- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
In the news release, READY CAPITAL CORPORATION REPORTS SECOND QUARTER 2022 RESULTS, issued 04-Aug-2022 by Ready Capital Corporation over PR Newswire, we are advised by the company that the sixth bullet point of the Second Quarter Highlights section should read "Declared and paid dividend of $0.42 per share in cash with distributable earnings coverage of the common dividend at 1.14x" rather than "...at 1.4x" as originally issued inadvertently. The complete, corrected release follows:
READY CAPITAL CORPORATION REPORTS SECOND QUARTER 2022 RESULTS
- GAAP EARNINGS PER COMMON SHARE OF $0.47 -
- DISTRIBUTABLE EARNINGS PER COMMON SHARE OF $0.48 -
- DISTRIBUTABLE RETURN ON AVERAGE STOCKHOLDERS' EQUITY OF 13.1% -
NEW YORK, Aug. 4, 2022 /PRNewswire/ -- Ready Capital Corporation ("Ready Capital" or the "Company") (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances, and services small-to-medium balance commercial loans, today reported financial results for the quarter ended June 30, 2022.
"Despite market volatility, Ready Capital's results are reflective of our ability to deploy capital across economic cycles," commented Thomas Capasse, Ready Capital's Chairman and Chief Executive Officer. "The quarterly growth in our loan portfolio, our continued access to the capital markets and the credit strength of our assets positions us well for the future."
Second Quarter Highlights
Total investments of $2.1 billion, including $1.2 billion of SBC originations and acquisitions, $746.4 million of residential mortgage loans, and $128.8 million of U.S. Small Business Administration 7(a) loans
Total year-to-date investment activity of $5.2 billion, 17% year-over-year growth
Closed a $754.2 million commercial mortgage CLO, consisting of 25 first-lien floating rate loans
Closed a $276.8 million fixed rate securitization with a 4.8% weighted average cost of debt
Closed a $120.0 million offering of 6.125% Senior Unsecured Notes due 2025
Declared and paid dividend of $0.42 per share in cash with distributable earnings coverage of the common dividend at 1.14x
Net book value of $15.28 per share of common stock as of June 30, 2022
Entered into a joint venture with pan-European commercial real estate lending platform Starz Real Estate, with the goal of originating approximately €300 million in senior commercial real estate loans between €10 million and €40 million in size throughout Europe over the next two years
Closed an $80.0 million placement of 7.375% Senior Unsecured Notes due 2027
Use of Non-GAAP Financial Information
In addition to the results presented in accordance with U.S. GAAP, this press release includes distributable earnings, formerly referred to as core earnings, which is a non-U.S. GAAP financial measure. The Company defines distributable earnings as net income adjusted for unrealized gains and losses related to certain mortgage backed securities ("MBS") not retained by us as part of our loan origination business, realized gains and losses on sales of certain MBS, unrealized gains and losses related to residential mortgage servicing rights ("MSR"), unrealized current non-cash provision for credit losses on accrual loans and one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains, merger related expenses, or other one-time items.
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, including the determination of dividends. However, because Distributable 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 Distributable Earnings may not be comparable to other similarly-titled measures of other companies.
In calculating Distributable 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 Distributable 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 Distributable 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-distributable. Certain MBS positions are considered to be non-distributable due to a variety of reasons which may include collateral type, duration, and size.
In addition, in calculating Distributable 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 Distributable 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.
To qualify as a REIT, the Company must distribute to its stockholders each calendar year at least 90% of its REIT taxable income (including certain items of non-cash income), determined without regard to the deduction for dividends paid and excluding net capital gain. There are certain items, including net income generated from the creation of MSRs, that are included in distributable earnings but are not included in the calculation of the current year's taxable income. These differences may result in certain items that are recognized in the current period's calculation of distributable earnings not being included in taxable income, and thus not subject to the REIT dividend distribution requirement until future years.
The table below reconciles Net Income computed in accordance with U.S. GAAP to Distributable Earnings.
Three Months Ended June 30, 2022
Unrealized loss on mortgage servicing rights
Impact of ASU 2016-13 on accrual loans
Non-recurring REO impairment
Merger transaction costs and other non-recurring expenses
Total reconciling items
Income tax adjustments
Less: Distributable earnings attributable to non-controlling interests
Less: Income attributable to participating shares
Distributable earnings attributable to common stockholders
Distributable earnings per common share - basic
Distributable earnings per common share - diluted
U.S. GAAP return on equity is based on U.S. GAAP net income, while distributable return on equity is based on distributable earnings, which adjusts U.S. GAAP net income for the items in the distributable earnings reconciliation above.
Webcast and Earnings Conference Call
Management will host a webcast and conference call on Friday, August 5, 2022 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended June 30, 2022.
The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in. The webcast of the conference call will 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.
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Conference Call Playback:
Replay Pin #: 13730375
The playback can be accessed through August 19, 2022.
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. The Company specializes in loans backed by commercial real estate, including agency multifamily, investor and bridge as well as U.S. Small Business Administration loans under its Section 7(a) program. Headquartered in New York, New York, the Company employs over 600 professionals nationwide.
Ready Capital Corporation
Additional information can be found on the Company's website at www.readycapital.com
READY CAPITAL CORPORATION
June 30, 2022
December 31, 2021
Cash and cash equivalents
Loans, net (including $9,956 and $10,766 held at fair value)
Loans, held for sale, at fair value
Paycheck Protection Program loans (including $763 and $3,243 held at fair value)
Mortgage-backed securities, at fair value
Loans eligible for repurchase from Ginnie Mae
Investment in unconsolidated joint ventures (including $8,430 and $8,894 held at fair value)
Investments held to maturity (including $9,601 held at fair value)
Purchased future receivables, net
Servicing rights (including $168,653 and $120,142 held at fair value)
Real estate owned, held for sale
Assets of consolidated VIEs
Paycheck Protection Program Liquidity Facility (PPPLF) borrowings
Securitized debt obligations of consolidated VIEs, net
Convertible notes, net
Senior secured notes, net
Corporate debt, net
Guaranteed loan financing
Liabilities for loans eligible for repurchase from Ginnie Mae
Loan participations sold
Due to third parties
Accounts payable and other accrued liabilities
Preferred stock Series C, liquidation preference $25.00 per share
Commitments & contingencies
Preferred stock Series E, liquidation preference $25.00 per share
Common stock, $0.0001 par value, 500,000,000 shares authorized, 114,375,070 and 75,838,050
Additional paid-in capital
Accumulated other comprehensive loss
Total Ready Capital Corporation equity
Total Stockholders' Equity
Total Liabilities, Redeemable Preferred Stock, and Stockholders' Equity
READY CAPITAL CORPORATION
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands, except share data)
Net interest income before recovery of (provision for) loan losses
Recovery of (provision for) loan losses
Net interest income after recovery of (provision for) loan losses
Residential mortgage banking activities
Net realized gain on financial instruments and real estate owned
Net unrealized gain (loss) on financial instruments
Servicing income, net of amortization and impairment of $5,660 and
Income on purchased future receivables, net of allowance for (recovery of)
Income on unconsolidated joint ventures
Other income (loss)
Total non-interest income
Employee compensation and benefits
Allocated employee compensation and benefits from related party
Variable income (expenses) on residential mortgage banking activities
Management fees – related party
Incentive fees – related party
Loan servicing expense
Transaction related expenses
Other operating expenses
Total non-interest expense
Income before provision for income taxes
Income tax provision
Less: Dividends on preferred stock
Less: Net income attributable to non-controlling interest
Net income attributable to Ready Capital Corporation
Earnings per common share - basic
Earnings per common share - diluted
Weighted-average shares outstanding