Toggle SGML Header (+)


Section 1: 8-K (8-K)

sld_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): November  7, 2018

 

 

 

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.)

 

  

 

 

1140 Avenue of the Americas, 7th Floor

New York, NY 10036

 

(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. 


 

 

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

 

On November  7, 2018, the Company issued an earnings release announcing the financial results for the quarter ended September 30, 2018. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

 

On November 7, 2018,  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 September 30, 2018

99.2

 

Supplemental Financial Information for the quarter ended September 30, 2018

 

  

 


 

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/ Frederick C. Herbst

 

 

 

Name:  Frederick C. Herbst

 

 

 

Title:   Chief Financial Officer

 

 

Date: November  7,  2018

 

 


(Back To Top)

Section 2: EX-99.1 (EX-99.1)

sld_Ex99_1

 

Exhibit 99.1

 

READY CAPITAL CORPORATION ANNOUNCES THIRD QUARTER 2018 RESULTS

-  Net Income of $0.53 per share of common stock in the third quarter   -

-  Third Quarter Core Earnings grew 26% to $0.48 per share of common stock   -

-  Added over $400 Million of SBC Loans During Third Quarter 2018      -

 

New York, New York, November 7, 2018 / PRNewswire / – Ready Capital Corporation (“Ready Capital” or the “Company”) (NYSE: RC) today reported financial results for the quarter ended September 30, 2018.      

Third Quarter Highlights:

·

Net income of $17.6 million, or $0.53 per share of common stock

·

Core earnings of $16.1 million, or $0.48 per share of common stock, up 26% compared to the same quarter last year

·

Return on Equity of 12.4%

·

Adjusted net book value of $17.08 per share of common stock as of September 30, 2018

·

Originated $291.2 million of small balance commercial (“SBC”) loans

·

Originated $51.1 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program

·

Originated $472.1 million of residential mortgage loans

·

Acquired $86.4 million of SBC loans

·

Declared and paid dividend of $0.40 per share. 

 

A summary of Ready Capital’s operating results for the quarter ended September 30, 2018 is presented below. Ready Capital reported U.S. GAAP net income for the three months ended September 30, 2018 of $17.6 million, or $0.53 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $16.1 million, or $0.48 per share of common stock.

 

“For the third consecutive quarter, our diversified multi-pronged platform enabled us to outperform our stated goal of a return on equity of at least 10%,” commented Thomas Capasse, Chairman and Chief Executive Officer. “Our focus on growing our earnings from our stable small balance commercial origination franchise, along with our robust origination and acquisition platform, also continued to contribute to our strong results and our efforts to provide strong value for our shareholders.”

The Company issued a supplemental presentation of its third quarter 2018 results, which can be viewed in the investor relations section at www.readycapital.com.

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 or realized gains (losses) related to certain mortgage backed securities, unrealized gains (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 providing investors with this non-U.S. GAAP financial information, in addition to the related U.S. GAAP measures, gives 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.

 

 

 


 

The following table reconciles net income computed in accordance with U.S. GAAP to Core Earnings for the three months ended September 30, 2018:  

 

 

 

 

(In Thousands)

    

 

Three Months Ended September 30, 2018

Net Income

 

$

17,569

Reconciling items:

 

 

 

Unrealized loss on mortgage-backed securities

 

 

(10)

Unrealized (gain) on mortgage servicing rights

 

 

(1,969)

Total reconciling items

 

$

(1,979)

Core earnings before income taxes

 

$

15,590

     Income tax adjustments

 

 

495

Core earnings

 

$

16,085

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Thursday,  November  8, 2018 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended September 30, 2018.  The conference call can be accessed by dialing 877-407-0792 (domestic) or 201-689-8263 (international).

 

The conference call will also 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.  A replay of the call will also be available on the Company’s website approximately two hours after the live call through November 22, 2018.  To access the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international). The replay pin number is 13683750.

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.

 

 

 

 

 

Contact

Investor Relations
Ready Capital Corporation
212-257-4666
InvestorRelations@readycapital.com

 

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


 

READY CAPITAL CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

(In Thousands)

    

September 30, 2018

    

December 31, 2017

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

47,845

 

$

63,425

Restricted cash

 

 

18,864

 

 

11,666

Loans, net (including $22,680 and $188,150 held at fair value)

 

 

1,256,177

 

 

1,017,920

Loans, held for sale, at fair value

 

 

124,988

 

 

216,022

Mortgage backed securities, at fair value

 

 

94,341

 

 

39,922

Loans eligible for repurchase from Ginnie Mae

 

 

79,600

 

 

95,158

Investment in unconsolidated joint venture

 

 

40,914

 

 

55,369

Derivative instruments

 

 

5,846

 

 

4,725

Servicing rights (including $91,708 and $72,295 held at fair value)

 

 

118,221

 

 

94,038

Receivable from third parties

 

 

1,529

 

 

6,756

Other assets

 

 

59,160

 

 

56,840

Assets of consolidated VIEs

 

 

1,053,274

 

 

861,662

Total Assets

 

$

2,900,759

 

$

2,523,503

Liabilities

 

 

 

 

 

 

Secured borrowings

 

 

817,051

 

 

631,286

Promissory note

 

 

5,363

 

 

6,107

Securitized debt obligations of consolidated VIEs, net

 

 

752,432

 

 

598,148

Convertible notes, net

 

 

109,743

 

 

108,991

Senior secured notes, net

 

 

178,757

 

 

138,078

Corporate debt, net

 

 

48,301

 

 

 —

Guaranteed loan financing

 

 

246,229

 

 

293,045

Contingent consideration

 

 

1,773

 

 

10,016

Liabilities for loans eligible for repurchase from Ginnie Mae

 

 

79,600

 

 

95,158

Derivative instruments

 

 

39

 

 

282

Dividends payable

 

 

13,346

 

 

12,289

Accounts payable and other accrued liabilities

 

 

79,089

 

 

74,636

Total Liabilities

 

$

2,331,723

 

$

1,968,036

Stockholders’ Equity

 

 

 

 

 

 

Common stock, $0.0001 par value, 500,000,000 shares authorized, 32,065,112 and 31,996,440 shares issued and outstanding, respectively

 

 

 3

 

 

 3

Additional paid-in capital

 

 

539,869

 

 

539,455

Retained earnings (deficit)

 

 

9,698

 

 

(3,385)

Total Ready Capital Corporation equity

 

 

549,570

 

 

536,073

Non-controlling interests

 

 

19,466

 

 

19,394

Total Stockholders’ Equity

 

$

569,036

 

$

555,467

Total Liabilities and Stockholders’ Equity

 

$

2,900,759

 

$

2,523,503

 


 

READY CAPITAL CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

(In Thousands, except share data)

    

2018

    

2017

    

2018

    

2017

 

Interest income

 

$

44,287

 

$

35,038

 

$

123,295

 

$

102,169

 

Interest expense

 

 

(28,925)

 

 

(19,908)

 

 

(77,996)

 

 

(53,579)

 

Net interest income before provision for loan losses

 

$

15,362

 

$

15,130

 

$

45,299

 

$

48,590

 

Provision for loan losses

 

 

(800)

 

 

(466)

 

 

(571)

 

 

(1,857)

 

Net interest income after provision for loan losses

 

$

14,562

 

$

14,664

 

$

44,728

 

$

46,733

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains on residential mortgage banking activities, net of variable loan expenses

 

 

8,674

 

 

10,735

 

 

30,170

 

 

32,229

 

Other income

 

 

1,204

 

 

1,853

 

 

4,364

 

 

4,281

 

Income on unconsolidated joint venture

 

 

2,178

 

 

 —

 

 

9,420

 

 

 —

 

Servicing income, net of amortization and impairment of $1,425 and $4,005  for the three and nine months ended September 30, 2018, and $976 and $5,252 for the three and nine months ended September 30, 2017, respectively

 

 

6,922

 

 

6,134

 

 

19,959

 

 

16,208

 

Total non-interest income

 

$

18,978

 

$

18,722

 

 

63,913

 

 

52,718

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

(14,163)

 

 

(13,715)

 

 

(43,755)

 

 

(40,630)

 

Allocated employee compensation and benefits from related party

 

 

(1,200)

 

 

(990)

 

 

(3,600)

 

 

(3,010)

 

Professional fees

 

 

(2,294)

 

 

(2,151)

 

 

(7,343)

 

 

(6,334)

 

Management fees – related party

 

 

(2,070)

 

 

(2,034)

 

 

(6,118)

 

 

(6,018)

 

Incentive fees – related party

 

 

 —

 

 

 —

 

 

(676)

 

 

 —

 

Loan servicing expense

 

 

(4,247)

 

 

(3,388)

 

 

(11,340)

 

 

(7,513)

 

Other operating expenses

 

 

(6,548)

 

 

(7,447)

 

 

(23,475)

 

 

(19,183)

 

Total non-interest expense

 

$

(30,522)

 

$

(29,725)

 

$

(96,307)

 

$

(82,688)

 

Net realized gain on financial instruments

 

 

6,946

 

 

5,695

 

 

27,796

 

 

13,151

 

Net unrealized gain on financial instruments

 

 

8,500

 

 

2,678

 

 

15,964

 

 

4,933

 

Income before provision for income taxes

 

$

18,464

 

$

12,034

 

$

56,094

 

$

34,847

 

Provision for income (taxes) benefit

 

 

(895)

 

 

340

 

 

(4,123)

 

 

(1,763)

 

Net income

 

$

17,569

 

$

12,374

 

$

51,971

 

$

33,084

 

Less: Net income attributable to non-controlling interest

 

 

638

 

 

533

 

 

1,890

 

 

1,891

 

Net income attributable to Ready Capital Corporation

 

$

16,931

 

$

11,841

 

$

50,081

 

$

31,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

 

$

0.53

 

$

0.37

 

$

1.57

 

$

1.00

 

Earnings per common share - diluted

 

$

0.53

 

$

0.37

 

$

1.57

 

$

1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

32,109,642

 

 

32,026,494

 

 

32,073,665

 

 

31,120,476

 

Diluted

 

 

32,130,262

 

 

32,028,980

 

 

32,090,126

 

 

31,121,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.40

 

$

0.37

 

$

1.17

 

$

1.11

 

 

 

 


 

 

READY CAPITAL CORPORATION

UNAUDITED SEGMENT REPORTING

fOR THE three MONTHS ENDED September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

SBA Originations,

    

Residential

    

 

    

 

 

 

Loan

 

SBC

 

Acquisitions,

 

Mortgage

 

Corporate-

 

 

(In Thousands)

 

Acquisitions

 

Originations

 

and Servicing

 

Banking

 

Other

 

Consolidated

Interest income

 

$

11,946

 

$

21,671

 

$

9,699

 

$

971

 

$

 —

 

$

44,287

Interest expense

 

 

(7,755)

 

 

(16,045)

 

 

(4,301)

 

 

(824)

 

 

 —

 

 

(28,925)

Net interest income before provision for loan losses

 

$

4,191

 

$

5,626

 

$

5,398

 

$

147

 

$

 —

 

$

15,362

Provision for loan losses

 

 

(796)

 

 

(101)

 

 

97

 

 

 —

 

 

 

 

 

(800)

Net interest income after provision for loan losses

 

$

3,395

 

$

5,525

 

$

5,495

 

$

147

 

$

 —

 

$

14,562

Non-interest income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains on residential mortgage banking activities, net of variable loan expenses

 

$

 —

 

$

 —

 

$

 —

 

$

8,674

 

$

 —

 

$

8,674

Other income (loss)

 

 

75

 

 

794

 

 

279

 

 

56

 

 

 —

 

 

1,204

Income from unconsolidated joint venture

 

 

2,178

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

2,178

Servicing income

 

 

 5

 

 

389

 

 

1,352

 

 

5,176

 

 

 —

 

 

6,922

Total non-interest income

 

$

2,258

 

$

1,183

 

$

1,631

 

$

13,906

 

$

 —

 

$

18,978

Employee compensation and benefits

 

 

(98)

 

 

(2,417)

 

 

(3,116)

 

 

(8,375)

 

 

(157)

 

 

(14,163)

Allocated employee compensation and benefits from related party

 

 

(120)

 

 

 —

 

 

 —

 

 

 —

 

 

(1,080)

 

 

(1,200)

Professional fees

 

 

(467)

 

 

(291)

 

 

(412)

 

 

(123)

 

 

(1,001)

 

 

(2,294)

Management fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2,070)

 

 

(2,070)

Incentive fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Loan servicing expense

 

 

(1,183)

 

 

(1,294)

 

 

(198)

 

 

(1,572)

 

 

 —

 

 

(4,247)

Other operating expenses

 

 

(450)

 

 

(2,545)

 

 

(929)

 

 

(2,080)

 

 

(544)

 

 

(6,548)

Total non-interest income (expense)

 

$

(2,318)

 

$

(6,547)

 

$

(4,655)

 

$

(12,150)

 

$

(4,852)

 

$

(30,522)

Net realized (loss) gain on financial instruments

 

 

774

 

 

3,253

 

 

2,919

 

 

 —

 

 

 —

 

 

6,946

Net unrealized gain (loss) on financial instruments

 

 

2,893

 

 

2,679

 

 

611

 

 

2,317

 

 

 —

 

 

8,500

Net income (loss) before provision for income taxes

 

$

7,002

 

$

6,093

 

$

6,001

 

$

4,220

 

$

(4,852)

 

$

18,464

Total assets

 

$

672,569

 

$

1,442,601

 

$

484,387

 

$

276,284

 

$

24,918

 

$

2,900,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

READY CAPITAL CORPORATION

UNAUDITED SEGMENT REPORTING

fOR THE NINE MONTHS ENDED September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

SBA Originations,

    

Residential

    

 

    

 

 

 

Loan

 

SBC

 

Acquisitions,

 

Mortgage

 

Corporate-

 

 

(In Thousands)

 

Acquisitions

 

Originations

 

and Servicing

 

Banking

 

Other

 

Consolidated

Interest income

 

$

34,602

 

$

58,423

 

$

27,411

 

$

2,859

 

$

 —

 

$

123,295

Interest expense

 

 

(19,779)

 

 

(43,912)

 

 

(11,892)

 

 

(2,413)

 

 

 —

 

 

(77,996)

Net interest income before provision for loan losses

 

$

14,823

 

$

14,511

 

$

15,519

 

$

446

 

$

 —

 

$

45,299

Provision for loan losses

 

 

(989)

 

 

 8

 

 

410

 

 

 —

 

 

 —

 

 

(571)

Net interest income after provision for loan losses

 

$

13,834

 

$

14,519

 

$

15,929

 

$

446

 

$

 —

 

$

44,728

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains on residential mortgage banking activities, net of variable loan expenses

 

$

 —

 

$

 —

 

$

 —

 

$

30,170

 

$

 —

 

$

30,170

Other income

 

 

342

 

 

3,409

 

 

447

 

 

166

 

 

 —

 

 

4,364

Income from unconsolidated joint venture

 

 

9,420

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

9,420

Servicing income

 

 

15

 

 

972

 

 

4,067

 

 

14,905

 

 

 —

 

 

19,959

Total non-interest income

 

$

9,777

 

$

4,381

 

$

4,514

 

$

45,241

 

$

 —

 

$

63,913

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

(410)

 

 

(7,339)

 

 

(9,510)

 

 

(26,025)

 

 

(471)

 

 

(43,755)

Allocated employee compensation and benefits from related party

 

 

(360)

 

 

 —

 

 

 —

 

 

 —

 

 

(3,240)

 

 

(3,600)

Professional fees

 

 

(928)

 

 

(1,012)

 

 

(1,414)

 

 

(347)

 

 

(3,642)

 

 

(7,343)

Management fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(6,118)

 

 

(6,118)

Incentive fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(676)

 

 

(676)

Loan servicing expense

 

 

(2,748)

 

 

(2,819)

 

 

89

 

 

(5,862)

 

 

 —

 

 

(11,340)

Other operating expenses

 

 

(3,267)

 

 

(8,512)

 

 

(3,009)

 

 

(6,760)

 

 

(1,927)

 

 

(23,475)

Total non-interest expense

 

$

(7,713)

 

$

(19,682)

 

$

(13,844)

 

$

(38,994)

 

$

(16,074)

 

$

(96,307)

Net realized gain on financial instruments

 

 

867

 

 

15,484

 

 

11,445

 

 

 —

 

 

 —

 

 

27,796

Net unrealized gain (loss) on financial instruments

 

 

3,695

 

 

4,441

 

 

325

 

 

7,503

 

 

 —

 

 

15,964

Net income (loss) before provision for income taxes

 

$

20,460

 

$

19,143

 

$

18,369

 

$

14,196

 

$

(16,074)

 

$

56,094

Total assets

 

$

672,569

 

$

1,442,601

 

$

484,387

 

$

276,284

 

$

24,918

 

$

2,900,759

 


(Back To Top)

Section 3: EX-99.2 (EX-99.2)

sld_Ex99_2

Exhibit 99.2

 

Doc1_raja_page_01.gif

Supplemental Financial Data Third Quarter 2018

 

 


 

Doc1_raja_page_02.gif

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 cause actual results to differ materially from those described in the forward-looking statements; Ready Capital Corporation (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 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. unless otherwise noted. All data is as of September 30, 2018, 2

 

 


 

Doc1_raja_page_03.gif

THIRD QUARTER 2018 HIGHLIGHTS (1) (2) (3) Inclusive of non-controlling interest Return on Equity is an annualized percentage equal to quarterly net income over the average monthly total stockholders’ equity for the period 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 Q3 Dividend yield for the period based on the 9/28/2018 closing share price of $16.65 Represents fully committed amounts (4) (5) (6) 3 Excludes the equity component of our 2017 convertible note issuance (7) Represents carrying value of loans BALANCE SHEET  Priced the securitization of $262.7 million of acquired SBC loans and will issue $217.0 million of senior bonds at a weighted average pass-through rate of 4.7%  Adjusted net book value(6) of $17.08 per common share  Loans increased by 3.9% to $2.4 billion(7) LOAN ORIGINATIONS(5) / ACQUISITIONS  SBC loan originations of $291.2 million  SBA loan originations of $51.1 million  Residential mortgage loan originations of $472.1 million  Acquired $86.4 million of SBC loans RETURNS  Return on Equity(2) of 12.4%  Core Return on Equity(3) of 11.3%  Dividend Yield(4) of 9.6% EARNINGS / DIVIDENDS  Net income of $17.6 million(1), or $0.53 per common share  Core earnings of $16.1 million(1), or $0.48 per common share  Declared dividend of $0.40 per share

 

 


 

Doc1_raja_page_04.gif

RETURN EQUITY ON Levered Yield (1) Equity Allocation & Servicing 1) Levered 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. 2) GAAP ROE is based on GAAP Net Income, while Core ROE is based on Core Earnings, which adjusts GAAP Net Income for the items in the “Core Earnings Reconciliation” slide. ROE based on net income before tax of the Residential Mortgage Banking business line divided by the business line’s equity. 3) 4 GAAP ROE (2) Core ROE (2) Core Segment Levered Yield (1) Q3'18 Q2'18 Q3'18 Q2'18 Loan Acquisitions 29.8 % 29.8 % 14.8 % SBC Originations 15.3 % 15.3 % 43.2 % SBA Originations, Acquisitions, 30.4 % 30.4 % 21.9 % Residential Mortgage Banking (3) 16.8 % 10.9 % 20.1 % 21.1 % 23.8 % 19.9 % 23.7 % Unallocated corporate finance and non-earning assets, net Gross return on equity Realized & unrealized gains, net Other income and expenses, net Investment advisory fees Provision for income taxes (2.5) (4.7) (2.3) (4.7) 18.6 % 19.1 % 17.6 % 19.0 % 6.5 4.7 6.4 4.7 (10.6) (10.5) (10.6) (10.5) (1.5) (1.6) (1.5) (1.6) (0.6) (0.5) (0.6) (0.5) Return on equity 12.4 % 11.2 % 11.3 % 11.1 %

 

 


 

Doc1_raja_page_05.gif

SBC ORIGINATION VOLUME PRODUCT TYPE BY $160.3 160 140 120 $105.2 100 80 60 40 20 0 Q3'17 Q4'17 SBA Q1'18 Freddie Mac Q2'18 Q3'18 Conventional Transitional Highlights • Total SBC and SBA loan originations of $342.3 million for the quarter • Conventional SBC loan originations up $56.0 million, or 80% QoQ • (1)Origination volumes are based on fully committed amounts 5 Fully committed ($ in millions) $122.6$125.4 $126.9 $95.5 $111.4$110.6 $75.4 $78.0 $69.4 $70.3 $46.7 $38.3 $48.3 $48.3 $51.1 $38.9 $23.0 $29.7

 

 


 

Doc1_raja_page_06.gif

Q3 2018 QUARTERLY SBC INVESTMENT ALLOCATION Total funded investments of $400.0 million added during the quarter. • • • Acquired $86.4 million of SBC loans Funded $313.6 million(1) of SBC and SBA loan originations. Debt Cost (6) # of Loans FX / ARM Prime + 29 Prime + 29 43 2.1 6.4% 5 years 96% / 4% 81% (1) (2) (3) (4) Represents actual disbursements during the quarter. $ in millions Based on fully funded loan amount 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 Weighted average debt cost of all assets of this loan type currently financed on the Company’s facilities SBA loan counts include the guaranteed and unguaranteed loan portion. (6) 6 (7) (in millions, except loan count inf ormation) Gross Investments(2) AvgGrossWeightedAvg Advance BalanceYield(4)Avg Maturity(3)Rate(5) Loan Originations Held-for-investment SBC $121.4 31$3.95.5%7 years100% / 0%70%1M Libor +286 Transitional 68.8 252.86.6%3 years3% / 97%60%1M Libor + 248 SBA(7) 13.3 650.17.6%21 years0% / 100%73%1M Libor + 250 Held-for-sale SBA(7) $39.8 65$0.37.6%21 years0% / 100%73%1M Libor + 250 Freddie Mac 70.3 292.44.5%16 years37% /63%100%1M Libor + 175 Total Loan Originations $313.6 SBC: 1M Libor + 236 215$1.65.9%11 years42% / 58%75% SBA: 1M Libor + 250; Prim e + 29 Loan Acquisitions SBC 86.4 SBC: 1M Libor + 248 Total Loan Acquisitions $86.4 43$2.16.4%5 years96% / 4%81% SBC: 1M Libor + 248 Total SBC Investment (Originations + Acquisitions) $400.0 SBC: 1M Libor + 236 258$1.76.0%10 years48% / 52%76% SBA: 1M Libor + 162; Prim e + 29

 

 


 

Doc1_raja_page_07.gif

SBC ORIGINATIONS - SEGMENT SNAPSHOT 30.0% • Originations of $291.2 million(1), 55% of loans held-for-investment are floating rate Gains on sales of Freddie Mac loans of $1.7 million Origination pipeline of $387.3 million(2) 25.0% 20.0% • 15.0% 10.0% • • • • $154.9 million of transitional loans $122.0 million of conventional SBC loans $110.4 million of Freddie Mac loans 5.0% 0.0% Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 (4) (5) Gross Levered Yield (ex. Gains)Gains on Loans, held for sale 1) 2) 3) 4) Represents fully committed amounts. As of October 31, 2018, including October 2018 fundings. $ in millions, as of quarter end. 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. Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. 7 6) 6.1% 4.2% 3.3% 4.5% 4.6% 13.8% 11.4% 15.9% 18.4% 10.7% Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Portfolio Metrics (Balance Sheet) Number of loans 368 365 357 397 403 Unpaid Principal Balance (3) $ 1,068 $ 1,094 $ 1,120 $ 1,202 $ 1,305 Carrying Value (3) $ 1,088 $ 1,108 $ 1,132 $ 1,213 $ 1,314 Weighted Average LTV 60% 61% 61% 60% 66% Weighted Average Coupon 6.3% 6.2% 6.4% 6.4% 6.9% Weighted Average Maturity 5 years 5 years 5 years 5 years 5 years Weighted Average Principal Balance (3) $ 2.9 $ 3.0 $ 3.1 $ 3.0 $ 3.2 Percentage of loans fixed / floating 64% / 36% 58% / 42% 56% / 44% 55% / 45% 56% / 44% Percentage of fixed, match funded (4) 60.2% 60.4% 82.2% 73.9% 62.8% Percentage of loans 30+ days delinquent 0.2% 1.4% 1.3% 1.7% 1.3% CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD

 

 


 

Doc1_raja_page_08.gif

SBA ORIGINATIONS, ACQUISITIONS, & SERVICING-SEGMENT SNAPSHOT 35.0% • $35.1 million of SBA secondary market loans sales, with an average sale premium of 9.8% Originations of $51.1 million(1) Origination pipeline of $147.2 million SBA loans(2) 30.0% 25.0% • • 20.0% 15.0% 10.0% 5.0% 0.0% Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 (5) Gross Levered Yield (ex. Gains)(4)Gains on Loans, held for sale financing costs. 1) 2) 3) 4) Represents fully committed amounts. As of October 31, 2018, including October 2018 fundings. $ in millions, as of quarter end. Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred 5) Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. 8 10.6% 12.4% 8.8% 10.3% 6.4% 21.7% 17.0% 19.8% 20.6% 18.0% Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Portfolio Metrics (Balance Sheet) Number of loans 2,194 2,106 2,062 2,029 1,976 Unpaid Principal Balance (3) $ 530 $ 508 $ 502 $ 489 $ 481 Carrying Value (3) $ 471 $ 455 $ 452 $ 438 $ 434 Weighted Average LTV 78% 78% 78% 79% 79% Weighted Average Coupon 5.9% 5.9% 6.2% 6.4% 6.6% Weighted Average Maturity 14 years 14 years 14 years 14 years 14 years Weighted Average Principal Balance (3) $ 0.2 $ 0.2 $ 0.2 $ 0.2 $ 0.2 Percentage of loans fixed / floating 1% / 99% 1% / 99% 1% / 99% 1% / 99% 1% / 99% Percentage of loans 30+ days delinquent 5.7% 6.9% 6.0% 3.6% 4.1% CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD

 

 


 

Doc1_raja_page_09.gif

LOAN ACQUISITIONS-SEGMENT SNAPSHOT 60.0% • At this stage of the credit cycle, ample inventory of opportunistic performing SBC loans Acquired $86.4 million of SBC loans Acquisition pipeline of $216.5 million SBC loans(4) 50.0% 40.0% • • 30.0% 20.0% 10.0% 0.0% Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Income on joint venture investment Gross Levered Yield (ex. Gains) 1) 2) 3) 4) Excludes joint venture investment. $ in millions, as of quarter end. Represents fixed rate loans that have been securitized. As of October 31, 2018, including October 2018 acquisitions. 9 36.9% 11.4% 8.0% 6.9% 19.0% 19.2% 18.4% 15.9% 14.5% GROSS LEVERED YIELD CURRENT QUARTER HIGHLIGHTS Portfolio Metrics(1) (Balance Sheet) Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Number of loans 766 858 976 1,019 949 Unpaid Principal Balance (2) $ 378 $ 417 $ 525 $ 602 $ 617 Carrying Value (2) $ 335 $ 376 $ 488 $ 569 $ 588 Weighted Average LTV 52% 49% 50% 51% 49% Weighted Average Coupon 6.3% 6.3% 6.5% 6.6% 6.7% Weighted Average Maturity 9 years 10 years 8 years 8 years 8 years Weighted Average Principal Balance (2) $ 0.5 $ 0.5 $ 0.5 $ 0.6 $ 0.6 Percentage of loans fixed / floating 46% / 54% 49% / 51% 58% / 42% 62% / 38% 65% / 35% Percentage of fixed, match funded (3) 55.1% 43.7% 27.0% 15.5% 11.4% Percentage of loans performing / non-performing 93% / 7% 96% / 4% 97% / 3% 97% / 3% 98% / 2%

 

 


 

Doc1_raja_page_10.gif

RESIDENTIAL MORTGAGE BANKING – SEGMENT SNAPSHOT $8.0 • MSR portfolio of approximately $7.3 billion in UPB, up 3% compared to Q2 • Fair market value of $91.7 million, up 7% compared to Q2 Originations of $472.1 million(2) Loan sales of $496.1 million, up 3% compared to Q2 Origination pipeline of $156.9 million in commitments to originate residential agency loans(2) $6.0 $4.0 • • $2.0 $0.0 • Q3' 17 Q4' 17 Q1'18 Q2'18 Q3'18 1) $ in millions. Represents activity during the quarter. 2) Represents fully committed amounts 10 Fair Q3' 17 Q4' 17 Q1' 18 Q2' 18 Q3' 18 Value ($ mm) $ 68.8 $ 72.3 $ 81.6 $ 85.6 $ 91.7 $7.3 $6.8 $7.0 $6.6 $6.3 CURRENT QUARTER HIGHLIGHTS MSR PORTFOLIO (UPB IN $ BILLIONS) Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Portfolio Metrics (quarterly activity) Originations Unpaid principal balance (1) $ 490.9 $458.7 $438.9 $498.6 $472.1 % of Originations - Purchased 78.8% 71.9% 72.8% 80.6% 79.6% % of Originations - Refinanced 21.2% 28.1% 27.2% 19.4% 20.4% Channel - % Correspondent 37.7% 38.6% 41.0% 36.7% 37.0% Channel - % Retail 37.6% 41.1% 39.3% 41.6% 42.5% Channel - % Wholesale 24.7% 20.3% 19.7% 21.7% 20.5% Sales Unpaid principal balance (1) $ 503.9 $429.1 $475.5 $479.9 $496.1 % of UPB - Fannie/ Freddie securitizations 62.0% 60.6% 68.8% 67.6% 65.6% % of UPB - Ginnie Mae securitizations 26.4% 28.8% 20.4% 23.0% 24.3% % of UPB - Other investors 11.6% 10.6% 10.8% 9.4% 10.1% 

 

 


 

Doc1_raja_page_11.gif

ACTIVE SBC SBA LOAN SECURITIZATION PERFORMANCE AND 11 1) Represents remaining collateral in the securitization Securitization Original Collateral Balance Pool - Factor(1) Issuance Date Delinquency 30+ Delinquency 60+ Delinquency 90+ Cumulative Loss Originated Fixed Rate $727,754 RCMT 2014-1 September 2014 181,922 0.30 0.0% 0.0% 0.0% 0.0% RCMT 2015-2 November 2015 218,757 0.67 0.0% 0.0% 0.0% 0.0% RCMT 2016-3 November 2016 162,075 0.61 0.0% 0.0% 0.0% 0.0% RCMT 2018-4 March 2018 165,000 0.98 0.0% 0.0% 0.0% 0.0% Floating Rate $522,080 RCMF 2017-FL1 August 2017 243,797 0.50 0.0% 0.0% 0.0% 0.0% RCMF 2018-FL2 June 2018 278,283 1.00 0.0% 0.0% 0.0% 0.0% Freddie Mac $1,371,456 FRESB 2016-SB11 January 2016 109,965 0.71 0.0% 0.0% 0.0% 0.0% FRESB 2016-SB18 July 2016 118,037 0.86 0.0% 0.0% 0.0% 0.0% FRESB 2017-SB33 June 2017 219,852 0.94 0.0% 0.0% 1.4% 0.0% FRESB 2018-SB45 January 2018 362,018 0.99 0.0% 0.0% 0.0% 0.0% FRESB 2018-SB52 September 2018 561,584 1.00 0.0% 0.0% 0.0% 0.0% Acquired SBA $189,492 RCLT2015-1 June 2015 189,492 0.43 7.5% 4.0% 2.6% 0.9% Acquired - Perf orming $252,486 WVMT 2011-SBC2 March 2011 97,557 0.25 2.2% 2.2% 1.6% 3.7% SCMT 2017-SBC6 August 2017 154,929 0.62 1.0% 0.4% 0.1% 0.0% Total loan s e curitizations $3,063,268

 

 


 

Doc1_raja_page_12.gif

INTEREST RATE RISK SENSITIVITY ► 45% of our fixed rate loan portfolio is match funded 1) 2) 3) As a percent of carrying value Excludes loans held-for-sale, at fair value Based on portfolio as of September 30, 2018 and assumes no future changes in the composition of the portfolio. 12 INTEREST RATE SENSITIVITY Annual Net Interest Income Per Share (Pre-tax)(3) $0.03 $0.02 $0.01 $-25 basis point 50 basis point 75 basis point 100 basis point increase increase increase increase PORTFOLIO - FIXED VS FLOATING % of Total Loan Exposure (1)(2) Fixed Rate, not match funded, 26.9% Floating Rate, 50.8% Fixed Rate, match funded, 22.3%

 

 


 

Doc1_raja_page_13.gif

2018(1)(2) LOAN PORTFOLIO COMPOSITION SEPTEMBER 30, AS OF 11.1% Offices, 16.2% Services, Other, 51.3% 10.2% (1) As a percent of unpaid principal balance (2) Excludes loans held-for-sale, at fair value 13 SBA Collateral Type Physicians Child Day Care 10.1% Lodging, Veterinarians, Eating Places, 7.0% 5.2% California , 14.6% Texas, 11.3% Other, 51.3% Florida , New York, Georgia, 6.3% 5.4% Collateral Type Other, 15.0%SBA, 19.5% Industrial, 8.7% Office, 15.0%Multi-Family, 22.3% Retail, 19.5% Lien Position Other, 0.9% Subordinated Mortgage, 1.4% First Mortgage, 97.7% Geographic Location

 

 


 

Doc1_raja_page_14.gif

CAPITAL STRUCTURE – REDUCTION LIQUIDITY RISK IN Total Debt + Equity ($M) 14 Funding Mix Corporate Financing (in $M) Principal Balance Coupon YTM Convertible Notes $ 115 7.0% 7.0% Senior Secured Notes $ 180 7.5% 7.0% Retail Baby Bonds $ 50 6.5% 6.5% Total $ 345 7.2% 7.0% $2,012 $2,038 $2,193 $2,382 $2,481 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Common Equity Convertible senior notes Senior secured notes and Corporate debt Credit facilities and repurchase agreements Securitized debt obligations 34% 26% 7% 5% 28% 29% 31% 7% 5% 27% 31% 33% 30% 8% 5% 26% 24% 30% 33% 29% 10% 9% 5% 4% 23% HISTORICAL CAPITAL STRUCTURE CURRENT SOURCES OF FUNDING ► Since going public in Q4 2016, we continue to optimize our capital structure: • Issued $345 million of corporate debt: • Convertible notes: 6 year notes, 7.0% coupon, $115 million • Senior secured notes: 5 year notes, 7.5% coupon •$75 million in 2/2017; YTM of 7.5% •$65 million in 6/2017; YTM of 6.75% •$40 million in 1/2018, YTM of 6.5% • Retail Baby Bonds: 3 year notes, 6.5% coupon, $50 million ► No Q3 securitizations; priced $217.0 million securitization of acquired SBC loans in Q4 (November 2018)

 

 


 

Doc1_raja_page_15.gif

FINANCING LEVERAGE AND 4 3.5 3 2.5 2 1.5 1 0.5 0 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 15 Recourse Total 3.4x 3.2x 2.9x 2.7x 2.4x 2.0x 1.8x 1.7x 1.6x 1.2x HISTORICAL LEVERAGE 9/30/2018 Total Debt-to-Equity Ratio (in millions) Secured borrowings (warehouse credit facilities and borrowings under repo transactions) $ 817.1 Promissory note 5.4 Securitized debt obligations 752.3 Senior secured notes and corporate bonds 227.1 Convertible notes 109.7 Total Debt $ 1,911.6 Total Stockholders' Equity $ 569.0 Total debt-to-equity ratio 3.36 Total recourse debt-to-equity ratio Total Debt $ 1,911.6 Less: Securitized debt obligations (752.3) Total recourse debt $ 1,159.3 Total Stockholders' Equity $ 569.0 Total recourse debt-to-equity ratio 2.04  

 

 


 

Doc1_raja_page_16.gif

LOAN WAREHOUSE FACILITIES Bank Maturity Rate Description and Uses of Funds ► In July 2018, entered into a new warehouse facility with East West Bank to provide financing of up to $50.0 million for new originations of SBA 7(a) loans. 16 (1) $ in millions FacilityAvailable Size (1)Capacity (1) Borrowings under credit facilities JPMorgan May '19 1M L + 2.50% $ 225 $ 138 Borrowings are us ed to finance SBC and SBA loan acquis itions , and SBA loan originations . Keybank Feb '19 1M L + 1.75% 125 107 Borrowings are us ed to finance Freddie Mac SBC loan originations . East West July '20 Prim e +/-0.29 to 0.821% 30 10 Borrowings are us ed to finance SBA loan originations . GMFS facilities < 1 year 1M L + 1.75 to 2.125% 205 128 Borrowings are us ed to finance Res idential Agency loan originations . GMFS - MSR Sept '23 1M L + 2.50% 50 45 Borrowings are us ed to finance Res idential Agency MSRs . Total Borrowings under credit facilities$635$428 Borrowings under repurchase agreements Citibank June '19 1M L + 2.125 to 2.50% $ 500 $ 119 Borrowings are us ed to finance SBC loan originations and SBC loan acquis itions . Deutsche Bank Feb '20 3M L + 2.30 to 2.80% 300 190 Borrowings are us ed to finance SBC loan originations and Trans itional loan originations . JPMorgan Dec '20 1M L + 2.25 to 4.00% 200 163 Borrowings are us ed to finance SBC and Trans itional loan originations , and SBC loan acquis itions . Total Borrowings under repurchase agreements $1,000 $472 Total Secured Borrowings$1,635 $901  

 

 


 

Doc1_raja_page_17.gif

READY CAPITAL SNAPSHOT ($ amounts in thousands, except per share data) Investment Type Average Carrying (2) (3) 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) Sutherland 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 9/30/2018 on an annualized basis. Excludes loans, held for sale, at fair value Excludes the equity component of our 2017 convertible note issuance. 17 4) 5) Q3 2018 Earnings Data Metrics Net income attributable to Ready Capital Corporation $ 16,931 Earnings per share - Basic and diluted $ 0.53 Core Earnings per Common Share $ 0.48 Return on Equity per Common Share 12.4% Core Return on Equity per Common Share 11.3% Dividend Yield 9.6% Servicing Portfolio Metrics SBA servicing rights - UPB $ 483,796 SBA servicing rights-carrying value $ 16,688 Freddie Mac servicing rights - UPB $ 916,965 Freddie Mac servicing rights - carrying value $ 9,825 Residential servicing rights - UPB $ 7,278,230 Residential servicing rights - carrying value $ 91,708 Gross Average Debt Value(1) Yield Balance Debt Cost Levered Yield Loan Acquisitions $ 641,001 8.3% $ 564,777 5.5% 29.8% SBC Originations $ 1,346,901 7.2% $ 1,131,960 5.7% 15.3% SBA Originations, Acquisitions, & Servicing $ 451,398 11.2% $ 341,372 5.0% 30.4% Total $ 2,439,300 8.9% $ 2,038,109 5.5% 22.2% Loan Portfolio Metrics (4) Book Equity Value Metrics Common Stockholders' equity $ 549,570 % Fixed vs Floating Rate 49.2% / 50.8% Common Stockholders' equity (adjusted)(5) $ 547,590 % Originated vs Acquired 59.4% / 40.6% Total Common Shares outstanding 32,065,112 Weighted Average LTV - SBC 66% Net Book Value per Common Share $ 17.14 Weighted Average LTV - SBA 79% Adjusted Net Book Value per Common Share $ 17.08 Weighted Average LTV - Acquired 49%

 

 


 

Doc1_raja_page_18.gif

APPENDIX 18

 

 


 

Doc1_raja_page_19.gif

PER SHARE FINANCIAL PERFORMANCE ► Adjusted net book value of $17.08 per common share as of September 30, 2018 19 $0.60 $0.50 $0.40 $0.30 $0.20 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Earnings Core earnings Dividends declared $0.56 $0.53 $0.48 $0.48 $0.47 $0.47 $0.40 $0.40 $0.38 $0.38 $0.37 $0.37 $0.37 $0.37 $0.37 Per Share Trends

 

 


 

Doc1_raja_page_20.gif

BALANCE SHEET QUARTER BY Cash and cash equivalents $ 70,590 $ 63,425 $ 86,773 $ 105,833 $ 47,845 Short-term investments 99,994 — — — — Loans, held f or sale, at f air value 200,318 216,022 160,999 188,752 124,988 Loans eligible f or repurchase f rom Ginnie Mae 101,408 95,158 81,484 79,623 79,600 Derivative instruments 4,131 4,725 5,022 4,758 5,846 Receivable f rom third parties 6,756 6,756 11,064 980 1,529 Assets of consolidated VIEs 944,894 861,662 968,999 1,122,706 1,053,274 Liabilitie s Promissory note, net 6,494 6,107 5,883 5,524 5,363 Convertible notes, net 109,414 108,991 109,226 109,484 109,743 Guaranteed loan f inancing 313,388 293,045 278,500 263,920 246,229 Liabilities f or loans eligible f or repurchase f rom Ginnie Mae 101,408 95,158 81,484 79,623 79,600 Dividends payable 12,289 12,289 12,335 13,340 13,346 Total Liabilitie s $ 1,948,090 $ 1,968,036 $ 2,079,198 $ 2,248,422 $ 2,331,723 Common stock 3 3 3 3 3 Retained earnings (Def icit) (3,952) (3,385) 2,559 5,870 9,698 Non-controlling interests 19,338 19,394 19,737 19,228 19,466 Total Liabilitie s and Stock holde r s ’ Equity $ 2,503,143 $ 2,523,503 $ 2,640,954 $ 2,812,980 $ 2,900,759 20 Adjus te d Book Value pe r Shar e $ 16.68 $ 16.67 $ 16.68 $ 16.95 $ 17.08 Total Stock holde r s ’ Equity $ 555,053 $ 555,467 $ 561,756 $ 564,558 $ 569,036 Total Ready Capital Corporation equity 535,715 536,073 542,019 545,330 549,570 Additional paid-in capital 539,664 539,455 539,457 539,457 539,869 Stock holde r s ’ Equity Accounts payable and other accrued liabilities 54,579 74,636 64,490 72,659 79,089 Derivative instruments 358 282 756 935 39 Contingent consideration 9,037 10,016 10,732 1,686 1,773 Senior secured notes and Corporate notes, net 138,074 138,078 178,688 226,890 227,058 Securitized debt obligations of consolidated VIEs, net 680,282 598,148 679,871 795,503 752,432 Secured borrow ings 522,767 631,286 657,233 678,858 817,051 Total As s e ts $ 2,503,143 $ 2,523,503 $ 2,640,954 $ 2,812,980 $ 2,900,759 Other assets 35,356 56,840 53,592 56,948 59,160 Servicing rights 89,372 94,038 104,613 111,274 118,221 Investment in unconsolidated joint venture— 55,369 50,229 41,598 40,914 Mortgage backed securities, at f air value 41,371 39,922 47,181 50,070 94,341 Loans, net 892,896 1,017,920 1,057,034 1,035,330 1,256,177 Restricted cash 16,057 11,666 13,964 15,108 18,864 (In Thous ands ) 9/30/2017 12/31/2017 3/31/2018 6/30/2018 9/30/2018 As s e ts 

 

 


 

Doc1_raja_page_21.gif

STATEMENT INCOME QUARTER OF BY Interest expense (19,908) (21,067) (22,666) (26,407) (28,925) Provision f or loan losses (466) (506) (167) 397 (800) Non-inte r e s t incom e Other income 1,853 3,130 1,334 1,826 1,204 Servicing income, net of amortization and impairment 6,134 6,787 6,410 6,627 6,922 Non-inte r e s t e xpe ns e Allocated employee compensation and benef its f rom related party (990) (833) (1,200) (1,200) (1,200) Management f ees – related party (2,034) (2,041) (2,013) (2,036) (2,070) Loan servicing expense (3,388) (2,811) (4,093) (3,000) (4,247) Total non-inte r e s t e xpe ns e $ (29,725) $ (30,434) $ (33,693) $ (32,094) $ (30,522) Ne t unr e alize d gain on financial ins tr um e nts 2,678 2,066 3,008 4,457 8,500 Provision f or income taxes 340 (76) (2,563) (665) (895) Less: Net income attributable to non-controlling interest 533 633 664 588 638 Ear nings pe r com m on s har e - bas ic $ 0.37 $ 0.38 $ 0.56 $ 0.48 $ 0.53 Weighted-average shares outstanding - Basic 32,026,494 32,031,494 32,036,504 32,073,717 32,109,642 Divide nds de clar e d pe r s har e of com m on s tock $ 0.37 $ 0.37 $ 0.37 $ 0.40 $ 0.40 21 Weighted-average shares outstanding - Diluted 32,028,980 32,034,610 32,045,844 32,092,750 32,130,262 Ear nings pe r com m on s har e - dilute d $ 0.37 $ 0.38 $ 0.56 $ 0.48 $ 0.53 Ne t incom e attr ibutable to Re ady Capital Cor por ation  $ 11,841 $ 12,097 $ 17,854 $ 15,296 $ 16,931 Ne t incom e $ 12,374 $ 12,730 $ 18,518 $ 15,884 $ 17,569 Income bef ore provision f or income taxes (benef it) $ 12,034 $ 12,806 $ 21,081 $ 16,549 $ 18,464 Ne t r e alize d gain on financial ins tr um e nts 5,695 6,177 12,232 8,620 6,946 Other operating expenses (7,447) (7,752) (8,011) (8,916) (6,548) Incentive f ees – related party— — (408)(269)— Prof essional f ees (2,151) (2,588) (2,648) (2,401) (2,294) Employee compensation and benef its (13,715) (14,409) (15,320) (14,272) (14,163) Total non-inte r e s t incom e $ 18,722 $ 20,435 $ 25,217 $ 19,718 $ 18,978 Income on unconsolidated joint venture — 1,048 5,739 1,503 2,178 Gains on residential mortgage banking activities, net of variable loan expenses $ 10,735 $ 9,470 $ 11,734 $ 9,762 $ 8,674 Ne t inte r e s t incom e afte r pr ovis ion for loan los s e s $ 14,664 $ 14,562 $ 14,317 $ 15,848 $ 14,562 Ne t inte r e s t incom e be for e pr ovis ion for loan los s e s $ 15,130 $ 15,068 $ 14,484 $ 15,451 $ 15,362 (In Thous ands , e xce pt s har e data) Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Interest income $ 35,038 $ 36,135 $ 37,150 $ 41,858 $ 44,287

 

 


 

Doc1_raja_page_22.gif

CORE EARNINGS RECONCILIATION Re conciling ite m s : Unrealized (gain) loss on mortgage servicing rights 1,728 47 (4,155) (253) (1,969) Cor e e ar nings be for e incom e taxe s $ 13,908 $ 12,801 $ 14,442 $ 15,717 $ 15,590 Cor e e ar nings $ 12,871 $ 12,442 $ 15,489 $ 15,781 $ 16,085 Cor e e ar nings attr ibutable to Com m on Stock holde r s $ 12,317 $ 11,823 $ 14,935 $ 15,197 $ 15,501 We ighte d ave r age com m on s har e s outs tanding 32,026,494 32,031,494 32,036,504 32,073,717 32,109,642 22 Cor e e ar nings pe r s har e $ 0.38 $ 0.37 $ 0.47 $ 0.47 $ 0.48 Less: Core earnings attributable to non-controlling interests$ 554 $ 619 $ 555 $ 584 $ 584 Income tax adjustments (1,037) (359) 1,047 64 495 Total reconciling items $ 1,534 $ 71 $ (4,076) $ (167) $ (1,979) Unrealized (gain) loss on mortgage-backed securities$ (194) $ 24 $ 79 $ 86 $ (10) (In Thous ands ) Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Ne t Incom e $ 12,374 $ 12,730 $ 18,518 $ 15,884 $ 17,569

 

 


 

Doc1_raja_page_23.gif

[LOGO]

 


(Back To Top)