Ready Capital Corporation Reports Third Quarter 2025 Results

- GAAP LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS OF $(0.13) -- DISTRIBUTABLE LOSS PER COMMON SHARE OF $(0.94) -- DISTRIBUTABLE LOSS PER COMMON SHARE BEFORE REALIZED LOSSES OF $(0.04) - NEW YORK, Nov. 06, 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 September 30, 2025. “Our primary focus continues to be restoring financial health,” said Thomas Capasse, Ready Capital’s Chairman and Chief Executive Officer. “Through our decisive exit strategies for our underperforming loan and real estate exposure and risk management of our upcoming debt maturities, we believe we are on the path to balance sheet stability and profitability.” Third Quarter Highlights LMM commercial real estate originations of $139 millionSmall Business Lending (“SBL”) loan originations of $283 million, including $173 million of Small Business Administration 7(a) loans and $67 million of United States Department of Agriculture loansCompleted two portfolio sales consisting of 217 loans with an unpaid principal balance of $758 million for net proceeds of $109 millionSecured ownership and control of the Portland OR, mixed-use asset via a consensual deed-in-lieu arrangementBook value of $10.28 per share of common stock as of September 30, 2025Acquired approximately 2.5 million shares of the Company’s common stock at an average price of $4.17 per share as part of stock repurchase program 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 changes in our current expected credit loss reserve and valuation allowance, 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, unrealized gains or losses on preferred equity, at fair value, unrealized gain or losses or other non-cash items related to real estate owned 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. 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 EndedSeptember 30, 2025Net Loss$(16,737)Reconciling items: Unrealized gain on joint ventures (4,336)Increase in CECL reserve 32,844 Decrease in valuation allowance (178,225)Non-recurring REO impairment 1,862 Non-cash compensation 1,591 Unrealized gain on preferred equity, at fair value (1,949)Merger transaction costs and other non-recurring expenses 2,220 Bargain purchase gain (24,472)Depreciation and amortization on real estate owned 1,100 Realized losses on sale of investments 188,512 Total reconciling items$19,147 Income tax adjustments (4,580)Distributable loss before realized losses$(2,170)Realized losses on sale of investments, net of tax (147,422)Distributable loss$(149,592)Less: Distributable earnings attributable to non-controlling interests 1,473 Less: Income attributable to participating shares 2,210 Distributable loss attributable to common stockholders$(153,275)Distributable loss before realized losses on investments, net of tax per common share - basic and diluted$(0.04)Distributable loss per common share - basic and diluted$(0.94) 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, November 6, 2025 at 8:30am ET to provide a general business update and discuss the financial results for the quarter ended September 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 #: 13753254 The playback can be accessed through November 21, 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)September 30, 2025 December 31, 2024Assets Cash and cash equivalents$147,505 $143,803 Restricted cash 44,491 30,560 Loans, net (including $1,088 and $3,533 held at fair value) 4,360,501 3,378,149 Loans, held for sale (including $143,819 and $128,531 held at fair value and net of valuation allowance of $53,937 and $97,620) 163,792 241,626 Mortgage-backed securities 33,105 31,006 Investment in unconsolidated joint ventures (including $5,952 and $6,577 held at fair value) 178,840 161,561 Derivative instruments 5,295 7,963 Servicing rights 126,966 128,440 Real estate owned 632,985 193,437 Other assets 472,516 362,486 Assets of consolidated VIEs 2,166,105 5,175,295 Assets held for sale — 287,595 Total Assets$8,332,101 $10,141,921 Liabilities Secured borrowings 2,879,172 2,035,176 Securitized debt obligations of consolidated VIEs, net 1,293,778 3,580,513 Senior secured notes, net 721,151 437,847 Corporate debt, net 666,624 895,265 Guaranteed loan financing 565,883 691,118 Contingent consideration 18,385 573 Derivative instruments 1,627 352 Dividends payable 22,602 43,168 Loan participations sold 102,987 95,578 Due to third parties 9,927 1,442 Accounts payable and other accrued liabilities 166,406 188,051 Liabilities held for sale — 228,735 Total Liabilities$6,448,542 $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, 161,834,837 and 162,792,372 shares issued and outstanding, respectively 17 17 Additional paid-in capital 2,257,078 2,250,291 Retained earnings (deficit) (569,709) (505,089)Accumulated other comprehensive loss (24,096) (18,552)Total Ready Capital Corporation equity 1,774,668 1,838,045 Non-controlling interests 100,530 97,697 Total Stockholders’ Equity$1,875,198 $1,935,742 Total Liabilities, Redeemable Preferred Stock, and Stockholders’ Equity$8,332,101 $10,141,921 READY CAPITAL CORPORATIONUNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands, except share data) 2025 2024 2025 2024 Interest income$137,491 $226,537 $445,193 $693,010 Interest expense (126,971) (175,572) (403,274) (542,544)Net interest income before (provision for) recovery of loan losses$10,520 $50,965 $41,919 $150,466 (Provision for) recovery of loan losses (37,977) (53,166) 62,951 (7,751)Net interest income after (provision for) recovery of loan losses$(27,457) $(2,201) $104,870 $142,715 Non-interest income Net realized gain (loss) on financial instruments and real estate owned (160,396) (69,184) (131,513) (43,066)Net unrealized gain (loss) on financial instruments 2,914 (1,241) (450) 2,034 Valuation recovery (allowance), loans held for sale 178,225 71,060 38,761 (156,107)Servicing income, net of amortization and impairment of $4,514 and $22,682 for the three and nine months ended September 30, 2025, and $5,841 and $14,216 for the three and nine months ended September 30, 2024, respectively 7,509 5,415 13,661 12,444 Gain on bargain purchase 24,472 32,165 112,562 13,859 Income (loss) on unconsolidated joint ventures 7,417 3,214 3,291 4,821 Other income 14,773 14,823 37,667 37,246 Total non-interest income (expense)$74,914 $56,252 $73,979 $(128,769)Non-interest expense Employee compensation and benefits (21,151) (22,989) (65,564) (59,202)Allocated employee compensation and benefits from related party (3,602) (2,537) (10,478) (8,037)Professional fees (6,008) (6,232) (17,864) (19,330)Management fees – related party (5,156) (6,498) (15,805) (19,344)Loan servicing expense (9,771) (10,101) (36,653) (33,907)Transaction related expenses (1,910) (2,998) (5,243) (5,240)Impairment on real estate (1,862) (525) (8,476) (26,627)Other operating expenses (24,879) (18,048) (57,135) (43,935)Total non-interest expense$(74,339) $(69,928) $(217,218) $(215,622)Loss from continuing operations before benefit for income taxes (26,882) (15,877) (38,369) (201,676)Income tax benefit 9,935 8,404 55,081 87,194 Net income (loss) from continuing operations$(16,947) $(7,473) $16,712 $(114,482)Discontinued operations Income (loss) from discontinued operations before benefit (provision) for income taxes 280 258 (6,881) (1,554)Income tax benefit (provision) (70) (64) 1,720 389 Net income (loss) from discontinued operations$210 $194 $(5,161) $(1,165)Net income (loss)$(16,737) $(7,279) $11,551 $(115,647)Less: Dividends on preferred stock 1,999 1,999 5,997 5,997 Less: Net income attributable to non-controlling interest 2,008 2,031 6,282 3,968 Net loss attributable to Ready Capital Corporation$(20,744) $(11,309) $(728) $(125,612) Earnings per common share from continuing operations - basic$(0.13) $(0.07) $0.02 $(0.74)Earnings per common share from discontinued operations - basic$0.00 $0.00 $(0.03) $(0.01)Total earnings per common share - basic$(0.13) $(0.07) $(0.01) $(0.75) Earnings per common share from continuing operations - diluted$(0.13) $(0.07) $0.02 $(0.74)Earnings per common share from discontinued operations - diluted$0.00 $0.00 $(0.03) $(0.01)Total earnings per common share - diluted$(0.13) $(0.07) $(0.01) $(0.75) Weighted-average shares outstanding Basic 163,574,703 168,335,483 165,491,135 169,669,145 Diluted 165,873,807 169,509,208 167,790,240 170,815,080 Dividends declared per share of common stock$0.125 $0.25 $0.375 $0.85 READY CAPITAL CORPORATIONUNAUDITED SEGMENT REPORTING Three Months Ended September 30, 2025(in thousands)LMM Commercial Real Estate Small Business Lending Corporate-Other ConsolidatedInterest income$105,856 $31,635 $— $137,491 Interest expense (106,556) (20,415) — (126,971)Net interest income before provision for loan losses$(700) $11,220 $— $10,520 Provision for loan losses (30,980) (6,997) — (37,977)Net interest income after provision for loan losses$(31,680) $4,223 $— $(27,457)Non-interest income Net realized gain (loss) on financial instruments and real estate owned (179,279) 18,883 — (160,396)Net unrealized gain (loss) on financial instruments 2,279 845 (210) 2,914 Valuation (allowance) recovery, loans held for sale 178,225 — — 178,225 Servicing income, net 1,155 6,354 — 7,509 Gain on bargain purchase — — 24,472 24,472 Income on unconsolidated joint ventures 7,410 7 — 7,417 Other income 7,238 6,475 1,060 14,773 Total non-interest income$17,028 $32,564 $25,322 $74,914 Non-interest expense Employee compensation and benefits (5,023) (13,939) (2,189) (21,151)Allocated employee compensation and benefits from related party (360) — (3,242) (3,602)Professional fees (790) (3,255) (1,963) (6,008)Management fees – related party — — (5,156) (5,156)Loan servicing expense (8,081) (1,690) — (9,771)Transaction related expenses — — (1,910) (1,910)Impairment on real estate (1,862) — — (1,862)Other operating expenses (13,022) (9,479) (2,378) (24,879)Total non-interest expense$(29,138) $(28,363) $(16,838) $(74,339)Income (loss) before provision for income taxes$(43,790) $8,424 $8,484 $(26,882)Total assets$6,436,175 $1,493,159 $402,767 $8,332,101 READY CAPITAL CORPORATIONUNAUDITED SEGMENT REPORTING Nine Months Ended September 30, 2025(in thousands)LMM Commercial Real Estate Small Business Lending Corporate-Other ConsolidatedInterest income$353,097 $92,096 $— $445,193 Interest expense (342,998) (60,276) — (403,274)Net interest income before recovery of (provision for) loan losses$10,099 $31,820 $— $41,919 Recovery of (provision for) loan losses 81,815 (18,864) — 62,951 Net interest income after recovery of (provision for) loan losses$91,914 $12,956 $— $104,870 Non-interest income Net realized gain (loss) on financial instruments and real estate owned (191,113) 59,600 — (131,513)Net unrealized gain (loss) on financial instruments (2,453) 3,079 (1,076) (450)Valuation (allowance) recovery, loans held for sale 38,761 — — 38,761 Servicing income, net 4,501 9,160 — 13,661 Gain on bargain purchase — — 112,562 112,562 Income (loss) on unconsolidated joint ventures 3,250 41 — 3,291 Other income 13,050 21,259 3,358 37,667 Total non-interest income (loss)$(134,004) $93,139 $114,844 $73,979 Non-interest expense Employee compensation and benefits (17,373) (43,678) (4,513) (65,564)Allocated employee compensation and benefits from related party (1,048) — (9,430) (10,478)Professional fees (2,537) (9,451) (5,876) (17,864)Management fees – related party — — (15,805) (15,805)Loan servicing expense (34,158) (2,495) — (36,653)Transaction related expenses — — (5,243) (5,243)Impairment on real estate (8,476) — — (8,476)Other operating expenses (20,830) (30,522) (5,783) (57,135)Total non-interest expense$(84,422) $(86,146) $(46,650) $(217,218)Income (loss) before provision for income taxes$(126,512) $19,949 $68,194 $(38,369)Total assets$6,436,175 $1,493,159 $402,767 $8,332,101

Ready Capital Corporation Reports Third Quarter 2025 Results

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