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Ready Capital posts Q2 loss; CEO says earnings pressure narrowing

Ready Capital posts Q2 loss; CEO says earnings pressure narrowing


Overview

  • U.S. real estate finance firm's Q2 GAAP loss per share was $0.63, with distributable loss per share at $0.47

  • Company generated $1.4 bln in cash YTD from loan sales and portfolio runoff

  • CEO says pace of book value reduction decelerating and earnings pressure narrowing

  • Securitized $158.2 mln of SBA 7(a) loans, adding $24.6 mln liquidity and $500 mln funding capacity


Outlook

  • Ready Capital says it is focused on meeting fourth-quarter debt maturities

  • Company is increasingly looking to restart growth in CRE debt investing and SBA 7(a) lending


Result Drivers

  • BALANCE SHEET REPOSITIONING - Co said Q2 results reflect continued progress on balance sheet repositioning, with slower book value reduction and narrowing earnings pressure, per CEO Thomas Capasse

  • LOAN SALES AND PORTFOLIO RUNOFF - Co generated $1.4 bln in cash YTD from loan sales and portfolio runoff, paying down over $1 bln in asset-level financing and retiring $184 mln of corporate debt

  • SBA LOAN SECURITIZATION - Securitized $158.2 mln of unguaranteed SBA 7(a) loans, generating $24.6 mln net liquidity and $500 mln additional funding capacity for 7(a) production


Company press release: ID:nGNX9f0Fqt


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Loss Per Share

$0.63

Q2 Net Loss

$99.68 mln


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 6 "hold" and 1 "sell" or "strong sell"

  • The average consensus recommendation for the specialized reits peer group is "buy."

  • Wall Street's median 12-month price target for Ready Capital Corp is $2.00, about 29% above its August 6 closing price of $1.55


Reuters Recommended Reads

  • Aug 5 - Granite Point Mortgage Trust Q2 loss widens as credit loss provisions rise

  • Aug 6 - Starwood Property Trust Q2 profit misses estimates

  • Aug 6 - NewtekOne Q2 net interest income rises on higher loan originations and deposits


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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