Ready Capital Corp Reports Q3 2023 Results Amidst Macroeconomic Challenges
Ready Capital Corp (NYSE:RC) reports third-quarter earnings with a focus on distributable earnings amidst a challenging macro environment.
The company's distributable earnings for Q3 2023 stood at $52.16 million, with a per-share value of $0.28 for both basic and diluted shares.
Net income for the quarter was reported at $47.18 million, influenced by various reconciling items including a significant loss on bargain purchase.
Ready Capital's total assets increased to $12.8 billion as of September 30, 2023, from $11.6 billion at the end of the previous year.
On November 7, 2023, Ready Capital Corp (NYSE:RC), a multi-strategy real estate finance company, released its financial results for the quarter ended September 30, 2023. Despite the challenging macroeconomic conditions, the company has managed to maintain a consistent source of capital for its customers, as highlighted by Chairman and Chief Executive Officer Thomas Capasse. The company's strategic approach to its broad suite of origination channels has been pivotal in navigating the short-term earnings pressure from the Broadmark acquisition. Looking forward, Ready Capital anticipates earnings growth driven by its well-positioned balance sheet and strong liquidity.
Financial Highlights and Performance
Ready Capital reported distributable earnings of $52.16 million for the third quarter of 2023, which is a non-GAAP financial measure that the company believes provides greater transparency into its operational decision-making. The distributable earnings per common share were $0.28 for both basic and diluted shares. The company's net income, as computed in accordance with U.S. GAAP, was $47.18 million. This figure includes several reconciling items such as a $14.86 million loss on bargain purchase and a $12.15 million decrease in CECL reserve, among others.
The company's total assets increased to $12.8 billion as of September 30, 2023, up from $11.6 billion at the end of 2022. This growth is reflected across various asset categories, including loans, net, which rose to $4.15 billion from $3.58 billion. The balance sheet also shows an increase in cash and cash equivalents, from $163.04 million to $181.91 million.
Income Statement and Balance Sheet Analysis
Ready Capital's interest income for the quarter was $250.59 million, a significant increase from the previous year's figure. However, interest expense also rose to $191.61 million, resulting in a net interest income before recovery of loan losses of $58.97 million. The recovery of loan losses added $12.15 million, leading to a net interest income after recovery of loan losses of $71.12 million.
Non-interest income for the quarter totaled $59.59 million, with contributions from various activities such as residential mortgage banking and servicing income. Non-interest expenses amounted to $79.51 million, with the largest expenses being employee compensation and benefits, professional fees, and loan servicing expenses.
After accounting for income tax provision, the net income attributable to Ready Capital Corporation was $43.66 million. The company declared dividends of $0.36 per share of common stock for the quarter.
Segment Reporting and Future Outlook
Segment reporting for the quarter shows that the SBC Lending and Acquisitions segment generated the most significant portion of interest income, totaling $219.41 million. The Residential Mortgage Banking segment also contributed to non-interest income with $7.05 million.
Looking ahead, Ready Capital is poised to leverage its strong liquidity and origination platform to drive earnings growth into the new year. The company's management will host a webcast and conference call to discuss the financial results and provide a general business update.
For detailed financial tables and further information, investors and interested parties are encouraged to review the full earnings release and to join the upcoming webcast and conference call.
Ready Capital Corp remains committed to transparency and operational efficiency as it navigates the evolving economic landscape, aiming to deliver value to its shareholders and customers alike.
Explore the complete 8-K earnings release (here) from Ready Capital Corp for further details.
This article first appeared on GuruFocus.
