Q2 2026 Ready Capital Corp Earnings Call Transcript
Key Points
- Completed significant balance sheet repositioning, generating approximately $1.9 billion in cash and paying down $1.7 billion in debt, achieving 81% of the liquidity target.
- Improved quarterly GAAP loss from continuing operations to $0.63 per share from $1.25 in the prior quarter, indicating a deceleration in financial pressures.
- Successfully securitized $158 million of unguaranteed SBA 7(a) loans, providing $500 million in additional funding capacity for future production.
- Ritz-Carlton asset stabilization is progressing, with 40% of condominium units sold and hotel RevPAR up 20% year-over-year.
- Executing a cost optimization program targeting a 25% to 35% reduction in operating expenses through divestitures and integration with Waterfall.
- Reported a GAAP loss from continuing operations of $0.63 per share and a distributable earnings loss of $0.47 per share for the quarter.
- Book value per share declined 8.1% to $6.83, driven by realized losses on asset sales and loan loss provisions.
- SBA 7(a) origination volume was only $82 million in the quarter, well below production capacity due to capital constraints.
- The legacy CRE loan book includes $1 billion in sub- and non-performing assets, with an earnings drag of $0.29 per share from these and REO.
- The Ritz-Carlton property remains a significant risk, representing 22% of stockholders' equity, with the office component only 26% occupied.
Thank you. Greetings and welcome to the Ready Capital Corporation second quarter 2026 earnings call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the call over to your host, Andrew Ahlborn, Chief Financial Officer. Thank you. You may begin.
Thank you, operator. And good morning to those of you on the call.
Some of our comments today will be forward-looking statements within the meaning of the federal securities laws. Such statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.
During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These
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