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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): November 6, 2019

 

 

 

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 November 6, 2019, the Company issued an earnings release announcing the financial results for the quarter ended September 30, 2019. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

 

On November 6,  2019,  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 November 6, 2019

99.2

 

Supplemental Financial Information for the quarter ended September 30, 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: November 6,  2019

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

rc_Ex99_1

 

Exhibit 99.1

 

READY CAPITAL CORPORATION ANNOUNCES THIRD QUARTER 2019 RESULTS

-  Net Income of $0.27 per share of common stock in the third quarter   -

-  Core Earnings of $0.40 per share of common stock in the third quarter   -

-  Originated and acquired over $590 million of Small Balance Commercial (SBC) loans in Q3 2019   -

 

New York, New York, November 6, 2019 / 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-sized balance commercial loans, today reported financial results for the quarter ended September 30, 2019.  A summary of Ready Capital’s operating results for the quarter ended September 30, 2019 is presented below. Ready Capital reported U.S. GAAP Net Income for the three months ended September 30, 2019 of $12.4 million, or $0.27 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $18.2 million, or $0.40 per share of common stock.

   Third Quarter Highlights:

·

U.S. GAAP Net Income of $12.4 million, or $0.27 per diluted share of common stock

·

Core Earnings of $18.2 million, or $0.40 per diluted share of common stock

·

Adjusted net book value of $16.16 per share of common stock as of September 30, 2019

·

Originated $465.4 million and acquired $77.9 million of small balance commercial (“SBC”) loans

·

Originated $48.2 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program

·

Originated $656.8 million of residential mortgage loans

·

Declared and paid dividend of $0.40 per share

·

Subsequent to quarter end, completed the acquisition of Knight Capital LLC

 

Thomas Capasse, Chairman and Chief Executive Officer commented, “We are pleased with the quarter’s financial results which mark continued progress in providing our shareholders with a stable and attractive risk adjusted return. Record origination levels in both our small balance commercial and residential operating businesses are indicative of the operating leverage we anticipated with increased scale.”

 

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 September 30, 2019:  

 

 

 

 

 

Three Months Ended

(In Thousands)

 

September 30, 

Net Income

$

12,427

Reconciling items:

 

 

Unrealized loss on mortgage-backed securities

 

85

Realized loss on mortgage-backed securities

 

 -

Unrealized loss on mortgage servicing rights

 

7,582

Merger transaction costs

 

51

Non-recurring expenses

 

 -

Total reconciling items

$

7,718

Core earnings before income taxes

$

20,145

     Income tax adjustments

 

(1,896)

Core earnings

$

18,249

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,  November 7, 2019 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended September 30, 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: 1-877-300-8521

International: 1-412-317-6026

Conference ID #: 10136503

 

Conference Call Playback:

 

Domestic: 1-844-512-2921

International: 1-412-317-6671

Replay Pin #: 10136503

 

The playback can be accessed through November  21, 2019.

 

 

 

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-sized 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)

    

September 30, 2019

    

December 31, 2018

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

52,727

 

$

54,406

Restricted cash

 

 

45,303

 

 

28,921

Loans, net (including $20,434 and $22,664 held at fair value)

 

 

1,380,359

 

 

1,193,392

Loans, held for sale, at fair value

 

 

203,110

 

 

115,258

Mortgage backed securities, at fair value

 

 

96,181

 

 

91,937

Loans eligible for repurchase from Ginnie Mae

 

 

71,528

 

 

74,180

Investment in unconsolidated joint ventures

 

 

55,663

 

 

33,438

Derivative instruments

 

 

4,181

 

 

2,070

Servicing rights (including $84,638 and $93,065 held at fair value)

 

 

114,480

 

 

120,062

Receivable from third parties

 

 

705

 

 

8,888

Real estate acquired in settlement of loans, held for sale

 

 

60,807

 

 

7,787

Other assets

 

 

76,848

 

 

55,447

Assets of consolidated VIEs

 

 

1,961,127

 

 

1,251,057

Total Assets

 

$

4,123,019

 

$

3,036,843

Liabilities

 

 

 

 

 

 

Secured borrowings

 

 

1,315,534

 

 

834,547

Securitized debt obligations of consolidated VIEs, net

 

 

1,465,539

 

 

905,367

Convertible notes, net

 

 

110,773

 

 

109,979

Senior secured notes, net

 

 

179,189

 

 

178,870

Corporate debt, net

 

 

104,441

 

 

48,457

Guaranteed loan financing

 

 

25,571

 

 

229,678

Liabilities for loans eligible for repurchase from Ginnie Mae

 

 

71,528

 

 

74,180

Derivative instruments

 

 

11,906

 

 

3,625

Dividends payable

 

 

18,292

 

 

13,346

Accounts payable and other accrued liabilities

 

 

81,235

 

 

74,719

Total Liabilities

 

$

3,384,008

 

$

2,472,768

Stockholders’ Equity

 

 

 

 

 

 

Common stock, $0.0001 par value, 500,000,000 shares authorized, 44,421,815 and 32,105,112 shares issued and outstanding, respectively

 

 

 4

 

 

 3

Additional paid-in capital

 

 

720,823

 

 

540,478

Retained earnings

 

 

9,173

 

 

5,272

Accumulated other comprehensive loss

 

 

(10,253)

 

 

(922)

Total Ready Capital Corporation equity

 

 

719,747

 

 

544,831

Non-controlling interests

 

 

19,264

 

 

19,244

Total Stockholders’ Equity

 

$

739,011

 

$

564,075

Total Liabilities and Stockholders’ Equity

 

$

4,123,019

 

$

3,036,843

 

READY CAPITAL CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

(In Thousands, except share data)

    

2019

    

2018

    

2019

    

2018

 

Interest income

 

$

59,723

 

$

44,287

 

$

165,510

 

$

123,295

 

Interest expense

 

 

(39,390)

 

 

(28,925)

 

 

(110,919)

 

 

(77,996)

 

Net interest income before provision for loan losses

 

$

20,333

 

$

15,362

 

$

54,591

 

$

45,299

 

Provision for loan losses

 

 

(693)

 

 

(800)

 

 

(2,559)

 

 

(571)

 

Net interest income after provision for loan losses

 

$

19,640

 

$

14,562

 

$

52,032

 

$

44,728

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage banking activities

 

 

29,013

 

 

17,011

 

 

64,621

 

 

48,290

 

Net realized gain on financial instruments and real estate owned

 

 

7,377

 

 

6,946

 

 

20,914

 

 

27,796

 

Net unrealized gain (loss) on financial instruments

 

 

(7,881)

 

 

8,500

 

 

(21,799)

 

 

15,964

 

Servicing income, net of amortization and impairment of $1,609 and $4,225 for the three and nine months ended September 30, 2019, and $1,425 and $5,252 for the three and nine months ended September 30, 2018, respectively

 

 

7,449

 

 

6,922

 

 

22,012

 

 

19,959

 

Other income

 

 

2,979

 

 

1,204

 

 

6,671

 

 

4,364

 

Income on unconsolidated joint ventures

 

 

1,047

 

 

2,178

 

 

6,059

 

 

9,420

 

Gain on bargain purchase

 

 

 —

 

 

 —

 

 

30,728

 

 

 —

 

Total non-interest income

 

$

39,984

 

$

42,761

 

$

129,206

 

$

125,793

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

(13,438)

 

 

(14,163)

 

 

(37,395)

 

 

(43,755)

 

Allocated employee compensation and benefits from related party

 

 

(1,500)

 

 

(1,200)

 

 

(3,603)

 

 

(3,600)

 

Variable expenses on residential mortgage banking activities

 

 

(17,318)

 

 

(8,337)

 

 

(39,995)

 

 

(18,120)

 

Professional fees

 

 

(2,030)

 

 

(2,294)

 

 

(5,445)

 

 

(7,343)

 

Management fees – related party

 

 

(2,495)

 

 

(2,070)

 

 

(6,987)

 

 

(6,118)

 

Incentive fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

(676)

 

Loan servicing expense

 

 

(4,866)

 

 

(4,247)

 

 

(13,085)

 

 

(11,340)

 

Merger related expenses

 

 

(51)

 

 

 —

 

 

(6,121)

 

 

 —

 

Other operating expenses

 

 

(8,144)

 

 

(6,548)

 

 

(23,091)

 

 

(23,475)

 

Total non-interest expense

 

$

(49,842)

 

$

(38,859)

 

$

(135,722)

 

$

(114,427)

 

Income before provision for income taxes

 

$

9,782

 

$

18,464

 

$

45,516

 

$

56,094

 

Benefit (provision) for income taxes

 

 

2,645

 

 

(895)

 

 

8,604

 

 

(4,123)

 

Net income

 

$

12,427

 

$

17,569

 

$

54,120

 

$

51,971

 

Less: Net income attributable to non-controlling interest

 

 

323

 

 

638

 

 

1,580

 

 

1,890

 

Net income attributable to Ready Capital Corporation

 

$

12,104

 

$

16,931

 

$

52,540

 

$

50,081

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

 

$

0.27

 

$

0.53

 

$

1.29

 

$

1.57

 

Earnings per common share - diluted

 

$

0.27

 

$

0.53

 

$

1.29

 

$

1.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

44,438,652

 

 

32,109,642

 

 

40,517,231

 

 

32,073,665

 

Diluted

 

 

44,467,801

 

 

32,130,262

 

 

40,546,380

 

 

32,090,126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.40

 

$

0.40

 

$

1.20

 

$

1.17

 

 

 

READY CAPITAL CORPORATION

 UNAUDITED SEGMENT REPORTING

fOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

SBA Originations,

    

Residential

    

 

    

 

 

 

Loan

 

SBC

 

Acquisitions,

 

Mortgage

 

Corporate-

 

 

(In Thousands)

 

Acquisitions

 

Originations

 

and Servicing

 

Banking

 

Other

 

Consolidated

Interest income

 

$

18,880

 

$

32,354

 

$

7,235

 

$

1,254

 

$

 —

 

$

59,723

Interest expense

 

 

(11,076)

 

 

(23,835)

 

 

(2,739)

 

 

(1,740)

 

 

 —

 

 

(39,390)

Net interest income before provision for loan losses

 

$

7,804

 

$

8,519

 

$

4,496

 

$

(486)

 

$

 —

 

$

20,333

Provision for loan losses

 

 

(94)

 

 

(33)

 

 

(566)

 

 

 —

 

 

 —

 

 

(693)

Net interest income after provision for loan losses

 

$

7,710

 

$

8,486

 

$

3,930

 

$

(486)

 

$

 —

 

$

19,640

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage banking activities

 

$

 —

 

$

 —

 

$

 —

 

$

29,013

 

$

 —

 

$

29,013

Net realized gain on financial instruments

 

 

(437)

 

 

5,065

 

 

2,749

 

 

 —

 

 

 —

 

 

7,377

Net unrealized gain on financial instruments

 

 

(206)

 

 

(865)

 

 

772

 

 

(7,582)

 

 

 —

 

 

(7,881)

Other income

 

 

925

 

 

1,118

 

 

812

 

 

80

 

 

44

 

 

2,979

Servicing income

 

 

 —

 

 

488

 

 

1,180

 

 

5,781

 

 

 —

 

 

7,449

Income from unconsolidated joint ventures

 

 

1,047

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,047

Gain on bargain purchase

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Total non-interest income

 

$

1,329

 

$

5,806

 

$

5,513

 

$

27,292

 

$

44

 

$

39,984

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

(26)

 

 

(1,420)

 

 

(4,070)

 

 

(7,091)

 

 

(831)

 

 

(13,438)

Allocated employee compensation and benefits from related party

 

 

(150)

 

 

 —

 

 

 —

 

 

 —

 

 

(1,350)

 

 

(1,500)

Variable expenses on residential mortgage banking activities

 

 

 —

 

 

 —

 

 

 —

 

 

(17,318)

 

 

 —

 

 

(17,318)

Professional fees

 

 

(195)

 

 

(571)

 

 

(279)

 

 

(344)

 

 

(641)

 

 

(2,030)

Management fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2,495)

 

 

(2,495)

Incentive fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Loan servicing expense

 

 

(1,461)

 

 

(1,495)

 

 

(205)

 

 

(1,672)

 

 

(33)

 

 

(4,866)

Merger related expenses

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(51)

 

 

(51)

Other operating expenses

 

 

(770)

 

 

(3,369)

 

 

(1,508)

 

 

(1,691)

 

 

(806)

 

 

(8,144)

Total non-interest expense

 

$

(2,602)

 

$

(6,855)

 

$

(6,062)

 

$

(28,116)

 

$

(6,207)

 

$

(49,842)

Net income (loss) before provision for income taxes

 

$

6,437

 

$

7,437

 

$

3,381

 

$

(1,310)

 

$

(6,163)

 

$

9,782

Total assets

 

$

1,165,470

 

$

2,266,076

 

$

273,217

 

$

327,162

 

$

91,094

 

$

4,123,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

READY CAPITAL CORPORATION

 UNAUDITED SEGMENT REPORTING

fOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

SBA Originations,

    

Residential

    

 

    

 

 

 

Loan

 

SBC

 

Acquisitions,

 

Mortgage

 

Corporate-

 

 

(In Thousands)

 

Acquisitions

 

Originations

 

and Servicing

 

Banking

 

Other

 

Consolidated

Interest income

 

$

47,761

 

$

91,182

 

$

23,468

 

$

3,099

 

$

 —

 

$

165,510

Interest expense

 

 

(29,383)

 

 

(65,903)

 

 

(11,529)

 

 

(4,104)

 

 

 —

 

 

(110,919)

Net interest income before provision for loan losses

 

$

18,378

 

$

25,279

 

$

11,939

 

$

(1,005)

 

$

 —

 

$

54,591

Provision for loan losses

 

 

(771)

 

 

(342)

 

 

(1,446)

 

 

 —

 

 

 —

 

 

(2,559)

Net interest income after provision for loan losses

 

$

17,607

 

$

24,937

 

$

10,493

 

$

(1,005)

 

$

 —

 

$

52,032

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage banking activities

 

$

 —

 

$

 —

 

$

 —

 

$

64,621

 

$

 —

 

$

64,621

Net realized gain on financial instruments

 

 

(33)

 

 

10,232

 

 

10,715

 

 

 —

 

 

 —

 

 

20,914

Net unrealized gain on financial instruments

 

 

(886)

 

 

(131)

 

 

268

 

 

(21,050)

 

 

 —

 

 

(21,799)

Other income

 

 

1,950

 

 

3,565

 

 

865

 

 

182

 

 

109

 

 

6,671

Servicing income

 

 

 —

 

 

1,386

 

 

4,013

 

 

16,613

 

 

 —

 

 

22,012

Income from unconsolidated joint ventures

 

 

6,059

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

6,059

Gain on bargain purchase

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

30,728

 

 

30,728

Total non-interest income

 

$

7,090

 

$

15,052

 

$

15,861

 

$

60,366

 

$

30,837

 

$

129,206

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

(53)

 

 

(5,454)

 

 

(12,262)

 

 

(17,131)

 

 

(2,495)

 

 

(37,395)

Allocated employee compensation and benefits from related party

 

 

(360)

 

 

 —

 

 

 —

 

 

 —

 

 

(3,243)

 

 

(3,603)

Variable expenses on residential mortgage banking activities

 

 

 —

 

 

 —

 

 

 —

 

 

(39,995)

 

 

 —

 

 

(39,995)

Professional fees

 

 

(412)

 

 

(1,185)

 

 

(635)

 

 

(809)

 

 

(2,404)

 

 

(5,445)

Management fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(6,987)

 

 

(6,987)

Incentive fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Loan servicing expense

 

 

(3,379)

 

 

(4,185)

 

 

(322)

 

 

(5,089)

 

 

(110)

 

 

(13,085)

Merger related expenses

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(6,121)

 

 

(6,121)

Other operating expenses

 

 

(2,073)

 

 

(8,198)

 

 

(4,635)

 

 

(5,818)

 

 

(2,367)

 

 

(23,091)

Total non-interest expense

 

$

(6,277)

 

$

(19,022)

 

$

(17,854)

 

$

(68,842)

 

$

(23,727)

 

$

(135,722)

Net income (loss) before provision for income taxes

 

$

18,420

 

$

20,967

 

$

8,500

 

$

(9,481)

 

$

7,110

 

$

45,516

Total assets

 

$

1,165,470

 

$

2,266,076

 

$

273,217

 

$

327,162

 

$

91,094

 

$

4,123,019

 

 

(Back To Top)

Section 3: EX-99.2 (EX-99.2)

Exhibit 99.2

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Supplemental Financial Data Third 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 September 30, 2019 unless otherwise noted.


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THIRD QUARTER 2019 HIGHLIGHTS 3 . Net income of $12.4 million(1), or $0.27 per common share . Core earnings of $18.2 million(1), or $0.40 per common share . Declared dividend of $0.40 per share EARNINGS / DIVIDENDS . Return on Equity(2) of 6.7% . Core Return on Equity(3) of 9.8% . Dividend Yield(4) of 10.1% RETURNS . Total SBC loan investment of $591.5 million . SBC loan originations of $465.4 million and $77.9 million of loan acquisitions . SBA loan originations of $48.2 million . Residential mortgage loan originations of $656.8 million LOAN ORIGINATIONS(5) / ACQUISITIONS . Adjusted net book value(6) of $16.16 per common share . Loans increased by 9% to $3.5 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) Q3 Dividend yield for the period based on the 9/30/2019 closing share price of $15.92 (5) Represents fully committed amounts (6) Excludes the equity component of our 2017 convertible note issuance (7) Represents carrying value of loans


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RETURN ON EQUITY 4 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 14.1 % 14.1 % 27.7 % SBC Originations 12.2 % 12.2 % 57.2 % SBA Originations, Acquisitions, & Servicing 38.9 % 38.9 % 8.8 % Residential Mortgage Banking (3) (6.5) % 43.8 % 6.3 % (0.1) (1.0) 0.7 (0.5) 13.7 % 12.4 % 17.7 % 15.7 % 1.8 2.0 1.9 2.0 (8.7) (7.9) (8.7) (7.9) - (0.4) - - (1.3) (1.3) (1.3) (1.3) 1.2 1.1 0.2 0.3 6.7 % 5.9 % 9.8 % 8.8 % G AAP R O E (2) Core ROE (2) Levered Yield (1) Core Levered Yield (1) Equity Allocation Q3'19 Q2'19 Q3'19 Q2'19 13.8 % 13.4 % 17.0 % 16.2 % Return on equity Realized & unrealized gains, net Other income and expenses, net Investment advisory fees Provision for income taxes Gross return on equity Corporate leverage, net of non-earnings assets Non-recurring gains and expenses


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SBC INVESTMENT BY PRODUCT TYPE(1) 5 (1) Origination volumes are based on fully committed amounts $51.1 $65.4 $44.1 $53.7 $48.2 $125.4 $95.7 $86.3 $177.5 $165.6 $70.3 $70.3 $62.9 $73.0 $146.2 $95.5 $166.9 $142.8 $169.1 $153.5 $86.4 $8.8 $128.7 $362.2 $77.9 $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Investment (UPB in $) SBA Conventional Freddie Mac Transitional Acquired


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Q3 2019 QUARTERLY SBC LOAN INVESTMENT ALLOCATION 6 • Total funded investments of $550.3 million added during the quarter. • Funded $472.4 million(1) of SBC and SBA loan originations. • Acquired $77.9 million of SBC loans (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. (8) Includes joint venture investment. (in millions, except loan count information) # of Loans Gross Yield(4) Weighted Avg Maturity(3) FX / ARM Avg Advance Rate(5) Debt Cost (6) Loan Originations Held-for-investment SBC $ 164.9 34 $ 4.8 5.0% 7 years 100% / 0% 80% 1M Libor +220 Transitional 151.9 41 3.7 5.6% 3 years 1% / 99% 72% 1M Libor + 225 SBA (7) 12.1 67 0.1 7.7% 20 years 5% / 95% 72% 1M Libor + 250 Prime + 29 Held-for-sale SBA (7) $36.1 67 $ 0.3 7.7% 20 years 5% / 95% 72% 1M Libor + 250 Prime + 29 Freddie Mac 107.4 42 2.6 4.3% 12 years 62% / 38% 100% 1M Libor + 150 Total Loan Originations $ 472.4 251 $ 1.9 5.3% 8 years 49% / 51% 81% SBC: 1M Libor + 215 SBA: 1M Libor + 250; Prim e + 29 Loan Acquisitions SBC(8) $ 77.9 88 0.8 6.1% 12 years 45% / 55% 78% SBC: 1M Libor + 227 SBA: 1M Libor + 250 Total Loan Acquisitions $ 77.9 88 $ 0.8 6.1% 12 years 45% / 55% 78% SBC: 1M Libor + 227 SBA: 1M Libor + 250 Total SBC Investment (Originations + Acquisitions) $ 550.3 339 $ 1.6 5.4% 9 years 48% / 52% 81% SBC: 1M Libor + 218 SBA: 1M Libor + 250; Prim e + 29 Avg Balance(2) Gross Investments (2)


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SBC ORIGINATIONS -S EGMENT SNAPSHOT 7 1) Represents fully committed amounts. 2) As of October 31, 2019 including October 2019 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 $465.4 million(1) • Origination pipeline of $487.9 million(2) : 9.4% 8.9% 9.3% 9.6% 9.4% 2.3% 1.8% 1.9% 1.7% 2.8% 0.0% 5.0% 10.0% 15.0% 20.0% Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Gross Levered Yield (ex. Gains) Gains on Loans, held for sale GROSS LEVERED YIELD CURRENT QUARTER HIGHLIGHTS (5) (6) Portfolio Metrics (Balance Sheet) Number of loans 403 421 429 485 501 Unpaid Principal Balance (3) $1,305 $ 1,479 $ 1,582 $ 1,829 $ 2,064 Carrying Value (3) $1,314 $ 1,488 $ 1,589 $ 1,835 $ 2,070 Weighted Average LTV 60% 63% 63% 63% 65% Weighted Average Coupon 6.3% 6.3% 6.2% 6.1% 5.8% Weighted Average Maturity 5 years 5 years 5 years 5 years 5 years Weighted Average Principal Balance (3) $ 3.2 $ 3.5 $ 3.7 $ 3.7 $ 4.1 Percentage of loans fixed / floating 56% / 44% 55% / 45% 53% / 47% 55% / 45% 55% / 45% Percentage of fixed, match funded (4) 62.8% 54.2% 87.3% 69.4% 68.3% Percentage of loans 30+ days delinquent 1.3% 2.3% 2.7% 2.7% 1.4% Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Fixed Rate $ 51.6 $ 84.8 $ 136.4 Transitional 84.7 144.1 228.8 Freddie Mac 42.5 80.2 122.7 Total $ 178.8 $ 309.1 $ 487.9 Product Oct 2019 Forward Total Pipeline


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SBA ORIGINATIONS, ACQUISITIONS, & SERVICING-S EGMENT SNAPSHOT 8 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 4) Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. • $29.3 million of SBA secondary market loans sales, with an average sale premium of 11.0% • Originations of $48.2 million(1) • Origination pipeline of $166.9 million SBA loans, including $27.1 million of October 2019 fundings 16.6% 17.1% 15.0% 22.1% 22.2% 11.6% 13.9% 11.1% 17.8% 16.7% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '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 1,976 1,931 1,876 1,902 1,875 Unpaid Principal Balance (2) $481 $ 467 $ 262 $ 270 $ 278 Carrying Value (2) $434 $ 424 $ 221 $ 230 $ 240 Weighted Average LTV 79% 79% 82% 87% 88% Weighted Average Coupon 6.6% 7.0% 7.4% 7.4% 7.4% Weighted Average Maturity 14 years 14 years 15 years 16 years 16 years Weighted Average Principal Balance (2) $0.2 $ 0.2 $ 0.1 $ 0.1 $ 0.1 Percentage of loans fixed / floating 1% / 99% 1% / 99% 1% / 99% 1% / 99% 1% / 99% Percentage of loans 30+ days delinquent 4.1% 7.0% 9.1% 6.5% 6.0% Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019


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LOAN ACQUISITIONS-S EGMENT SNAPSHOT 9 1) Excludes joint venture investments. 2) $ in millions, as of quarter end. 3) Represents fixed rate loans that have been securitized. • Acquired $77.9 million of SBC loans • Acquisition pipeline of $236.8 million SBC loans, including October 2019 acquisitions of $67.3 million 11.9% 12.2% 13.8% 11.3% 12.5% 4.5% 7.0% 8.4% 3.2% 1.6% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Income on joint venture investment Gross Levered Yield (ex. Gains) CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD Portfolio Metrics(1) (Balance Sheet) Number of loans 949 896 1,018 2,385 2,363 Unpaid Principal Balance (2) $617 $ 573 $ 798 $ 1,075 $ 1,068 Carrying Value (2) $588 $ 548 $ 770 $ 1,055 $ 1,056 Weighted Average LTV 49% 44% 53% 46% 42% Weighted Average Coupon 6.7% 6.6% 6.7% 6.3% 6.3% Weighted Average Maturity 8 years 7 years 7 years 10 years 10 years Weighted Average Principal Balance (2) $ 0.6 $ 0.6 $ 0.8 $ 0.5 $ 0.5 Percentage of loans fixed / floating 65% / 35% 66% / 34% 61% / 39% 48% / 52% 47% / 53% Percentage of fixed, match funded (3) 11.4% 51.6% 51.6% 61.0% 44.6% Percentage of loans performing / non-performing 98% / 2% 98% / 2% 95% / 5% 98% / 2% 98% / 2% Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019


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RESIDENTIAL MORTGAGE BANKING –S EGMENT SNAPSHOT 10 1) $ in millions. Represents activity during the quarter. 2) Represents fully committed amounts • MSR portfolio of approximately $8.0 billion in UPB, up 3% compared to Q2 • Fair market value of $84.6 million • Originations of $656.8 million(2) • Loan sales of $631.9 million • Origination pipeline of $273.8 million in commitments to originate residential agency loans(2) $7.3 $7.5 $7.6 $7.8 $8.0 $6.0 $6.5 $7.0 $7.5 $8.0 MSR PORTFOLIO (UPB IN $ BILLIONS) CURRENT QUARTER HIGHLIGHTS Fair Q3' 18 Q4' 18 Q1' 19 Q2' 19 Q3' 19 Value ($ mm) $ 91.7 $ 93.1 $ 88.2 $ 85.7 $ 84.6 Portfolio Metrics (quarterly activity) Unpaid principal balance (1) $ 472.1 $ 369.1 $ 344.4 $ 518.2 $ 656.8 % of Originations - Purchased 79.6% 76.7% 74.3% 74.0% 60.5% % of Originations - Refinanced 20.4% 23.3% 25.7% 26.0% 39.5% Channel - % Correspondent 37.0% 38.2% 34.5% 36.4% 33.6% Channel - % Retail 42.5% 44.0% 47.2% 45.7% 50.9% Channel - % Wholesale 20.5% 17.8% 18.2% 17.9% 15.5% Unpaid principal balance (1) $ 496.1 $ 382.7 $ 326.5 $ 492.1 $ 631.9 % of UPB - Fannie/ Freddie securitizations 65.6% 62.8% 68.4% 69.7% 69.7% % of UPB - Ginnie Mae securitizations 24.3% 25.8% 24.6% 22.4% 25.1% % of UPB - Other investors 10.1% 11.5% 7.0% 7.9% 5.2% Q2 2019 Q3 2019 Originations Sales Q3 2018 Q4 2018 Q1 2019


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ACTIVE SBC AND SBA LOAN SECURITIZATION PERFORMANCE(1) Originated Conventional SBC Loans Originated Transitional Loans (3) Acquired SBC Loans Originated Freddie Mac Loans 11 1) Represents remaining collateral in the securitization Original Collateral: $1.1 b Remaining collateral: $754 m Original Collateral: $842 m Remaining collateral: $523 m Original Collateral: $822 m Remaining collateral: $579 m Original Collateral: $1.9 b Remaining collateral: $1.7 b


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LOAN PORTFOLIO COMPOSITION AS OF SEPTEMBER 30, 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 12


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CAPITAL STRUCTURE ► Renegotiated warehouse facilities rates and capacity ► Completed $57.5 million issuance of 6.2% corporate baby bonds in July 2019 ► Anticipated Q4 closing of $430 million securitization of fixed-rate SBC loans 13 Funding Mix Total Debt + Equity CURRENT SOURCES OF FUNDING HISTORICAL CAPITAL STRUCTURE Total Debt + Equity ($M) Funding Mix $2,480 $2,641 $3,088 $3,642 $3,915 23% 21% 25% 21% 19% 4% 4% 4% 3% 3% 9% 9% 7% 6% 7% 33% 32% 27% 27% 34% 30% 34% 37% 43% 37% Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Stockholders Equity Convertible senior notes Senior secured notes and Corporate debt Credit facilities and repurchase agreements Securitized debt obligations Convertible Notes $ 115.0 7.0% 7.0% Senior Secured Notes $ 180.0 7.5% 7.0% Baby Bonds $ 107.5 6.3% 6.3% Total $ 402.5 7.0% 6.8% Principal Balance Coupon YTM Corporate Financing (in $M)


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FINANCING AND LEVERAGE 14 2.0x 2.1x 1.6x 1.8x 2.3x 3.4x 3.7x 3.1x 3.9x 4.3x - 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Historical Leverage Recourse Total HISTORICAL LEVERAGE Total Debt-to-Equity Ratio Secured borrowings (warehouse credit facilities and borrowings under repo transactions) $ 1,316 Securitized debt obligations 1,466 Senior secured notes and corporate bonds 284 Convertible notes 111 Total Debt $ 3,176 Total Stockholders' Equity $ 739 Total debt-to-equity ratio 4.3 Total recourse debt-to-equity ratio Total Debt $ 3,176 Less: Securitized debt obligations (1,466) Total recourse debt $ 1,710 Total Stockholders' Equity $ 739 Total recourse debt-to-equity ratio 2.3 9/30/2019 (in millions)


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LOAN WAREHOUSE FACILITIES 15 (1) $ in millions Bank Maturity Rate Description and Uses of Funds JPMorgan Aug '20 1M L + 2.00 to 2.50% $ 250 $ 80 Borrowings are used to finance SBC and SBA loan acquisitions, and SBA loan originations. KeyBank Feb '20 1M L + 1.50% 125 95 Borrowings are used to finance Freddie Mac SBC loan originations. East West July '20 Prime - 0.821 to + 0.29% 50 2 Borrowings are used to finance SBA loan originations and acquisitions. FCB June '21 2.75% 2 - Borrowings are used to finance SBC loan acquisitions. GMFS facilities < 1 year 1M L + 1.75 to 2.0% 290 149 Borrowings are used to finance Residential Agency loan originations. GMFS - MSR Sept '23 1M L + 2.50% 50 14 Borrowings are used to finance Residential Agency MSRs. Rabobank Jan '21 4.22% 15 2 Borrowings are used to finance acquired REO properties. $ 781 $ 342 Citibank Aug '20 1M L + 1.875 to 2.125% $ 500 $ 275 Borrowings are used to finance SBC loan originations and SBC loan acquisitions. Deutsche Bank Feb '20 3M L + 2.30 to 2.80% 300 1 Borrowings are used to finance SBC loan originations and Transitional loan originations. JPMorgan Dec '20 1M L + 2.25 to 4.00% 200 66 Borrowings are used to finance SBC and Transitional loan originations, and SBC loan acquisitions. $ 1,000 $ 342 Borrowings under repurchase agreements Total Borrowings under repurchase agreements Total Borrowings under credit facilities Borrowings under credit facilities Available Capacity (1) Facility Size (1)


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READY CAPITAL SNAPSHOT ($ amounts in thousands, except per share data) 16 (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 9/30/2019 on an annualized basis. 4) Excludes loans, held for sale, at fair value 5) Excludes the equity component of our 2017 convertible note issuance. SBA servicing rights - UPB $ 555,772 SBA servicing rights- carrying value $ 17,532 Freddie Mac servicing rights - UPB $ 1,120,377 Freddie Mac servicing rights - carrying value $ 12,310 Residential servicing rights - UPB $ 7,982,024 Residential servicing rights - carrying value $ 84,638 Servicing Portfolio Metrics Average Carrying Value(1) Debt Cost (3) Levered Yield Loan Acquisitions 1,052,870 $ 6.7% 789,360 $ 4.2% 14.1% SBC Originations 2,112,876 $ 6.8% 1,569,124 $ 4.9% 12.2% SBA Originations, Acquisitions, & Servicing 253,402 $ 16.7% 170,233 $ 5.9% 38.6% Total 3,419,148 $ 7.5% 2,528,717 $ 4.8% 15.2% Investment Type Gross Yield(2) Average Debt Balance Common Stockholders' equity $ 719,747 Common Stockholders' equity (adjusted)(5) $ 717,767 Total Common Shares outstanding 44,421,815 Net Book Value per Common Share $ 16.20 Adjusted Net Book Value per Common Share $ 16.16 Book Equity Value Metrics % Fixed vs Floating Rate 49.0% / 51.0% % Originated vs Acquired 63.8% / 36.2% Weighted Average LTV - SBC 65% Weighted Average LTV - SBA 88% Weighted Average LTV - Acquired 42% Loan Portfolio Metrics (4) Net income | Core earnings $ 12,427 | $ 18,249 Earnings per share - Basic and diluted $ 0.27 Core Earnings per Common Share $ 0.40 Return on Equity per Common Share 6.7% Core Return on Equity per Common Share 9.8% Dividend Yield 10.1% Q3 2019 Earnings Data Metrics


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APPENDIX 17


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PER SHARE FINANCIAL PERFORMANCE BY QUARTER 18 ► Adjusted net book value of $16.16 per common share as of September 30, 2019 Per Share Trends $0.53 $0.30 $0.90 $0.25 $0.27 $0.48 $0.34 $0.34 $0.37 $0.40 $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 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Earnings Core earnings Dividends declared


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BALANCE SHEET BY QUARTER 19 (In Thousands) Assets Cash and cash equivalents $ 47,845 $ 54,406 $ 47,597 $ 41,925 $ 52,727 Restricted cash 18,864 28,921 29,979 38,019 45,303 Loans, net 1,256,177 1,193,392 1,057,023 1,002,676 1,380,359 Loans, held for sale, at fair value 124,988 115,258 115,778 177,507 203,110 Mortgage backed securities, at fair value 94,341 91,937 91,435 99,407 96,181 Loans eligible for repurchase from Ginnie Mae 79,600 74,180 73,057 69,101 71,528 Investment in unconsolidated joint venture 40,914 33,438 39,025 47,551 55,663 Derivative instruments 5,846 2,070 2,483 3,670 4,181 Servicing rights 118,221 120,062 115,652 114,761 114,480 Receivable from third parties 1,529 8,888 718 2,763 705 Real estate acquired in settlement of loans 4,045 7,787 75,517 65,834 60,807 Other assets 55,115 55,447 68,886 68,399 76,848 Assets of consolidated VIEs 1,053,274 1,251,057 1,561,864 2,108,710 1,961,127 Total Assets $ 2,900,759 $ 3,036,843 $ 3,279,014 $ 3,840,323 $ 4,123,019 Liabilities Secured borrow ings 822,414 834,547 848,225 988,868 1,315,534 Securitized debt obligations of consolidated VIEs, net 752,432 905,367 1,140,919 1,567,113 1,465,539 Convertible notes, net 109,743 109,979 110,241 110,506 110,773 Senior secured notes and Corporate notes, net 227,058 227,327 227,608 227,881 283,630 Guaranteed loan financing 246,229 229,678 34,047 28,445 25,571 Contingent consideration 1,773 1,207 — — — Liabilities for loans eligible for repurchase from Ginnie Mae 79,600 74,180 73,057 69,101 71,528 Derivative instruments 39 3,625 3,392 9,032 11,906 Dividends payable 13,346 13,346 13,396 18,292 18,292 Accounts payable and other accrued liabilities 79,089 73,512 67,240 73,679 81,235 Total Liabilities $ 2,331,723 $ 2,472,768 $ 2,518,125 $ 3,092,917 $ 3,384,008 Stockholders’ Equity Common stock 3 3 4 4 4 Additional paid-in capital 539,869 540,478 720,680 720,812 720,823 Retained earnings 9,698 5,272 21,790 14,914 9,173 Accumulated other comprehensive loss — (922) (1,328) (7,703) (10,253) Total Ready Capital Corporation equity 549,570 544,831 741,146 728,027 719,747 Non-controlling interests 19,466 19,244 19,743 19,379 19,264 Total Stockholders’ Equity $ 569,036 $ 564,075 $ 760,889 $ 747,406 $ 739,011 Total Liabilities and Stockholders’ Equity $ 2,900,759 $ 3,036,843 $ 3,279,014 $ 3,840,323 $ 4,123,019 Adjusted Book Value per Share $ 17.08 $ 16.91 $ 16.65 $ 16.35 $ 16.16 9/30/2019 9/30/2018 12/31/2018 3/31/2019 6/30/2019


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STATEMENT OF INCOME BY QUARTER 20 (1) Certain balances have been reclassified to match current period presentation (In Thousands, except share data) Interest income $ 44,287 $ 46,204 $ 48,753 $ 57,034 $ 59,723 Interes t expense (28,925) (31,240) (35,775) (35,753) (39,390) Net interest income before provision for loan losses $ 15,362 $ 14,964 $ 12,978 $ 21,281 $ 20,333 Provision for loan losses (800) (1,131) (518) (1,348) (693) Net interest income after provision for loan losses $ 14,562 $ 13,833 $ 12,460 $ 19,933 $ 19,640 Non-interest income Residential mortgage banking activities $ 17,011 $ 11,561 $ 14,587 $ 21,021 $ 29,013 Net realized gain on financial instruments 6,946 10,610 7,282 6,255 7,377 Net unrealized gain (loss) on financial instruments 8,500 (11,112) (6,912) (7,006) (7,881) Other income 1,204 1,222 900 2,792 2,979 Servicing income, net of amortization and impairment 6,922 7,116 6,752 7,811 7,449 Income on unconsolidated joint venture 2,178 2,728 2,929 2,083 1,047 Gain on bargain purchase — — 30,728 — — Total non-interest income $ 42,761 $ 22,125 $ 56,266 $ 32,956 $ 39,984 Non-interest expense Employee compensation and benefits (14,163) (12,847) (11,448) (12,509) (13,438) Allocate d emp loyee compensat ion an d bene fits f rom re late d party (1,200) (600) (853) (1,250) (1,500) V ar iable expenses on res id ent ial mortgage ban king act iv ities (8,337) (4,108) (9,176) (13,501) (17,318) Professional fees (2,294) (420) (1,829) (1,586) (2,030) Management fees – related party (2,070) (2,058) (1,997) (2,495) (2,495) Incentive fees – related party — (467) — — — Loan servicing expense (4,247) (3,442) (3,648) (4,571) (4,866) ORM merger expenses — — (5,467) (603) (51) Other operating expenses (6,548) (5,267) (6,861) (8,085) (8,144) Total non-interest expense $ (38,859) $ (29,209) $ (41,279) $ (44,600) $ (49,842) Income before provision for income taxes $ 18,464 $ 6,749 $ 27,447 $ 8,289 $ 9,782 Provision for income (taxes) benefit (895) 2,737 3,003 2,956 2,645 Ne t incom e $ 17,569 $ 9,486 $ 30,450 $ 11,245 $ 12,427 Less: Net income attributable to non-controlling interest 638 309 983 276 323 Net income attributable to Ready Capital Corporation $ 16,931 $ 9,177 $ 29,467 $ 10,969 $ 12,104 Earnings per common share - basic $0.53 $ 0.30 $ 0.90 $ 0.25 $ 0.27 Earn ings per common s h are - dil u te d $0.53 $ 0.30 $ 0.90 $ 0.25 $ 0.27 Weighted-average shares outstanding - Basic 32,109,642 32,122,503 32,556,875 44,425,598 44,438,652 Weighted-average shares outstanding - Diluted 32,130,262 32,138,712 32,563,644 44,431,263 44,467,801 Dividends declared per share of common stock $0.40 $ 0.40 $ 0.40 $ 0.40 $ 0.40 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019


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CORE EARNINGS RECONCILIATION BY QUARTER 21 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 $ 17,569 $ 9,486 $ 30,450 $ 11,245 $ 12,427 Reconciling items: Gain on bargain purchase $— $ — $ (30,728) $ — $ — ORM merger expenses — — 5,467 603 51 Non-recurring expenses — — 726 67 — Unrealized (gain) loss on mortgage-backed securities (10) 226 14 106 85 Unrealized (gain) loss on mortgage servicing rights (1,969) 2,171 7,128 6,339 7,582 Total reconciling items $ (1,979) $ 2,397 $ (17,393) $ 7,115 $ 7,718 Core earnings before income taxes $ 15,590 $ 11,883 $ 13,057 $ 18,360 $ 20,145 Income tax adjustments 495 (547) (1,782) (1,585) (1,896) Core earnings $ 16,085 $ 11,336 $ 11,275 $ 16,775 $ 18,249 Less: Core earnings attributable to non-controlling interests $584 $ 369 $ 364 $ 412 $ 474 Core earnings attributable to Common Stockholders $ 15,501 $ 10,967 $ 10,911 $ 16,363 $ 17,775 Core earnings per share $0.48 $ 0.34 $ 0.34 $ 0.37 $ 0.40 Weighted average common shares outstanding 32,109,642 32,122,503 32,556,875 44,425,598 44,438,652 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019


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