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Dec 31, 2024
Ready Capital Q4 2024 Earnings Report
Ready Capital reported a net loss due to reserving for non-performing loans, while Small Business Lending showed strong origination growth.
Key Takeaways
Ready Capital posted a significant net loss in Q4 2024 as it fully reserved for non-performing commercial real estate loans. Small Business Lending continued to perform well, with solid loan originations. The company also adjusted its dividend and repurchased shares as part of its capital strategy.
GAAP loss per share was $(1.80), driven by higher loan loss provisions.
Distributable loss per share was $(0.03), while distributable earnings before realized losses were $0.23.
Total loan originations in Q4 reached $784 million, with strong contributions from Small Business Lending.
Company repurchased 5.8 million shares at an average price of $7.35 per share.
Forward Guidance
Ready Capital aims to stabilize its balance sheet and improve liquidity through accelerated resolution of non-performing loans. The company expects potential earnings recovery and upward dividend adjustments in the future.
Positive Outlook
- Fully reserved for non-performing loans to create a path to recovery.
- Potential for higher reinvestment in high-yield originations.
- Stock repurchase program to enhance shareholder value.
- Strong Small Business Lending origination growth.
- Strategic merger agreement with United Development Funding IV.
Challenges Ahead
- Higher interest rates and inflation pressures affecting multi-family lending.
- Lower rent growth impacting commercial real estate portfolio.
- Book value per share reduced due to loan loss reserves.
- Dividend cut to align with anticipated cash earnings.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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