In This Article:
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Book Value Per Share: Flat at $10.61 per share quarter-over-quarter.
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Net Interest Income: $43.4 million, or $0.26 per share, with a lever yield of 10.2% in the core portfolio.
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CRE Loan Portfolio: $7.1 billion total, with $5.9 billion in core, higher yield, better credit bridge loans.
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Delinquencies: 60 day-plus delinquencies at 4%, a $117 million increase quarter-over-quarter.
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GAAP Earnings Per Share: $0.47.
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Distributable Earnings: Loss of $0.09 per common share.
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Net Interest Income Decline: Reduced to $14.6 million due to non-core assets moving to non-accrual status.
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Gain on Sale Income: $20.1 million, driven by the sale of SBA-7A and Freddie Mac loans.
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Operating Costs: $55.4 million, a 7.5% improvement from the previous quarter.
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Bargain Purchase Gain: $102.5 million related to the UDF IV merger.
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Leverage: Total leverage declined to 3.5x.
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Liquidity: Over $200 million in unrestricted cash and $1 billion of total uncovered assets.
Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Ready Capital Corp (NYSE:RC) successfully stabilized its book value per share at $10.61, benefiting from share repurchases and the UDF merger.
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The company exceeded its first-quarter liquidation targets, generating $28 million in liquidity and reducing the non-core portfolio by 6%.
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Ready Capital Corp (NYSE:RC) maintained a healthy credit metric with 60-day-plus delinquencies remaining relatively low at 4%.
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The SBA business showed strong performance with a 12-month default rate of 3.2%, below the industry average, and a historic low in the repair and denial rate.
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The company demonstrated the ability to access capital markets, successfully closing a $220 million senior secured offering and increasing it by $50 million post-quarter.
Negative Points
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Net interest income declined to $14.6 million due to non-core assets moving to non-accrual status, impacting earnings.
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The non-core portfolio's transition to non-accrual status resulted in a $0.13 per share reduction in earnings.
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Delinquencies increased in both core and non-core portfolios, with risk-rated 4 and 5 loans rising to 7.5% of the total.
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The SBA business is expected to see a moderation in volume due to policy changes and capital constraints.
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Freddie Mac loan volumes were muted in the first quarter, with competition from banks and credit unions affecting the business.
Q & A Highlights
Q: You highlighted that you're expecting a large portion of the non-core book to pay off in the second quarter. Can you talk about any impact to those expectations from April's volatility and how those conversations are going? A: (Adam Zausmer, Chief Credit Officer) The loan sales are progressing well, with parties having completed due diligence and working on strategies. We don't expect April's volatility to significantly impact the exits in progress. (Thomas Capasse, CEO) The multi-family sector is performing well, with increased rents and strong capital inflows, which supports our expectations.