Ready Capital Corporation, Supplemental Financial Data, First Quarter 2020 (Form 8-K Exhibit 99.2)

Summary

Ready Capital Corporation's Supplemental Financial Data for the first quarter of 2020, filed as Exhibit 99.2 to a Form 8-K. The presentation says Ready Capital's SBA operations obtained authorizations on approximately $3.0 billion of PPP loans consisting of 40,000 applications with an average loan size of $75k, and that the Company facilitated the funding of approximately $2.1 billion of PPP loans. It reports a net loss of $51.5 million, or $(0.98) per common share, core earnings of $1.2 million, or $0.01 per common share, and a declared dividend of $0.40 per share. It also reports adjusted net book value of $14.52 per common share.

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EX-99.2 3 tmb-20200511xex99d2.htm EX-99.2

Exhibit 99.2

Supplemental Financial Data
First Quarter 2020
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 safe harbor provided
by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that
could cause actual results to differ materially from those described in the forward-looking statements; Ready Capital Corporation (the "Company") can give no
assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include those set
forth in the Risk Factors section of the most recent Annual Report on Form 10-K filed with the SEC and other reports filed by the Company with the SEC,
copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes
after the date of this release, except as required by law.
This presentation includes certain non-GAAP financial measures, including Core Earnings. These non-GAAP financial measures should be considered only as
supplemental to, and not as superior to, financial measures in accordance with GAAP. Please refer to Appendix A for the most recent GAAP information.
This presentation also contains market statistics and industry data which are subject to uncertainty and are not necessarily reflective of market conditions.
These have been derived from third party sources and have not been independently verified by the Company or its affiliates.
All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. All data is as of March 31, 2020
unless otherwise noted.
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 efforts focused on identifying accretive investments post COVID
BUSINESS ACTIVITIES
. 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 paid margin calls and provided
additional funds needed to roll repurchase obligations, totaling $96 million
. The Company has reduced short-term repurchase obligations by 35% to $191
million since December 31st, 2019
LIQUIDITY
. Current $4.2 billion portfolio of > 4,500 loans have a weighted average LTV of ~
60% and 90% are current through April 30, 2020
. 10% of loans in the CRE portfolio and 7% of loans in the residential portfolio have
been offered forbearance
BOOK VALUE
PRESERVATION
PAYCHECK PROTECTION
PROGRAM
. Ready Capital’s SBA operations obtained authorizations on ~ $3.0 billion of PPP
loans consisting of 40,000 applications with an average loan size of $75k
. Facilitated the funding of ~ $2.1 billion of PPP loans
. ~$800 million of PPP loans expected to be processed in short order pending receipt
of required documentation and completion of required underwriting procedures
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 Yield(4) of 22.2%
RETURNS
. Total SBC loan investment of $566.8 million
. SBC loan originations of $469.7 million and $51.5 million of loan acquisitions
. SBA loan originations of $45.5 million
. Residential mortgage loan originations of $691.3 million
LOAN ORIGINATIONS(5) /
ACQUISITIONS
. Adjusted net book value(6) of $14.52 per common share
. BV per share decline primarily attributable to:
. Adoption of CECL of $(0.79)(7)
. Unrealized losses on MSRs of $(0.24) and MBS of $(0.23)
BALANCE SHEET
(1) Inclusive of non-controlling interest
(2) Return on Equity is an annualized percentage equal to quarterly net income over the average monthly total stockholders’ equity for the period
(3) Core Return on Equity is an annualized percentage equal to core earnings over the average monthly total stockholders’ equity for the period. Refer to the “Core Earnings
Reconciliation” slide for a reconciliation of GAAP Net Income to Core Earnings
(4) Q1 Dividend yield for the period based on the 3/31/2020 closing share price of $7.22
(5) Represents fully committed amounts
(6) Excludes the equity component of our 2017 convertible note issuance
(7) Includes day 1 transition adjustment of $(0.13) per share
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
 Total ending Q1 2020 allowance reserves of $58.0 million, representing 1.4% of the held-for-investment loan balance
5
(In Thousands)
Originated
SBC loans
Originated
Transitional
loans
Acquired
 loans
 SBA 7(a)
loans
Total held-for-
investment
loans
Beginning balance 304 $ 188 $ 3,054 $ 3,895 $ 7,441 $
CECL PCD loan gross up (1/1/20) - - 1,158 2,440 3,598
CECL Day 1 adjustment (1/1/20) 2,400 1,906 720 2,501 7,527
Balance as of 1/1/2020 2,704 $ 2,094 $ 4,932 $ 8,836 $ 18,566 $
 Provision for loan losses 7,658 22,170 5,722 4,254 39,804
 Charge-offs - - (8) (460) (468)
 Recoveries - - - 66 66
Ending balance - 3/31/20 10,362 $ 24,264 $ 10,646 $ 12,696 $ 57,968 $
Loan balance - 3/31/20 1,215,061 $ 1,260,771 $ 1,062,170 $ 660,269 $ 4,198,271 $
% of Loan balance - 3/31/20 0.9% 1.9% 1.0% 1.9% 1.4%
(1) Pre-tax impact on balance sheet reserve.
(2) We recorded a $6.8 million cumulative-effect adjustment to the opening retained earnings (net of taxes) in our consolidated
statement of equity as of January 1, 2020, which includes $0.2 million attributable to non-controlling interests.
(3) Includes $35.4 million attributable to performing loans.
(1)
(3)
(2)
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 of
deferred financing costs on an annualized basis.
2) GAAP ROE is based on GAAP Net Income, while Core ROE is based on
Core Earnings, which adjusts GAAP Net Income for certain items
detailed on the “Core Earnings Reconciliation” slide.
3) ROE based on net income before tax of the Residential Mortgage
Banking business line divided by the business line’s average monthly
equity.
Segment
Loan Acquisitions 7.3 % 7.9 % 23.9 %
SBC Originations 12.5 % 12.5 % 63.1 %
SBA Originations, Acquisitions,
& Servicing 43.7 % 43.7 % 6.7 %
Residential Mortgage Banking (3) -33.4% 70.5% 6.3%
(1.8) 0.2 (0.3) (0.1)
8.7% 16.3% 16.8% 15.0%
(7.9) 2.9 (7.8) 3.0
(17.1) - - -
(7.8) (7.8) (7.4) (7.7)
(2.5) (0.8) - -
(1.2) (1.4) (1.2) (1.4)
2.9 1.7 0.2 2.0
-24.9% 10.9% 0.6% 10.9% Return on equity
CECL earnings impact
Gross return on equity
Realized & unrealized gains, net
Other income and expenses, net
Non-recurring gains, losses and expenses
Investment advisory fees
Provision for income taxes
10.5 % 16.1 % 17.1 % 15.1 %
Corporate leverage, net of non-earning assets
GAAP ROE (2) Core ROE (2)
Levered
Yield (1)
Core
Levered
Yield (1)
Equity
Allocation Q1'20 Q4'19 Q1'20 Q4'19
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
 $400
 $450
Q1'19 Q2'19 Q3'19 Q4'19 Q1'20
Investment (UPB in $)
SBA Conventional Freddie Mac Transitional Acquired
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
financing costs.
5) Includes realized and unrealized gains (losses) on loans held for
sale and MSR creation.
• Originations of $469.7 million(1)
• 97% of portfolio is current as of 3/31/20
9.3% 9.6% 9.4% 10.1% 10.5%
1.9% 1.7% 2.8% 1.9% 2.0%
0.0%
5.0%
10.0%
15.0%
20.0%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
Gross Levered Yield (ex. Gains) Gains on Loans, held for sale
GROSS LEVERED YIELD CURRENT QUARTER HIGHLIGHTS
(4) (5)
Portfolio Metrics (Balance Sheet)
Number of loans 429 485 501 537 593
Unpaid Principal Balance (3) $ 1,582 $ 1,829 $ 2,064 $ 2,298 $ 2,581
Carrying Value (3) $ 1,589 $ 1,835 $ 2,070 $ 2,300 $ 2,580
Weighted Average LTV 63% 63% 65% 61% 64%
Weighted Average Coupon 6.2% 6.1% 5.8% 6.2% 5.4%
Weighted Average Maturity 5 years 5 years 5 years 5 years 5 years
Weighted Average Principal Balance (3) $ 3.7 $ 3.7 $ 4.1 $ 4.3 $ 4.4
Percentage of loans fixed / floating 53% / 47% 55% / 45% 55% / 45% 53% / 47% 58% / 42%
Percentage of fixed, match funded (4) 87.3% 69.4% 68.3% 84.9% 80.9%
Percentage of loans 30+ days delinquent 2.7% 2.7% 1.4% 1.9% 2.6%
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
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 realized and unrealized gains (losses) on loans held
for sale and MSR creation.
5) Reflects an increase in balances as a result of the Q4 2019
securitization and effects of the guaranteed loan financing
gross up.
• $52.0 million of SBA secondary market
loans sales, with an average sale
premium of 9.6%
• Originations of $45.5 million(1)
15.0%
22.1% 22.2% 27.6% 25.1%
11.1%
17.8% 16.7%
23.0%
18.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
Gross Levered Yield (ex. Gains) Gains on Loans, held for sale
CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD
(3) (4)
Portfolio Metrics (Balance Sheet)
Number of loans 1,876 1,902 1,875 1,880 1,813
Unpaid Principal Balance (2) $ 262 $ 270 $ 278 $ 804 $ 701
Carrying Value (2) $ 221 $ 230 $ 240 $ 770 $ 664
Weighted Average LTV 82% 87% 88% 83% 84%
Weighted Average Coupon 7.4% 7.4% 7.4% 6.9% 6.7%
Weighted Average Maturity 15 years 16 years 16 years 15 years 17 years
Weighted Average Principal Balance (2) $ 0.1 $ 0.1 $ 0.1 $ 0.4 $ 0.4
Percentage of loans fixed / floating 1% / 99% 1% / 99% 1% / 99% 3% / 97% 1% / 99%
Percentage of loans 30+ days delinquent 9.1% 6.5% 6.0% 3.1% 5.3%
Q1 2019 Q2 2019 Q3 2019 Q4 2019(5) Q1 2020(5)
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% 0.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
Income on joint venture investments
Gross Levered Yield (ex. Gains)
CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD
Portfolio Metrics(1) (Balance Sheet)
Number of loans 1,018 2,385 2,363 2,231 2,212
Unpaid Principal Balance (2) $ 798 $ 1,075 $ 1,068 $ 1,048 $ 1,073
Carrying Value (2) $ 770 $ 1,055 $ 1,056 $ 1,039 $ 1,066
Weighted Average LTV 53% 46% 42% 43% 40%
Weighted Average Coupon 6.7% 6.3% 6.3% 6.1% 6.1%
Weighted Average Maturity 7 years 10 years 10 years 9 years 9 years
Weighted Average Principal Balance (2) $ 0.8 $ 0.5 $ 0.5 $ 0.5 $ 0.5
Percentage of loans fixed / floating 61% / 39% 48% / 52% 47% / 53% 45% / 55% 49% / 51%
Percentage of fixed, match funded (3) 51.6% 61.0% 44.6% 52.3% 43.3%
Percentage of loans performing / non-performing 95% / 5% 98% / 2% 98% / 2% 98% / 2% 98% / 2%
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
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 sales of $643.9 million
• Origination pipeline of $601.3 million
residential agency loans(2) $7.6 $7.8
$8.0 $8.2 $8.3
$7.0
$7.3
$7.5
$7.8
$8.0
$8.3
$8.5
MSR PORTFOLIO (UPB IN $ BILLIONS)CURRENT QUARTER HIGHLIGHTS
Portfolio Metrics (quarterly activity)
Unpaid principal balance (1) $ 344.4 $ 518.2 $ 656.8 $ 586.3 $ 691.3
 % of Originations - Purchased 74.3% 74.0% 60.5% 54.7% 51.2%
 % of Originations - Refinanced 25.7% 26.0% 39.5% 45.3% 48.8%
Channel - % Correspondent 34.5% 36.4% 33.6% 37.9% 34.4%
Channel - % Retail 47.2% 45.7% 50.9% 46.8% 50.3%
Channel - % Wholesale 18.2% 17.9% 15.5% 15.3% 15.3%
Unpaid principal balance (1) $ 326.5 $ 492.1 $ 631.9 $ 601.6 $ 643.9
 % of UPB - Fannie/ Freddie securitizations 68.4% 69.7% 69.7% 66.6% 72.4%
 % of UPB - Ginnie Mae securitizations 24.6% 22.4% 25.1% 26.8% 17.3%
 % of UPB - Other investors 7.0% 7.9% 5.2% 6.6% 10.3%
Q4 2019 Q1 2020
Originations
Sales
Q1 2019 Q2 2019 Q3 2019
Fair Q1' 19 Q2' 19 Q3' 19 Q4' 19 Q1' 20
Value
($ mm) $ 88.2 $ 85.7 $ 84.6 $ 91.2 $ 78.6
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 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 of deferred financing costs on an annualized basis.
(3)
12
PORTFOLIO BREAKDOWN(1) EARNINGS BREAKDOWN(2)
Acquisitions
25%
SBC Originations
- Fixed rate
26% SBC Originations
- Bridge
26%
SBC Originations
- Freddie Mac
3%
SBA
Originations,
Acquisitions, &
Servicing
14%
Residential
Mortgage
Banking
6%
Acquisitions,
($4,963)
SBC Originations
- Fixed rate,
$2,555
SBC Originations
- Bridge, $10,511
SBC Originations
- Freddie Mac,
($4,387)
SBA
Originations,
Acquisitions, &
Servicing,
$1,416
Residential
Mortgage
Banking, $7,048
($6,000)
($4,000)
($2,000)
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
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 Mortgage
98.9%
Subordinated
Mortgage
0.8%
Other
0.3%
SBA
16%
Multi-Family
27%
Retail
17%
Office
12%
Mixed use
12%
Other
16% Physicians
Offices
14%
Child Day Care
Services
8%
Lodging
19%
Veterinarians
4%
Restaurants
6%
Other
49%
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 $191
million
14
Total Debt
+ Equity
LIQUIDITY UPDATE HISTORICAL CAPITAL STRUCTURE Total
Debt +
Equity
($M)
Funding Mix
$3,088 $3,642 $3,915 $4,290 $4,608
Convertible Notes $ 115.0 7.0% 7.0%
Senior Secured Notes $ 180.0 7.5% 7.0%
Baby Bonds $ 149.5 6.3% 6.2%
Total $ 444.5 7.0% 6.7%
Principal
Balance Coupon YTM
Corporate
Financing (in $M)
25% 21% 19% 20% 17%
4%
3% 3% 3% 2%
7%
6% 7% 8%
7%
27%
27% 34% 28% 37%
37% 43% 37% 42% 37%
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Stockholders Equity Convertible senior notes
Senior secured notes and Corporate debt Credit facilities and repurchase agreements
Securitized debt obligations
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 transactions) $ 1,699
 Securitized debt obligations 1,692
 Senior secured notes and corporate bonds 329
 Convertible notes 111
Total Debt $ 3,831
Total Stockholders' Equity $ 776
Total debt-to-equity ratio 4.9
Total recourse debt-to-equity ratio
Total Debt $ 3,831
 Less: Securitized debt obligations (1,692)
Total recourse debt $ 2,139
Total Stockholders' Equity $ 776
Total recourse debt-to-equity ratio 2.8
3/31/2020
(in millions)
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 loans Feb-2021 1M L + 1.30% 100,000 78,726 21,274
 East West Bank SBA loans Jul-2020 Prime - 0.821 to + 0.29% 50,000 30,911 19,089
 Credit Suisse(2) Acquired loans (non USD) Dec-2021 Euribor + 2.50% 224,500 37,030 187,470
 GMFS facilities Residential loans Apr-2020 - Nov-2020 Various 340,000 204,655 135,345
 GMFS - MSR Residential MSRs Sep-2023 1M L + 2.50% 50,000 49,200 800
 Other - various Various Jan-2021 - Jun-2021 Various 65,718 56,854 8,864
 $ 1,080,218 $ 539,580 $ 540,638
 Citibank Fixed rate, Transitional, Acquired loans Aug-2020 1M L + 1.875 to 2.125% $ 500,000 $ 246,417 $ 253,583
 Deutsche Bank Fixed rate, Transitional loans Nov-2021 3M L + 2.00 to 2.40% 425,000 331,181 93,819
 JPMorgan Transitional loans Dec-2020 1M L + 2.25 to 4.00% 400,000 297,342 102,658
 Various MBS Apr-2020 Various 284,417 284,417 -
 $ 1,609,417 $ 1,159,357 $ 450,060
Total Secured Borrowings $ 2,689,635 $ 1,698,937 $ 990,698
Borrowings under repurchase agreements
 Total Borrowings under repurchase agreements
 Total Borrowings under credit facilities
Borrowings under credit facilities
Available
Capacity (1)
Facility
Size (1)
Carrying
Value(1)
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, accretion of discount, MSR creation, income from
our unconsolidated joint venture, 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 of deferred financing costs on an annualized basis.
3) The Company finances the assets included in the Investment Type through
securitizations, repurchase agreements, warehouse facilities and bank credit facilities.
Interest expense is calculated based on interest expense and deferred financing
amortization for the quarter ended 3/31/2020 on an annualized basis.
4) Excludes loans, held for sale, at fair value
5) Excludes the equity component of our 2017 convertible note issuance.
Common Stockholders' equity $ 757,928
Common Stockholders' equity (adjusted)(5) $ 756,576
Total Common Shares outstanding 52,091,850
Net Book Value per Common Share $ 14.55
Adjusted Net Book Value per Common Share $ 14.52
Book Equity Value Metrics
SBA servicing rights - UPB $ 583,614
SBA servicing rights- carrying value $ 17,536
Freddie Mac servicing rights - UPB $ 1,193,274
Freddie Mac servicing rights - carrying value $ 13,944
Residential servicing rights - UPB $ 8,326,668
Residential servicing rights - carrying value $ 78,631
Servicing Portfolio Metrics
% Fixed vs Floating Rate 41.5% / 58.5%
% Originated vs Acquired 67.9% / 32.1%
Weighted Average LTV - SBC 64%
Weighted Average LTV - SBA 84%
Weighted Average LTV - Acquired 40%
Loan Portfolio Metrics (4)
Average Carrying
Value(1) Debt Cost (3) Levered Yield
Loan Acquisitions 1,101,490 $ 4.5% 861,219 $ 3.7% 7.3%
SBC Originations 2,594,876 $ 6.2% 1,960,563 $ 4.2% 12.5%
SBA Originations, Acquisitions, & Servicing 243,372 $ 16.1% 175,273 $ 5.4% 43.7%
 Total 3,939,738 $ 6.4% 2,997,055 $ 4.1% 13.4%
Investment Type Gross
Yield(2)
Average Debt
Balance
Net income (loss) | Core earnings $ (51,516) | $ 1,225
Earnings per share - Basic and diluted $ (0.98)
Core Earnings per Common Share $ 0.01
Return on Equity per Common Share -24.9%
Core Return on Equity per Common Share 0.6%
Dividend Yield 22.2%
Q1 2020 Earnings Data Metrics
APPENDIX
18
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 115,778 177,507 203,110 188,077 306,328
Mortgage backed securities, at fair value 91,435 99,407 96,181 92,466 78,540
Loans eligible for repurchase from Ginnie Mae 73,057 69,101 71,528 77,953 77,605
Investment in unconsolidated joint venture 39,025 47,551 55,663 58,850 53,379
Purchased future receivables, net — — — 43,265 49,150
Derivative instruments 2,483 3,670 4,181 2,814 17,756
Servicing rights 115,652 114,761 114,480 121,969 110,111
Real estate acquired in settlement of loans 75,517 65,834 60,807 58,573 48,292
Other assets 69,604 71,162 77,553 106,925 114,891
Assets of consolidated VIEs 1,561,864 2,108,710 1,961,127 2,378,486 2,229,517
Total Assets $ 3,279,014 $ 3,840,323 $ 4,123,019 $ 4,977,018 $ 5,270,050
Liabilities
Secured borrowings 848,225 988,868 1,315,534 1,189,392 1,698,937
Securitized debt obligations of consolidated VIEs, net 1,140,919 1,567,113 1,465,539 1,815,154 1,692,074
Convertible notes, net 110,241 110,506 110,773 111,040 111,310
Senior secured notes and Corporate notes, net 227,608 227,881 283,630 329,275 329,461
Guaranteed loan financing 34,047 28,445 25,571 485,461 457,032
Liabilities for loans eligible for repurchase from Ginnie Mae 73,057 69,101 71,528 77,953 77,605
Derivative instruments 3,392 9,032 11,906 5,250 16,585
Dividends payable 13,396 18,292 18,292 21,302 21,747
Accounts payable and other accrued liabilities 67,240 73,679 81,235 97,407 89,740
Total Liabilities $ 2,518,125 $ 3,092,917 $ 3,384,008 $ 4,132,234 $ 4,494,491
Stockholders’ Equity
Common stock 4 4 4 5 5
Additional paid-in capital 720,680 720,812 720,823 822,837 837,064
Retained earnings 21,790 14,914 9,173 8,746 (69,605)
Accumulated other comprehensive loss (1,328) (7,703) (10,253) (6,176) (9,536)
Total Ready Capital Corporation equity 741,146 728,027 719,747 825,412 757,928
Non-controlling interests 19,743 19,379 19,264 19,372 17,631
Total Stockholders’ Equity $ 760,889 $ 747,406 $ 739,011 $ 844,784 $ 775,559
Total Liabilities and Stockholders’ Equity $ 3,279,014 $ 3,840,323 $ 4,123,019 $ 4,977,018 $ 5,270,050
Adjusted Book Value per Share $ 16.65 $ 16.35 $ 16.16 $ 16.12 $ 14.52
3/31/2020 3/31/2019 6/30/2019 9/30/2019 12/31/2019
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 provision for loan losses $ 12,978 $ 21,281 $ 20,333 $ 23,444 $ 22,621
Provision for loan losses (518) (1,348) (693) (1,125) (39,804)
Net interest income after provision for loan losses $ 12,460 $ 19,933 $ 19,640 $ 22,319 $ (17,183)
Non-interest income
Residential mortgage banking activities $ 14,587 $ 21,021 $ 29,013 $ 18,918 $ 36,669
Net realized gain on financial instruments 7,282 6,255 7,377 8,044 7,172
Net unrealized gain (loss) on financial instruments (6,912) (7,006) (7,881) 3,009 (33,434)
Servicing income, net of amortization and impairment 6,752 7,811 7,449 8,653 8,097
Income on purchased future receivables, net — — — 2,362 3,483
Income on unconsolidated joint venture 2,929 2,083 1,047 29 (3,537)
Other income 900 2,792 2,979 4,407 4,073
Gain on bargain purchase 30,728 — — — —
 Total non-interest income $ 56,266 $ 32,956 $ 39,984 $ 45,422 $ 22,523
Non-interest expense
Employee compensation and benefits (11,448) (12,509) (13,438) (13,842) (18,936)
Allocated employee compensation and benefits from related party (853) (1,250) (1,500) (1,870) (1,250)
Variable expenses on residential mortgage banking activities (9,176) (13,501) (17,318) (11,765) (20,129)
Professional fees (1,829) (1,586) (2,030) (1,989) (2,556)
Management fees – related party (1,997) (2,495) (2,495) (2,591) (2,561)
Incentive fees – related party — — — (106) —
Loan servicing expense (3,648) (4,571) (4,866) (4,891) (5,570)
Merger related expenses (5,467) (603) (51) (1,629) (47)
Other operating expenses (6,861) (8,085) (8,144) (10,070) (13,744)
Total non-interest expense $ (41,279) $ (44,600) $ (49,842) $ (48,753) $ (64,793)
Income before provision for income taxes $ 27,447 $ 8,289 $ 9,782 $ 18,988 $ (59,453)
Provision for income (taxes) benefit 3,003 2,956 2,645 1,948 7,937
Net income $ 30,450 $ 11,245 $ 12,427 $ 20,936 $ (51,516)
Less: Net income attributable to non-controlling interest 983 276 323 508 (1,064)
Net income attributable to Ready Capital Corporation $ 29,467 $ 10,969 $ 12,104 $ 20,428 $ (50,452)
Earnings per common share - basic $ 0.90 $ 0.25 $ 0.27 $ 0.43 $ (0.98)
Earnings per common share - diluted $ 0.90 $ 0.25 $ 0.27 $ 0.43 $ (0.98)
Weighted-average shares outstanding - Basic 32,556,875 44,425,598 44,438,652 46,446,573 51,984,040
Weighted-average shares outstanding - Diluted 32,563,644 44,431,263 44,467,801 46,482,470 51,990,013
Dividends declared per share of common stock $ 0.40 $ 0.40 $ 0.40 $ 0.40 $ 0.40
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
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-making. However,
because Core Earnings is an incomplete measure of our financial performance and involves differences from net income computed in accordance with U.S. GAAP, it should be considered along with, but not as an alternative to, our net income as a measure of our financial
performance. In addition, because not all companies use identical calculations, our presentation of Core Earnings may not be comparable to other similarly-titled measures of other companies.
We calculate Core Earnings as GAAP net income (loss) excluding the following:
i) any unrealized gains or losses on certain MBS
ii) any realized gains or losses on sales of certain MBS
iii) any unrealized gains or losses on Residential MSRs
iv) one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains, or merger related expenses
In calculating Core Earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains and losses on MBS acquired by us in the secondary market, but is not adjusted to exclude unrealized gains and losses on MBS retained by us as part of our loan
origination businesses, where we transfer originated loans into an MBS securitization and retain an interest in the securitization. In calculating Core Earnings, we do not adjust Net Income (in accordance with U.S. GAAP) to take into account unrealized gains and losses on MBS
retained by us as part of our loan origination businesses because we consider the unrealized gains and losses that are generated in the loan origination and securitization process to be a fundamental part of this business and an indicator of the ongoing performance and credit quality of
our historical loan originations. In calculating Core Earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude realized gains and losses on certain MBS securities considered to be non-core. Certain MBS positions are considered to be non-core due to a variety of
reasons which may include collateral type, duration, and size. In addition, in calculating Core Earnings, Net Income (in accordance with GAAP) is adjusted to exclude unrealized gains or losses on Residential MSRs, held at fair value. We treat our commercial MSRs and Residential
MSRs as two separate classes based on the nature of the underlying mortgages and our treatment of these assets as two separate pools for risk management purposes. Servicing rights relating to our small business commercial business are accounted for under ASC 860, Transfer and
Servicing, while our residential MSRs are accounted for under the fair value option under ASC 825, Financial Instruments. In calculating Core Earnings, we do not exclude realized gains or losses on either commercial MSRs or residential MSRs, held at fair value, as servicing
income is a fundamental part of our business and is an indicator of the ongoing performance.
(In Thousands)
Net Income $ 30,450 $ 11,245 $ 12,427 $ 20,936 $ (51,516)
Reconciling items:
Unrealized (gain) loss on mortgage servicing rights $ 7,128 $ 6,339 $ 7,582 $ (2,482) $ 16,437
Adoption of ASU 2016-3 — — — — 35,438
Non-recurring REO impairment — — — — 2,969
Gain on bargain purchase (30,728) — — — —
Merger transaction costs and other non-recurring expenses 6,193 670 51 1,938 1,255
Unrealized loss on mortgage-backed securities 14 106 85 29 230
Unrealized loss on de-designated cash flow hedges — — — — 2,118
 Total reconciling items $ (17,393) $ 7,115 $ 7,718 $ (515) $ 58,447
Core earnings before income taxes $ 13,057 $ 18,360 $ 20,145 $ 20,421 $ 6,931
Income tax adjustments (1,782) (1,585) (1,896) 544 (5,706)
Core earnings $ 11,275 $ 16,775 $ 18,249 $ 20,965 $ 1,225
Less: Core earnings attributable to non-controlling interests $ 364 $ 412 $ 474 $ 509 $ 25
Less: Income attributable to participating shares 82 79 79 413 463
Core earnings attributable to Common Stockholders $ 10,829 $ 16,284 $ 17,696 $ 20,043 $ 736
Core earnings per share $ 0.34 $ 0.37 $ 0.40 $ 0.43 $ 0.01
Weighted average common shares outstanding 32,556,875 44,425,598 44,438,652 46,446,573 51,984,040
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

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