December 21, 2018
Frederick Herbst
Chief Financial Officer
Ready Capital Corporation
1140 Avenue of the Americas, 7th Floor
New York, NY 10036
Re: Sutherland Asset Management Corporation
Form 10-K for the year ended December 31, 2017
Filed March 16, 2018
File No. 001-35808
Dear Mr. Herbst:
We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments. In some of our comments, we may
ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the year ended December 31, 2017
Return Information, page 80
1. We note several non-GAAP measures disclosed in the tables on pages 80 and
81: Core
Earnings per Common Share, Core Return on Equity per Common Share and
Core ROE.
To the extent that these measures are presented in future filings, please
include a
reconciliation of Core Earnings to Net Income for any period that you
present a non-
GAAP measure based on Core Earnings. In addition, with respect to your
presentation of
Core ROE in the table at the top of page 81, please include an
explanation of any
differences between GAAP ROE and CORE ROE. For example, GAAP ROE for FY
2017 is 17.0% and CORE ROE for FY 2017 is 17.6% for one line item in your
table;
please revise to include an explanation of this 0.6% difference.
Reference is made to Item
10(e) of Regulation S-X.
Non-GAAP Financial Measures, page 96
Frederick Herbst
FirstName LastNameFrederick Herbst
Ready Capital Corporation
Comapany21, 2018
December NameReady Capital Corporation
December 21, 2018 Page 2
Page 2
FirstName LastName
2. We note that Core Earnings excludes unrealized and realized gains and
losses on certain
MBS and unrealized gains or losses on MSRs. Please tell us and expand
your definition
in future filings to clarify how you determine if the gain or loss on
a particular category of
MBS is excluded from Core Earnings. In addition, please tell us and
revise future filings
to disclose the reasons why you believe that the exclusion of these
gains or losses provides
useful information to investors. Reference is made to Item 10(e) of
Regulation S-K.
Liquidity and Capital Resources, page 99
3. We note that you account for repurchase agreements as collateralized
financing transactions. As previously requested in the Staff comment
letter dated June 7,
2016, please disclose in future filings the average quarterly balances
of your repurchase
agreements for each of the past three years. In addition, please
quantify the period end
balance for each of those quarters and the maximum balance at any
month-end. Also
explain the causes and business reasons for any significant variances
among these
amounts.
Consolidated Statements of Income, page 115
4. We note your presentation of the line item labeled Gains on
residential mortgage banking
activities, net of variable loan expenses. Please tell us how your
presentation of this line
item complies with Rule 9-04 of Regulation S-X.
Notes to the Consolidated Financial Statements
Note 3 - Summary of Significant Accounting Policies
Loans, held at fair value, page 122
5. We note you transfer loans held at fair value to loans,
held-for-investment upon the
completion of securitization. Please clarify for us if you cease to
account for these loans
at fair value upon transfer. To the extent you do not continue to
account for these loans,
held-for-investment at fair value, please tell us how you complied
with ASC 825-10-25-2,
which states that the fair value option shall be irrevocable unless a
new election date
occurs.
Servicing rights, page 125
6. We note your disclosure that servicing rights are recognized upon
securitization of loans if
servicing is retained. Please tell us how you determined it is
appropriate to recognize
servicing rights for a loan securitization. Please refer to ASC
860-50-25-2.
Schedule IV - Mortgage Loans on Real Estate, page 176
7. We note your disclosure that applicable information on your loan
portfolio is in Note 6.
We are unable to locate your disclosure of interest rates and
maturities in Note 6. Please
advise or revise future filings to include this information, which may
be stated in terms of
Frederick Herbst
Ready Capital Corporation
December 21, 2018
Page 3
ranges. Reference is made to Rule 12-29 of Regulation S-X.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Kristi Marrone at (202) 551-3429 or Jennifer Monick at
(202) 551-
3295 with any questions.
Sincerely,
FirstName LastNameFrederick Herbst
Division of
Corporation Finance
Comapany NameReady Capital Corporation
Office of Real
Estate and
December 21, 2018 Page 3 Commodities
FirstName LastName