Company Performance - Ready Capital Corporation (RC) reported poor Q2-2024 results with distributable income at 7 cents per share, significantly below the 30 cents per share distribution [3] - GAAP and non-GAAP metrics both showed poor performance, with GAAP reflecting the company's poor investment decisions [3] - The company's tangible book value per share declined to $12.97, and total leverage stood at 3.5x [3] - RC's distributable return on equity (ROE) was 2.6%, and the dividend yield was 14.7% [3] - The company's 60+ days past due loans improved to 6.3%, a positive trend compared to previous quarters [6] Financial Metrics - RC's net book value per share was $12.97, and the total leverage ratio was 3.5x [3] - The company's distributable ROE was 2.6%, and the dividend yield was 14.7% [3] - RC's loan portfolio included $9.3 billion in unpaid principal balance (UPB) with a weighted average coupon of 9.1% [32] - The company's originated loans had a weighted average loan-to-value (LTV) ratio of 65.6%, while acquired loans had an LTV of 62.7% [32][30] Strategic Actions - RC modified 25 loans totaling $801 million in its originated CRE bridge portfolio, with 82% of modifications completed in Q2-2024 [32] - The company focused on selling underperforming assets where liquidation exceeded in-house asset management strategies [32] - RC sold its residential mortgage banking business as part of its cleanup efforts [34] Leverage and Capital Structure - RC's total leverage ratio increased marginally by 0.1x to 3.5x, with recourse leverage also rising slightly [33][34] - The company plans to deliver a 10% return on tangible equity, which would require increasing leverage beyond the current 3.5x ratio [34] - RC's historical performance shows a sub-4% annual return over the last decade when distributions were not reinvested [34] Market Reaction and Valuation - The stock reacted positively to the company's cleanup actions, despite the poor financial results [36] - RC's price-to-tangible book value remains low, making it difficult to assign a bearish rating [36] - The company's high-yield bonds, such as the 6.125% April 30, 2025 bonds, are preferred over common shares due to their higher position in the capital structure [36] Industry Context - RC is a multi-strategy real estate finance company that originates, acquires, and services loans, primarily in the commercial real estate sector [3][32] - The company's performance is closely tied to credit spreads and the broader real estate market conditions [34]

Financial Data and Key Metrics - Quarterly GAAP earnings per common share were a loss of $0.21, while distributable earnings per common share were $0.07 [16] - Distributable earnings less realized losses on asset sales were $0.19 per common share, equating to a 5.8% return on average stockholders' equity [16] - Revenue from net interest income, servicing income, and gain on sale increased by $6.2 million or 9% quarter-over-quarter to $73.7 million [16] - The levered yield in the portfolio increased to 16.3% due to the liquidation of $140.1 million of under-yielding assets and a higher percentage of accrual loans [16] - Book value per share decreased by 3.5% to $12.97 per share, primarily due to mark-to-market or realized losses on loans and REO liquidation [20] Business Line Data and Key Metrics - Origination activity in the CRE loan business totaled $256 million in the quarter, with 61% in transitional loans and 39% in Freddie Mac loans [7] - The small business lending segment saw SBA 7(a) loan originations grow 80% year-over-year to $217 million, putting the company on pace to achieve a $1 billion target run rate by the fourth quarter [9] - The M&A portfolio totaled $1.1 billion across 81 assets as of June 30, with 60-day plus delinquencies improving by 910 basis points to 15% [8] Market Data and Key Metrics - Office loans constituted only 4% of the portfolio but represented 16% of delinquencies, with 60-day plus delinquencies at 26% compared to multifamily at 6% [5] - The company's portfolio was 82% concentrated in mid-market multifamily, driven by nationwide affordability gaps and rental demand [9] - The company's office exposure net of specific reserves was reduced to 4% of loan exposure, with plans to reduce it further to 3% by year-end [8] Company Strategy and Industry Competition - The company is focusing on active asset management, reallocation of low-yield assets, adding accretive leverage, exiting residential mortgage banking, and growing the small business lending platform [4] - The company closed two strategic acquisitions in the quarter to support origination growth in the small business lending segment through expanded product offerings and increased market share [10][11] - The company aims to achieve a $1 billion target run rate in SBA 7(a) loans by the fourth quarter and eventually reach a 1.5 to 2 billion run rate in the next 12-24 months [34] Management Commentary on Operating Environment and Future Outlook - The company believes that multifamily credit fundamentals are bottoming, with green shoots in the form of rate declines and improving transaction volumes [14] - The company expects to achieve a 10% annual return target through strategic initiatives, including portfolio cleanup, reinvestment, and organic growth [14][29] - The company anticipates that the full financial effects of its initiatives will be felt by 2025, with some benefits expected in the remainder of 2024 [30] Other Important Information - The company repurchased 2.3 million shares at an average price of $8.61 during the quarter [20] - The company has $226 million of unrestricted cash and an additional $40 million in committed but undrawn borrowings [20] Q&A Session Summary Question: Details on loan sales in the quarter - The company sold approximately $450 million of loans, with $20 million in realized losses. The sales involved 15 individual buyers, mainly regional investors and local groups [21][23] - The remaining $130 million in loans to be sold are mostly 60-plus days delinquent, with office loans marked down to 25% and multifamily loans marked down slightly higher [25] Question: Core earnings trajectory and 10% ROE target - The company provided a bridge to dividend coverage, focusing on portfolio cleanup, reinvestment, and organic growth. The full financial effects are expected to be felt by 2025 [27][29][30] Question: Appetite for further SBA originator roll-ups - M&A opportunities in the SBA channel are limited due to the small number of non-bank licenses. Growth will primarily come from acquiring specialist origination teams [32][33] Question: Long-term growth in SBA lending - The company aims to grow its SBA 7(a) loan run rate to 1.5-2 billion in the next 12-24 months, driven by leadership in the small loan component and fintech growth [34][35] Question: Risks to earnings ramp and credit migration - The primary risk is negative credit migration in the multifamily book, though the company believes the worst is behind them [39][40][42] Question: Buybacks and capital allocation - The company has $42 million left in its share repurchase program and will consider buybacks depending on stock price and other capital needs [45] Question: Earnings excluding tax gains and delinquency rates - Tax activity in the quarter was related to loan sale losses, and the company expects to cover the $0.30 EBITDA by 2025 [49][50] - Delinquency rates declined primarily due to modifications and natural credit improvement, with minimal impact from loan sales [52] Question: Valuation allowance and rent regulation exposure - The majority of the CECL reduction was related to loans transferred to held for sale, and the company does not expect a drastic reduction in CECL reserves [56][57] - The company has minimal exposure to rent regulation, with less than 1% of the portfolio affected [58][59] Question: Strategic implications of Funding Circle acquisition - Funding Circle's platform complements the company's existing technology, with opportunities for cross-selling, cost reduction, and bolt-on products [60][61][62]

For the quarter ended June 2024, Ready Capital (RC) reported revenue of $50.95 million, down 15.6% over the same period last year. EPS came in at $0.07, compared to $0.35 in the year-ago quarter. The reported revenue represents a surprise of -17.51% over the Zacks Consensus Estimate of $61.77 million. With the consensus EPS estimate being $0.26, the EPS surprise was -73.08%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine ...

- GAAP LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS OF $(0.21) - - DISTRIBUTABLE EARNINGS PER COMMON SHARE OF $0.07 - - DISTRIBUTABLE EARNINGS PER COMMON SHARE BEFORE REALIZED LOSSES OF $0.19 - - DISTRIBUTABLE RETURN ON AVERAGE STOCKHOLDERS' EQUITY OF 2.6% - NEW YORK, Aug. 07, 2024 (GLOBE NEWSWIRE) -- Ready Capital Corporation ("Ready Capital" or the "Company") (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances, and services lower-to-middle-market ("LMM") invest ...

Core Viewpoint - Ready Capital Corporation will release its second quarter 2024 financial results on August 7, 2024, after market close, followed by a conference call on August 8, 2024, at 8:30 a.m. Eastern Time to discuss the results and provide a business update [1]. Company Overview - Ready Capital Corporation (NYSE: RC) 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 under its Section 7(a) program [5]. - Headquartered in New York, the company employs approximately 350 professionals nationwide [5]. Conference Call Details - The conference call can be accessed by dialing 877-407-0792 for domestic calls or 201-689-8263 for international calls [3]. - A replay of the call will be available approximately two hours after the live call and can be accessed until August 22, 2024, using the domestic number 844-512-2921 or the international number 412-317-6671 with the replay pin number 13746991 [4]. - The company encourages the use of the webcast for the conference call due to potential extended wait times for dial-in access [2].

NEW YORK, July 31, 2024 (GLOBE NEWSWIRE) -- Ready Capital Corporation (NYSE: RC) (the "Company") today announced that the Company will release its second quarter 2024 financial results after the New York Stock Exchange closes on Wednesday, August 7, 2024. Management will host a webcast and conference call on Thursday, August 8, 2024 at 8:30 a.m. Eastern Time to provide a general business update and discuss the financial results for the quarter ended June 30, 2024. Webcast: The Company encourages use of the ...

FORT LAUDERDALE, Fla., June 24, 2024 /PRNewswire/ -- iBusiness Funding LLC (iBusiness), the technology and lending services division of Ready Capital Corporation (NYSE: RC), and Funding Circle Holdings plc are pleased to announce a share purchase agreement, positioning iBusiness Funding, LLC as the new owner of FC USA and its subsidiaries, contingent on the return of its Small Business Lending Company (SBLC) license to the SBA. iBusiness Funding Logo (PRNewsfoto/iBusiness Funding)iBusiness Funding Logo (PRN ...

The Company declared a dividend of $0.390625 per share of Series C Preferred Stock payable on July 15, 2024, to Series C Preferred stockholders of record as of the close of business on June 28, 2024, which is the effective record date since June 30, 2024, is not a business day. About Ready Capital Corporation Contact NEW YORK, June 14, 2024 (GLOBE NEWSWIRE) -- Ready Capital Corporation (NYSE:RC) (the "Company") announced that its Board of Directors declared a quarterly cash dividend of $0.30 per share of co ...

NEW YORK, June 14, 2024 (GLOBE NEWSWIRE) -- Ready Capital Corporation (NYSE:RC) (the "Company") announced that its Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock and Operating Partnership unit for the quarter ended June 30, 2024. This dividend is payable on July 31, 2024, to shareholders of record as of the close of business on June 28, 2024. Additionally, the Company announced that its Board of Directors declared quarterly cash dividends on its 6.25% Series C Cumul ...

Core Insights - Ready Capital Corporation has acquired Madison One Capital, M1 CUSO, and Madison One Lender Services, enhancing its position in the government guaranteed loan industry, particularly in USDA and SBA loan products [1][2][5] Group 1: Acquisition Details - The acquisition aims to expand Ready Capital's presence in USDA lending, supporting guaranteed loans for small businesses and energy projects in rural areas [2] - Madison One will operate as a subsidiary under its current name, with its team remaining intact and reporting to ReadyCap Lending's CEO [3][4] Group 2: Financial Impact - The transaction is expected to generate over $300 million in USDA loan volume annually, contributing to Ready Capital's gain-on-sale earnings [5] - Ready Capital is already the fourth largest originator of SBA 7(a) loans, indicating a strong foothold in the small business lending market [2] Group 3: Strategic Benefits - The partnership is anticipated to provide Madison One with a direct balance sheet, facilitating growth in its USDA platform and offering more flexible financing options for rural clients [5] - The acquisition is expected to create synergies that will enable Madison One to extend more capital into rural America [5]