Ready Capital Corporation Reports Second Quarter 2025 Results

- GAAP LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS OF $(0.31) - - DISTRIBUTABLE LOSS PER COMMON SHARE OF $(0.14) - - DISTRIBUTABLE LOSS PER COMMON SHARE BEFORE REALIZED LOSSES OF $(0.10) -    

NEW YORK, Aug. 07, 2025 (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") investor and owner-occupied commercial real estate loans, today reported financial results for the quarter ended June 30, 2025.

"As we begin to emerge from this CRE cycle, several items were completed since the first quarter which we believe will restore us to profitability", said Thomas Capasse, Ready Capital's Chairman and Chief Executive Officer. "Our continued, targeted and decisive liquidation strategy on underperforming assets is designed to provide liquidity to support future reinvestment in our Core multi-family bridge portfolio."

Second Quarter Highlights

LMM commercial real estate originations of $173 million

Small Business Lending ("SBL") loan originations of $359 million, including $216 million of Small Business Administration 7(a) loans and $96 million of USDA loans

Completed the sale of the Residential Mortgage Banking segment

Book value of $10.44 per share of common stock as of June 30, 2025

Acquired approximately 8.5 million shares of the Company's common stock at an average price of $4.41 per share as part of stock repurchase program

Issued an additional $50 million in aggregate principal amount of its 9.375% Senior Secured Notes due 2028

Subsequent Events

On July 21, 2025, the Company secured ownership of the Portland OR, mixed-use asset via a consensual deed-in-lieu arrangement in which the Company assumed control. All components of the property will continue to operate business as usual.

On August 6, 2025, the Company completed the sale of 21 loans with a carrying value of $494 million for net proceeds of $85 million.

Use of Non-GAAP Financial Information

In addition to the results presented in accordance with U.S. GAAP, this press release includes distributable earnings, formerly referred to as core earnings, which is a non-U.S. GAAP financial measure. The Company defines distributable earnings as net income adjusted for unrealized gains and losses related to certain mortgage backed securities ("MBS") not retained by us as part of our loan origination business, realized gains and losses on sales of certain MBS, unrealized gains and losses related to residential mortgage servicing rights ("MSR") from discontinued operations, unrealized changes in our current expected credit loss reserve, unrealized gains or losses on de-designated cash flow hedges, unrealized gains or losses on foreign exchange hedges, unrealized gains or losses on certain unconsolidated joint ventures, non-cash compensation expense related to our stock-based incentive plan, and one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains, or merger related expenses.

The Company believes that this non-U.S. GAAP financial information, in addition to the related U.S. GAAP measures, provides investors greater transparency into the information used by management in its financial and operational decision-making, including the determination of dividends. However, because distributable earnings is an incomplete measure of the Company's financial performance and involves differences from net income computed in accordance with U.S. GAAP, it should be considered along with, but not as an alternative to, the Company's net income computed in accordance with U.S. GAAP as a measure of the Company's financial performance. In addition, because not all companies use identical calculations, the Company's presentation of distributable earnings may not be comparable to other similarly-titled measures of other companies.

In calculating distributable earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains and losses on MBS acquired by the Company in the secondary market but is not adjusted to exclude unrealized gains and losses on MBS retained by Ready Capital as part of its loan origination businesses, where the Company transfers originated loans into an MBS securitization and the Company retains an interest in the securitization. In calculating distributable earnings, the Company does not adjust Net Income (in accordance with U.S. GAAP) to take into account unrealized gains and losses on MBS retained by us as part of the loan origination businesses because the unrealized gains and losses that are generated in the loan origination and securitization process are considered to be a fundamental part of this business and an indicator of the ongoing performance and credit quality of the Company's historical loan originations. In calculating distributable earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude realized gains and losses on certain MBS securities considered to be non-distributable. Certain MBS positions are considered to be non-distributable due to a variety of reasons which may include collateral type, duration, and size.

In addition, in calculating distributable earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains or losses on residential MSRs, held at fair value from discontinued operations. Servicing rights relating to the Company's small business commercial business are accounted for under ASC 860, Transfer and Servicing. In calculating distributable earnings, the Company does not exclude realized gains or losses on commercial MSRs, as servicing income is a fundamental part of Ready Capital's business and is an indicator of the ongoing performance.

To qualify as a REIT, the Company must distribute to its stockholders each calendar year at least 90% of its REIT taxable income (including certain items of non-cash income), determined without regard to the deduction for dividends paid and excluding net capital gain. There are certain items, including net income generated from the creation of MSRs, that are included in distributable earnings but are not included in the calculation of the current year's taxable income. These differences may result in certain items that are recognized in the current period's calculation of distributable earnings not being included in taxable income, and thus not subject to the REIT dividend distribution requirement until future years.

The table below reconciles Net Income computed in accordance with U.S. GAAP to Distributable Earnings.

(in thousands)

Three Months Ended June 30, 2025

Net Loss

$

(53,677

)

Reconciling items:

 

Unrealized loss on joint ventures

 

1,019

 

Increase in CECL reserve

 

487

 

Increase in valuation allowance

 

39,746

 

Non-recurring REO impairment

 

4,418

 

Non-cash compensation

 

1,634

 

Unrealized gain on preferred equity, at fair value

 

(4,227

)

Merger transaction costs and other non-recurring expenses

 

12,115

 

Loss on bargain purchase

 

14,381

 

Realized losses on sale of investments

 

8,896

 

Total reconciling items

$

78,469

 

Income tax adjustments

 

(37,496

)

Distributable earnings before realized losses

$

(12,704

)

Realized losses on sale of investments, net of tax

 

(7,088

)

Distributable loss

$

(19,792

)

Less: Distributable earnings attributable to non-controlling interests

 

1,990

 

Less: Income attributable to participating shares

 

2,214

 

Distributable loss attributable to common stockholders

$

(23,996

)

Distributable earnings before realized losses on investments, net of tax per common share - basic and diluted

$

(0.10

)

Distributable loss per common share - basic and diluted

$

(0.14

)

U.S. GAAP return on equity is based on U.S. GAAP net income, while distributable return on equity is based on distributable earnings, which adjusts U.S. GAAP net income for the items Din the distributable earnings reconciliation above.

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Friday, August 8, 2025 at 8:30am ET to provide a general business update and discuss the financial results for the quarter ended June 30, 2025. During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company's responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.

The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in. The webcast of the conference call will be available in the Investor Relations section of the Company's website at www.readycapital.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.

To Participate in the Telephone Conference Call:

Dial in at least five minutes prior to start time.

Domestic: 1-877-407-0792International: 1-201-689-8263

Conference Call Playback:

Domestic: 1-844-512-2921International: 1-412-317-6671Replay Pin #: 13753253

The playback can be accessed through August 22, 2025.

Safe Harbor Statement

This press release 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 cause actual results to differ materially from those described in the forward-looking statements; the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, applicable regulatory changes; general volatility of the capital markets; changes in the Company's investment objectives and business strategy; the availability of financing on acceptable terms or at all; the availability, terms and deployment of capital; the availability of suitable investment opportunities; changes in the interest rates or the general economy; increased rates of default and/or decreased recovery rates on investments; changes in interest rates, interest rate spreads, the yield curve or prepayment rates; changes in prepayments of Company's assets; the degree and nature of competition, including competition for the Company's target assets; and other factors, including those set forth in the Risk Factors section of the Company's most recent Annual Report on Form 10-K filed with the SEC, and other reports filed by the Company with the SEC, copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

About Ready Capital Corporation

Ready Capital Corporation (NYSE:RC) 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. The Company specializes in loans backed by commercial real estate, including agency multifamily, investor, construction, and bridge 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. Headquartered in New York, New York, the Company employs approximately 500 professionals nationwide.

ContactInvestor Relations Ready Capital Corporation212-257-4666

Additional information can be found on the Company's website at www.readycapital.com. 

 

READY CAPITAL CORPORATIONUNAUDITED CONSOLIDATED BALANCE SHEETS

 

(in thousands)

June 30, 2025

 

December 31, 2024

Assets

 

 

 

Cash and cash equivalents

$

162,935

 

 

$

143,803

 

Restricted cash

 

56,769

 

 

 

30,560

 

Loans, net (including $1,263 and $3,533 held at fair value)

 

5,066,694

 

 

 

3,378,149

 

Loans, held for sale (including $134,541 and $128,531 held at fair value and net of valuation allowance of $212,693 and $97,620)

 

632,784

 

 

 

241,626

 

Mortgage-backed securities

 

32,310

 

 

 

31,006

 

Investment in unconsolidated joint ventures (including $6,163 and $6,577 held at fair value)

 

169,369

 

 

 

161,561

 

Derivative instruments

 

5,754

 

 

 

7,963

 

Servicing rights

 

124,283

 

 

 

128,440

 

Real estate owned, held for sale

 

199,790

 

 

 

193,437

 

Other assets

 

462,711

 

 

 

362,486

 

Assets of consolidated VIEs

 

2,395,398

 

 

 

5,175,295

 

Assets held for sale

 

—

 

 

 

287,595

 

Total Assets

$

9,308,797

 

 

$

10,141,921

 

Liabilities

 

 

 

Secured borrowings

 

3,506,670

 

 

 

2,035,176

 

Securitized debt obligations of consolidated VIEs, net

 

1,513,297

 

 

 

3,580,513

 

Senior secured notes, net

 

720,893

 

 

 

437,847

 

Corporate debt, net

 

666,136

 

 

 

895,265

 

Guaranteed loan financing

 

629,380

 

 

 

691,118

 

Contingent consideration

 

17,189

 

 

 

573

 

Derivative instruments

 

1,986

 

 

 

352

 

Dividends payable

 

22,917

 

 

 

43,168

 

Loan participations sold

 

101,863

 

 

 

95,578

 

Due to third parties

 

9,791

 

 

 

1,442

 

Accounts payable and other accrued liabilities

 

184,652

 

 

 

188,051

 

Liabilities held for sale

 

—

 

 

 

228,735

 

Total Liabilities

$

7,374,774

 

 

$

8,197,818

 

Preferred stock Series C, liquidation preference $25.00 per share

 

8,361

 

 

 

8,361

 

 

 

 

 

Commitments & contingencies

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

Preferred stock Series E, liquidation preference $25.00 per share

 

111,378

 

 

 

111,378

 

Common stock, $0.0001 par value, 500,000,000 shares authorized, 164,326,387 and 162,792,372 shares issued and outstanding, respectively

 

17

 

 

 

17

 

Additional paid-in capital

 

2,267,540

 

 

 

2,250,291

 

Retained earnings (deficit)

 

(528,524

)

 

 

(505,089

)

Accumulated other comprehensive loss

 

(23,293

)

 

 

(18,552

)

Total Ready Capital Corporation equity

 

1,827,118

 

 

 

1,838,045

 

Non-controlling interests

 

98,544

 

 

 

97,697

 

Total Stockholders' Equity

$

1,925,662

 

 

$

1,935,742

 

Total Liabilities, Redeemable Preferred Stock, and Stockholders' Equity

$

9,308,797

 

 

$

10,141,921

 

READY CAPITAL CORPORATIONUNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands, except share data)

 

2025

 

 

 

2024

 

 

 

2025

 

 

 

2024

 

Interest income

$

152,735

 

 

$

234,119

 

 

$

307,702

 

 

$

466,473

 

Interest expense

 

(135,837

)

 

 

(183,167

)

 

 

(276,303

)

 

 

(366,972

)

Net interest income before (provision for) recovery of loan losses

$

16,898

 

 

$

50,952

 

 

$

31,399

 

 

$

99,501

 

(Provision for) recovery of loan losses

 

(8,640

)

 

 

18,871

 

 

 

100,928

 

 

 

45,415

 

Net interest income after (provision for) recovery of loan losses

$

8,258

 

 

$

69,823

 

 

$

132,327

 

 

$