Ready Capital Corporation · NYSE:RC
Ready Capital — Q1 2020 Earnings Presentation
22 slides from Ready Capital's earnings presentation, May 11, 2020
Slide 1: Supplemental Financial Data First Quarter 2020
Supplemental Financial Data First 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 .. Government sponsored lending segments remain active with SBA, Mortgage Banking and Freddie Mac Multifamily originations operating at full capacity .. CRE lending activities reduced due to uncertainty in the capital markets and a preference for retaining liquidity .. Acquisition e
Slide 4: First Quarter 2020 Results
FIRST QUARTER 2020 RESULTS 4 .. Net loss of $51.5 million(1), or $(0.98) per common share .. Core earnings of $1.2 million(1), or $0.01 per common share .. Declared dividend of $0.40 per share EARNINGS / DIVIDENDS .. Return on Equity(2) of (24.9)% .. Core Return on Equity(3) of 0.6% .. Dividend Yiel
Slide 5: Adoption of CECL
ADOPTION OF CECL Impact of the adoption of ASU 2016-13 standard on January 1, 2020: Initial CECL reserve adjustment of approximately $11.1 million, $3.6 million of which is a PCD loan gross up Q1 2020 provision for loan losses of $39.8 million (pre-tax), $35.4 million on performing loans Tot
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 $44.1 $53.7 $48.2 $70.2 $45.5 $86.3 $177.5 $165.6 $116.0 $60.7 $62.9 $73.0 $146.2 $104.7 $149.4 $142.8 $169.1 $153.5 $305.0 $259.6 $128.7 $362.2 $77.9 $153.7 $51.5 $- $50 $100 $150 $200 $250 $300 $350 $4
Slide 8: SBC Originations - Segment Snapshot
SBC ORIGINATIONS -SEGMENT SNAPSHOT 8 1) Represents fully committed amounts. 2) $ in millions, as of quarter end. 3) Represents fixed rate loans that have been securitized. 4) Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred fi
Slide 9: SBA Originations, Acquisitions, & Servicing - Segment Snapshot
SBA ORIGINATIONS, ACQUISITIONS, & SERVICING -SEGMENT SNAPSHOT 9 1) Represents fully committed amounts. 2) $ in millions, as of quarter end. 3) Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred financing costs. 4) Includes reali
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. • Acquired $51.5 million of SBC loans • 98% of portfolio is current as of 3/31/20 13.8% 11.3% 12.5% 12.1% 7.3% 8.4% 3.2% 1.6%
Slide 11: Residential Mortgage Banking - Segment Snapshot
RESIDENTIAL MORTGAGE BANKING –SEGMENT SNAPSHOT 11 1) $ in millions. Represents activity during the quarter. 2) Represents fully committed amounts • MSR portfolio of approximately $8.3 billion in UPB, up 2% compared to Q4 • Fair market value of $78.6 million • Originations of $691.3 million(2) • Loan
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 Core Earnings. Core earnings includes interest income, accretion of discount, MSR creation, income from unconsolidated
Slide 13: Loan Portfolio Composition as of March 31, 2020
LOAN PORTFOLIO COMPOSITION AS OF MARCH 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 15% Florida 8% New York 9% Illinois 5% Other 45% First
Slide 14: Capital Structure
CAPITAL STRUCTURE ► Approximate liquidity of $100 million consisting of cash on hand and available borrowing capacity on committed warehouse lines ► Since the start of COVID-19, the Company has met margin calls of $96 million ► The Company has reduced short term repurchase obligations by 35% to $191
Slide 15: Financing and Leverage
FINANCING AND LEVERAGE 15 1.6x 1.8x 2.3x 1.9x 2.8x 3.1x 3.9x 4.3x 4.1x 4.9x - 1.0 2.0 3.0 4.0 5.0 6.0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Historical Leverage Recourse Total HISTORICAL LEVERAGE Total Debt-to-Equity Ratio Secured borrowings (warehouse credit facilities and borrowings under repo tr
Slide 16: Credit and Repurchase Facilities
CREDIT AND REPURCHASE FACILITIES 16 (1) $ in thousands (2) Commitment size is €200.0 million, but has been converted for purposes of this disclosure. Lender Asset Class Maturity Pricing JPMorgan Acquired loans, SBA loans Aug-2020 1M L + 2.00 to 2.50% $ 250,000 $ 82,204 $ 167,796 Keybank Freddie Mac
Slide 17: Ready Capital Snapshot
READY CAPITAL SNAPSHOT ($ amounts in thousands, except per share data) 17 (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, accretio
Slide 18: Appendix
~ READY CAPITAL. APPENDIX
Slide 19: Balance Sheet by Quarter
BALANCE SHEET BY QUARTER 19 (In Thousands) Assets Cash and cash equivalents $ 47,597 $ 41,925 $ 52,727 $ 67,928 $ 122,265 Restricted cash 29,979 38,019 45,303 51,728 93,164 Loans, net 1,057,023 1,002,676 1,380,359 1,727,984 1,969,052 Loans, held for sale, at fair value 115,778 177,507 203,110 188,07
Slide 20: Statement of Income by Quarter
STATEMENT OF INCOME BY QUARTER 20 (1) Certain balances have been reclassified to match current period presentation (In thousands, except share data) Interest income $ 48,753 $ 57,034 $ 59,723 $ 64,406 $ 69,551 Interest expense (35,775) (35,753) (39,390) (40,962) (46,930) Net interest income before p
Slide 21: Core Earnings Reconciliation by Quarter
CORE EARNINGS RECONCILIATION BY QUARTER 21 We believe that providing investors with Core Earnings, a non-U.S. GAAP financial measure, in addition to the related U.S. GAAP measures, gives investors greater transparency into the information used by management in our financial and operational decision-
Slide 22: * READY
* READY _ CAPITAL. RC LISTED NYSE