Ready Capital Corporation · NYSE:RC
Ready Capital — Q3 2019 Earnings Presentation
22 slides from Ready Capital's earnings presentation, Nov 6, 2019
Slide 1: Supplemental Financial Data Third Quarter 2019
Supplemental Financial Data Third 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: Third Quarter 2019 Highlights
THIRD QUARTER 2019 HIGHLIGHTS 3 .. Net income of $12.4 million(1), or $0.27 per common share .. Core earnings of $18.2 million(1), or $0.40 per common share .. Declared dividend of $0.40 per share EARNINGS / DIVIDENDS .. Return on Equity(2) of 6.7% .. Core Return on Equity(3) of 9.8% .. Dividend Yie
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 $51.1 $65.4 $44.1 $53.7 $48.2 $125.4 $95.7 $86.3 $177.5 $165.6 $70.3 $70.3 $62.9 $73.0 $146.2 $95.5 $166.9 $142.8 $169.1 $153.5 $86.4 $8.8 $128.7 $362.2 $77.9 $- $50 $100 $150 $200 $250 $300 $350 $400 $4
Slide 6: Q3 2019 Quarterly SBC Loan Investment Allocation
Q3 2019 QUARTERLY SBC LOAN INVESTMENT ALLOCATION 6 • Total funded investments of $550.3 million added during the quarter. • Funded $472.4 million(1) of SBC and SBA loan originations. • Acquired $77.9 million of SBC loans (1) Represents actual disbursements during the quarter. (2) $ in millions (3) B
Slide 7: SBC Originations - Segment Snapshot
SBC ORIGINATIONS -S EGMENT SNAPSHOT 7 1) Represents fully committed amounts. 2) As of October 31, 2019 including October 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 in
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 $77.9 million of SBC loans • Acquisition pipeline of $236.8 million SBC loans, including October 2019 acquisitions o
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 $8.0 billion in UPB, up 3% compared to Q2 • Fair market value of $84.6 million • Originations of $656.8 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: $754 m Original Coll
Slide 12: Loan Portfolio Composition as of September 30, 2019
LOAN PORTFOLIO COMPOSITION AS OF SEPTEMBER 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 ► Renegotiated warehouse facilities rates and capacity ► Completed $57.5 million issuance of 6.2% corporate baby bonds in July 2019 ► Anticipated Q4 closing of $430 million securitization of fixed-rate SBC loans 13 Funding Mix Total Debt + Equity CURRENT SOURCES OF FUNDING HISTORIC
Slide 14: Financing and Leverage
FINANCING AND LEVERAGE 14 2.0x 2.1x 1.6x 1.8x 2.3x 3.4x 3.7x 3.1x 3.9x 4.3x - 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Historical Leverage Recourse Total HISTORICAL LEVERAGE Total Debt-to-Equity Ratio Secured borrowings (warehouse credit facilities and borrowin
Slide 15: Loan Warehouse Facilities
LOAN WAREHOUSE FACILITIES 15 (1) $ in millions Bank Maturity Rate Description and Uses of Funds JPMorgan Aug '20 1M L + 2.00 to 2.50% $ 250 $ 80 Borrowings are used to finance SBC and SBA loan acquisitions, and SBA loan originations. KeyBank Feb '20 1M L + 1.50% 125 95 Borrowings are used to finance
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 by Quarter
PER SHARE FINANCIAL PERFORMANCE BY QUARTER 18 ► Adjusted net book value of $16.16 per common share as of September 30, 2019 Per Share Trends $0.53 $0.30 $0.90 $0.25 $0.27 $0.48 $0.34 $0.34 $0.37 $0.40 $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 Q3 2018 Q
Slide 19: Balance Sheet by Quarter
BALANCE SHEET BY QUARTER 19 (In Thousands) Assets Cash and cash equivalents $ 47,845 $ 54,406 $ 47,597 $ 41,925 $ 52,727 Restricted cash 18,864 28,921 29,979 38,019 45,303 Loans, net 1,256,177 1,193,392 1,057,023 1,002,676 1,380,359 Loans, held for sale, at fair value 124,988 115,258 115,778 177,507
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 $ 44,287 $ 46,204 $ 48,753 $ 57,034 $ 59,723 Interes t expense (28,925) (31,240) (35,775) (35,753) (39,390) Net interest income before
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 Capital
~ READY _ CAPITAL. RC LISTED NYSE