Ready Capital (RC) Q1 2025 earnings summary

Executive summary

• Book value per share was $10.61 at March 31, 2025, remaining stable quarter-over-quarter, supported by the accretive UDF IV merger and share repurchases.

• Q1 2025 net income from continuing operations was $82.4 million, or $0.47 per share, driven by a $102.5 million gain from the UDF IV merger, while distributable earnings before realized losses were $4.1 million and distributable loss per share was $(0.09).

• Completed the UDF IV, Funding Circle, and Madison One acquisitions, expanding loan origination and servicing capabilities.

• Repurchased 3.4 million shares at an average price of $5.02, increasing per-share value by $0.11.

• Declared and paid a $0.125 per share dividend.

Financial highlights

• Total loan portfolio was $8.4 billion, with a $5.9 billion CRE core portfolio yielding 8.3% and a non-core portfolio reduced to $740 million.

• Net interest income after loan loss recovery was $124.07 million; net income attributable to Ready Capital was $77.5 million.

• Loan originations reached $466.1 million, with repayments and sales totaling $758.2 million.

• Gain on sale income was $20.1 million, mainly from SBA and Freddie Mac loan sales.

• Dividend yield was 9.8% as of March 31, 2025.

Outlook and guidance

• Management expects continued focus on LMM commercial real estate and small business lending, with the Residential Mortgage Banking segment divestiture to be completed in Q2 2025.

• Asset management strategy for the Portland mixed-use property targets sequential exits over 2–3 years.

• Non-core portfolio exit timeline projects 40% of value resolved in Q2 2025, with most remaining assets targeted for resolution by Q2 2026 and beyond.

• Dividend expected to remain at current level until earnings profile improves.

• SBA origination volume expected below $1.5 billion for 2025, with potential to increase if policy changes are implemented.