Ready Capital's 2024 Q4 Results: Insights and Future Plans
Ready Capital Corporation Financial Results and Future Strategies
Ready Capital Corporation (NYSE: RC), a prominent multi-strategy real estate finance company, recently unveiled its financial outcomes for the fourth quarter ending December 31, 2024. This report provided insights into the various operational performances and strategic plans moving forward.
Overview of Financial Performance
For the fourth quarter of 2024, Ready Capital reported a GAAP loss of $(1.80) per share, while the distributable loss came to $(0.03) per share. In contrast, the company recorded distributable earnings of $0.23 per share prior to any realized losses. These numbers reflect a distributable return on average stockholders' equity before realized losses of 7.1%.
Dividend Announcements
In conjunction with its financial results, Ready Capital announced a quarterly cash dividend of $0.125 per share for common stock and operating partnership units. This dividend will be effective for the quarter ending March 31, 2025. The decision aligns with the company's strategy to preserve capital for reinvestment and potential share repurchases, while also supporting upcoming growth in earnings.
Highlights from the Fourth Quarter
A closer look at the quarterly performance reveals several important highlights:
- LMM commercial real estate originations reached $436 million.
- Small Business Lending (SBL) loan originations totaled $348 million, of which $315 million were Small Business Administration 7(a) loans.
- The book value per share of common stock stood at $10.61 as of December 31, 2024.
- The company entered a merger agreement to acquire United Development Funding IV, enhancing its capital solutions to residential real estate developers.
- Approximately 5.8 million shares of common stock were repurchased at an average price of $7.35 as part of their ongoing stock repurchase program.
- Ready Capital successfully issued $130 million in 9.00% Senior Unsecured Notes due 2029.
Annual Performance Summary
When reviewing the complete year, Ready Capital noted a GAAP loss per share of $(2.52) and a distributable earnings per share before realized losses of $0.97. Overall, the company finalized LMM and SBL originations totaling $2.4 billion, which included $1.1 billion from SBA 7(a) loans and sold $7.6 billion in mortgage servicing rights as part of its residential mortgage banking segment transition.
Actions Moving Into 2025
As the new year approaches, Ready Capital remains focused on refining its operational strategy. The company's management emphasized the importance of stabilizing the balance sheet and improving the net interest margin by fully reserving for non-performing loans in the commercial real estate (CRE) portfolio. While this might lead to a short-term reduction in book value, they anticipate a future recovery which will yield increased liquidity for reinvesting in higher-yielding loans.
Future Outlook
The leadership team, particularly Chairman and CEO Thomas Capasse, expressed optimism about the company’s growth trajectory. They anticipate that the adjustments, including aligning dividends with anticipated cash earnings, will empower the organization to bounce back and stimulate future growth.
Frequently Asked Questions
What were the key highlights from Ready Capital's Q4 2024 results?
The quarter saw LMM commercial real estate originations at $436 million and significant growth in SBL loan origination, totaling $348 million, which includes $315 million in SBA loans.
What is the declared dividend for the first quarter of 2025?
Ready Capital has declared a quarterly cash dividend of $0.125 per share for the upcoming quarter, payable to shareholders of record by the end of March 2025.
How did the company plan to address its non-performing loans?
The management indicated that they have taken decisive actions to fully reserve for all non-performing loans in their CRE portfolio, which is expected to lead to improved liquidity for future investments.
What was the total amount of originations for the year?
Ready Capital reported total originations amounting to $2.4 billion for the fiscal year, which included significant contributions from both LMM and SBL loans.
What strategic changes are expected moving forward?
Moving into 2025, Ready Capital plans to continue its focus on stabilizing its balance sheet while positioning for future growth through strategic investments and dividend realignment.
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