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Section 1: 8-K (8-K)

rc_8K_earnings-shell

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 

 

FORM 8-K

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 11, 2020

 

 

 

READY CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)

 

 

 

 

Maryland

001-35808

90-0729143

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

1251 Avenue of the Americas, 50th Floor

New York, NY 10020

 

 

(Address of principal executive offices)
(Zip Code)

 

  

 

 

 

Registrant's telephone number, including area code: (212) 257-4600

n/a
(Former name or former address, if changed since last report.)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

7.00% Convertible Senior Notes due 2023

6.50% Senior Notes due 2021

6.20% Senior Notes due 2026

RC

RCA

RCP

RCB

New York Stock Exchange

New York Stock Exchange

New York Stock Exchange

New York Stock Exchange

 

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

 

On March 11, 2020, the Company issued an earnings release announcing the financial results for the quarter ended December 31, 2019. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

 

On March 11, 2020,  Ready Capital Corporation (the “Company”) posted supplemental financial information on the Investor Relations section of its website (www.readycapital.com). A copy of the supplemental financial information is furnished as Exhibit 99.2 hereto and incorporated herein by reference.

 

The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless it is specifically incorporated by reference therein.

 

 

 

Item 9.01 Financial Statements and Exhibits.

 

 

 

 

 

 

(d)

Exhibits

 

 

1,

 

 

Exhibit No.

 

Description

 

 

99.1

 

 

Earnings Release, dated March 11, 2020

99.2

 

Supplemental Financial Information for the quarter ended December 31, 2019

 

  

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

READY CAPITAL CORPORATION

 

 

 

 

 

 

 

 

 

 

By:

/s/ Andrew Ahlborn

 

 

 

Name:  Andrew Ahlborn

 

 

 

Title:   Chief Financial Officer

 

 

Date: March 11, 2020

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

rc_Ex99_1

 

Exhibit 99.1

 

READY CAPITAL CORPORATION ANNOUNCES FOURTH QUARTER 2019 RESULTS

-  Net Income of $0.43 per share of common stock in the fourth quarter   -

-  Core Earnings of $0.43 per share of common stock in the fourth quarter   -

-  Originated and acquired approximately $750 million of Small Balance Commercial (SBC) loans in Q4 2019   -

-  Declared First Quarter 2020 Dividend of $0.40 Per Share   -

 

New York, New York, March 11, 2020 / PRNewswire / – Ready Capital Corporation (“Ready Capital” or the “Company”) (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances, and services small to medium balance commercial loans, today reported financial results for the quarter ended December 31, 2019.  A summary of Ready Capital’s operating results for the quarter ended December 31, 2019 is presented below. Ready Capital reported U.S. GAAP Net Income for the three months ended December 31, 2019 of $20.9 million, or $0.43 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $21.0 million, or $0.43 per share of common stock.

   Fourth Quarter Highlights:

·

U.S. GAAP Net Income of $20.9 million, or $0.43 per diluted share of common stock

·

Core Earnings of $21.0 million, or $0.43 per diluted share of common stock

·

Adjusted net book value of $16.12 per share of common stock as of December 31, 2019

·

Originated $525.7 million and acquired $153.7 million of small balance commercial (“SBC”) loans

·

Originated $70.2 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program

·

Originated $586.3 million of residential mortgage loans

·

Declared and paid dividend of $0.40 per share

 

Thomas Capasse, Chairman and Chief Executive Officer said, “We closed out a very positive 2019 continuing to sequentially grow our net interest income while starting to benefit from the operating leverage afforded through increased scale.  Volumes remain robust across most business lines led by record origination levels in both our small balance commercial and residential operating businesses as we continue to take advantage of our platform diversity.”  

 

Dividends

 

For the first quarter 2020 the Company declared a dividend of $0.40 per share of common stock and operating partnership unit. This dividend is payable on April 30, 2020 to shareholders of record as of the close of business on March 31, 2020.

Use of Non-GAAP Financial Information

In addition to the results presented in accordance with U.S. GAAP, this press release includes Core Earnings, which is a non-U.S. GAAP financial measure. The Company defines Core Earnings as net income adjusted for unrealized gains and losses related to certain mortgage backed securities (“MBS”),  realized gains and losses on sales of certain MBS, unrealized gains and losses related to residential mortgage servicing rights, 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. However, because Core 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 Core Earnings may not be comparable to other similarly-titled measures of other companies.

In calculating Core 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 Core 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 Core 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-core.  Certain MBS positions are considered to be non-core due to a variety of reasons which may include collateral type, duration, and size.

In addition, in calculating Core Earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains or losses on residential MSRs, held at fair value.  The Company treats its commercial MSRs and residential MSRs as two separate classes based on the nature of the underlying mortgages and the treatment of these assets as two separate pools for risk management purposes.  Servicing rights relating to the Company’s small business commercial business are accounted for under ASC 860, Transfer and Servicing, while the Company’s residential MSRs are accounted for under the fair value option under ASC 825, Financial Instruments.  In calculating Core Earnings, the Company does not exclude realized gains or losses on either commercial MSRs or residential MSRs, held at fair value, as servicing income is a fundamental part of Ready Capital’s business and is an indicator of the ongoing performance.

The following table reconciles net income computed in accordance with U.S. GAAP to Core Earnings for the three months ended December 31, 2019:  

 

 

 

 

 

Three Months Ended

(In Thousands)

 

December 31, 

Net Income

$

20,936

Reconciling items:

 

 

Unrealized loss on mortgage servicing rights

 

(2,482)

Merger transaction costs

 

1,938

Unrealized loss on mortgage-backed securities

 

29

Total reconciling items

$

(515)

Core earnings before income taxes

$

20,421

     Income tax adjustments

 

544

Core earnings

$

20,965

Core earnings per share

$

0.43

U.S. GAAP Return on Equity is based on U.S. GAAP Net Income, while Core Return on Equity is based on Core Earnings, which adjusts GAAP Net Income for the items in the Core reconciliation above.

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Thursday,  March 12, 2020 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended December 31, 2019.  The webcast will be available on the Company’s website at www.readycapital.com. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register and 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: 1-877-407-0792

International: 1-201-689-8263

Conference ID #: 13699720

 

Conference Call Playback:

 

Domestic: 1-844-512-2921

International: 1-412-317-6671

Replay Pin #: 13699720

 

The playback can be accessed through March 26, 2020.

 

 

 

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 small to medium balance commercial loans. Ready Capital specializes in loans backed by commercial real estate, including agency multifamily, investor and bridge as well as SBA 7(a) business loans. Headquartered in New York, New York, Ready Capital employs over 400 lending professionals nationwide. The company is externally managed and advised by Waterfall Asset Management, LLC.

 

 

Contact

Investor Relations
Ready Capital Corporation
212-257-4666
[email protected]

 

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

 

 

READY CAPITAL CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

(In Thousands)

    

December 31, 2019

    

December 31, 2018

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

67,928

 

$

54,406

Restricted cash

 

 

51,728

 

 

28,921

Loans, net (including $20,212 and $22,664 held at fair value)

 

 

1,727,984

 

 

1,193,392

Loans, held for sale, at fair value

 

 

188,077

 

 

115,258

Mortgage backed securities, at fair value

 

 

92,466

 

 

91,937

Loans eligible for repurchase from Ginnie Mae

 

 

77,953

 

 

74,180

Investment in unconsolidated joint ventures

 

 

58,850

 

 

33,438

Purchased future receivables, net

 

 

43,265

 

 

 —

Derivative instruments

 

 

2,814

 

 

2,070

Servicing rights (including $91,174 and $93,065 held at fair value)

 

 

121,969

 

 

120,062

Real estate, held for sale

 

 

58,573

 

 

7,787

Other assets

 

 

106,925

 

 

64,335

Assets of consolidated VIEs

 

 

2,378,486

 

 

1,251,057

Total Assets

 

$

4,977,018

 

$

3,036,843

Liabilities

 

 

 

 

 

 

Secured borrowings

 

 

1,189,392

 

 

834,547

Securitized debt obligations of consolidated VIEs, net

 

 

1,815,154

 

 

905,367

Convertible notes, net

 

 

111,040

 

 

109,979

Senior secured notes, net

 

 

179,289

 

 

178,870

Corporate debt, net

 

 

149,986

 

 

48,457

Guaranteed loan financing

 

 

485,461

 

 

229,678

Liabilities for loans eligible for repurchase from Ginnie Mae

 

 

77,953

 

 

74,180

Derivative instruments

 

 

5,250

 

 

3,625

Dividends payable

 

 

21,302

 

 

13,346

Accounts payable and other accrued liabilities

 

 

97,407

 

 

74,719

Total Liabilities

 

$

4,132,234

 

$

2,472,768

Stockholders’ Equity

 

 

 

 

 

 

Common stock, $0.0001 par value, 500,000,000 shares authorized, 51,127,326 and 32,105,112 shares issued and outstanding, respectively

 

 

 5

 

 

 3

Additional paid-in capital

 

 

822,837

 

 

540,478

Retained earnings

 

 

8,746

 

 

5,272

Accumulated other comprehensive loss

 

 

(6,176)

 

 

(922)

Total Ready Capital Corporation equity

 

 

825,412

 

 

544,831

Non-controlling interests

 

 

19,372

 

 

19,244

Total Stockholders’ Equity

 

$

844,784

 

$

564,075

Total Liabilities and Stockholders’ Equity

 

$

4,977,018

 

$

3,036,843

 

READY CAPITAL CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 

 

Year Ended December 31, 

(In Thousands, except share data)

    

2019

    

2019

Interest income

 

$

64,406

 

$

229,916

Interest expense

 

 

(40,962)

 

 

(151,880)

Net interest income before provision for loan losses

 

$

23,444

 

$

78,036

Provision for loan losses

 

 

(1,125)

 

 

(3,684)

Net interest income after provision for loan losses

 

$

22,319

 

$

74,352

Non-interest income

 

 

 

 

 

 

Residential mortgage banking activities

 

$

18,918

 

$

83,539

Net realized gain on financial instruments and real estate owned

 

 

8,044

 

 

28,958

Net unrealized gain (loss) on financial instruments

 

 

3,009

 

 

(18,790)

Servicing income, net

 

 

8,653

 

 

30,665

Income on purchased future receivables, net of allowance for doubtful accounts of $5,082

 

 

2,362

 

 

2,362

Income on unconsolidated joint ventures

 

 

29

 

 

6,088

Other income

 

 

4,407

 

 

11,078

Gain on bargain purchase

 

 

 —

 

 

30,728

Total non-interest income

 

$

45,422

 

$

174,628

Non-interest expense

 

 

 

 

 

 

Employee compensation and benefits

 

 

(13,842)

 

 

(51,237)

Allocated employee compensation and benefits from related party

 

 

(1,870)

 

 

(5,473)

Variable expenses on residential mortgage banking activities

 

 

(11,765)

 

 

(51,760)

Professional fees

 

 

(1,989)

 

 

(7,434)

Management fees – related party

 

 

(2,591)

 

 

(9,578)

Incentive fees – related party

 

 

(106)

 

 

(106)

Loan servicing expense

 

 

(4,891)

 

 

(17,976)

Merger related expenses

 

 

(1,629)

 

 

(7,750)

Other operating expenses

 

 

(10,070)

 

 

(33,162)

Total non-interest expense

 

$

(48,753)

 

$

(184,476)

Income before provision for income taxes

 

$

18,988

 

$

64,504

Income tax benefit (provision)

 

 

1,948

 

 

10,552

Net income

 

$

20,936

 

$

75,056

Less: Net income attributable to non-controlling interest

 

 

508

 

 

2,088

Net income attributable to Ready Capital Corporation

 

$

20,428

 

$

72,968

 

 

 

 

 

 

 

Earnings per common share - basic

 

$

0.43

 

$

1.72

Earnings per common share - diluted

 

$

0.43

 

$

1.72

 

 

 

 

 

 

 

Weighted-average shares outstanding

 

 

 

 

 

 

Basic

 

 

46,446,573

 

 

42,011,750

Diluted

 

 

46,482,470

 

 

42,047,648

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.40

 

$

1.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

READY CAPITAL CORPORATION

 UNAUDITED SEGMENT REPORTING

fOR THE THREE MONTHS ENDED december 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

SBA Originations,

    

Residential

    

 

    

 

 

 

Loan

 

SBC

 

Acquisitions,

 

Mortgage

 

Corporate-

 

 

(In Thousands)

 

Acquisitions

 

Originations

 

and Servicing

 

Banking

 

Other

 

Consolidated

Interest income

 

$

18,161

 

$

36,313

 

$

8,628

 

$

1,304

 

$

 —

 

$

64,406

Interest expense

 

 

(11,120)

 

 

(24,774)

 

 

(3,335)

 

 

(1,733)

 

 

 —

 

 

(40,962)

Net interest income before provision for loan losses

 

$

7,041

 

$

11,539

 

$

5,293

 

$

(429)

 

$

 —

 

$

23,444

Provision for loan losses

 

 

(37)

 

 

23

 

 

(1,111)

 

 

 —

 

 

 —

 

 

(1,125)

Net interest income after provision for loan losses

 

$

7,004

 

$

11,562

 

$

4,182

 

$

(429)

 

$

 —

 

$

22,319

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage banking activities

 

$

 —

 

$

 —

 

$

 —

 

$

18,918

 

$

 —

 

$

18,918

Net realized gain on financial instruments

 

 

51

 

 

3,518

 

 

4,475

 

 

 —

 

 

 —

 

 

8,044

Net unrealized gain (loss) on financial instruments

 

 

632

 

 

24

 

 

125

 

 

2,481

 

 

(253)

 

 

3,009

Other income

 

 

2,260

 

 

1,342

 

 

683

 

 

67

 

 

55

 

 

4,407

Income on purchased future receivables, net

 

 

2,362

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

2,362

Servicing income

 

 

797

 

 

513

 

 

1,317

 

 

6,026

 

 

 —

 

 

8,653

Income from unconsolidated joint ventures

 

 

29

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

29

Gain on bargain purchase

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Total non-interest income

 

$

6,131

 

$

5,397

 

$

6,600

 

$

27,492

 

$

(198)

 

$

45,422

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

(1,802)

 

 

(1,451)

 

 

(3,993)

 

 

(5,751)

 

 

(845)

 

 

(13,842)

Allocated employee compensation and benefits from related party

 

 

(187)

 

 

 —

 

 

 —

 

 

 —

 

 

(1,683)

 

 

(1,870)

Variable expenses on residential mortgage banking activities

 

 

 —

 

 

 —

 

 

 —

 

 

(11,765)

 

 

 —

 

 

(11,765)

Professional fees

 

 

(311)

 

 

(467)

 

 

(376)

 

 

(292)

 

 

(543)

 

 

(1,989)

Management fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2,591)

 

 

(2,591)

Incentive fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(106)

 

 

(106)

Loan servicing expense

 

 

(1,283)

 

 

(1,510)

 

 

61

 

 

(2,136)

 

 

(23)

 

 

(4,891)

Merger related expenses

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,629)

 

 

(1,629)

Other operating expenses

 

 

(2,498)

 

 

(3,001)

 

 

(1,957)

 

 

(1,899)

 

 

(715)

 

 

(10,070)

Total non-interest expense

 

$

(6,081)

 

$

(6,429)

 

$

(6,265)

 

$

(21,843)

 

$

(8,135)

 

$

(48,753)

Net income (loss) before provision for income taxes

 

$

7,054

 

$

10,530

 

$

4,517

 

$

5,220

 

$

(8,333)

 

$

18,988

Total assets

 

$

1,264,226

 

$

2,492,156

 

$

760,031

 

$

330,363

 

$

130,242

 

$

4,977,018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

READY CAPITAL CORPORATION

 UNAUDITED SEGMENT REPORTING

fOR THE Year ENDED dECEMBER 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

SBA Originations,

    

Residential

    

 

    

 

 

 

 

 

SBC

 

Acquisitions,

 

Mortgage

 

Corporate-

 

 

(In Thousands)

 

Acquisitions

 

Originations

 

and Servicing

 

Banking

 

Other

 

Consolidated

Interest income

 

$

65,922

 

$

127,495

 

$

32,096

 

$

4,403

 

$

 —

 

$

229,916

Interest expense

 

 

(40,502)

 

 

(90,677)

 

 

(14,864)

 

 

(5,837)

 

 

 —

 

 

(151,880)

Net interest income before provision for loan losses

 

$

25,420

 

$

36,818

 

$

17,232

 

$

(1,434)

 

$

 —

 

$

78,036

Provision for loan losses

 

 

(808)

 

 

(319)

 

 

(2,557)

 

 

 —

 

 

 —

 

 

(3,684)

Net interest income after provision for loan losses

 

$

24,612

 

$

36,499

 

$

14,675

 

$

(1,434)

 

$

 —

 

$

74,352

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage banking activities

 

$

 —

 

$

 —

 

$

 —

 

$

83,539

 

$

 —

 

$

83,539

Net realized gain on financial instruments

 

 

18

 

 

13,750

 

 

15,190

 

 

 —

 

 

 —

 

 

28,958

Net unrealized gain (loss) on financial instruments

 

 

(254)

 

 

(107)

 

 

393

 

 

(18,569)

 

 

(253)

 

 

(18,790)

Servicing income

 

 

798

 

 

1,898

 

 

5,330

 

 

22,639

 

 

 —

 

 

30,665

Income on purchased future receivables, net of allowance for doubtful accounts

 

 

2,362

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

2,362

Income from unconsolidated joint ventures

 

 

6,088

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

6,088

Other income

 

 

4,210

 

 

4,907

 

 

1,548

 

 

249

 

 

164

 

 

11,078

Gain on bargain purchase

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

30,728

 

 

30,728

Total non-interest income

 

$

13,222

 

$

20,448

 

$

22,461

 

$

87,858

 

$

30,639

 

$

174,628

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

(1,855)

 

 

(6,905)

 

 

(16,255)

 

 

(22,882)

 

 

(3,340)

 

 

(51,237)

Allocated employee compensation and benefits from related party

 

 

(547)

 

 

 —

 

 

 —

 

 

 —

 

 

(4,926)

 

 

(5,473)

Variable expenses on residential mortgage banking activities

 

 

 —

 

 

 —

 

 

 —

 

 

(51,760)

 

 

 —

 

 

(51,760)

Professional fees

 

 

(723)

 

 

(1,652)

 

 

(1,011)

 

 

(1,101)

 

 

(2,947)

 

 

(7,434)

Management fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(9,578)

 

 

(9,578)

Incentive fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(106)

 

 

(106)

Loan servicing expense

 

 

(4,662)

 

 

(5,695)

 

 

(261)

 

 

(7,225)

 

 

(133)

 

 

(17,976)

Merger related expenses

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(7,750)

 

 

(7,750)

Other operating expenses

 

 

(4,573)

 

 

(11,199)

 

 

(6,591)

 

 

(7,717)

 

 

(3,082)

 

 

(33,162)

Total non-interest expense

 

$

(12,360)

 

$

(25,451)

 

$

(24,118)

 

$

(90,685)

 

$

(31,862)

 

$

(184,476)

Net income (loss) before provision for income taxes

 

$

25,474

 

$

31,496

 

$

13,018

 

$

(4,261)

 

$

(1,223)

 

$

64,504

Total assets

 

$

1,264,226

 

$

2,492,156

 

$

760,031

 

$

330,363

 

$

130,242

 

$

4,977,018

 

 

(Back To Top)

Section 3: EX-99.2 (EX-99.2)

Exhibit 99.2

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Supplemental Financial Data Fourth Quarter 2019

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DISCLAIMER 2 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 cause actual results to differ materially from those described in the forward-looking statements; Ready Capital Corporation (the "Company") cangiveno assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include those set forth in the Risk Factors section of the 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. This presentation includes certain non-GAAP financial measures, including Core Earnings. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures in accordance with GAAP. Please refer to Appendix A for the most recent GAAP information. This presentation also contains market statistics and industry data which are subject to uncertainty and are not necessarily reflective of market conditions. These have been derived from third party sources and have not been independently verified by the Company or its affiliates. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. All data is as of December 31, 2019 unless otherwise noted.

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FOURTH QUARTER 2019 HIGHLIGHTS 3 . Net income of $20.9 million(1), or $0.43 per common share . Core earnings of $21.0 million(1), or $0.43 per common share . Declared dividend of $0.40 per share EARNINGS / DIVIDENDS . Return on Equity(2) of 10.9% . Core Return on Equity(3) of 10.9% . Dividend Yield(4) of 10.4% RETURNS . Total SBC loan investment of $749.6 million . SBC loan originations of $525.7 million and $153.7 million of loan acquisitions . SBA loan originations of $70.2 million . Residential mortgage loan originations of $586.3 million LOAN ORIGINATIONS(5) / ACQUISITIONS . Adjusted net book value(6) of $16.12 per common share . Loans increased by 9% to $3.6 billion(7) BALANCE SHEET (1) Inclusive of non-controlling interest (2) Return on Equity is an annualized percentage equal to quarterly net income over the average monthly total stockholders’ equity for the period (3) Core Return on Equity is an annualized percentage equal to core earnings over the average monthly total stockholders’ equity for the period. Refer to the “Core Earnings Reconciliation” slide for a reconciliation of GAAP Net Income to Core Earnings (4) Q4 Dividend yield for the period based on the 12/31/2019 closing share price of $15.42 (5) Represents fully committed amounts (6) Excludes the equity component of our 2017 convertible note issuance (7) Represents carrying value of portfolio loans, excludes guaranteed loan financing

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2019 HIGHLIGHTS 4 . Net income of $75.1 million(1), or $1.72 per common share . Core earnings of $67.3 million(1), or $1.54 per common share . Declared dividend of $1.60 per share EARNINGS / DIVIDENDS . Return on Equity(2) of 10.5% . Core Return on Equity(3) of 9.4% . Dividend Yield(4) of 10.9% RETURNS . SBC loan originations of $1.7 billion . SBA loan originations of $216.3 million . Residential mortgage loan originations of $2.1 billion . Acquired $722.5 million of SBC loans LOAN ORIGINATIONS(5) / ACQUISITIONS . Completed five separate firm-sponsored securitizations of originated fixed-rate SBC loans, originated transitional loans, acquired SBC loans, and originated SBA loans totaling approximately $1.5 billion of bonds issued . Loans increased by 63% to $3.6 billion(6) BALANCE SHEET (1) Inclusive of non-controlling interest (2) Return on Equity is an annualized percentage equal to quarterly net income over the average monthly total stockholders’ equity for the period (3) Core Return on Equity is an annualized percentage equal to core earnings over the average monthly total stockholders’ equity for the period. Refer to the “Core Earnings Reconciliation” slide for a reconciliation of GAAP Net Income to Core Earnings (4) Q4 Dividend yield for the period based on the average 2019 share price of $14.63. (5) Represents fully committed amounts (6) Represents carrying value of portfolio loans, excludes guaranteed loan financing

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RETURN ON EQUITY 5 1) Levered yield includes interest income, accretion of discount, MSR creation, income from unconsolidated joint ventures, realized gains (losses) on loans held for sale, unrealized gains (losses) on loans held for sale and servicing income net of interest expense and amortization of deferred financing costs on an annualized basis. 2) GAAP ROE is based on GAAP Net Income, while Core ROE is based on Core Earnings, which adjusts GAAP Net Income for certain items detailed on the “Core Earnings Reconciliation” slide. 3) ROE based on net income before tax of the Residential Mortgage Banking business line divided by the business line’s average monthly equity. Segment Loan Acquisitions 12.6 % 12.6 % 26.3 % SBC Originations 12.0 % 12.0 % 58.8 % SBA Originations, Acquisitions, & Servicing 50.6 % 50.6 % 8.2 % Residential Mortgage Banking (3) 23.9 % 8.8 % 6.7 % 0.2 (0.1) (0.3) (0.1) 0.7 0.2 16.3 % 13.7 % 13.4 % 15.0 % 17.7 % 16.0 % 2.9 1.8 2.6 3.0 1.9 2.6 (7.8) (8.7) (8.5) (7.7) (8.7) (8.5) (0.8) - 3.1 - - - (1.4) (1.3) (1.4) (1.4) (1.3) (1.4) 1.7 1.2 1.3 2.0 0.2 0.7 10.9 % 6.7 % 10.5 % 10.9 % 9.8 % 9.4 % Return on equity Corporate leverage, net of non-earnings assets Realized & unrealized gains, net Other income and expenses, net Investment advisory fees Provision for income taxes Gross return on equity Non-recurring gains and expenses 16.1 % 13.7 % 15.1 % 13.8 % 17.0 % 15.8 % GAAP ROE (2) Core ROE (2) Levered Yield (1) Core Levered Yield (1) Equity Allocation Q4'19 FY 2019 Q4'19 FY 2019 Q3'19 Q3'19

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SBC INVESTMENT BY PRODUCT TYPE(1) 6 (1) Origination volumes are based on fully committed amounts $65.4 $44.1 $53.7 $48.2 $70.2 $95.7 $86.3 $177.5 $165.6 $116.0 $70.3 $62.9 $73.0 $146.2 $104.7 $166.9 $142.8 $169.1 $153.5 $305.0 $8.8 $128.7 $362.2 $77.9 $153.7 $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Investment (UPB in $) SBA Conventional Freddie Mac Transitional Acquired

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Q4 2019 QUARTERLY SBC LOAN INVESTMENT ALLOCATION 7 • Total funded investments of $650.9 million added during the quarter. • Funded $497.2 million(1) of SBC and SBA loan originations. • Acquired $143.0 million of SBC loans and $10.7 million of joint venture investments (1) Represents actual disbursements during the quarter. (2) $ in millions (3) Based on fully funded loan amount (4) Gross yield equals contractual interest rates and accretion of discount based on the Company’s estimates of loan performance, where applicable (5) Weighted average advance rate of all assets of this loan type currently financed on the Company’s facilities (6) Weighted average debt cost of all assets of this loan type currently financed on the Company’s facilities (7) SBA loan counts include the guaranteed and unguaranteed loan portion. (in millions, except loan count information) # of Investments Gross Yield (4) Weighted Avg Maturity (3) FX / ARM Avg Advance Rate (5) Loan Originations Held-for-investment SBC $ 121.2 38 $ 3.1 4.8% 8 years 100% / 0% 76% Transitional 231.6 56 3.3 5.4% 3 years 0% / 100% 73% SBA (7) 17.6 88 0.1 7.1% 19 years 0% / 100% 74% Held-for-sale SBA (7) $ 52.7 88 $ 0.3 7.1% 19 years 0% / 100% 74% Freddie Mac 74.1 28 2.6 4.1% 13 years 61% / 39% 100% Total Loan Originations $ 497.2 298 $ 1.7 5.3% 8 years 33% / 67% 78% Loan Acquisitions SBC $ 143.0 33 $ 4.3 5.2% 3 years 49% / 51% 67% Total Loan Acquisitions $ 143.0 33 $ 4.3 5.2% 3 years 49% / 51% 67% Total Joint Venture Investments $ 10.7 3 Total SBC Investment $ 650.9 334 $ 1.9 5.3% 7 years 37% / 63% 74% Gross Investments (2) Avg Balance (2)

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SBC ORIGINATIONS -S EGMENT SNAPSHOT 8 1) Represents fully committed amounts. 2) As of February 28, 2020 including 2020 fundings. 3) $ in millions, as of quarter end. 4) Represents fixed rate loans that have been securitized. 5) Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred financing costs. 6) Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. • Originations of $525.7 million(1) • Current quarter funded and money up pipeline of $820.7 million(2) : 8.9% 9.3% 9.6% 9.4% 10.1% 1.8% 1.9% 1.7% 2.8% 1.9% 0.0% 5.0% 10.0% 15.0% 20.0% Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Gross Levered Yield (ex. Gains) Gains on Loans, held for sale GROSS LEVERED YIELD CURRENT QUARTER HIGHLIGHTS (5) (6) Fixed Rate $ 37.2 $ 112.7 $ 149.9 Transitional 222.8 170.9 393.7 Freddie Mac 67.6 209.5 277.1 Total $ 327.6 $ 493.1 $ 820.7 Product 2020 fundings Money up pipeline Total Portfolio Metrics (Balance Sheet) Number of loans 421 429 485 501 537 Unpaid Principal Balance (3) $ 1,479 $ 1,582 $ 1,829 $ 2,064 $ 2,298 Carrying Value (3) $ 1,488 $ 1,589 $ 1,835 $ 2,070 $ 2,300 Weighted Average LTV 63% 63% 63% 65% 61% Weighted Average Coupon 6.3% 6.2% 6.1% 5.8% 6.2% Weighted Average Maturity 5 years 5 years 5 years 5 years 5 years Weighted Average Principal Balance (3) $ 3.5 $ 3.7 $ 3.7 $ 4.1 $ 4.3 Percentage of loans fixed / floating 55% / 45% 53% / 47% 55% / 45% 55% / 45% 53% / 47% Percentage of fixed, match funded (4) 54.2% 87.3% 69.4% 68.3% 84.9% Percentage of loans 30+ days delinquent 2.3% 2.7% 2.7% 1.4% 1.9% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

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SBA ORIGINATIONS, ACQUISITIONS, & SERVICING-S EGMENT SNAPSHOT 9 1) Represents fully committed amounts. 2) $ in millions, as of quarter end. 3) Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred financing costs. 4) Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. 5) Reflects an increase in balances as a result of the 2019 securitization and effects of the guaranteed loan financing gross up. • $52.9 million of SBA secondary market loans sales, with an average sale premium of 9.8% • Originations of $70.2 million(1) • Origination pipeline of $177.7 million SBA loans, including $38.6 million of 2020 fundings • Completed $131.0 million securitization of SBA loans 17.1% 15.0% 22.1% 22.2% 27.6% 13.9% 11.1% 17.8% 16.7% 23.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Gross Levered Yield (ex. Gains) Gains on Loans, held for sale CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD (3) (4) Portfolio Metrics (Balance Sheet) Number of loans 1,931 1,876 1,902 1,875 1,880 Unpaid Principal Balance (2) $467 $ 262 $ 270 $ 278 $ 804 Carrying Value (2) $424 $ 221 $ 230 $ 240 $ 770 Weighted Average LTV 79% 82% 87% 88% 83% Weighted Average Coupon 7.0% 7.4% 7.4% 7.4% 6.9% Weighted Average Maturity 14 years 15 years 16 years 16 years 15 years Weighted Average Principal Balance (2) $0.2 $ 0.1 $ 0.1 $ 0.1 $ 0.4 Percentage of loans fixed / floating 1% / 99% 1% / 99% 1% / 99% 1% / 99% 3% / 97% Percentage of loans 30+ days delinquent 7.0% 9.1% 6.5% 6.0% 3.1% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019(5)

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LOAN ACQUISITIONS-S EGMENT SNAPSHOT 10 1) Excludes joint venture investments. 2) $ in millions, as of quarter end. 3) Represents fixed rate loans that have been securitized. • Acquired $153.7 million of SBC loans, including $10.7 million of joint venture investments • Acquisition pipeline of $116.1 million SBC loans, including 2020 acquisitions of $39.3 million 12.2% 13.8% 11.3% 12.5% 12.1% 7.0% 8.4% 3.2% 1.6% 0.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Income on joint venture investments Gross Levered Yield (ex. Gains) CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD Portfolio Metrics(1) (Balance Sheet) Number of loans 896 1,018 2,385 2,363 2,231 Unpaid Principal Balance (2) $573 $ 798 $ 1,075 $ 1,068 $ 1,048 Carrying Value (2) $548 $ 770 $ 1,055 $ 1,056 $ 1,039 Weighted Average LTV 44% 53% 46% 42% 43% Weighted Average Coupon 6.6% 6.7% 6.3% 6.3% 6.1% Weighted Average Maturity 7 years 7 years 10 years 10 years 9 years Weighted Average Principal Balance (2) $ 0.6 $ 0.8 $ 0.5 $ 0.5 $ 0.5 Percentage of loans fixed / floating 66% / 34% 61% / 39% 48% / 52% 47% / 53% 45% / 55% Percentage of fixed, match funded (3) 51.6% 51.6% 61.0% 44.6% 52.3% Percentage of loans performing / non-performing 98% / 2% 95% / 5% 98% / 2% 98% / 2% 98% / 2% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

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RESIDENTIAL MORTGAGE BANKING –S EGMENT SNAPSHOT 11 1) $ in millions. Represents activity during the quarter. 2) Represents fully committed amounts • MSR portfolio of approximately $8.2 billion in UPB, up 2% compared to Q3 • Fair market value of $91.2 million • Originations of $586.3 million(2) • Loan sales of $601.6 million • Origination pipeline of $566.8 million residential agency loans (2), including $373.8 million of 2020 fundings $7.5 $7.6 $7.8 $8.0 $8.2 $7.0 $7.3 $7.5 $7.8 $8.0 $8.3 $8.5 MSR PORTFOLIO (UPB IN $ BILLIONS) CURRENT QUARTER HIGHLIGHTS Fair Q4' 18 Q1' 19 Q2' 19 Q3' 19 Q4' 19 Value ($ mm) $ 93.1 $ 88.2 $ 85.7 $ 84.6 $ 91.2 Portfolio Metrics (quarterly activity) Unpaid principal balance (1) $ 369.1 $ 344.4 $ 518.2 $ 656.8 $ 586.3 % of Originations - Purchased 76.7% 74.3% 74.0% 60.5% 54.7% % of Originations - Refinanced 23.3% 25.7% 26.0% 39.5% 45.3% Channel - % Correspondent 38.2% 34.5% 36.4% 33.6% 37.9% Channel - % Retail 44.0% 47.2% 45.7% 50.9% 46.8% Channel - % Wholesale 17.8% 18.2% 17.9% 15.5% 15.3% Unpaid principal balance (1) $ 382.7 $ 326.5 $ 492.1 $ 631.9 $ 601.6 % of UPB - Fannie/ Freddie securitizations 62.8% 68.4% 69.7% 69.7% 66.6% % of UPB - Ginnie Mae securitizations 25.8% 24.6% 22.4% 25.1% 26.8% % of UPB - Other investors 11.5% 7.0% 7.9% 5.2% 6.6% Q3 2019 Q4 2019 Originations Sales Q4 2018 Q1 2019 Q2 2019

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DIVERSIFIED, COMPLEMENTARY, AND SCALABLE PLATFORMS (1) Assets include loans, MBS, servicing assets, JV investments, real estate owned, and purchased future receivables. (2) Represents 2019 YTD amounts, based on Core Earnings, which includes interest income, accretion of discount, MSR creation, income from unconsolidated joint ventures, realized gains (losses) on loans held for sale, unrealized gains (losses) on loans held for sale and servicing income net of interest expense and amortization of deferred financing costs on an annualized basis. (3) 12 PORTFOLIO BREAKDOWN(1) EARNINGS BREAKDOWN(2) Acquisitions 27% SBC Originations - Fixed rate 27% SBC Originations - Bridge 23% SBC Originations - Freddie Mac 2% SBA Originations, Acquisitions, & Servicing 16% Residential Mortgage Banking 5% Acquisitions 29% SBC Originations -Fixed rate 11% SBC Originations - Bridge 27% SBC Originations - Freddie Mac 9% SBA Originations, Acquisitions, & Servicing 14% Residential Mortgage Banking 10%

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LOAN PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2019(1)(2) Geographic Location Lien Position (1) As a percent of unpaid principal balance (2) Excludes loans held-for-sale, at fair value (3) Collateral Type SBA Collateral Type 13 California 17% Texas 15% Florida 9% New York 8% Illinois 5% Other 46% First Mortgage 98% Subordinated Mortgage 1% Other 1% SBA 18% Multi-Family 27% Retail 17% Office 13% Mixed use 10% Other 15% Physicians Offices 14% Child Day Care Services 8% Lodging 6% Hotels, Motels & Tourist Courts 12% Restaurants 6% Other 54%

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CAPITAL STRUCTURE ► Completed public offering of 6.0 million shares of common stock in December 2019; an additional 0.9 million shares of common stock in January 2020 ► Completed $45.0 million issuance of 6.2% corporate baby bonds in November 2019, at a yield-to-maturity of 6.0% ► Q4 closing of $430.7 million securitization of fixed-rate SBC loans ► Q4 closing of $131.0 million securitization of SBA loans 14 Funding Mix Total Debt + Equity CURRENT SOURCES OF FUNDING HISTORICAL CAPITAL STRUCTURE Total Debt + Equity ($M) Funding Mix $2,641 $3,088 $3,642 $3,915 $4,290 Convertible Notes $ 115.0 7.0% 7.0% Senior Secured Notes $ 180.0 7.5% 7.0% Baby Bonds $ 149.5 6.3% 6.2% Total $ 444.5 7.0% 6.7% Principal Balance Coupon YTM Corporate Financing (in $M) 21% 25% 21% 19% 20% 4% 4% 3% 3% 3% 9% 7% 6% 7% 8% 32% 27% 27% 34% 28% 34% 37% 43% 37% 42% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Stockholders Equity Convertible senior notes Senior secured notes and Corporate debt Credit facilities and repurchase agreements Securitized debt obligations

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FINANCING AND LEVERAGE 15 2.1x 1.6x 1.8x 2.3x 1.9x 3.7x 3.1x 3.9x 4.3x 4.1x - 1.0 2.0 3.0 4.0 5.0 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Historical Leverage Recourse Total HISTORICAL LEVERAGE Total Debt-to-Equity Ratio Secured borrowings (warehouse credit facilities and borrowings under repo transactions) $ 1,189 Securitized debt obligations 1,815 Senior secured notes and corporate bonds 329 Convertible notes 111 Total Debt $3,444 Total Stockholders' Equity $845 Total debt-to-equity ratio 4.1 Total recourse debt-to-equity ratio Total Debt $ 3,444 Less: Securitized debt obligations (1,815) Total recourse debt $1,629 Total Stockholders' Equity $845 Total recourse debt-to-equity ratio 1.9 12/31/2019 (in millions)

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CREDIT AND REPURCHASE FACILITIES 16 (1) $ in thousands (2) Commitment size is €200.0 million, but has been converted for purposes of this disclosure. Lender Asset Class Maturity Pricing JPMorgan Acquired loans, SBA loans Aug-2020 1M L + 2.00 to 2.50% $ 250,000 $ 88,972 $ 161,028 Keybank Freddie Mac loans Feb-2020 1M L + 1.50% 125,000 21,513 103,487 East West Bank SBA loans Jul-2020 Prime - 0.821 to + 0.29% 50,000 13,294 36,706 Credit Suisse (2) Acquired loans (non USD) Dec-2021 Euribor + 2.50% 224,500 37,646 186,854 GMFS facilities Residential loans Apr-2020 - Nov-2020 Various 290,000 130,139 159,861 GMFS - MSR Residential MSRs Sep-2023 1M L + 2.50% 50,000 39,900 10,100 Other - various Various Jan-2021 - Jun-2021 Various 65,899 48,739 17,160 $ 1,055,399 $ 380,203 $ 675,196 Citibank Fixed rate, Transitional, Acquired loans Aug-2020 1M L + 1.875 to 2.125% $ 500,000 $ 141,356 $ 358,644 Deutsche Bank Fixed rate, Transitional loans Nov-2021 3M L + 2.00 to 2.40% 425,000 250,466 174,534 JPMorgan Transitional loans Feb-2020 1M L + 2.25 to 4.00% 275,000 124,718 150,282 Various MBS Apr-2020 Various 292,649 292,649 - $ 1,492,649 $ 809,189 $ 683,460 Total Secured Borrowings $ 2,548,048 $ 1,189,392 $ 1,358,656 Borrowings under repurchase agreements Total Borrowings under repurchase agreements Total Borrowings under credit facilities Borrowings under credit facilities Available Capacity (1) Facility Size (1) Carrying Value(1)

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READY CAPITAL SNAPSHOT ($ amounts in thousands, except per share data) 17 (5) Excludes the equity component of our 2017 convertible note issuance 1) Average carrying value includes average quarterly carrying value of loan and servicing asset balances 2) Gross yields include interest income, accretion of discount, MSR creation, income from our unconsolidated joint venture, realized gains (losses) on loans held for sale, unrealized gains (losses) on loans held for sale and servicing income net of interest expense and amortization of deferred financing costs on an annualized basis. 3) The Company finances the assets included in the Investment Type through securitizations, repurchase agreements, warehouse facilities and bank credit facilities. Interest expense is calculated based on interest expense and deferred financing amortization for the quarter ended 12/31/2019 on an annualized basis. 4) Excludes loans, held for sale, at fair value 5) Excludes the equity component of our 2017 convertible note issuance. Common Stockholders' equity $ 825,412 Common Stockholders' equity (adjusted) (5) $ 823,966 Total Common Shares outstanding 51,127,326 Net Book Value per Common Share $ 16.14 Adjusted Net Book Value per Common Share $ 16.12 Book Equity Value Metrics SBA servicing rights - UPB $ 568,017 SBA servicing rights- carrying value $ 17,660 Freddie Mac servicing rights - UPB $ 1,167,476 Freddie Mac servicing rights - carrying value $ 13,135 Residential servicing rights - UPB $ 8,164,604 Residential servicing rights - carrying value $ 91,174 Servicing Portfolio Metrics Average Carrying Value (1) Debt Cost (3) Levered Yield Loan Acquisitions 1,072,225 $ 6.1% 815,634 $ 4.0% 12.6% SBC Originations 2,350,042 $ 6.4% 1,776,658 $ 4.5% 12.0% SBA Originations, Acquisitions, & Servicing 259,935 $ 18.8% 180,543 $ 4.8% 50.6% Total 3,682,202 $ 7.1% 2,772,835 $ 4.4% 15.6% Investment Type Gross Yield (2) Average Debt Balance Net income | Core earnings $ 20,936 | $ 20,965 Earnings per share - Basic and diluted $ 0.43 Core Earnings per Common Share $ 0.43 Return on Equity per Common Share 10.9% Core Return on Equity per Common Share 10.9% Dividend Yield 10.4% Q4 2019 Earnings Data Metrics % Fixed vs Floating Rate 44.1% / 55.9% % Originated vs Acquired 66.8% / 33.2% Weighted Average LTV - SBC 61% Weighted Average LTV - SBA 83% Weighted Average LTV - Acquired 43% Loan Portfolio Metrics (4)

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APPENDIX 18

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PER SHARE FINANCIAL PERFORMANCE BY QUARTER 19 ► Adjusted net book value of $16.12 per common share as of December 31, 2019 Per Share Trends $0.30 $0.90 $0.25 $0.27 $0.43 $0.34 $0.34 $0.37 $0.40 $0.43 $0.40 $0.40 $0.40 $0.40 $0.40 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Earnings Core earnings Dividends declared

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BALANCE SHEET BY QUARTER 20 (In Thousands) Assets Cash and cash equivalents $ 54,406 $ 47,597 $ 41,925 $ 52,727 $ 67,928 Restricted cash 28,921 29,979 38,019 45,303 51,728 Loans, net 1,193,392 1,057,023 1,002,676 1,380,359 1,727,984 Loans, held for sale, at fair value 115,258 115,778 177,507 203,110 188,077 Mortgage backed securities, at fair value 91,937 91,435 99,407 96,181 92,466 Loans eligible for repurchase from Ginnie Mae 74,180 73,057 69,101 71,528 77,953 Investment in unconsolidated joint venture 33,438 39,025 47,551 55,663 58,850 Purchased future receivables, net — — — — 43,265 Derivative instruments 2,070 2,483 3,670 4,181 2,814 Servicing rights 120,062 115,652 114,761 114,480 121,969 Real estate acquired in settlement of loans 7,787 75,517 65,834 60,807 58,573 Other assets 64,335 69,604 71,162 77,553 106,925 Assets of consolidated VIEs 1,251,057 1,561,864 2,108,710 1,961,127 2,378,486 Total Assets $ 3,036,843 $ 3,279,014 $ 3,840,323 $ 4,123,019 $ 4,977,018 Liabilities Secured borrow ings 834,547 848,225 988,868 1,315,534 1,189,392 Securitized debt obligations of consolidated VIEs, net 905,367 1,140,919 1,567,113 1,465,539 1,815,154 Convertible notes, net 109,979 110,241 110,506 110,773 111,040 Senior secured notes and Corporate notes, net 227,327 227,608 227,881 283,630 329,275 Guaranteed loan financing 229,678 34,047 28,445 25,571 485,461 Contingent consideration 1,207 — — — — Liabilities for loans eligible for repurchase from Ginnie Mae 74,180 73,057 69,101 71,528 77,953 Derivative instruments 3,625 3,392 9,032 11,906 5,250 Dividends payable 13,346 13,396 18,292 18,292 21,302 Accounts payable and other accrued liabilities 73,512 67,240 73,679 81,235 97,407 Total Liabilities $ 2,472,768 $ 2,518,125 $ 3,092,917 $ 3,384,008 $ 4,132,234 Stockholders’ Equity Common stock 3 4 4 4 5 Additional paid-in capital 540,478 720,680 720,812 720,823 822,837 Retained earnings 5,272 21,790 14,914 9,173 8,746 Accumulated other comprehensive loss (922) (1,328) (7,703) (10,253) (6,176) Total Ready Capital Corporation equity 544,831 741,146 728,027 719,747 825,412 Non-controlling interests 19,244 19,743 19,379 19,264 19,372 Total Stockholders’ Equity $ 564,075 $ 760,889 $ 747,406 $ 739,011 $ 844,784 Total Liabilities and Stockholders’ Equity $ 3,036,843 $ 3,279,014 $ 3,840,323 $ 4,123,019 $ 4,977,018 Adjusted Book Value per Share $ 16.91 $ 16.65 $ 16.35 $ 16.16 $ 16.12 12/31/2019 12/31/2018 3/31/2019 6/30/2019 9/30/2019

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STATEMENT OF INCOME BY QUARTER 21 (1) Certain balances have been reclassified to match current period presentation (In thousands, except share data) Interest income $ 46,204 $ 48,753 $ 57,034 $ 59,723 $ 64,406 Interes t expense (31,240) (35,775) (35,753) (39,390) (40,962) Net interest income before provision for loan losses $ 14,964 $ 12,978 $ 21,281 $ 20,333 $ 23,444 Provision for loan losses (1,131) (518) (1,348) (693) (1,125) Net interest income after provision for loan losses $ 13,833 $ 12,460 $ 19,933 $ 19,640 $ 22,319 Non-interest income Residential mortgage banking activities $ 11,561 $ 14,587 $ 21,021 $ 29,013 $ 18,918 Net realized gain on financial instruments 10,610 7,282 6,255 7,377 8,044 Net unrealized gain (loss) on financial instruments (11,112) (6,912) (7,006) (7,881) 3,009 Servicing income, net of amortization and impairment 7,116 6,752 7,811 7,449 8,653 Income on purchased future receivables, net — — — — 2,362 Income on unconsolidated joint venture 2,728 2,929 2,083 1,047 29 Other income 1,222 900 2,792 2,979 4,407 Gain on bargain purchase — 30,728 — — — Total non-interest income $ 22,125 $ 56,266 $ 32,956 $ 39,984 $ 45,422 Non-interest expense Employee compensation and benefits (12,847) (11,448) (12,509) (13,438) (13,842) All ocate d emp loyee compensat ion an d bene fits f rom re late d party (600) (853) (1,250) (1,500) (1,870) Variable expenses on residential mortgage banking activities (4,108) (9,176) (13,501) (17,318) (11,765) Professional fees (420) (1,829) (1,586) (2,030) (1,989) Management fees – related party (2,058) (1,997) (2,495) (2,495) (2,591) Incentive fees – related party (467) — — — (106) Loan servicing expense (3,442) (3,648) (4,571) (4,866) (4,891) ORM merger expenses — (5,467) (603) (51) (1,629) Other operating expenses (5,267) (6,861) (8,085) (8,144) (10,070) Total non-interest expense $ (29,209) $ (41,279) $ (44,600) $ (49,842) $ (48,753) Income before provision for income taxes $ 6,749 $ 27,447 $ 8,289 $ 9,782 $ 18,988 Provision for income (taxes) benefit 2,737 3,003 2,956 2,645 1,948 Ne t incom e $ 9,486 $ 30,450 $ 11,245 $ 12,427 $ 20,936 Less: Net income attributable to non-controlling interest 309 983 276 323 508 Net income attributable to Ready Capital Corporation $ 9,177 $ 29,467 $ 10,969 $ 12,104 $ 20,428 Earnings per common share - basic $0.30 $ 0.90 $ 0.25 $ 0.27 $ 0.43 Earn ings per common s h are - dil u te d $0.30 $ 0.90 $ 0.25 $ 0.27 $ 0.43 Weighted-average shares outstanding - Basic 32,122,503 32,556,875 44,425,598 44,438,652 46,446,573 Weighted-average shares outstanding - Diluted 32,138,712 32,563,644 44,431,263 44,467,801 46,482,470 Dividends declared per share of common stock $0.40 $ 0.40 $ 0.40 $ 0.40 $ 0.40 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

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CORE EARNINGS RECONCILIATION BY QUARTER 22 We believe that providing investors with Core Earnings, a non-U.S. GAAP financial measure, in addition to the related U.S. GAAP measures, gives investors greater transparency into the information used by management in our financial and operational decision-making. However, because Core Earnings is an incomplete measure of our 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, our net income as a measure of our financial performance. In addition, because not all companies use identical calculations, our presentation of Core Earnings may not be comparable to other similarly-titled measures of other companies. We calculate Core Earnings as GAAP net income (loss) excluding the following: i) any unrealized gains or losses on certain MBS ii) any realized gains or losses on sales of certain MBS iii) any unrealized gains or losses on Residential MSRs iv) one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains, or merger related expenses In calculating Core Earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains and losses on MBS acquired by us in the secondary market, but is not adjusted to exclude unrealized gains and losses on MBS retained by us as part of our loan origination businesses, where we transfer originated loans into an MBS securitization and retain an interest in the securitization. In calculating Core Earnings, we do 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 our loan origination businesses because we consider the unrealized gains and losses that are generated in the loan origination and securitization process to be a fundamental part of this business and an indicator of the ongoing performance and credit quality of our historical loan originations. In calculating Core 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-core. Certain MBS positions are considered to be non-core due to a variety of reasons which may include collateral type, duration, and size. In addition, in calculating Core Earnings, Net Income (in accordance with GAAP) is adjusted to exclude unrealized gains or losses on Residential MSRs, held at fair value. We treat our commercial MSRs and Residential MSRs as two separate classes based on the nature of the underlying mortgages and our treatment of these assets as two separate pools for risk management purposes. Servicing rights relating to our small business commercial business are accounted for under ASC 860, Transfer and Servicing, while our residential MSRs are accounted for under the fair value option under ASC 825, Financial Instruments. In calculating Core Earnings, we do not exclude realized gains or losses on either commercial MSRs or residential MSRs, held at fair value, as servicing income is a fundamental part of our business and is an indicator of the ongoing performance. (In Thousands) Ne t Incom e $9,486 $ 30,450 $ 11,245 $ 12,427 $ 20,936 Reconciling items: Unrealized (gain) loss on mortgage servicing rights $2,171 $ 7,128 $ 6,339 $ 7,582 $ (2,482) Gain on bargain purchase — (30,728) — — — Merger transaction costs — 5,467 603 51 1,938 Non-recurring expenses — 726 67 — — Unrealized (gain) loss on mortgage-backed securities 226 14 106 85 29 Total reconciling items $2,397 $ (17,393) $ 7,115 $ 7,718 $ (515) Core earnings before income taxes $ 11,883 $ 13,057 $ 18,360 $ 20,145 $ 20,421 Income tax adjustments (547) (1,782) (1,585) (1,896) 544 Core earnings $ 11,336 $ 11,275 $ 16,775 $ 18,249 $ 20,965 Less: Core earnings attributable to non-controlling interests $369 $ 364 $ 412 $ 474 $ 509 Less: Income attributable to participating shares 57 82 79 79 413 Core earnings attributable to Common Stockholders $ 10,910 $ 10,829 $ 16,284 $ 17,696 $ 20,043 Core earnings per share $0.34 $ 0.34 $ 0.37 $ 0.40 $ 0.43 Weighted average common shares outstanding 32,122,503 32,556,875 44,425,598 44,438,652 46,446,573 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

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