Q4 2024 Ready Capital Corp Earnings Call Transcript
Key Points
- Ready Capital Corp (RC) has aggressively reserved $284 million for problem loans, marking 100% of non-performing loans to current values, which sets a bottom for future recovery.
- The company has experienced significant growth in its Small Business Lending operations, with a 1.7x increase in origination, contributing positively to earnings.
- RC has initiated a $150 million share repurchase program, which is expected to enhance shareholder returns.
- The company is strategically bifurcating its CRE portfolio into core and non-core assets, providing transparency and a clear path for asset management and recovery.
- RC's Small Business Lending segment is a leading non-bank lender, contributing significantly to earnings with a strong growth outlook for 2025.
- Ready Capital Corp (RC) reported a fourth-quarter GAAP loss per common share of $1.90, indicating financial challenges.
- The company has reduced its dividend to $0.125 per share to better align with projected cash earnings, reflecting current financial pressures.
- RC's book value per share has decreased by 14% to $10.61 due to aggressive reserving and valuation allowances.
- The non-core portfolio, representing 17% of the total CRE portfolio, faces challenges with a high delinquency rate and is expected to take 7 to 10 quarters for full liquidation.
- The company faces significant upcoming debt maturities, which may strain liquidity and require strategic financial management.
Greetings and welcome to Ready Capital fourth-quarter 2024 earnings conference call. At this time, all participants are on a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Andrew Ahlborn, Chief Financial Officer. Thank you, sir. 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 uncertainty 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
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