Ready Capital Corporation · NYSE:RC
Ready Capital — Q4 2019 Earnings Presentation
23 slides from Ready Capital's earnings presentation, Mar 11, 2020
Slide 1: Supplemental Financial Data Fourth Quarter 2019
Supplemental Financial Data Fourth Quarter 2019
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: Fourth Quarter 2019 Highlights
FOURTH QUARTER 2019 HIGHLIGHTS 3 .. Net income of $20.9 million(1), or $0.43 per common share .. Core earnings of $21.0 million(1), or $0.43 per common share .. Declared dividend of $0.40 per share EARNINGS / DIVIDENDS .. Return on Equity(2) of 10.9% .. Core Return on Equity(3) of 10.9% .. Dividend
Slide 4: 2019 Highlights
2019 HIGHLIGHTS 4 .. Net income of $75.1 million(1), or $1.72 per common share .. Core earnings of $67.3 million(1), or $1.54 per common share .. Declared dividend of $1.60 per share EARNINGS / DIVIDENDS .. Return on Equity(2) of 10.5% .. Core Return on Equity(3) of 9.4% .. Dividend Yield(4) of 10.9
Slide 5: Return on Equity
RETURN ON EQUITY 5 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 6: SBC Investment by Product Type
SBC INVESTMENT BY PRODUCT TYPE(1) 6 (1) Origination volumes are based on fully committed amounts $65.4 $44.1 $53.7 $48.2 $70.2 $95.7 $86.3 $177.5 $165.6 $116.0 $70.3 $62.9 $73.0 $146.2 $104.7 $166.9 $142.8 $169.1 $153.5 $305.0 $8.8 $128.7 $362.2 $77.9 $153.7 $- $50 $100 $150 $200 $250 $300 $350 $400
Slide 7: Q4 2019 Quarterly SBC Loan Investment Allocation
Q4 2019 QUARTERLY SBC LOAN INVESTMENT ALLOCATION 7 • Total funded investments of $650.9 million added during the quarter. • Funded $497.2 million(1) of SBC and SBA loan originations. • Acquired $143.0 million of SBC loans and $10.7 million of joint venture investments (1) Represents actual disbursem
Slide 8: SBC Originations - Segment Snapshot
SBC ORIGINATIONS -S EGMENT SNAPSHOT 8 1) Represents fully committed amounts. 2) As of February 28, 2020 including 2020 fundings. 3) $ in millions, as of quarter end. 4) Represents fixed rate loans that have been securitized. 5) Includes interest income, accretion of discount, and servicing income ne
Slide 9: SBA Originations, Acquisitions, & Servicing - Segment Snapshot
SBA ORIGINATIONS, ACQUISITIONS, & SERVICING-S EGMENT 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-S EGMENT SNAPSHOT 10 1) Excludes joint venture investments. 2) $ in millions, as of quarter end. 3) Represents fixed rate loans that have been securitized. • Acquired $153.7 million of SBC loans, including $10.7 million of joint venture investments • Acquisition pipeline of $116.1
Slide 11: Residential Mortgage Banking - Segment Snapshot
RESIDENTIAL MORTGAGE BANKING –S EGMENT SNAPSHOT 11 1) $ in millions. Represents activity during the quarter. 2) Represents fully committed amounts • MSR portfolio of approximately $8.2 billion in UPB, up 2% compared to Q3 • Fair market value of $91.2 million • Originations of $586.3 million(2) • Loa
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) Represents 2019 YTD amounts, based on Core Earnings, which includes interest income, accretion of discount, MSR creation, incom
Slide 13: Loan Portfolio Composition as of December 31, 2019
LOAN PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2019(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 17% Texas 15% Florida 9% New York 8% Illinois 5% Other 46% Fir
Slide 14: Capital Structure
CAPITAL STRUCTURE ► Completed public offering of 6.0 million shares of common stock in December 2019; an additional 0.9 million shares of common stock in January 2020 ► Completed $45.0 million issuance of 6.2% corporate baby bonds in November 2019, at a yield-to-maturity of 6.0% ► Q4 closing of $430
Slide 15: Financing and Leverage
FINANCING AND LEVERAGE 15 2.1x 1.6x 1.8x 2.3x 1.9x 3.7x 3.1x 3.9x 4.3x 4.1x - 1.0 2.0 3.0 4.0 5.0 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Historical Leverage Recourse Total HISTORICAL LEVERAGE Total Debt-to-Equity Ratio Secured borrowings (warehouse credit facilities and borrowings under repo transa
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 $ 88,972 $ 161,028 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: Per Share Financial Performance by Quarter
PER SHARE FINANCIAL PERFORMANCE BY QUARTER 19 ► Adjusted net book value of $16.12 per common share as of December 31, 2019 Per Share Trends $0.30 $0.90 $0.25 $0.27 $0.43 $0.34 $0.34 $0.37 $0.40 $0.43 $0.40 $0.40 $0.40 $0.40 $0.40 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 Q4 2018 Q1
Slide 20: Balance Sheet by Quarter
BALANCE SHEET BY QUARTER 20 (In Thousands) Assets Cash and cash equivalents $ 54,406 $ 47,597 $ 41,925 $ 52,727 $ 67,928 Restricted cash 28,921 29,979 38,019 45,303 51,728 Loans, net 1,193,392 1,057,023 1,002,676 1,380,359 1,727,984 Loans, held for sale, at fair value 115,258 115,778 177,507 203,110
Slide 21: Statement of Income by Quarter
STATEMENT OF INCOME BY QUARTER 21 (1) Certain balances have been reclassified to match current period presentation (In thousands, except share data) Interest income $ 46,204 $ 48,753 $ 57,034 $ 59,723 $ 64,406 Interes t expense (31,240) (35,775) (35,753) (39,390) (40,962) Net interest income before
Slide 22: Core Earnings Reconciliation by Quarter
CORE EARNINGS RECONCILIATION BY QUARTER 22 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 23: Ready Capital
~ READY _ CAPITAL. RC LISTED NYSE