Ready Capital Corporation · NYSE:RC
Ready Capital — Q2 2019 Earnings Presentation
22 slides from Ready Capital's earnings presentation, Aug 7, 2019
Slide 1: Supplemental Financial Data Second Quarter 2019
Supplemental Financial Data Second 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: Second Quarter 2019 Highlights
SECOND QUARTER 2019 HIGHLIGHTS 3 .. Net income of $11.2 million(1), or $0.25 per common share .. Core earnings of $16.8 million(1), or $0.37 per common share .. Declared dividend of $0.40 per share EARNINGS / DIVIDENDS .. Return on Equity(2) of 5.9% .. Core Return on Equity(3) of 8.8% .. Dividend Yi
Slide 4: Return on Equity
RETURN ON EQUITY 4 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 5: SBC Investment by Product Type
SBC INVESTMENT BY PRODUCT TYPE(1) 5 (1) Origination volumes are based on fully committed amounts $48.3 $51.1 $65.4 $44.1 $53.7 $69.4 $125.4 $95.7 $86.3 $177.5 $160.3 $70.3 $70.3 $62.9 $73.0 $122.6 $95.5 $166.9 $142.8 $169.1 $142.8 $86.4 $8.8 $128.7 $362.2 $- $50 $100 $150 $200 $250 $300 $350 $400 $4
Slide 6: Q2 2019 Quarterly SBC Loan Investment Allocation
Q2 2019 QUARTERLY SBC LOAN INVESTMENT ALLOCATION 6 • Total funded investments of $771.3 million added during the quarter. • Funded $409.1 million(1) of SBC and SBA loan originations. • Acquired $362.2 million of SBC loans (1) Represents actual disbursements during the quarter. (2) $ in millions (3)
Slide 7: SBC Originations - Segment Snapshot
SBC ORIGINATIONS -S EGMENT SNAPSHOT 7 1) Represents fully committed amounts. 2) As of July 31, 2019 including July 2019 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 n
Slide 8: SBA Originations, Acquisitions, & Servicing - Segment Snapshot
SBA ORIGINATIONS, ACQUISITIONS, & SERVICING-S EGMENT SNAPSHOT 8 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 4) Includes realized and unrealize
Slide 9: Loan Acquisitions - Segment Snapshot
LOAN ACQUISITIONS-S EGMENT SNAPSHOT 9 1) Excludes joint venture investments. 2) $ in millions, as of quarter end. 3) Represents fixed rate loans that have been securitized. • Acquired $362.2 million of SBC loans • Acquisition pipeline of $300.3 million SBC loans, including July 2019 acquisitions of
Slide 10: Residential Mortgage Banking - Segment Snapshot
RESIDENTIAL MORTGAGE BANKING –S EGMENT SNAPSHOT 10 1) $ in millions. Represents activity during the quarter. 2) Represents fully committed amounts • MSR portfolio of approximately $7.8 billion in UPB, up 2% compared to Q1 • Fair market value of $85.7 million • Originations of $518.2 million(2) • Loa
Slide 11: Active SBC and SBA Loan Securitization Performance
ACTIVE SBC AND SBA LOAN SECURITIZATION PERFORMANCE(1) Originated Conventional SBC Loans Originated Transitional Loans (3) Acquired SBC Loans Originated Freddie Mac Loans 11 1) Represents remaining collateral in the securitization Original Collateral: $1.1 b Remaining collateral: $764 m Original Coll
Slide 12: Loan Portfolio Composition as of June 30, 2019
LOAN PORTFOLIO COMPOSITION AS OF JUNE 30, 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 12
Slide 13: Capital Structure
CAPITAL STRUCTURE ► Completed $320 million securitization of originated transitional loans in April 2019 ► Completed $300 million securitization of acquired SBC loans in June 2019 ► Renegotiated warehouse facilities rates ► Completed $57.5 million issuance of 6.2% corporate baby bonds in July 2019 1
Slide 14: Financing and Leverage
FINANCING AND LEVERAGE 14 1.8x 2.0x 2.1x 1.6x 1.8x 3.2x 3.4x 3.7x 3.1x 3.9x 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Historical Leverage Recourse Total HISTORICAL LEVERAGE Total Debt-to-Equity Ratio Secured borrowings (warehouse credit facilities and borrowings under rep
Slide 15: Loan Warehouse Facilities
LOAN WAREHOUSE FACILITIES 15 (1) $ in millions Bank Maturity Rate Description and Uses of Funds JPMorgan May '20 1M L + 2.50% $ 225 $ 97 Borrowings are used to finance SBC and SBA loan acquisitions, and SBA loan originations. KeyBank Feb '20 1M L + 1.50% 125 90 Borrowings are used to finance Freddie
Slide 16: Ready Capital Snapshot
READY CAPITAL SNAPSHOT ($ amounts in thousands, except per share data) 16 (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 17: Appendix
~ READY CAPITAL. APPENDIX
Slide 18: Per Share Financial Performance
PER SHARE FINANCIAL PERFORMANCE 18 ► Adjusted net book value of $16.35 per common share as of June 30, 2019 Per Share Trends $0.48 $0.53 $0.30 $0.90 $0.25 $0.47 $0.48 $0.34 $0.34 $0.37 $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 Q2 2018 Q3 2018 Q4 2018 Q
Slide 19: Balance Sheet by Quarter
BALANCE SHEET BY QUARTER 19 (In Thousands) Assets Cash and cash equivalents $ 105,833 $ 47,845 $ 54,406 $ 47,597 $ 41,925 Restricted cash 15,108 18,864 28,921 29,979 38,019 Loans, net 1,035,330 1,256,177 1,193,392 1,057,023 1,002,676 Loans, held for sale, at fair value 188,752 124,988 115,258 115,77
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 $ 41,858 $ 44,287 $ 46,204 $ 48,753 $ 57,034 Interes t expense (26,407) (28,925) (31,240) (35,775) (35,753) Net interest income before
Slide 21: Core Earnings Reconciliation
CORE EARNINGS RECONCILIATION 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-making. How
Slide 22: Ready Capital
* READY _ CAPITAL. RC LISTED NYSE