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].

From the start of the fourth quarter to date, we have generated approximately $380 million in free cash from two primary sources: $130 million from bulk portfolio sales and $250 million from portfolio runoff and other asset management resolutions. Overall, our liquidity projections anticipate generating an additional $500 million in free cash flow by year-end from two primary sources. First, we expect to generate $250 million from portfolio runoff consistent with our 36% trailing twelve-month repayment rate ...

SUPPLEMENTAL FINANCIAL DATA Q4 2025 Disclaimer This presentation contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could ...

Group 1 - U.S. stock futures are lower, with Dow futures down approximately 0.2% [1] - Travere Therapeutics Inc expects total U.S. net product sales of $127 million for Q4 and $410 million for 2025 [1] - Travere Therapeutics will restart its Phase 3 HARMONY study in Q1 2026 [1] Group 2 - Travere Therapeutics shares fell 28.2% to $24.50 in pre-market trading [2] - Lulu's Fashion Lounge Holdings Inc shares decreased 10.4% to $10.89 after a significant rise of 79% on Monday [3] - Other stocks such as Graf Global Corp, Ready Capital Corp, and Baidu Inc also experienced declines in pre-market trading [3]

Core Insights - The financial sector is experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - Major oversold stocks in the financial sector have an RSI near or below 30, indicating potential undervaluation [2] - Noah Holdings Limited (NYSE:NOAH) has an RSI value of 26.1, with a recent stock price of $9.64, despite reporting a 52.2% year-over-year increase in non-GAAP net income to RMB229.1 million [7] - Ready Capital Corp (NYSE:RC) also has an RSI value of 26.1, with shares closing at $2.22, following a 12% decline over the past month [7] - X Financial (NYSE:XYF) has an RSI value of 25.2, with a stock price of $6.63, experiencing a significant 41% drop in the past month [7] Group 2: Company Performance - Noah Holdings reported net revenues of RMB632.9 million, showing slight sequential growth, while its stock fell approximately 10% over the past month [7] - Ready Capital's third-quarter total net revenue was $275.5 million (RMB1,961.0 million), reflecting a year-over-year increase of 23.9% but a quarter-over-quarter decrease of 13.7% [7] - X Financial's third-quarter results indicated challenges with loan origination and increased delinquency rates, leading to a focus on risk control and maintaining credit quality [7]

Market Overview - U.S. stock futures are lower, with Dow futures down approximately 0.2% [1] Company-Specific Movements - Lightwave Logic Inc (NASDAQ:LWLG) shares fell 14.5% to $3.22 in pre-market trading following the announcement of a $35 million public offering of common stock [1] - Ascent Solar Technologies, Inc. (NASDAQ:ASTI) shares decreased by 15.1% to $3.54 after a previous increase of 34% on Monday [2] - Fractyl Health Inc (NASDAQ:GUTS) shares dropped 10.4% to $2.00 in pre-market trading [2] - Ready Capital Corp (NYSE:RC) shares fell 9% to $2.12, despite declaring a quarterly cash dividend of $0.01 per share for the quarter ended December 31, 2025 [2] - Cellectis SA (NASDAQ:CLLS) shares declined 8.4% to $4.39 following arbitration results with Servier [2] - Destiny Tech100 Inc (NYSE:DXYZ) shares decreased by 7.4% to $31.59 [2] - Kyverna Therapeutics Inc (NASDAQ:KYTX) shares fell 7.2% to $10.04 after announcing a $100 million offering [2] - Maase Inc (NASDAQ:MAAS) shares dropped 6.3% to $4.16 [2] - Argo Blockchain PLC – ADR (NASDAQ:ARBK) shares fell 6% to $5.32 after an 18% decline on Monday [2] - Canopy Growth Corp (NASDAQ:CGC) shares decreased by 5.4% to $1.57 [2] - Neogen Corp (NASDAQ:NEOG) shares fell 4.5% to $6.54 [2]

Market Overview - U.S. stock futures are lower, with Dow futures down approximately 0.2% [1] Company-Specific Movements - Lightwave Logic Inc (NASDAQ:LWLG) shares fell 14.5% to $3.22 in pre-market trading following the announcement of a $35 million public offering of common stock [1] - Ascent Solar Technologies, Inc. (NASDAQ:ASTI) shares decreased 15.1% to $3.54 after a previous jump of 34% on Monday [2] - Fractyl Health Inc (NASDAQ:GUTS) shares fell 10.4% to $2.00 in pre-market trading [2] - Ready Capital Corp (NYSE:RC) shares dipped 9% to $2.12, despite declaring a quarterly cash dividend of $0.01 per share for the quarter ended December 31, 2025 [2] - Cellectis SA (NASDAQ:CLLS) shares declined 8.4% to $4.39 following arbitration results with Servier [2] - Destiny Tech100 Inc (NYSE:DXYZ) shares decreased 7.4% to $31.59 [2] - Kyverna Therapeutics Inc (NASDAQ:KYTX) shares fell 7.2% to $10.04 after announcing a $100 million offering [2] - Maase Inc (NASDAQ:MAAS) shares dropped 6.3% to $4.16 [2] - Argo Blockchain PLC – ADR (NASDAQ:ARBK) shares fell 6% to $5.32 after an 18% decline on Monday [2] - Canopy Growth Corp (NASDAQ:CGC) shares decreased 5.4% to $1.57 [2] - Neogen Corp (NASDAQ:NEOG) shares fell 4.5% to $6.54 [2]

Core Insights - The article focuses on analyzing Rithm Capital Corp.'s (RITM) recent performance metrics in comparison to 17 mortgage real estate investment trust (mREIT) peers, highlighting investment composition, leverage, hedging coverage, and economic returns [1][3][54] Investment Composition and Portfolio Overview - As of September 30, 2025, RITM's investment portfolio consisted of 21% fixed-rate agency MBS, 0% variable-rate agency MBS, 32% mortgage servicing rights (MSR), and 47% non-agency MBS and other mortgage-related investments [19][28] - RITM's diverse investment strategy includes subsidiaries like Newrez, SCU, Crestline, and RPT, which contribute to a broad range of financial investments [28][39] Leverage and Hedging Coverage - RITM's on-balance sheet leverage ratio was 2.4x, with an at-risk leverage ratio of 1.0x as of September 30, 2025, indicating a slight decrease in on-balance sheet leverage and a slight increase in at-risk leverage compared to the previous quarter [20][21] - The hedging coverage ratio for RITM decreased to 58% as of September 30, 2025, reflecting the company's strategy to prepare for lower mortgage interest rates [51] Economic Returns and Valuation - RITM reported a book value (BV) of $12.83 per share at the end of Q3 2025, representing a quarterly increase of 0.94% and an economic return of 2.91% for the same period [22][23] - The trailing 24-month economic return for RITM was 20.37%, ranking it as the 4th best performer among the analyzed mREIT peers, significantly outperforming the average returns of other mREIT categories [55] Comparative Analysis with Peers - RITM's economic return and leverage metrics indicate it operates with lower average leverage compared to its closest peer, PMT, and the broader mREIT sector, which helps mitigate book value volatility [56] - The stock price of RITM was trading at a 13.44% discount to the estimated current BV as of December 5, 2025, suggesting potential undervaluation [52][53]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Company Ratings and Performance - **Ready Capital Corp (NYSE:RC)**: - Dividend Yield: 19.69% - Analyst Jade Rahmani from Keefe, Bruyette & Woods maintained an Underperform rating and reduced the price target from $3.5 to $2.5 on Nov. 12, 2025, with an accuracy rate of 69% [7] - Analyst Randy Binner from B. Riley Securities maintained a Neutral rating and lowered the price target from $6 to $4 on Aug. 11, 2025, with an accuracy rate of 71% [7] - Recent News: Posted disappointing quarterly results on Nov. 6, 2025 [7] - **Two Harbors Investment Corp (NYSE:TWO)**: - Dividend Yield: 13.32% - Analyst Richard Shane from JP Morgan maintained a Neutral rating and raised the price target from $9.5 to $10 on Oct. 20, 2025, with an accuracy rate of 67% [7] - Analyst Kenneth Lee from RBC Capital maintained a Sector Perform rating and cut the price target from $13 to $12 on May 28, 2025, with an accuracy rate of 62% [7] - Recent News: Reported in-line earnings for the third quarter on Oct. 27, 2025 [7] - **Arbor Realty Trust Inc (NYSE:ABR)**: - Dividend Yield: 13.29% - Analyst Jade Rahmani from Keefe, Bruyette & Woods maintained a Market Perform rating and reduced the price target from $12 to $11 on Nov. 3, 2025, with an accuracy rate of 69% [7] - Analyst Richard Shane from JP Morgan maintained an Underweight rating and slashed the price target from $11.5 to $10 on Nov. 3, 2025, with an accuracy rate of 67% [7] - Recent News: Reported mixed third-quarter financial results on Oct. 31, 2025 [7]

Core Insights - Investors are increasingly turning to dividend-yielding stocks during market turbulence and uncertainty, as these companies typically have high free cash flows and offer substantial dividend payouts [1] Company Ratings and Performance - **Ready Capital Corp (NYSE:RC)**: - Dividend Yield: 19.69% - Analyst Jade Rahmani from Keefe, Bruyette & Woods maintained an Underperform rating and reduced the price target from $3.5 to $2.5 on Nov. 12, 2025, with an accuracy rate of 69% [7] - Analyst Randy Binner from B. Riley Securities maintained a Neutral rating and lowered the price target from $6 to $4 on Aug. 11, 2025, with an accuracy rate of 71% [7] - Recent News: Posted downbeat quarterly results on Nov. 6, 2025 [7] - **Two Harbors Investment Corp (NYSE:TWO)**: - Dividend Yield: 13.32% - Analyst Richard Shane from JP Morgan maintained a Neutral rating and raised the price target from $9.5 to $10 on Oct. 20, 2025, with an accuracy rate of 67% [7] - Analyst Kenneth Lee from RBC Capital maintained a Sector Perform rating and cut the price target from $13 to $12 on May 28, 2025, with an accuracy rate of 62% [7] - Recent News: Reported in-line earnings for the third quarter on Oct. 27, 2025 [7] - **Arbor Realty Trust Inc (NYSE:ABR)**: - Dividend Yield: 13.29% - Analyst Jade Rahmani from Keefe, Bruyette & Woods maintained a Market Perform rating and reduced the price target from $12 to $11 on Nov. 3, 2025, with an accuracy rate of 69% [7] - Analyst Richard Shane from JP Morgan maintained an Underweight rating and slashed the price target from $11.5 to $10 on Nov. 3, 2025, with an accuracy rate of 67% [7] - Recent News: Reported mixed third-quarter financial results on Oct. 31, 2025 [7]