Core Points - Ready Capital Corporation will release its third quarter 2025 financial results on November 6, 2025, after the market closes [1] - A webcast and conference call will be held on November 7, 2025, at 8:30 a.m. Eastern Time to discuss the financial results [1] Company Overview - Ready Capital Corporation is a multi-strategy real estate finance company that focuses on originating, acquiring, financing, and servicing lower-to-middle-market commercial real estate loans [5] - 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 [5] - Headquartered in New York, the company employs approximately 500 professionals nationwide [5]

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Ready Capital Corporation (NYSE:RC) is included among the 10 Best Dividend Stocks Under $10 to Invest in. UBS Lowers Price Target on Ready Capital (RC), Maintains Neutral Outlook Image by Steve Buissinne from Pixabay Ready Capital Corporation (NYSE:RC) o‍perates as a multi-st‍rategy rea⁠l estate finance company, focusing on origin‌ating⁠, acq⁠uiring,⁠ financing, and serv‌icing small​- to medium-sized balance commercial loa‍ns. On October 14,‍ UBS re‌vised its outlook on Ready Capital Corporation (NYSE: ...

Group 1 - The Company declared a quarterly cash dividend of $0.125 per share of common stock and Operating Partnership unit for the quarter ended September 30, 2025, payable on October 31, 2025 [1] - The Company declared a dividend of $0.390625 per share of its 6.25% Series C Cumulative Convertible Preferred Stock, payable on October 15, 2025 [2] - The Company declared a dividend of $0.40625 per share of its 6.50% Series E Cumulative Redeemable Preferred Stock, payable on October 31, 2025 [3] Group 2 - 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 [4] - The Company is headquartered in New York, New York, and employs approximately 500 professionals nationwide [4]

Group 1 - Ready Capital (NYSE: RC) is trading at a significant discount to its book value per share while offering an uncovered double-digit dividend yield to shareholders from interest income [1] - The company’s portfolio is primarily formed from high-growth companies, high-dividend stocks, REITs, and green energy firms, indicating a focus on long-term wealth creation [1] Group 2 - Pacifica Yield aims to pursue long-term wealth creation by focusing on undervalued yet high-growth companies [1]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Ready Capital Corporation due to a class action complaint alleging breaches of fiduciary duties by the company's board of directors during a specified class period [1][2]. Group 1: Legal Investigation - The law firm is encouraging long-term stockholders of Ready Capital who suffered losses between November 7, 2024, and March 2, 2025, to discuss their legal rights [1]. - A class action complaint was filed on March 6, 2025, alleging that the board made materially false and misleading statements regarding the company's business and operations [2]. Group 2: Allegations Against Ready Capital - The complaint claims that significant non-performing loans in Ready Capital's commercial real estate (CRE) portfolio were unlikely to be collectible, which was not disclosed to investors [2]. - It is alleged that Ready Capital would fully reserve these problem loans to stabilize its CRE portfolio, and this was not accurately reflected in the company's expected credit loss or valuation allowances [2]. - As a result of these undisclosed issues, the company's financial results were adversely affected, and the positive statements made by the defendants were misleading [2].

Group 1 - The Conservative Income Portfolio targets high-value stocks with significant margins of safety and aims to reduce volatility through well-priced options [1] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1] - The Covered Calls Portfolio focuses on lower volatility income investing with an emphasis on capital preservation [1][2] Group 2 - Trapping Value is a team of analysts with over 40 years of combined experience in generating options income while prioritizing capital preservation [2] - The investing group operates the Conservative Income Portfolio in collaboration with Preferred Stock Trader, featuring two income-generating portfolios and a bond ladder [2]

Group 1 - The analysis focuses on value investing, emphasizing an owner's mindset and a long-term investment horizon [1] - The author does not engage in writing sell articles or recommending shorting stocks, indicating a preference for long positions [1] - The article expresses personal opinions and is not influenced by any business relationships with the companies mentioned [2] Group 2 - There is a clear disclaimer that past performance does not guarantee future results, highlighting the inherent uncertainties in investment [3] - The article does not provide specific investment recommendations or advice tailored to individual investors [3] - The authorship includes both professional and individual investors, suggesting a diverse range of perspectives [3]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements for Q2 2025 show a net loss and a decrease in total assets to $9.3 billion [Consolidated Balance Sheets](index=3&type=section&id=UNAUDITED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets decreased to $9.31 billion by June 30, 2025, primarily due to reduced VIE assets, while liabilities also declined Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$9,308,797** | **$10,141,921** | | Cash and cash equivalents | $162,935 | $143,803 | | Loans, net | $5,066,694 | $3,378,149 | | Assets of consolidated VIEs | $2,395,398 | $5,175,295 | | **Total Liabilities** | **$7,374,774** | **$8,197,818** | | Secured borrowings | $3,506,670 | $2,035,176 | | Securitized debt obligations of consolidated VIEs, net | $1,513,297 | $3,580,513 | | **Total Stockholders' Equity** | **$1,925,662** | **$1,935,742** | [Consolidated Statements of Operations](index=3&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The company reported a Q2 2025 net loss of $53.7 million, but a six-month net income of $28.3 million due to loan loss recovery Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $16,898 | $50,952 | $31,399 | $99,501 | | (Provision for) recovery of loan losses | ($8,640) | $18,871 | $100,928 | $45,415 | | Net income (loss) from continuing operations | ($48,751) | ($31,427) | $33,659 | ($107,009) | | **Net income (loss)** | **($53,677)** | **($34,201)** | **$28,288** | **($108,368)** | | **Total earnings per common share - diluted** | **($0.34)** | **($0.23)** | **$0.12** | **($0.68)** | | Dividends declared per share of common stock | $0.125 | $0.30 | $0.25 | $0.60 | [Consolidated Statements of Cash Flows](index=6&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash provided by operating activities was $8.2 million for the six months ended June 30, 2025, with a net increase in cash of $9.9 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,202 | $24,507 | | Net cash provided by investing activities | $789,020 | $624,996 | | Net cash used for financing activities | ($787,307) | ($626,874) | | **Net increase in cash, cash equivalents, and restricted cash** | **$9,915** | **$22,629** | [Notes to the Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20THE%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) The notes detail the company's organization, accounting policies, recent acquisitions, loan portfolio performance, and discontinued operations - The company is a **multi-strategy real estate finance company** focused on originating, acquiring, financing, and servicing **lower-to-middle-market (LMM) commercial real estate loans, SBA loans**, and other related investments, externally managed by **Waterfall Asset Management, LLC**[23](index=23&type=chunk)[24](index=24&type=chunk) - On March 13, 2025, the company **acquired United Development Funding IV (UDF IV)**, a real estate investment trust, resulting in an updated bargain purchase gain of **$88.1 million**[26](index=26&type=chunk)[27](index=27&type=chunk)[132](index=132&type=chunk) - The company completed the **disposition of its Residential Mortgage Banking segment** effective June 30, 2025, with its results now presented as **discontinued operations** for all periods[221](index=221&type=chunk) Loan Portfolio Carrying Value (in thousands) | Loan Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Loans, net** | **$5,066,694** | **$3,378,149** | | Bridge | $2,769,324 | $1,246,725 | | SBA - 7(a) | $1,073,576 | $1,043,120 | | Construction | $885,016 | $733,276 | | **Loans, held for sale** | **$632,784** | **$241,626** | Loan Delinquency Status (Carrying Value, in thousands) | Delinquency Status | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current | $6,111,778 | $7,787,647 | | 30 - 59 days past due | $292,232 | $131,288 | | 60+ days past due | $780,902 | $389,275 | | **Total Loans, net** | **$7,184,912** | **$8,308,210** | | Non-Accrual Loans | $824,915 | $526,761 | Allowance for Loan Losses Activity (in thousands) | Period | Beginning Balance | Provision for (Recoveries of) Loan Losses | Charge-offs and Sales | Ending Balance | | :--- | :--- | :--- | :--- | :--- | | **Six Months Ended June 30, 2025** | **$339,939** | **($105,648)** | **($11,510)** | **$232,579** | | Six Months Ended June 30, 2024 | $101,605 | ($45,278) | ($11,699) | $44,832 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses business strategy, recent acquisitions, and the Q2 2025 distributable loss of $19.8 million, noting macroeconomic impacts - The company's core focus is on **LMM commercial real estate lending** and **small business loans**, operating through two segments: **LMM Commercial Real Estate** and **Small Business Lending**[389](index=389&type=chunk) - **Macroeconomic concerns**, including global market volatility, **inflation**, and **elevated interest rates**, persist and may adversely impact financial condition and results[401](index=401&type=chunk) Key Financial Metrics | ($ in thousands, except per share data) | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (loss) from continuing operations | $(48,751) | $(31,427) | $33,659 | $(107,009) | | Distributable earnings | $(19,792) | $16,631 | $(31,176) | $70,607 | | Distributable earnings per common share - diluted | $(0.14) | $0.07 | $(0.23) | $0.37 | | Dividends declared per common share | $0.125 | $0.30 | $0.25 | $0.60 | | Book value per common share | $10.44 | $12.97 | $10.44 | $12.97 | Loan Originations (in thousands) | Loan Type | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | LMM loans | $173,356 | $256,485 | $252,013 | $516,161 | | SBL loans | $358,751 | $217,258 | $746,139 | $414,417 | | **Total loan investment activity** | **$532,107** | **$473,743** | **$998,152** | **$930,578** | - As of June 30, 2025, the company had a **total leverage ratio of 3.5x** and a **recourse leverage ratio of 1.5x**[447](index=447&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market, credit, interest rate, liquidity, and counterparty risks, with a 100 basis point rate increase potentially boosting net interest income by $7.5 million - The company is exposed to **market, credit, interest rate, liquidity, prepayment, real estate, fair value, and counterparty risks**, which are **heightened by current economic conditions**[503](index=503&type=chunk)[504](index=504&type=chunk)[505](index=505&type=chunk) 12-Month Pretax Net Interest Income Sensitivity to Interest Rate Changes (in thousands) | Instantaneous Change in Rates | Total Net Impact to Net Interest Income | | :--- | :--- | | +100 basis points | $7,457 | | +50 basis points | $3,567 | | -50 basis points | ($2,544) | | -100 basis points | ($3,440) | - The company has **significant counterparty risk** with **JPMorgan Chase Bank, N.A.**, representing an exposure of **$1.1 billion**, or **56.8% of stockholders' equity**, as of June 30, 2025[521](index=521&type=chunk) [Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[524](index=524&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the quarter ended June 30, 2025[525](index=525&type=chunk) [PART II. OTHER INFORMATION](index=66&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in multiple legal proceedings, including class action lawsuits related to mergers and securities disclosures - The company is subject to **class action lawsuits** related to its **mergers with Broadmark and UDF IV**, alleging **breaches of fiduciary duty** by the former boards of those companies[528](index=528&type=chunk)[530](index=530&type=chunk) - The company and certain executives are defendants in putative **stockholder class action and derivative lawsuits** alleging **violations of the Exchange Act** related to disclosures about its commercial real estate loan portfolio[531](index=531&type=chunk)[532](index=532&type=chunk) - As a result of the UDF IV Merger, the company **assumed outstanding litigation against UDF IV**, including the "Megatel Action" which alleges **RICO violations and fraud**[538](index=538&type=chunk)[539](index=539&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported for the period, referencing prior disclosures in the Form 10-K - **No material changes** to risk factors were reported for the period, referencing the disclosures in the company's Form 10-K[542](index=542&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a $150.0 million share repurchase program, with 8.5 million shares repurchased in Q2 2025 and $95.2 million remaining - On January 16, 2025, the Board approved a new share repurchase program authorizing up to **$150.0 million** of common stock[543](index=543&type=chunk) Share Repurchases for Q2 2025 | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April | 2,000,000 | $4.65 | | May | 6,515,274 | $4.33 | | June | 3,190 | $4.41 | | **Total** | **8,518,464** | **$4.41** | - As of the end of Q2 2025, approximately **$95.2 million** remained available for purchase under the share repurchase program[545](index=545&type=chunk)

Financial Data and Key Metrics Changes - The company reported a GAAP loss from continuing operations of $0.31 per common share and distributable earnings loss of $0.14 per common share, with a loss of $0.10 per share excluding realized losses on asset sales [17][20] - Net interest income increased to $17 million in the quarter, attributed to a full quarter of interest income from the UDF transaction and lower interest expense [17][18] - The book value per share was $10.44 at quarter end, down $0.17 from March 31, primarily due to the dividend and coverage shortfall [21] Business Line Data and Key Metrics Changes - In the core portfolio, the interest yield was 8.1% and cash yield was 6.1%, while the interest yield in the non-core portfolio was 2.4% [18] - The CRE loan portfolio totaled $6.1 billion, segmented into a $5.4 billion core portfolio and a $695 million non-core portfolio [9][10] - The non-core portfolio was reduced by 52% to $333 million carrying value, with a quarterly yield of negative 10.7% [12] Market Data and Key Metrics Changes - The company experienced a decrease in SBA origination volume to $216 million due to capital constraints while awaiting approval for increased warehouse capacity [13] - The company anticipates a return of SBA seven lending volumes to over $325 million per quarter and entry into the USDA market at scale [15] Company Strategy and Development Direction - The company is focusing on repositioning its balance sheet by evaluating loans for potential asset sales to improve net interest margin [4] - The strategy includes stabilizing the Portland mixed-use asset and enhancing liquidity to support loan origination [8][15] - The company plans to reenter the origination market in the third quarter, focusing on high-quality multifamily bridge loans [11] Management's Comments on Operating Environment and Future Outlook - Management expects modest earnings growth in 2025 from increased originations, stabilization of the Portland asset, and a return to SBA lending volumes [15] - The company aims to maintain its current dividend level until its earnings profile warrants an increase [16] Other Important Information - The company completed the sale of $494 million of legacy multifamily bridge assets, generating net proceeds of $85 million [4][5] - The company took ownership of a mixed-use asset in Portland, Oregon, with a net cash outlay of $10 million [6] Q&A Session Summary Question: Will the company still expect distributable earnings losses in the near term? - Management indicated that the origination team is gearing up for new vintage multifamily bridge loans, which may take about 120 days to ramp up [26] Question: Can you describe the type of buyer for the bulk sale of legacy bridge loans? - The buyer is a multifamily operator with significant assets under management, and the sale price was around 77% of the unpaid principal balance [33][34] Question: What will be the driver for the expected increase in SBA volumes? - The company anticipates a ramp in demand for small business loans, particularly in M&A, and is awaiting approval for increased warehouse lines [40][41] Question: Why not eliminate the dividend and reallocate that capital toward debt repayment? - Management stated that the dividend is part of their repositioning strategy, and they are evaluating the performance of the core portfolio in relation to the dividend [63][65] Question: How much capital will need to be put in across the three categories for the Portland asset? - The company is currently assessing the budget for tenant improvements and marketing, with costs expected to be around $150 to $200 per square foot for office tenants [59][60]