Ready Capital Corporation Reports Second Quarter 2025 Results

- GAAP LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS OF $(0.31) - - DISTRIBUTABLE LOSS PER COMMON SHARE OF $(0.14) - - DISTRIBUTABLE LOSS PER COMMON SHARE BEFORE REALIZED LOSSES OF $(0.10) - NEW YORK, Aug. 07, 2025 (GLOBE NEWSWIRE) -- Ready Capital Corporation (“Ready Capital” or the “Company”) (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances, and services lower-to-middle-market (“LMM”) investor and owner-occupied commercial real estate loans, today reported financial results for the quarter ended June 30, 2025. “As we begin to emerge from this CRE cycle, several items were completed since the first quarter which we believe will restore us to profitability”, said Thomas Capasse, Ready Capital’s Chairman and Chief Executive Officer. “Our continued, targeted and decisive liquidation strategy on underperforming assets is designed to provide liquidity to support future reinvestment in our Core multi-family bridge portfolio.” Second Quarter Highlights LMM commercial real estate originations of $173 millionSmall Business Lending (“SBL”) loan originations of $359 million, including $216 million of Small Business Administration 7(a) loans and $96 million of USDA loansCompleted the sale of the Residential Mortgage Banking segmentBook value of $10.44 per share of common stock as of June 30, 2025Acquired approximately 8.5 million shares of the Company’s common stock at an average price of $4.41 per share as part of stock repurchase programIssued an additional $50 million in aggregate principal amount of its 9.375% Senior Secured Notes due 2028 Subsequent Events On July 21, 2025, the Company secured ownership of the Portland OR, mixed-use asset via a consensual deed-in-lieu arrangement in which the Company assumed control. All components of the property will continue to operate business as usual. On August 6, 2025, the Company completed the sale of 21 loans with a carrying value of $494 million for net proceeds of $85 million. 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”) from discontinued operations, unrealized changes in our current expected credit loss reserve, unrealized gains or losses on de-designated cash flow hedges, unrealized gains or losses on foreign exchange hedges, unrealized gains or losses on certain unconsolidated joint ventures, non-cash compensation expense related to our stock-based incentive plan, 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, 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 from discontinued operations. Servicing rights relating to the Company’s small business commercial business are accounted for under ASC 860, Transfer and Servicing. In calculating distributable earnings, the Company does not exclude realized gains or losses on commercial MSRs, 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. (in thousands)Three Months Ended June 30, 2025Net Loss$(53,677)Reconciling items: Unrealized loss on joint ventures 1,019 Increase in CECL reserve 487 Increase in valuation allowance 39,746 Non-recurring REO impairment 4,418 Non-cash compensation 1,634 Unrealized gain on preferred equity, at fair value (4,227)Merger transaction costs and other non-recurring expenses 12,115 Loss on bargain purchase 14,381 Realized losses on sale of investments 8,896 Total reconciling items$78,469 Income tax adjustments (37,496)Distributable earnings before realized losses$(12,704)Realized losses on sale of investments, net of tax (7,088)Distributable loss$(19,792)Less: Distributable earnings attributable to non-controlling interests 1,990 Less: Income attributable to participating shares 2,214 Distributable loss attributable to common stockholders$(23,996)Distributable earnings before realized losses on investments, net of tax per common share - basic and diluted$(0.10)Distributable loss per common share - basic and diluted$(0.14) 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 Din the distributable earnings reconciliation above. Webcast and Earnings Conference Call Management will host a webcast and conference call on Friday, August 8, 2025 at 8:30am ET to provide a general business update and discuss the financial results for the quarter ended June 30, 2025. During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously. 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. Domestic: 1-877-407-0792International: 1-201-689-8263 Conference Call Playback: Domestic: 1-844-512-2921International: 1-412-317-6671Replay Pin #: 13753253 The playback can be accessed through August 22, 2025. 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 lower-to-middle-market investor and owner occupied commercial real estate loans. The Company specializes in loans backed by commercial real estate, including agency multifamily, investor, construction, and bridge as well as U.S. Small Business Administration loans under its Section 7(a) program and government guaranteed loans focused on the United States Department of Agriculture. Headquartered in New York, New York, the Company employs approximately 500 professionals nationwide. ContactInvestor Relations Ready Capital Corporation212-257-4666 InvestorRelations@readycapital.com Additional information can be found on the Company’s website at www.readycapital.com. READY CAPITAL CORPORATIONUNAUDITED CONSOLIDATED BALANCE SHEETS (in thousands)June 30, 2025 December 31, 2024Assets Cash and cash equivalents$162,935 $143,803 Restricted cash 56,769 30,560 Loans, net (including $1,263 and $3,533 held at fair value) 5,066,694 3,378,149 Loans, held for sale (including $134,541 and $128,531 held at fair value and net of valuation allowance of $212,693 and $97,620) 632,784 241,626 Mortgage-backed securities 32,310 31,006 Investment in unconsolidated joint ventures (including $6,163 and $6,577 held at fair value) 169,369 161,561 Derivative instruments 5,754 7,963 Servicing rights 124,283 128,440 Real estate owned, held for sale 199,790 193,437 Other assets 462,711 362,486 Assets of consolidated VIEs 2,395,398 5,175,295 Assets held for sale — 287,595 Total Assets$9,308,797 $10,141,921 Liabilities Secured borrowings 3,506,670 2,035,176 Securitized debt obligations of consolidated VIEs, net 1,513,297 3,580,513 Senior secured notes, net 720,893 437,847 Corporate debt, net 666,136 895,265 Guaranteed loan financing 629,380 691,118 Contingent consideration 17,189 573 Derivative instruments 1,986 352 Dividends payable 22,917 43,168 Loan participations sold 101,863 95,578 Due to third parties 9,791 1,442 Accounts payable and other accrued liabilities 184,652 188,051 Liabilities held for sale — 228,735 Total Liabilities$7,374,774 $8,197,818 Preferred stock Series C, liquidation preference $25.00 per share 8,361 8,361 Commitments & contingencies Stockholders’ Equity Preferred stock Series E, liquidation preference $25.00 per share 111,378 111,378 Common stock, $0.0001 par value, 500,000,000 shares authorized, 164,326,387 and 162,792,372 shares issued and outstanding, respectively 17 17 Additional paid-in capital 2,267,540 2,250,291 Retained earnings (deficit) (528,524) (505,089)Accumulated other comprehensive loss (23,293) (18,552)Total Ready Capital Corporation equity 1,827,118 1,838,045 Non-controlling interests 98,544 97,697 Total Stockholders’ Equity$1,925,662 $1,935,742 Total Liabilities, Redeemable Preferred Stock, and Stockholders’ Equity$9,308,797 $10,141,921 READY CAPITAL CORPORATIONUNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended June 30, Six Months Ended June 30,(in thousands, except share data) 2025 2024 2025 2024 Interest income$152,735 $234,119 $307,702 $466,473 Interest expense (135,837) (183,167) (276,303) (366,972)Net interest income before (provision for) recovery of loan losses$16,898 $50,952 $31,399 $99,501 (Provision for) recovery of loan losses (8,640) 18,871 100,928 45,415 Net interest income after (provision for) recovery of loan losses$8,258 $69,823 $132,327 $144,916 Non-interest income Net realized gain (loss) on financial instruments and real estate owned 18,214 7,250 28,883 26,118 Net unrealized gain (loss) on financial instruments (1,614) (1,357) (3,364) 3,275 Valuation allowance, loans held for sale (39,746) (80,987) (139,464) (227,167)Servicing income, net of amortization and impairment of $12,874 and $18,168 for the three and six months ended June 30, 2025, and $4,678 and $8,375 for the three and six months ended June 30, 2024, respectively (304) 3,271 6,152 7,029 Gain (loss) on bargain purchase (14,381) (18,306) 88,090 (18,306)Income (loss) on unconsolidated joint ventures (144) 1,139 (4,126) 1,607 Other income 11,304 6,597 22,894 22,423 Total non-interest income (expense)$(26,671) $(82,393) $(935) $(185,021)Non-interest expense Employee compensation and benefits (23,159) (17,799) (44,413) (36,213)Allocated employee compensation and benefits from related party (3,600) (3,000) (6,876) (5,500)Professional fees (6,368) (6,033) (11,856) (13,098)Management fees – related party (5,072) (6,198) (10,649) (12,846)Loan servicing expense (11,038) (11,012) (26,882) (23,806)Transaction related expenses (639) (1,592) (3,333) (2,242)Impairment on real estate (4,268) (9,130) (6,614) (26,102)Other operating expenses (16,133) (12,672) (32,256) (25,887)Total non-interest expense$(70,277) $(67,436) $(142,879) $(145,694)Loss from continuing operations before benefit for income taxes (88,690) (80,006) (11,487) (185,799)Income tax benefit 39,939 48,579 45,146 78,790 Net income (loss) from continuing operations$(48,751) $(31,427) $33,659 $(107,009)Discontinued operations Income (loss) from discontinued operations before benefit for income taxes (6,567) (3,699) (7,161) (1,812)Income tax benefit (provision) 1,641 925 1,790 453 Net income (loss) from discontinued operations$(4,926) $(2,774) $(5,371) $(1,359)Net income (loss)$(53,677) $(34,201) $28,288 $(108,368)Less: Dividends on preferred stock 1,999 1,999 3,998 3,998 Less: Net income attributable to non-controlling interest 1,814 1,820 4,274 1,937 Net income (loss) attributable to Ready Capital Corporation$(57,490) $(38,020) $20,016 $(114,303) Earnings per common share from continuing operations - basic$(0.31) $(0.21) $0.15 $(0.67)Earnings per common share from discontinued operations - basic$(0.03) $(0.02) $(0.03) $(0.01)Total earnings per common share - basic$(0.34) $(0.23) $0.12 $(0.68) Earnings per common share from continuing operations - diluted$(0.31) $(0.21) $0.15 $(0.67)Earnings per common share from discontinued operations - diluted$(0.03) $(0.02) $(0.03) $(0.01)Total earnings per common share - diluted$(0.34) $(0.23) $0.12 $(0.68) Weighted-average shares outstanding Basic 167,749,917 168,653,741 166,465,234 170,343,303 Diluted 170,673,088 169,863,975 169,320,001 171,513,556 Dividends declared per share of common stock$0.125 $0.30 $0.25 $0.60 READY CAPITAL CORPORATION UNAUDITED SEGMENT REPORTING Three Months Ended June 30, 2025(in thousands)LMM Commercial Real Estate Small Business Lending Corporate-Other ConsolidatedInterest income$122,268 $30,467 $— $152,735 Interest expense (116,088) (19,749) — (135,837)Net interest income before provision for loan losses$6,180 $10,718 $— $16,898 Provision for loan losses (5,146) (3,494) — (8,640)Net interest income after provision for loan losses$1,034 $7,224 $— $8,258 Non-interest income Net realized gain (loss) on financial instruments and real estate owned 2,766 15,448 — 18,214 Net unrealized gain (loss) on financial instruments (4,128) 3,380 (866) (1,614)Valuation allowance, loans held for sale (39,746) — — (39,746)Servicing income, net 1,931 (2,235) — (304)Loss on bargain purchase — — (14,381) (14,381)Income on unconsolidated joint ventures (155) 11 — (144)Other income 2,775 7,522 1,007 11,304 Total non-interest income (loss)$(36,557) $24,126 $(14,240) $(26,671)Non-interest expense Employee compensation and benefits (6,479) (14,435) (2,245) (23,159)Allocated employee compensation and benefits from related party (360) — (3,240) (3,600)Professional fees (929) (3,291) (2,148) (6,368)Management fees – related party — — (5,072) (5,072)Loan servicing expense (11,013) (25) — (11,038)Transaction related expenses — — (639) (639)Impairment on real estate (4,268) — — (4,268)Other operating expenses (4,472) (9,972) (1,689) (16,133)Total non-interest expense$(27,521) $(27,723) $(15,033) $(70,277)Income (loss) before provision for income taxes$(63,044) $3,627 $(29,273) $(88,690)Total assets$7,377,104 $1,530,810 $400,883 $9,308,797 READY CAPITAL CORPORATIONUNAUDITED SEGMENT REPORTING Six Months Ended June 30, 2025(in thousands)LMMCommercialReal Estate Small BusinessLending Corporate-Other ConsolidatedInterest income$247,241 $60,461 $— $307,702 Interest expense (236,442) (39,861) — (276,303)Net interest income before recovery of (provision for) loan losses$10,799 $20,600 $— $31,399 Recovery of (provision for) loan losses 112,795 (11,867) — 100,928 Net interest income after recovery of (provision for) loan losses$123,594 $8,733 $— $132,327 Non-interest income Net realized gain (loss) on financial instruments and real estate owned (11,834) 40,717 — 28,883 Net unrealized gain (loss) on financial instruments (4,732) 2,234 (866) (3,364)Valuation allowance, loans held for sale (139,464) — — (139,464)Servicing income, net 3,346 2,806 — 6,152 Gain on bargain purchase — — 88,090 88,090 Income (loss) on unconsolidated joint ventures (4,160) 34 — (4,126)Other income 5,812 14,784 2,298 22,894 Total non-interest income (loss)$(151,032) $60,575 $89,522 $(935)Non-interest expense Employee compensation and benefits (12,350) (29,739) (2,324) (44,413)Allocated employee compensation and benefits from related party (688) — (6,188) (6,876)Professional fees (1,747) (6,196) (3,913) (11,856)Management fees – related party — — (10,649) (10,649)Loan servicing expense (26,077) (805) — (26,882)Transaction related expenses — — (3,333) (3,333)Impairment on real estate (6,614) — — (6,614)Other operating expenses (7,808) (21,043) (3,405) (32,256)Total non-interest expense$(55,284) $(57,783) $(29,812) $(142,879)Income (loss) before provision for income taxes$(82,722) $11,525 $59,710 $(11,487)Total assets$7,377,104 $1,530,810 $400,883 $9,308,797

Ready Capital Corporation Reports Second Quarter 2025 Results

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