What factors drove the changes in Ready Capital's revenue and profit?

What were the key takeaways from Ready Capital's earnings call?

What guidance did Ready Capital's management provide for the next earnings period?

Did Ready Capital beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for Ready Capital year over year?

What is the market's earnings forecast for Ready Capital next quarter?

What is Ready Capital's gross profit margin?

What does Ready Capital do and what are its main business segments?

- **Portfolio Restructuring Success**: Sold $665M in low-yielding loans, netting $85M and driving 11% levered yield. Non-core drag reduced to $8M.
- **Portland Asset Progress**: Hotel RevPAR up, 11 condos sold, nearing breakeven. Differentiated from office market trends.
- **SBL Platform Resilience**: $11M net income despite 50% below-target origination, with 2026 growth pipeline.
- **Debt Management Focus**: $650M 2026 maturities to be addressed via $830M unencumbered assets and new debt; dividend evaluation pending.
- **Financial Health Indicators**: Book value $10.28, $150M cash, and 8% cost improvement to $52.5M.

**【CEO Summary Section】**
- **Portfolio Restructuring Progress**: Sold $665M in low-yielding CRE loans, netting $85M and contributing $0.02 per share in Q3, with full quarter impact of $0.05. Also sold $93M in high-servicing-cost loans, netting $24M. Portfolio now totals $5.4B (94% core, 6% non-core), with levered yield up 10bps to 11%.
- **Delinquency Management**: Core delinquencies rose to 5.9% due to $131M migrating to 60+ days, but $91M resolved via modification/liquidation. Non-core portfolio dragged earnings by $8M, with $503M liquidated in Q3.
- **Portland Asset Update**: Hotel RevPAR up sequentially, office/retail 28% leased, and 11 condos sold. Asset nearing breakeven operationally, with plans to exit post-stabilization.
- **SBL Growth Challenges**: Originated $175M in SBA 7(a) loans (50% below target) due to capital market delays. Platform generated $11M net income, 280bps ROE, with 2026 growth expected via new warehouse facilities.
- **Debt Maturity Strategy**: $650M maturing in 2026 to be addressed via $830M unencumbered assets, $425M portfolio maturities, and new debt issuance. Dividend evaluation pending in December.

**【CFO Financial Commentary】**
- **Q3 Financials**: GAAP loss of $0.13 per share, distributable loss of $0.94 (excluding $0.04 in realized losses). Net interest income down $1.4B due to portfolio reduction. Gain-on-sale income decreased 26% to $20M, offset by $189M realized losses (partially offset by $178M valuation allowance reversal).
- **Cost Management**: Operating expenses improved 8% to $52.5M, driven by $4.1M savings in compensation and servicing costs. Book value per share declined $0.16 to $10.28, with $150M unrestricted cash and $830M unencumbered assets.

**【Q&A Highlights】**
- **Leverage & Debt Mix**: Current gross leverage 3.5x, targeting below this with more secured debt issuance. CFO expects unsecured debt access but prioritizes secured options.
- **Dividend Policy**: Evaluating dividend level in December, prioritizing debt repayment over buybacks. Management emphasizes conservative posture to address 2026 maturities.
- **Deferred Tax Assets**: Reevaluated annually; profitability in SBL and potential TRS monetization provide pathways to utilize DTAs over time.
- **Portland Property**: Carried at fair value for condos (sold) and cost for other components. Not unencumbered; defended as unique luxury asset vs. office market trends.

Ready Capital Corporation (RC) Q3 2025 Earnings Call Transcript

- **Strategic Liquidity Boost**: $221M generated from bulk loan sales, CLO collapses, and USDA/SBA capacity expansions. 
- **Noncore Drag Reduction**: Noncore portfolio reduced 52% post-bulk sale, with yield improving from -10.7% to +13-15% via reinvestment. 
- **Earnings Growth Path**: $0.08-$0.10/share incremental from bulk sale, reinvestment, and SBA/USDA ramp, offset by $0.03-$0.05/share debt cost headwinds. 
- **Portland Asset Stabilization**: $5.3M/Q negative carry expected to decline as office leasing (70K sq.ft. remaining) and condo sales progress. 
- **Dividend Sustainability**: Maintained at current level; Board evaluates core portfolio recovery and macro trends. 


**【CEO Summary Section】**
- **Three Strategic Initiatives**: 
  1. **Bulk Loan Sale**: Sold $494M legacy multifamily bridge loans, generating $85M net proceeds. Removed 100% of 2021 vintage syndicated loans, reducing negative carry by $0.05/share and enabling $0.02/share from reinvestment. 
  2. **Portland Asset Acquisition**: Took ownership of a mixed-use asset (Ritz-Carlton, residences, office) to avoid foreclosure. Current negative carry: $5.3M/Q ($0.03/share). Aims to stabilize through leasing and sales. 
  3. **Capital Expansion**: Collapsed 2 CRE CLOs, added $75M SBA warehouse capacity, and secured $200M USDA facilities. Generated $221M liquidity to rebuild NIM. 
- **Portfolio Segmentation**: $5.4B core (hold-to-maturity) vs. $695M noncore (accelerated liquidation). Noncore yield: -10.7% ($0.03/share drag). 
- **Origination Restart**: Targeting 13-15% retained yields on new multifamily bridge loans. External manager to deploy capital in CMBS. 
- **Outlook**: Modest earnings growth in H2 2025, with focus on reducing noncore assets to 12% of investments. Dividend maintained until earnings warrant increase. 

**【CFO Financial Commentary】**
- **Q2 Results**: GAAP loss of $0.31/share, distributable loss of $0.14/share (excluding realized losses). 
- **Net Interest Income**: $17M (up from prior quarter), driven by UDF transaction and lower borrowing costs (6.8%). Core portfolio yield: 10.9% ($0.26/share). 
- **Gain on Sales**: $22.7M (SBA, Freddie Mac, USDA). Offset by $8.9M realized losses from asset sales. 
- **Operating Costs**: $58M (5% QoQ increase). 
- **Provisions**: $48.4M (valuation allowance and loan-specific reserves). 
- **Balance Sheet**: Book value $10.44/share (-$0.17 QoQ). Unrestricted cash: $150M+. 
- **Debt Management**: Retired $50M corporate debt, targeting $650M maturities through 2026. 

**【Q&A Highlights】**
- **Earnings Growth Path**: $0.05/share from bulk sale, $0.02/share from reinvestment, $0.01/share from debt payoff. SBA/USDA ramp to add $0.05-$0.08/share. Offset by $0.03-$0.05/share from higher debt costs. 
- **Portland Asset**: $425M initial valuation. Operating costs: $5.3M/Q (stable). Potential capital needs: $150-$200/sq.ft. for office TIs, marketing for condos. 
- **SBA/USDA Lending**: Target $325M+/Q SBA origination by Q4. USDA to reach $300M/year. Constrained by warehouse approvals but awaiting $100M+ capacity. 
- **Dividend Policy**: Maintain current level until earnings justify increase. Deferred tax asset provides flexibility, but Board focused on core portfolio recovery. 
- **M&A Strategy**: Limited focus on accretive transactions; prioritize organic growth in SBA/USDA. 
- **CRE Market**: Private equity influx targeting multifamily, enabling bulk sales to reduce noncore drag. 


Ready Capital Corporation (RC) Q2 2025 Earnings Call Transcript

- **Non-Core Asset Cleanup Accelerating**: Q1 liquidations exceeded targets by 2x ($51M at 102% premium), with $470M more liquidations planned for Q2 to reduce non-core portfolio to $270M.
- **Dividend Stability Assured**: Current dividend maintained through 2025; no increase until net interest margin (NIM) normalization in 2026+.
- **SBA Lending Headwinds**: 2025 origination volume expected below $1.5B due to SBA policy changes, but long-term constructive on program reforms.
- **Portland Asset Turnaround**: Hotel RevPAR +11% Q1, 28% office/retail leased; sequential exits of stabilized components (hotel, office) expected over 2-3 years.

**【CEO Summary Section】**
- **Market Response & Balance Sheet Restructuring**: Implemented a defensive late-cycle strategy in Q4 2024, including non-core asset liquidations and the UDF IV merger. Q1 2025 book value per share remained stable at $10.61, with $11.14 per share from share buybacks and UDF merger accretion.
- **Core Portfolio Performance**: Core CRE loans ($5.9B) maintained strong credit metrics (4% delinquencies, 78% multifamily concentration), with 52% of Q1 modifications expected to resolve by Q2. Non-core portfolio ($1.2B) reduced by 6% via $51M liquidations at 102% premium, targeting $270M by Q2 and $210M by year-end.
- **Portland Asset Update**: Transitioned to non-accrual status due to stabilization efforts, with Q1 RevPAR +11% and 28% office/retail leasing. Expected sequential exits of stabilized components (hotel, office) over 2-3 years.
- **SBA Business Resilience**: Q1 origination volumes ($343M) remained high despite policy changes. 12-month default rate (3.2%) outperformed industry average (3.4%).

**【CFO Financial Commentary】**
- **Earnings Performance**: GAAP EPS $0.47 vs. distributable loss of $0.09 (excluding realized losses). Core portfolio net interest income ($43.4M) driven by 10.2% levered yield, 80% current pay. Non-core portfolio liquidations generated $28M liquidity.
- **Cost Management**: Operating expenses declined 7.5% Q/Q to $55.4M, with $8M savings offset by $3.4M servicing advances. Provision for loan losses decreased $9.9M due to $16.8M reserve recoveries.
- **Balance Sheet Liquidity**: Total leverage 3.5x, with $200M+ unrestricted cash and $1B unencumbered assets. Q1 CLO collapses freed $78M liquidity, targeting additional $130M via 2H 2025 CLO redemptions.

**【Q&A Key Highlights】**
- **Non-Core Liquidation Progress**: Exceeding Q1 targets by 2x ($51M liquidated at 102% premium). Q2 target: $470M liquidations, reducing non-core to $270M. Portland asset stabilization expected to generate upside beyond current mark.
- **Dividend Outlook**: Dividend maintained at current level until earnings recovery; no increase expected until NIM normalization (2026+).
- **SBA Volume Moderation**: 2025 origination volume expected below $1.5B due to policy changes, but long-term constructive on SBA program reforms.
- **Debt Market Access**: Confident in refinancing $650M 2025-2026 maturities via secured debt; $220M senior notes issued post-Q1 to extend maturity profile.

Ready Capital (RC)-9 May 25-2025 Q1 Earnings call transcript

- **Balance sheet reset**: $284M reserves set bottom for non-core loans; dividend cut to $0.125/Q1 to preserve capital.
- **Core portfolio recovery**: 83% of CRE loans at 8% yield, with $1B+ new originations in 2025.
- **SBA growth engine**: 170% YoY originations to $1.2B, contributing $0.08 EPS; USDA expansion adds $0.05 EPS.
- **2025 EPS recovery**: $0.18 EPS from non-core liquidation, $0.05 from CLO reissuance, and $0.17 from UDF merger.
- **Liquidity and buybacks**: $185M cash + $150M buyback program; Q1 CLO reissuance to generate $60M liquidity.

**【CEO Summary Section】**
- **Aggressive balance sheet reset**: $284M CECL reserves on non-performing loans, reducing book value to $10.61 per share but setting a bottom for asset resolution. Dividend cut to $0.125/Q1 to align with cash earnings and preserve capital for reinvestment.
- **Portfolio bifurcation**: CRE loans split into 83% core (strong credit metrics, 8% yield) and 17% non-core (liquidation target). Core portfolio contracted $1.3B in 2024, with $1B-$1.5B new originations expected in 2025.
- **Small business lending growth**: SBA originations up 170% YoY to $1.2B, contributing $0.08 EPS (290bps ROE). USDA lending expansion expected to add $0.05 EPS in 2025.
- **2025 recovery roadmap**: Four drivers to 10%+ ROE: non-core liquidation ($0.18 EPS), CLO reissuance ($0.05 EPS), SBA growth ($0.05 EPS), and UDF merger ($0.17 EPS).

**【CFO Financial Commentary】**
- **Q4 2024 results**: GAAP loss $1.90 EPS, distributable loss $0.03 (7.1% ROE). Core revenue decline ($12.4M QoQ) due to lower NII and gain on sales. Operating expenses rose to $57.9M, driven by legal and servicing costs.
- **Balance sheet**: Book value $10.61/share (-15% QoQ). Liquidity at $185M, with $350M debt raised post-earnings to refinance maturing notes.
- **Share buybacks**: $150M program initiated, with 5.8M shares repurchased at $7.35 avg price in Q4.

**【Q&A Key Highlights】**
- **Dividend coverage**: Q1 2025 EPS expected to cover dividend 1.5x, with OpEx savings ($0.05 EPS) and UDF merger ($0.17 EPS) driving recovery.
- **UDF merger rationale**: 17% EPS accretion from residential lot loans in Texas, with no delinquencies and 2028 maturities.
- **SBA credit trends**: 2.8% delinquency rate stable, with growth in micro loans offset by strong underwriting.
- **Share buyback pace**: $60M from CLO reissuance in Q1, with additional liquidity from non-core sales.
- **2026 maturities**: $760M debt to be refinanced via corporate markets, aligned with asset maturity ladder.

Ready Capital (RC)-3 Mar 25-2024 Q4 Earnings call transcript

Ready Capital (RC)-8 Nov 24-2024 Q3 Earnings call transcript

Ready Capital (RC)-8 Aug 24-2024 Q2 Earnings call transcript

Ready Capital (RC)-9 May 24-2024 Q1 Earnings call transcript

Ready Capital Corporation (RC) Q4 2023 Earnings Call Transcript

Ready Capital (RC)-8 Nov 23-2023 Q3 Earnings call transcript

Ready Capital (RC)-9 May 23-2023 Q1 Earnings call transcript

Ready Capital (RC)-27 Feb 23-2022 Q4 Earnings call transcript

Ready Capital (RC)-8 Nov 22-2022 Q3 Earnings call transcript

Ready Capital (RC)-7 Aug 22-2022 Q2 Earnings call transcript

Ready Capital (RC)-6 May 22-2022 Q1 Earnings call transcript

Ready Capital (RC)-25 Feb 22-2021 Q4 Earnings call transcript

Ready Capital (RC)-5 Nov 21-2021 Q3 Earnings call transcript

Ready Capital (RC)-5 Aug 21-2021 Q2 Earnings call transcript

Ready Capital (RC)-7 May 21-2021 Q1 Earnings call transcript

Ready Capital (RC)-12 Mar 21-2020 Q4 Earnings call transcript

Ready Capital (RC)-8 Nov 20-2020 Q3 Earnings call transcript

Ready Capital (RC)-7 Aug 20-2020 Q2 Earnings call transcript

Ready Capital (RC)-11 May 20-2020 Q1 Earnings call transcript

Ready Capital (RC)-12 Mar 20-2019 Q4 Earnings call transcript

Ready Capital (RC)-10 Nov 19-2019 Q3 Earnings call transcript

Anworth Mortgage Asset Corporation (ANH) CEO Joseph McAdams on Q2 2019 Results - Earnings Call Transcript

Anworth Mortgage Asset Corporation (ANH) CEO Joseph McAdams on Q1 2019 Results - Earnings Call Transcript

Ready Capital (RC)-13 Mar 19-2018 Q4 Earnings call transcript

Anworth Mortgage Asset Corporation (ANH) CEO Joe McAdams on Q3 2018 Results - Earnings Call Transcript

Ready Capital (RC)-11 Aug 18-2018 Q2 Earnings call transcript

Anworth Mortgage Asset's (ANH) CEO Lloyd McAdams on Q1 2018 Results - Earnings Call Transcript

Ready Capital (RC)-15 Mar 18-2017 Q4 Earnings call transcript

Ready Capital (RC)-11 Nov 17-2017 Q3 Earnings call transcript

RC

RC fundamentals

Earnings Call

You can ask Aime