year, aiming to improve the fundamental earnings capacity of the business [53] - The company is making strategic asset management decisions to not extend loans, focusing on short-term resolutions through asset sales [22][26] Other Important Information - The Ritz property remains the largest single equity allocation, representing 16% of year-end stockholders' equity, with significant progress made in the stabilization plan [9] - The company has successfully retired its 5.75% February senior unsecured note upon maturity [8] Q&A Session Summary Question: Thoughts on keeping the Portland asset and accelerating the time frame - Management indicated strong progress in the stabilization plan and would likely lean towards holding the asset until stabilization is achieved before considering an accelerated sale [19][20] Question: Increase in nonaccruals and underlying performance - Management clarified that the increase in nonaccruals is due to a strategic decision to not extend loans rather than negative credit migration [22][23] Question: Anticipation of needing to reverse previously accrued interest on nonaccruals - Management confirmed that accrued interest for loans identified for sale was written down in the fourth quarter [28][32] Question: Average price and conversion rate of reservation agreements for the Portland asset - Of the 25 reservation agreements, 16 are in contract with hard deposits, and the average price for sold units is $737 per square foot [37][39] Question: Sales price of loans sold in February relative to par and carrying value - Loans sold in February were priced in the high nineties, with carrying and UPB values being closely aligned [40] Question: Plans for retiring upcoming debt maturities - Management stated that the liquidity plan provides a substantial cushion to address debt maturities, with plans to sequentially take out bonds in the upcoming weeks [44][45] Question: Other monetization strategies being considered - Management is reviewing potential dispositions of non-core assets, while maintaining a strong commitment to the SBA business [48][49]

Financial Data and Key Metrics Changes - The company reported a GAAP loss from continuing operations of $1.46 per common share for Q4 2025, with distributable earnings showing a loss of $0.43 per common share, and $0.09 per common share excluding realized losses on asset sales [14] - Book value declined 14% per share to $8.79 from $10.28 in the prior quarter, primarily due to an increase in combined valuation allowance and CECL reserves of $173 million [14][15] - The company generated approximately $380 million in free cash from portfolio sales and asset management resolutions, with a target of generating over $850 million in free cash flow by year-end [6][9] Business Line Data and Key Metrics Changes - Recurring revenue decreased to $41.5 million from $47.3 million in the prior quarter, mainly due to a $7.7 million reduction in gain on sale revenue from lower SBA 7(a) and USDA loan sales [15] - Operating expenses increased by $7.4 million quarter-over-quarter to $59.9 million, driven by higher compensation expenses and legal fees [16] - The company plans to reduce operating costs by 25% to align with a simplified CRE investment strategy and increase capital allocation to capital-light small business lending operations from 10% to 20% [10] Market Data and Key Metrics Changes - The company experienced a 50% decline in SBA 7(a) originations in the quarter to $84 million, significantly below 2026 volume targets, attributed to last year's government shutdown [12] - Year-over-year occupancy for the hotel segment increased by 6.5%, with ADR rising by 5% to $492, and RevPAR reaching $210 [11] Company Strategy and Development Direction - The company is focused on a comprehensive balance sheet repositioning strategy with three key priorities: strengthening liquidity, selling underperforming CRE assets, and positioning for sustainable future growth [4] - The repositioning plan includes aggressive asset management and streamlining the CRE origination business into a lower-cost structure [4][6] - The company is committed to enhancing liquidity and strengthening its platform while increasing reliance on external managers to expand investment capacity [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the liquidity plan and emerging in a stronger position in the latter half of the year, aiming to improve fundamental earnings capacity [55] - The company anticipates additional book value pressure as it executes its liquidity plan, but expects a more attractive portfolio with a competitive earnings profile [9][10] Other Important Information - The company has promoted Dominick Scali to Chief Credit Officer and Co-President of its CRE operating business to lead the repositioning efforts [5] - The Ritz property remains the largest single equity allocation, representing 16% of year-end stockholders' equity, with significant progress made in its stabilization plan [10][11] Q&A Session Summary Question: Thoughts on keeping the Portland asset and accelerating the time frame - Management indicated strong progress in the stabilization plan and would likely lean towards holding the asset until stabilization is achieved before considering an early disposition [20][21] Question: Increase in nonaccruals and underlying performance - Management clarified that the increase in nonaccruals is due to a strategic decision to focus on short-term resolutions rather than negative credit migration [22][24] Question: Anticipation of needing to reverse previously accrued interest on nonaccruals - Management confirmed that accrued interest associated with loans identified for sale was written down in the fourth quarter [29][32] Question: Average price and conversion rate of reservation agreements for the Portland asset - Of the 25 reservation agreements, 16 are in contract with hard deposits, and the average price for sold units is $737 per square foot [37][39] Question: Sales price of loans sold in February relative to par and carrying value - The loans sold in February were priced in the high nineties, with carrying and UPB being closely aligned [41] Question: Plans for retiring upcoming debt maturities - Management indicated that the liquidity plan provides a substantial cushion to address debt maturities, with plans to sequentially take out bonds in the upcoming weeks [46]