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READY CAPITAL CORPORATION ANNOUNCES THIRD QUARTER 2020 RESULTS
New York, New York, November 4, 2020 / PRNewswire / – Ready Capital Corporation (“Ready Capital” or the “Company”) (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances, and services small to medium balance commercial loans, today reported financial results for the quarter ended September 30, 2020. Ready Capital reported U.S. GAAP Net income for the three months ended September 30, 2020 of $35.4 million, or $0.63 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $32.1 million, or $0.57 per share of common stock.
Third Quarter Results:
|●||U.S. GAAP Net income of $35.4 million, or $0.63 per diluted share of common stock|
|●||Core Earnings of $32.1 million, or $0.57 per diluted share of common stock|
|●||Adjusted net book value of $14.84 per share of common stock as of September 30, 2020|
|●||Current unrestricted cash and available liquidity of $221.7 million|
|●||Originated $1.2 billion of residential mortgage loans|
|●||Originated $105.6 million of Freddie Mac loans|
|●||Originated a record $82.9 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program|
|●||Declared and paid dividend of $0.30 per share in cash|
"The quarterly results are reflective of the benefits our stakeholders' receive from Ready Capital's diversified and differentiated business model," commented Thomas Capasse, Ready Capital's Chairman and Chief Executive Officer. "Although we remain cautious of the uncertainties surrounding the COVID pandemic, we are optimistic that our diverse portfolio and government sponsored lending businesses will continue to provide superior returns for our shareholders."
Use of Non-GAAP Financial Information
In addition to the results presented in accordance with U.S. GAAP, this press release includes Core Earnings, which is a non-U.S. GAAP financial measure. The Company defines Core Earnings as net income adjusted for unrealized gains and losses related to certain mortgage backed securities (“MBS”), realized gains and losses on sales of certain MBS, unrealized gains and losses related to residential mortgage servicing rights, unrealized gains or losses resulting from a change in CECL impairment reserves on accrual loans, and one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains, merger related expenses, or other one-time items.
The Company believes that this non-U.S. GAAP financial information, in addition to the related U.S. GAAP measures, provides investors greater transparency into the information used by management in its financial and operational decision-making. However, because Core Earnings is an incomplete measure of the Company's 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, the Company's net income computed in accordance with U.S. GAAP as a measure of the Company's financial performance. In addition, because not all companies use identical calculations, the Company's presentation of Core Earnings may not be comparable to other similarly-titled measures of other companies.
In calculating Core Earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains and losses on MBS acquired by the Company in the secondary market, but is not adjusted to exclude unrealized gains and losses on MBS retained by Ready Capital as part of its loan origination businesses, where the Company transfers originated loans into an MBS securitization and the Company retains an interest in the securitization. In calculating Core Earnings, the Company does 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 the loan origination businesses because the unrealized gains and losses that are generated in the loan origination and securitization process are considered to be a fundamental part of this business and an indicator of the ongoing performance and credit quality of the Company’s 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 U.S. GAAP) is adjusted to exclude unrealized gains or losses on residential MSRs, held at fair value. The Company treats its commercial MSRs and residential MSRs as two separate classes based on the nature of the underlying mortgages and the treatment of these assets as two separate pools for risk management purposes.
The following information was filed by Ready Capital Corp (RC) on Wednesday, November 4, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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