Ready Capital Corporation · NYSE:RC
Ready Capital — Q4 2020 Earnings Presentation
25 slides from Ready Capital's earnings presentation, Mar 11, 2021
Slide 1: Supplemental Financial Data Fourth Quarter 2020
Supplemental Financial Data Fourth Quarter 2020
Slide 2: Disclaimer
DISCLAIMER 2 This presentation 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
Slide 3: Company Update
3 COMPANY UPDATE .. Successful re-launch of small balance commercial lending operation with $625.7 million in loans originated year-to-date .. Elevated activity in residential mortgage banking operations with $758.0 million in year-to-date originations .. The increase in SBA 7a guarantee to 90% from
Slide 4: Fourth Quarter 2020 Results
FOURTH QUARTER 2020 RESULTS 4 .. Net income of $27.6 million(1), or $0.49 per common share .. Distributable earnings of $28.8 million(1), or $0.51 per common share .. Declared dividend of $0.35 per share EARNINGS / DIVIDENDS .. Return on Equity(2) of 13.3% .. Distributable Return on Equity(3) of 13.
Slide 5: 2020 Results
2020 RESULTS 5 .. Net income of $46.1 million(1), or $0.81 per common share .. Distributable earnings of $101.4 million(1), or $1.82 per common share .. Declared dividend of $1.30 per share; 13.1% dividend yield over average RC share price EARNINGS / DIVIDENDS .. Return on Equity(2) of 5.6% .. Distr
Slide 6: Return on Equity
RETURN ON EQUITY 6 1) Levered yield includes interest income, accretion of discount, MSR creation, income from unconsolidated joint ventures, realized gains (losses) on loans held for sale, unrealized gains (losses) on loans held for sale and servicing income net of interest expense and amortization
Slide 7: SBC Investment by Product Type
SBC INVESTMENT BY PRODUCT TYPE(1) 7 1) Origination volumes are based on fully committed amounts $70.2 $45.5 $20.8 $82.9 $65.0 $116.0 $60.7 $0.0 $0.0 $17.0 $104.7 $149.4 $157.9 $105.6 $132.1 $305.0 $259.6 $- $16.9 $243.2 $153.7 $51.5 $0.0 $15.8 $140.2 $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q4
Slide 8: SBC Originations - Segment Snapshot
SBC ORIGINATIONS - SEGMENT SNAPSHOT 8 1) $ in millions, as of quarter end. 2) Represents fixed rate loans that have been securitized. 3) Represents fully committed amounts. 4) Calculated on unpaid principal balance 5) Includes interest income, accretion of discount, and servicing income net of inter
Slide 9: SBA Originations, Acquisitions, & Servicing - Segment Snapshot
SBA ORIGINATIONS, ACQUISITIONS, & SERVICING - SEGMENT SNAPSHOT 9 1) $ in millions, as of quarter end. 2) Calculated on unpaid principal balance and excludes assets offset by guaranteed loan financing liabilities 3) Includes interest income, accretion of discount, and servicing income net of interest
Slide 10: Loan Acquisitions - Segment Snapshot
LOAN ACQUISITIONS - SEGMENT SNAPSHOT 10 1) Excludes joint venture investments. 2) $ in millions, as of quarter end. 3) Represents fixed rate loans that have been securitized. 4) Calculated on unpaid principal balance 5) Includes interest income, accretion of discount, and servicing income net of int
Slide 11: Residential Mortgage Banking - Segment Snapshot
RESIDENTIAL MORTGAGE BANKING – SEGMENT SNAPSHOT 11 1) $ in millions. Represents activity during the quarter. • Elevated originations of $1.2 billion • Recapture rates of 35% • Average margin of 275bps for the quarter $8.2 $8.3 $8.7 $9.1 $9.5 $7.5 $8.0 $8.5 $9.0 $9.5 $10.0 MSR PORTFOLIO (UPB IN $ BIL
Slide 12: Diversified, Complementary, and Scalable Platforms
DIVERSIFIED, COMPLEMENTARY, AND SCALABLE PLATFORMS (1) Assets include loans, MBS, servicing assets, JV investments, real estate owned, and purchased future receivables. (2) Based on QTD Distributable Earnings. Distributable earnings includes interest income, accretion of discount, MSR creation, inco
Slide 13: Loan Portfolio Composition as of December 31, 2020
LOAN PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2020(1)(2) Geographic Location Lien Position (1) As a percent of unpaid principal balance (2) Excludes loans held-for-sale, at fair value (3) Collateral Type SBA Collateral Type 13 California 18% Texas 14% Florida 8% New York 10% Illinois 5% Other 45% Fi
Slide 14: Current Expected Credit Losses
14 CURRENT EXPECTED CREDIT LOSSES
Slide 15: Loan Portfolio - Risk Ratings as of December 31, 2020
LOAN PORTFOLIO – RISK RATINGS AS OF DECEMBER 31, 2020(1)(2)(3) CREDIT QUALITY INDICATORS (1) Commercial real estate portfolio only (2) As a percent of unpaid principal balance (3) Excludes loans held-for-sale, at fair value 15 Bucket 1 17% Bucket 2 58% Bucket 3 12% Bucket 4 9% Bucket 5 4% CRITERIA •
Slide 16: Capital Structure
CAPITAL STRUCTURE ► Current cash and available liquidity of $172 million ► Closed $201 million in senior unsecured notes in Q1 with 5-year maturity and 5 ¾ coupon 16 Total Debt + Equity LIQUIDITY UPDATE HISTORICAL CAPITAL STRUCTURE Total Debt + Equity ($M) Funding Mix $4,290 $4,608 $4,648 $4,502 $4,
Slide 17: Financing and Leverage
FINANCING AND LEVERAGE 17 1.9x 2.8x 2.1x 2.0x 2.2x 4.1x 4.9x 4.7x 4.5x 4.5x - 1.0 2.0 3.0 4.0 5.0 6.0 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Historical Leverage Recourse Total HISTORICAL LEVERAGE • $372 million of secured debt financing agency production $ in millions Total debt-to-equity ratio Sec
Slide 18: Credit and Repurchase Facilities
CREDIT AND REPURCHASE FACILITIES 18 1) Commitment size is €200.0 million and has been converted for purposes of this disclosure. $ in thousands Lender Asset Class Maturity Pricing JPMorgan Acquired loans, SBA loans June 2021 1M L + 2.25 to 2.875% $ 200,000 $ 36,604 $ 163,396 Keybank Freddie Mac loan
Slide 19: Financial Snapshot
FINANCIAL SNAPSHOT ($ in thousands, except per share data) 19 (5) Excludes the equity component of our 2017 convertible note issuance 1) Average carrying value includes average quarterly carrying value of loan and servicing asset balances 2) Gross yields include interest income, accretion of discoun
Slide 20: Transaction Highlights for Ready Capital Shareholders
20 TRANSACTION HIGHLIGHTS FOR READY CAPITAL SHAREHOLDERS .. $1 billion+ combined equity base allows for greater market presence and further optimization of funding sources .. Access to incremental capital will enhance Ready Capital’s diversified investment strategy .. Augment market positioning, enh
Slide 21: Appendix
=)” READY CAPITAL. APPENDIX 21
Slide 22: Balance Sheet by Quarter
BALANCE SHEET BY QUARTER 22 (In Thousands) Assets Cash and cash equivalents $ 67,928 $ 122,265 $ 257,017 $ 149,847 $ 138,975 Restricted cash 51,728 93,164 91,539 46,204 47,697 Loans, net 1,727,984 1,969,052 1,432,807 1,393,139 1,625,555 Loans, held for sale, at fair value 188,077 306,328 297,669 348
Slide 23: Statement of Income by Quarter
STATEMENT OF INCOME BY QUARTER 23 (1) Certain balances have been reclassified to match current period presentation (In thousands, except share data) Interest income $ 64,406 $ 69,551 $ 63,211 $ 61,074 $ 64,810 Interest expense (40,962) (46,930) (43,408) (43,823) (41,319) Net interest income before p
Slide 24: Distributable Earnings Reconciliation by Quarter
DISTRIBUTABLE EARNINGS RECONCILIATION BY QUARTER 24 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, inc
Slide 25: ely READY
ely READY . CAPITAL. RC LISTED NYSE