Q3 2024 Ready Capital Corp Earnings Call Transcript
Key Points
- Ready Capital Corp (RC) reported stabilization in the commercial real estate market, particularly in the multi-family sector, driven by rate cuts and strong occupant demand.
- The company's small business lending operations achieved record growth, with $440 million in quarterly originations, marking the highest earnings contribution from this platform in RC's history.
- RC's strategic portfolio initiatives have made significant progress, with 72% of portfolio repositioning efforts complete, generating $55 million in net proceeds.
- The company's small business lending segment has become a leading national non-bank lender, exceeding its $1 billion annual target for SBA 7(a) loans.
- RC's leverage position remains conservative, with a total leverage of 3.3x, below its long-term target of 4x, allowing for opportunities to optimize its capital structure.
- Ready Capital Corp (RC) reported a third-quarter GAAP loss per common share of $0.07 and a distributable earnings loss of $0.28, reflecting timing differences in valuation allowances and realized losses.
- The company's originated portfolio saw a 6% decline, with 60-day plus delinquencies increasing marginally, indicating ongoing challenges in credit migration.
- RC's M&A portfolio, although reduced by 17%, still has a high delinquency rate of 16%, highlighting ongoing risks in this segment.
- The company's exit from residential mortgage banking is still in progress, with remaining MSRs expected to generate $40 million in net proceeds, but the platform sale is pending agency approval.
- RC's book value per share decreased to $12.59 from $12.97 last quarter, primarily due to declines related to CECL reserves and net realized losses.
Greetings and welcome to the Ready Capital third-quarter 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce Andrew Ahlborn, Chief Financial Officer. Thank you. You may be good.
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 measures should not be considered in isolation or as a
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