- GAAP EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS OF
- DISTRIBUTABLE EARNINGS PER COMMON SHARE OF
- DISTRIBUTABLE RETURN ON AVERAGE STOCKHOLDERS’ EQUITY OF 7.5% -
“We continue to make progress on our business strategy of repositioning the capital acquired in our merger with
Fourth Quarter Highlights
- Total investments of
$449 million , including$297 million of LMM originations and$152 million ofU.S. Small Business Administration 7(a) loans - Declared and paid dividend of
$0.30 per share in cash - Net book value of
$14.10 per share of common stock as ofDecember 31, 2023
Full Year Highlights
- GAAP earnings per common share from continuing operations of
$2.27 and distributable earnings per common share of$1.18 - Distributable return on average stockholders’ equity of 8.6%
- Total LMM originations of
$1.7 billion and SBA 7(a) originations of$494 million - Completed two securitizations consisting of
$1.2 billion of floating rate LMM loans and sold$1.0 billion of senior bonds at a weighted average cost of SOFR + 2.9% - Completed merger with
Broadmark Realty Capital Inc. , a specialty real estate finance company specializing in originating and servicing residential and commercial construction loans, with 23% of the portfolio liquidated since acquisition - Initiated a new stock repurchase program, authorizing the repurchase of
$100 million of the Company’s common stock; acquired approximately 1.7 million shares of the Company’s common stock at an average price of$10.82
Use of Non-GAAP Financial Information
In addition to the results presented in accordance with
The Company believes that this non-
In calculating distributable earnings, Net Income (in accordance with
In addition, in calculating distributable earnings, Net Income (in accordance with
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
(in thousands) | Three Months Ended | ||
Net Income | $ | 10,881 | |
Reconciling items: | |||
Unrealized loss on MSR - discontinued operations | 20,715 | ||
Unrealized loss on joint ventures | 2,124 | ||
Unrealized loss on foreign exchange hedges | 1,582 | ||
Increase in CECL reserve | 3,195 | ||
Non-cash compensation | 1,360 | ||
Merger transaction costs and other non-recurring expenses | 7,361 | ||
Loss on bargain purchase | 7,060 | ||
Total reconciling items | $ | 43,397 | |
Income tax adjustments | (5,754 | ) | |
Distributable earnings | $ | 48,524 | |
Less: Distributable earnings attributable to non-controlling interests | 1,358 | ||
Less: Income attributable to participating shares | 2,206 | ||
Distributable earnings attributable to common stockholders | $ | 44,960 | |
Distributable earnings per common share – basic | $ | 0.26 | |
Distributable earnings per common share – diluted | $ | 0.26 |
Webcast and Earnings Conference Call
Management will host a webcast and conference call on
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: 1-877-407-0792
International: 1-201-689-8263
Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Replay Pin #: 13743091
The playback can be accessed through
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
About
Contact
Investor Relations
212-257-4666
InvestorRelations@readycapital.com
Additional information can be found on the Company’s website at www.readycapital.com
UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 138,532 | $ | 147,399 | ||||
Restricted cash | 30,063 | 48,146 | ||||||
Loans, net (including | 4,020,160 | 3,571,799 | ||||||
Loans, held for sale, at fair value | 81,599 | 123,735 | ||||||
Paycheck Protection Program loans (including | 34,597 | 186,985 | ||||||
Mortgage-backed securities | 27,436 | 32,041 | ||||||
Investment in unconsolidated joint ventures (including | 133,321 | 118,641 | ||||||
Derivative instruments | 2,404 | 12,532 | ||||||
Servicing rights | 102,837 | 87,117 | ||||||
Real estate owned, held for sale | 252,949 | 117,098 | ||||||
Other assets | 265,578 | 183,533 | ||||||
Assets of consolidated VIEs | 6,897,145 | 6,552,760 | ||||||
Assets held for sale | 454,596 | 439,191 | ||||||
Total Assets | $ | 12,441,217 | $ | 11,620,977 | ||||
Liabilities | ||||||||
Secured borrowings | 2,102,075 | 2,663,735 | ||||||
Paycheck Protection Program Liquidity Facility (PPPLF) borrowings | 36,036 | 201,011 | ||||||
Securitized debt obligations of consolidated VIEs, net | 5,068,453 | 4,903,350 | ||||||
Convertible notes, net | — | 114,397 | ||||||
Senior secured notes, net | 345,127 | 343,355 | ||||||
Corporate debt, net | 764,908 | 662,665 | ||||||
Guaranteed loan financing | 844,540 | 264,889 | ||||||
Contingent consideration | 7,628 | 28,500 | ||||||
Derivative instruments | 212 | 1,319 | ||||||
Dividends payable | 54,289 | 47,177 | ||||||
Loan participations sold | 62,944 | 54,641 | ||||||
Due to third parties | 3,641 | 11,805 | ||||||
Accounts payable and other accrued liabilities | 171,445 | 153,614 | ||||||
Liabilities held for sale | 333,157 | 271,924 | ||||||
Total Liabilities | $ | 9,794,455 | $ | 9,722,382 | ||||
Preferred stock Series C, liquidation preference | 8,361 | 8,361 | ||||||
Commitments & contingencies | ||||||||
Stockholders’ Equity | ||||||||
Preferred stock Series E, liquidation preference | 111,378 | 111,378 | ||||||
Common stock, | 17 | 11 | ||||||
Additional paid-in capital | 2,321,989 | 1,684,074 | ||||||
Retained earnings | 124,413 | 4,994 | ||||||
Accumulated other comprehensive loss | (17,860 | ) | (9,369 | ) | ||||
2,539,937 | 1,791,088 | |||||||
Non-controlling interests | 98,464 | 99,146 | ||||||
Total Stockholders’ Equity | $ | 2,638,401 | $ | 1,890,234 | ||||
Total Liabilities, Redeemable Preferred Stock, and Stockholders’ Equity | $ | 12,441,217 | $ | 11,620,977 |
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
(in thousands, except share data) | Three Months Ended | For the Year Ended | ||||||
Interest income | $ | 250,130 | $ | 945,814 | ||||
Interest expense | (197,591 | ) | (716,468 | ) | ||||
Net interest income before provision for loan losses | $ | 52,539 | $ | 229,346 | ||||
Provision for loan losses | (6,688 | ) | (7,230 | ) | ||||
Net interest income after provision for loan losses | $ | 45,851 | $ | 222,116 | ||||
Non-interest income | ||||||||
Net realized gain (loss) on financial instruments and real estate owned | 15,153 | 65,008 | ||||||
Net unrealized gain (loss) on financial instruments | 1,643 | 9,718 | ||||||
Servicing income, net of amortization and impairment of | 4,613 | 21,161 | ||||||
Income on purchased future receivables, net of allowance for credit losses of | 857 | 2,387 | ||||||
Gain (loss) on bargain purchase | (7,060 | ) | 207,972 | |||||
Loss on unconsolidated joint ventures | (1,650 | ) | (905 | ) | ||||
Other income | 46,458 | 103,127 | ||||||
Total non-interest income | $ | 60,014 | $ | 408,468 | ||||
Non-interest expense | ||||||||
Employee compensation and benefits | (19,410 | ) | (81,530 | ) | ||||
Allocated employee compensation and benefits from related party | (3,010 | ) | (10,837 | ) | ||||
Professional fees | (15,997 | ) | (34,738 | ) | ||||
Management fees – related party | (7,035 | ) | (25,103 | ) | ||||
Incentive fees – related party | — | (1,791 | ) | |||||
Loan servicing expense | (9,221 | ) | (40,811 | ) | ||||
Transaction related expenses | (576 | ) | (17,764 | ) | ||||
Other operating expenses | (24,806 | ) | (59,591 | ) | ||||
Total non-interest expense | $ | (80,055 | ) | $ | (272,165 | ) | ||
Income from continuing operations before provision for income taxes | 25,810 | 358,419 | ||||||
Income tax provision | (1,236 | ) | (7,174 | ) | ||||
Net income from continuing operations | $ | 24,574 | $ | 351,245 | ||||
Discontinued operations | ||||||||
Loss from discontinued operations before provision for income taxes | (18,258 | ) | (3,779 | ) | ||||
Income tax benefit | 4,565 | 945 | ||||||
Net loss from discontinued operations | (13,693 | ) | (2,834 | ) | ||||
Net income | 10,881 | 348,411 | ||||||
Less: Dividends on preferred stock | 1,999 | 7,997 | ||||||
Less: Net income attributable to non-controlling interest | 1,118 | 8,960 | ||||||
Net income attributable to | $ | 7,764 | $ | 331,454 | ||||
Earnings per common share from continuing operations - basic | $ | 0.12 | $ | 2.27 | ||||
Earnings per common share from discontinued operations - basic | $ | (0.08 | ) | $ | (0.02 | ) | ||
Total earnings per common share - basic | $ | 0.04 | $ | 2.25 | ||||
Earnings per common share from continuing operations - diluted | $ | 0.12 | $ | 2.24 | ||||
Earnings per common share from discontinued operations - diluted | $ | (0.08 | ) | $ | (0.02 | ) | ||
Total earnings per common share - diluted | $ | 0.04 | $ | 2.22 | ||||
Weighted-average shares outstanding | ||||||||
Basic | 172,116,989 | 146,841,594 | ||||||
Diluted | 173,957,731 | 148,567,026 | ||||||
Dividends declared per share of common stock | $ | 0.30 | $ | 1.46 |
UNAUDITED SEGMENT REPORTING FOR THE THREE MONTHS ENDED | |||||||||||||||
(in thousands) | LMM Commercial Real Estate | Small Business Lending | Corporate- Other | Consolidated | |||||||||||
Interest income | $ | 217,566 | $ | 32,564 | $ | — | $ | 250,130 | |||||||
Interest expense | (171,629 | ) | (25,983 | ) | 21 | (197,591 | ) | ||||||||
Net interest income before provision for loan losses | $ | 45,937 | $ | 6,581 | $ | 21 | $ | 52,539 | |||||||
Provision for loan losses | (6,592 | ) | (96 | ) | — | (6,688 | ) | ||||||||
Net interest income after provision for loan losses | $ | 39,345 | $ | 6,485 | $ | 21 | $ | 45,851 | |||||||
Non-interest income | |||||||||||||||
Net realized gain (loss) on financial instruments and real estate owned | 6,838 | 8,315 | — | 15,153 | |||||||||||
Net unrealized gain (loss) on financial instruments | 700 | 943 | — | 1,643 | |||||||||||
Servicing income, net | 1,638 | 2,975 | — | 4,613 | |||||||||||
Income on purchased future receivables, net | — | 857 | — | 857 | |||||||||||
Loss on bargain purchase | — | — | (7,060 | ) | (7,060 | ) | |||||||||
Loss on unconsolidated joint ventures | (1,650 | ) | — | — | (1,650 | ) | |||||||||
Other income | 12,723 | 32,722 | 1,013 | 46,458 | |||||||||||
Total non-interest income (loss) | $ | 20,249 | $ | 45,812 | $ | (6,047 | ) | $ | 60,014 | ||||||
Non-interest expense | |||||||||||||||
Employee compensation and benefits | (7,859 | ) | (8,893 | ) | (2,658 | ) | (19,410 | ) | |||||||
Allocated employee compensation and benefits from related party | (301 | ) | — | (2,709 | ) | (3,010 | ) | ||||||||
Professional fees | (1,989 | ) | (11,672 | ) | (2,336 | ) | (15,997 | ) | |||||||
Management fees – related party | — | — | (7,035 | ) | (7,035 | ) | |||||||||
Incentive fees – related party | — | — | — | — | |||||||||||
Loan servicing expense | (9,062 | ) | (159 | ) | — | (9,221 | ) | ||||||||
Transaction related expenses | — | — | (576 | ) | (576 | ) | |||||||||
Other operating expenses | (8,367 | ) | (13,760 | ) | (2,679 | ) | (24,806 | ) | |||||||
Total non-interest expense | $ | (27,578 | ) | $ | (34,484 | ) | $ | (17,993 | ) | $ | (80,055 | ) | |||
Income (loss) before provision for income taxes | $ | 32,016 | $ | 17,813 | $ | (24,019 | ) | $ | 25,810 | ||||||
Total assets | $ | 10,282,531 | $ | 1,395,687 | $ | 308,403 | $ | 11,986,621 |
UNAUDITED SEGMENT REPORTING FOR THE YEAR ENDED | |||||||||||||||
(in thousands) | LMM Commercial Real Estate | Small Business Lending | Corporate- Other | Consolidated | |||||||||||
Interest income | $ | 847,253 | $ | 98,561 | $ | — | $ | 945,814 | |||||||
Interest expense | (650,624 | ) | (65,844 | ) | — | (716,468 | ) | ||||||||
Net interest income before provision for loan losses | $ | 196,629 | $ | 32,717 | $ | — | $ | 229,346 | |||||||
Provision for loan losses | (1,413 | ) | (5,817 | ) | — | (7,230 | ) | ||||||||
Net interest income after provision for loan losses | $ | 195,216 | $ | 26,900 | $ | — | $ | 222,116 | |||||||
Non-interest income | |||||||||||||||
Net realized gain (loss) on financial instruments and real estate owned | 34,072 | 30,936 | — | 65,008 | |||||||||||
Net unrealized gain (loss) on financial instruments | 8,427 | 1,291 | — | 9,718 | |||||||||||
Servicing income, net | 5,819 | 15,342 | — | 21,161 | |||||||||||
Income on purchased future receivables, net | — | 2,387 | — | 2,387 | |||||||||||
Gain on bargain purchase | — | — | 207,972 | 207,972 | |||||||||||
Loss on unconsolidated joint ventures | (905 | ) | — | — | (905 | ) | |||||||||
Other income | 38,552 | 62,112 | 2,463 | 103,127 | |||||||||||
Total non-interest income | $ | 85,965 | $ | 112,068 | $ | 210,435 | $ | 408,468 | |||||||
Non-interest expense | |||||||||||||||
Employee compensation and benefits | (33,012 | ) | (40,289 | ) | (8,229 | ) | (81,530 | ) | |||||||
Allocated employee compensation and benefits from related party | (882 | ) | — | (9,955 | ) | (10,837 | ) | ||||||||
Professional fees | (5,369 | ) | (19,535 | ) | (9,834 | ) | (34,738 | ) | |||||||
Management fees – related party | — | — | (25,103 | ) | (25,103 | ) | |||||||||
Incentive fees – related party | — | — | (1,791 | ) | (1,791 | ) | |||||||||
Loan servicing expense | (40,070 | ) | (741 | ) | — | (40,811 | ) | ||||||||
Transaction related expenses | — | — | (17,764 | ) | (17,764 | ) | |||||||||
Other operating expenses | (24,443 | ) | (27,763 | ) | (7,385 | ) | (59,591 | ) | |||||||
Total non-interest expense | $ | (103,776 | ) | $ | (88,328 | ) | $ | (80,061 | ) | $ | (272,165 | ) | |||
Income before provision for income taxes | $ | 177,405 | $ | 50,640 | $ | 130,374 | $ | 358,419 | |||||||
Total assets | $ | 10,282,531 | $ | 1,395,687 | $ | 308,403 | $ | 11,986,621 |
Source:
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