RC - Earnings call transcript Q3 2024 | Ready Capital Corporation

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Operator

Greetings, and welcome to the Ready Capital Third Quarter 2024 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce Andrew Ahlborn, Chief Financial Officer. Thank you.

begin. may You

Andrew Ahlborn

and the operator, to of those Thank good on call. you you, morning

our be we statements Some the today differ that comments of will results actual the numerous and to securities could to cause meaning from forward-looking federal laws. subject Such what are materially risks our uncertainties of within more We to our impact SEC expect. Therefore, in operating caution that you exercise future of interpreting and risks for financial refer a detailed and you should relying discussion the on condition. them. results filings could statements

the we results be reconciliation which comparable Ready of isolation measures in call, the evaluating in prepared quarter should XXXX be the the with the will of believe directly in is financial in considered be supplemental or During to our accordance found Capital discuss can as and our measures, website. useful These not measures these we a information, non-GAAP our company's substitute most performance. available A operating which in our earnings can for third measure GAAP section GAAP. Investors release

Officer. Officer, addition will over and myself on Credit joined by turn today's now In Tom Executive Adam Capasse. Zausmer, to to Capital's Chief we Chief are it Ready call, Tom also I

Thomas Capasse

you Thanks, thank Good Andrew. morning, call everyone, for today. the joining and

see improving stabilization the quarters. over seeing points, quarter we marked and We're coming estate a the by real to X commercial those cycle, prices of both or occupant reduction at strong multifamily factors: driven demand. nearly in particularly and bottom sector. property XX% begin the third the The our the what we To market of benefit be rent starts believe near in core cuts, growth to rate in conditions key should multifamily

metrics, on strategic repositioning to strength Capital, outlined small supported nonperforming loans. portfolio significant Our progress at the economy. while CRE lending the achieving the are growth, the year, in make is Ready we on stabilizing business continue focus by record start of operations our broader credit showing portfolio At initiatives which

of M&A, stabilize. quarter originated The in rate respectively, term and Our billion portfolio $X.X million being the of contractual declined structures. proceeds CRE CLO our leading portfolio volume, of is XX% transaction these while which to increased in multifamily primary being carry XX% portfolio credit of continues at originated of cash $XXX rate, to increased the X% to of delinquencies contractual modification. the existing XXXX in billion. payoffs modified, loans, broadly, has the More at cash loans CRE XX-day LTVs XX% of portfolio XX% are extensions in plus Within XX%. consists third interest of X.X% negative the total XX% the $X.X end. predominantly The by the These average stabilized and equaled with produce through quarter cash The at X total, flow portfolio to features majority X% paying. have modified These paying. million. quarter to of end. originated leverage the modified CRE continue Stronger quarter a portfolio, with marginally been of reduce segments, XX% and rate portfolio representing X.X% and multifamily $XX with our migration went fundamentals increased

to has of second grown quarter increasing XX% $XXX are executing million. million since $XXX the gradually our new stance, We and originations also offensive our pipeline

business. historically liquidating core on CRE assets, M&A acquiring into lending strategy legacy reinvesting focused has noncore proceeds the Our then our and

portfolio, reduce our which now a improvement. stands million, to M&A at XX% $XXX continue We

our remaining increased M&A Our levered to at active asset The delinquencies has XX.X%. management has XX%. stabilized in XX-day portfolio yield

estate-backed $XX,XXX USDA unsecured million small full lending and SBA in of of to administration a small plus suite $XXX of $XXX leading loans. working business a X(a) This options or loans become capital consists $XX nonbank national invested capital With origination of This small the businesses, loans. working small from a million Ready loans to has providing segment, business real quarterly lender of business our of million Capital $XX USDA million. capital record loans, in resulted $XX million loan

now SBA X(a) dual and small loans strategy both large Our targeting annual our target. $X billion has exceeded

This XX%. up small $XXX,XXX quarter's million loan our and traditional channel below $X XX% our volume was at channel large split between loan to at

of loans. business SBA guarantee strategic Fintech be leader The has a small averaging and has Our XX% origination X(a) mix and percentages gain market generated in grown respectively. higher XX%, sale premiums to the SBA on

the lender #X country. now SBA are fourth nonbank in the overall and We

the to execute continue We CRE X navigate cycle. initiatives credit to

in XX% assets. and repositioning settlement XX the loan million our and sales reduced across carry in of proceeds are portfolio of million $XXX sales REO These following by net generated efforts First, $X.XX $XX share. complete per negative

loans, XX totaling $XXX comprised and land inventory assets, XX% are M&A carrying properties. loan assets a of includes of of mix remaining assets X% which multifamily loans Our industrial XX% million and XX% originated and office in value,

XX have sale. listed currently valued We million REO $XXX for at assets

of second, remains to conservative. into leverage of the our the extend half entire position We expect monetization first position XXXX. And

raise quarter, leverage below X.Xx our existing Of has accretive structure. is our current CRE securitization, and basis liquidity average XXX of capital securitizations, call Improving In of improving yields liquidity called advance generating our we million total XX%. outstanding fixed XXXX-X, an enabled us RCMT pursue long-term the third Xx. in to Our points. are opportunities capital and legacy by with X eligible the $X.X of target sector XX to for optimize rate rate

managed which less peer loans, comparisons. credit flexibility static delinquent group our affects on CLOs discussed As calls, than typical have prior managing in CLOs

X X.X% remain showed coverage October interest delinquencies servicing X over-collateralization of loans CLOs improving passed strong, and their outstanding tests. remittances special our and our issuances respectively. However, in XX%, and to

year next the and in called from issuance production. collateral We new half first deals next expect both legacy our of using

Lending contribution share. million platform of from Third, third the from platform segment earnings operations acquired Business highest Funding lending business to this income lender our USDA lending growth are or fully any once total, the in small earnings quarter. In accretive $XX our distributable Madison impact and ramped. history. business the new quarter, results in These generated Madison heights small One, $X.XX Circle pretax per our our Small reached One in expected be or exclude Circle, our to marking Funding

operating During pipeline the loss forward $X.X these timing quarterly distributable earnings recognition of share. or due per building of quarter, million acquisitions This posted to loss a $X.XX a of post-acquisition efficiencies. and was

with equity the our significantly scale at higher a value business forward, nature with the capital-light and a our mortgage group growing along and CRE business our earnings to premium X% progresses The normalization a of segment peer from contribution, peer residential ROE support book our provides our levels ROE historical exit small Looking well. amongst lending banking Fourth, value. clear segment's to group. differentiator should high of market only longer-term

for generate completed We with our CRE expected approval a settlement early the in planned in $XX are pending settlement over in sale with is market. late to November the coming Capital platform XXXX. remaining MSRs net the tailwinds million to to capitalize approximately positioned on The expected weeks be agency proceeds. marketing currently is well Ready

to few the our benefits, a take realize more contribute key fully to will drivers X will quarters future it earnings growth. While

over M&A business sustained our Our in to turnover portfolio our of growth stabilizing With small platform. CRE Andrew. continued lending turn that, and platform, it I'll

Andrew Ahlborn

Tom. Thanks,

distributable of share Third common losses were earnings while quarter showed a loss $X.XX. $X.XX, GAAP per

quarters key sales, an on second allowances were equity. the average primarily per and losses X.X% timing in first the distributable losses settlements on earnings. quarterly the earnings realized The factors quarter. valuation difference asset loss Three return common between from Excluding recorded and in our stockholders' $X.XX third share, distributable representing reflects impacted the realized

Mosaic sales million. $X.X net revenue change XX% to million was X(a) Funding First, growth revenue increased through growth servicing a Funding primarily interest portfolio. million. sale to Of The acquired gain gain MSRs of XX% the origination yield $XX sale $XXX.X XX% of lower $X.X $XXX million, business million, equates income the business, representing higher of income, are was which lending growth X.X% at stable from remained interest business $X.X portfolio income, working This and and gain primarily income liquidations. offset million and million, reductions income the production. payoffs SBA time. CLOs. from the from the from on acquisitions. at our driven from in repaid Nonaccrual Madison Circle by origination million cash interest $XX million. X.X%. of declined in related expense cash transaction, This $XXX construction generating income on by at from on in small servicing or small held accrued Quarterly through XX%, interest Interest the expected acquired CRE or revenue capital million quarter-over-quarter and of income One balances be in to the platform sale $X.X and $XX.X income quarter-over-quarter XX% Net loans deleveraging in was Circle through of with steady XX% to in our end year. the assets of paid portfolio

assets. million loans. the an the Second, general Loan recovery sales, $XX.X related reserves from at loan valuation the in sheet decrease settlement was specific million million of of plus balance of several in valuation in valuation is quarter $XX.X $XX.X loans decrease The end. loan release allowance $XX.X a million the settlements had provision the $XXX.X is combined increase $XX.X $X.X and of The an to million impact on for $XX.X million on to allowance of increase tax. by to net million. CECL on loss of due decreased reserves remaining due a offset allowance The million incremental allowance the

driven rose costs X% expenses in charge-offs a the Funding a other bargain quarter, and in $XX.X Circle Third, tax Funding Circle to completion realizing We million reflecting quarter. recorded to gain $X.X in included production. Noncash of million REO increase $XX.X million as million, of million transaction, variable the net $XX.X from valuation by in costs from operating allowances. $XXX,XXX a the were primarily expected, purchase down costs asset, operating $X.X related in the deferred second

now per purchase losses share cash On share by losses the a $X.XX per declines per $XX.XX $X.XX declines book to last $X.XX is through realized share realized offset share share related bargain covered net CECL, Distributable comprehensive related to These $XX.XX related were quarter. the to $X.XX earnings primarily from value dividend. share per per The reduction in absent per due was to versus and partially net income. sheet, flow balance other the changes of increase gain. share per change hedges

million strong With Our cash in $XXX in open will unrestricted questions. position $XX undrawn borrowings. for line million but the committed includes we and liquidity that,

Operator

come Sandler. of line Crispin questions the from first with Our Love Piper

Crispin Love

to left quarter? total the it sale sales was is loss. you amount $XXX little on did I And get can What the then wrong? on saw at? a the what's you I in the loan that detail more and just sell, sold First, the $XXX million discount it Or million? give

Andrew Ahlborn

So, quarter what settled quarter we in in million. line $XX million. the EPS of The we relatively those proceeds right $XX was last in $X.XX, loss of the of which $XXX disclosed with pricing around a million $X.XX. impact the sales quarter, a roughly generated sales was and The in was total

In remaining that, on a on $X.XX to selling. valuation and $XXX sheet the balance effect roughly population We of loans have do a of tax, we million had addition the effects allowances anticipate EPS. million gross of of of took we $XX increased that that

Crispin Love

the in can over and next how income then was Okay. And quarters? disclose PIK much the that, just Andrew. from just you appreciate few third from expectations quarter, interest PIK I

Andrew Ahlborn

Yes.

in PIK expectation X of those cash components Mosaic portion said in component quarter XX% When XX% The a break construction actually turn to is that coming fourth his is those you investments. pushing As from the the paying the transaction. little Tom large a acquired sort clear accrued. of down, in either comments, was and out or loans over

The modified subset relates to other loans. the

is his the that mentioned paying accrued cash recoverability with roughly As being ultimate component Tom if also XX% the is supportable. of

breakdown. So that's the

Crispin Love

XX% but Okay. Great. then income? And sorry, that income interest interest of is or net

Andrew Ahlborn

on top It's line. the

Operator

line come of with from Harter UBS. the Our next Douglas questions

Douglas Harter

and to assets of either how portfolio, do the both of thinking resolutions expect guess assets? inflows delinquents problem trajectory or of I you new potential perform, nonaccrual originated the

Thomas Capasse

seeing to than you on new that just industry And we're Yes. decline the on broadly. which comment want comment the just being one the delinquencies, maybe of XX-day in but Adam, denominator thing to portfolio actually, greater terms more Adam, underscore do yes, I the that? in is think so-called effect,

Adam Zausmer

sure. Yes,

highlighted, the rates it's commercial volatile, as multifamily So, and less is certainly on fundamentals portfolio, we multi. On area the the are is that denominator as the specifically we've we're as space, the the originated XX% right? is ease, will to equity effect, heavily the denominator certainly new is remain that there's highlighting, Tom that been we've highlighted, in deals. loans so work especially real off. estate portfolio. going are majority peaked a as begin delinquency favorable. these more through strong product, the also, say And We exposed, in And delinquency. plus certainly, where Andrew paying improving. multifamily as But it feel path, I'd certainly And market down stabilizing right, as loans as our originating today, we're

So, we had new had about of is the $XXX denominator. quarter. that We've certainly which million XX-plus in this year, delinquency exits only of $XX about million reducing

about only So, XX-basis XX-plus, although the a new was attributable million it's to point there in XX-plus. increase $XX of

that is impacting highlights, certainly increase. effect denominator So delinquency the as Tom

Douglas Harter

between do of kind backup in have about impact kind maybe the of an of how I one more and of which longer-term as short-term likely appreciate to rates rates, a you recovery real that. within think And kind commercial on difference about estate, is lower the but market? those of the of think you pace

Andrew Ahlborn

space, going lower was unequivocally for vacancy well. rate at you're at seeing CoStar X see that middle of flattening the X.X%. of on And broadly, markets the around starting some market. negative time just rent X%, the was curve as quarters, growth like down to has out is and X which were multifamily kind year-over-year, to to starting Austin, even especially X.X% see in X.X% flatten you're I flatlined first say in flat a or we're definitely the on Delinquencies more

So that's have X definitive LTV X or property well or asset rates values. modified on And rating. stabilization cap risk and our the loans especially XXX, is you're side, a have seeing in been some mark-to-market the under on that

So that's the relative positive there.

rates, service and definitely coverage see in a interesting their improve as a will The benefit while ratio, basis far by decline dynamic. all improving steepening being else our modified in rates rates out on an as they work curve, short the debt NOI. short As it's plans short the equal, you loans business delayed the

out there's So, expansion, rates the the seeing -- end debt got of kind when the back capped of in crushed which service cycle, of benefit 'XX. the a on coverage you're

seeing that were then better modified multifamily So, on I into of we're our think that's new out market. And there's bridge thing debt. that from subtle going And lot taken to benefit private a bridge debt seeing us. this of another coming being private is we're and some capital by loans extended

extent that above on our So, be at however, dynamic debt The the to yield going long tailwind. elevated is focused headwind, takeout a Fannie, hit harder rates, a it's stays that on that means though, is Freddie, takeout. to is X.X%, the XX-year to GSE,

in those rates. of So are X terms the trends countervailing

Operator

Our next Jade KBW. the from questions of come Rahmani line with

Jade Rahmani

of and fees, or ratio loans? interest, relates Mosaic presumably any the category a nonperforming loan accrued categories loan to is intangibles, of been large write-down interest and relates tracking deferred assets goodwill potentially any deferred components as of and goodwill of the Is similar Since and to Other of fees accrued I've include portion there the the and some risk these assets. XX% about that tax deferred impairment Broadmark and sell acquisitions. some you then

Andrew Ahlborn

I'll them take the So, in components.

So, at based TRS. on the and down deferred the impaired gets asset profitability evaluated tax regularly expectations

those expect don't impairment So, the we on trajectory based of issues businesses. there any

that any that staff something we believe certain that we on At a said, gets Goodwill we the to of recommend only are in regularly. evaluated effects part recoverable. that goodwill. interest, asset this be are case, also the though, we accrued where On time, impairment to would interest fairly being like DPO. the don't although the be accruing be the believe write-off, may With interest accrued And see circumstances minimal. there management of the

Jade Rahmani

And does to goodwill Mosaic? any relate or of Broadmark the

Andrew Ahlborn

Both those gains. of were bargain purchase

Jade Rahmani

a that no? So, is

Andrew Ahlborn

Yes.

So, goodwill if purchase the gain. a goodwill you -- you bargain have can't have

do trade. they no, So really not

Jade Rahmani

of there's portfolio. moving Okay. I in a And know the your lot -- then just mind, because the balance parts across the

loans the nonperforming And through of of and anticipated of that. inherited M&A. balance what's were Some clearly, some you the nonperforming today loans REO? REO But and

Andrew Ahlborn

the on M&A touch of answer's only now it, -- of is billion. to originated in want you is portfolio that down to, what total, the of do context portfolio $X.X way portfolio bifurcate Jade, the our the $XXX the XX% And is the we Yes. And million.

to answer the question the those context in maybe that portfolios. of So X

Thomas Capasse

Yes, Adam, do to bifurcation want you touch there? on the

Adam Zausmer

Yes.

a here. from dollar me, do So, perspective, just I pardon math the

portfolio, north $XXX on then piece, is So, the M&A of the it acquired the of originated just million, $XXX about And has million. $XXX delinquency million.

Jade Rahmani

And the balance of REO?

Adam Zausmer

is million process a $XXX sale REO The today. in

Jade Rahmani

The a the value million. of quarter, up quarter? completed is last Okay. interest I PIK in the $XX Could the said dollar which It you of PIK really number. modifications quarter, XX% million was from, give were $XX in you high implies think

So, it doubled. basically

the could If dollar correct value me give any numbers and if just of are you modifications right. those of not

Adam Zausmer

Yes.

bridge on modifications quarter, million. it quarter. the was $XXX $XXX the Previous million the were So, in approximately book about

bridge across those are So, And billion XX of entire within the $X portfolio, vast modifications assets. the majority roughly CLOs. across the sit

Jade Rahmani

is the it Do of $XX increases million $XX stable, you But interest income. think Okay. or decreases? around stay million

Andrew Ahlborn

Jade, chunk And in loan those construction of that coming end a at Mosaic XX% rolled end. of quarter as that at quarter into that loans off balance said the acquired expectation I a earlier, cash-linked pays or transaction. is is is the good from

So, down. number come I think to that is going

Jade Rahmani

do going you won't And when they're be to those credit Okay. there issues, at issues and off there? pay off, think pay par

Andrew Ahlborn

in the variety we staying loans of cycle. takeout of projects of involved economics of those these built the a through life the is take can Well, forms. platform the Part

an of on a our actual in, And cash flow into could sheet. somewhere in or via balance else so, payoff loan movement form payoff refi bridge the the come

different could take it forms. a So, variety of

Thomas Capasse

the our cycle. life now is Well, Jade. model to differentiation, important an business whole that's Yes,

ground-up project And with looking bridge stay start near you multifamily, once to it with do it's multi-PSE slipped But a loan. stabilization, into ultimately, the across project And a construction. cycle. if we're So, is life sponsors loan. the we'll these

Operator

line Our come next from James. questions with Laws of Raymond Stephen the

Stephen Laws

far. provided appreciate Andrew, and you have I so Tom guys the color

what You've this move that reserve about increases specific? lot. guess, covered the allocated general in around of confidence touch a or drove reserve I that's CECL. talk to we CECL between kind on how build about And I as build and and wanted quarter? considerations you that Can level forward? this potential assets

Thomas Capasse

Yes.

So, specifics. over Adam, today the XX% to X% the little bucket. talk in movements overall, I'll want a the let But CECL and general talk of the CECL Adam reserve is the on total do is on this quarter? you

Adam Zausmer

Yes. And multi then M&A portfolio property some the types, the range in it's million, in entirely across that quarter, industrial, $XX a broad and there. movements this there's almost of office,

Stephen Laws

Great. Appreciate some there. color Okay.

As $X.XX. earnings the we ex number, think losses, about distributable

need think you to sequential we what that number distributable in As about? change comfortable onetime moving ex losses earnings cover Or think about items the the that we dividend? QX, continue can $X.XX into are that do feel to

Adam Zausmer

Yes.

I about are that think think a good $X.XX important. things are I think baseline. I go-forward is few When there level a the earnings,

of points businesses of online. totality we've that first and the of last the platform. the the business XXX is of company, contribution quarters over the over sustainable basis couple level growth now the The small purchased and made expect investments come substantial return the as to all and is overall some grows And we a contributing years, to is lending is we've capital platform, given the of

about is accounts of way, business return repositioned, of level, back the over the small our the to historical XXX return original rebounds that you competitive the real turns affects as migrates earnings, how get as is a estate of equity, levels platform returns. to back which when portfolio we XXX business to our so thesis building provide portfolio business, and this M&A to the of lending the majority to which that that commercial premium and CRE think portion for go-forward closer And point having migrates sort basis

of of sale a But earnings that held distributable loans those items there's no cal. realized losses path losses, you a think flow is there's onetime where into I the exception I going bucket path the growth aware are to a There through levels. growth there still with XXXX. for of from so, impact And the I'm think have absent these are of headed

Stephen Laws

I to the Great. touch wanted on CLOs.

them, the as is them do some relationship different, can And this let about call changing go I of on you servicer and guys to potentially assets talked They're and bad continue that actually doing talk earlier that year. think, and quickly something? have about can nature. these the year, or your it or you You of how how Can talked you every this start to mentioned, in-house. special thoughts you before kind and you to to static ability about your step in start manage you

Thomas Capasse

of the kind quickly address maybe it with we Adam, the team. terms existing success with protocols our in had changing the servicer in how the we've relative mods management frame dynamic of of context asset that around and

touch maybe on that. So

Adam Zausmer

Yes.

last employ. onset the they see I what requests at the address of think would to end of as the I type year, servicing industry, environment how with due this rate special to I our from clients, think, the the relief environment, started the struggled think of I we modifications stress to think towards

execute modifications early market clients struggled to relief. I we with our and provide to on, certainly think

tenant servicer, continuing our projects I this some putting to environment. to base execute the these not help These this kind projects think made have industry significant terms utilize to have in in alternatives these of QX through progress we special mods, and a mod. quarter, room navigate especially to with standard versus into modifications having again, breathing help and capital different challenging of

at pace executing for is we So, relationship special and well. our solutions I'd in are as healthy our clients summary, remains with healthy our which the servicer say

Operator

Ladenburg. come of with the line next questions Our from Nolan Christopher

Christopher Nolan

your comments real thinking were of you're commercial the you earlier Capital? sort the through I worst Tom, am that of that estate Ready cycle correct for

Thomas Capasse

of data delinquencies the absolute you're of terms the sawtooth X, multifamily and seeing to in evidenced relates in down X by macro in in of Adam's the as the the We're kind mirroring definitely the what as the dollar migration sector. seeing originated it it seeing, of Yes. in of is what portfolio, comments assets definitely we're terms terms

Christopher Nolan

Great. or then coverage fees? ratio, after taxes is your rates, calculation comments terms property interest earlier your in ratio and And municipal in lower improved of coverage before other

Adam Zausmer

in calculation want debt of of you DSCR? Fannie, on terms because at the that that formulaic the from maybe, comment the I comment do it's to Andrew, terms mean it OpEx. look methodology, somewhat Adam, Freddie on in but we

Thomas Capasse

after Yes, sure. and ratios the Yes, coverage taxes are reserves.

Christopher Nolan

Okay. And final question discussed is, given all that, ROE what's the outlook quarters? you target for previous the XX% guys distributable in

Andrew Ahlborn

So, the losses realized was absent in mid-Xs this the quarter.

the Given profitability target. the XX% before as towards my I recovers, we about the of the business small CRE comments of sustainability that march think from lending segment business part

Christopher Nolan

Okay.

should issue. So, losses really an didn't the think before, was forward I because calculation excluding going realized that be

Andrew Ahlborn

assets realized we population are related for to primarily. losses held that we transferred sale the of So, posted into the

And so the not XXX% of that bucket third settled in quarter.

year. $XXX So, into settles next noise as going remaining you see to the are million some

value the most that the has impact the but of the flow see realized you of for the So, book through components earnings. distributable transfer been economic company, part through felt will

have distributable that is periods. metric important core losses across we business of an the realized So, less operations of the think just earnings comparability to

Operator

from line of with Our Matt the final Securities. questions Howlett B. come will Riley

Matthew Howlett

sales the quarter? say this million freed Tom, in up you did from loan you cash $XX

Thomas Capasse

Yes.

Matthew Howlett

these much are quarters continue cash -- be free few in of going the me just to the the you company. would So, from How what sales get sales? in fourth the through quarter, up next loan the cadence mortgage to you walk

Andrew Ahlborn

Yes.

So, the maybe take components.

of the the impact So, in million platform and the The as in that cash. incremental financing likely roughly on The range. that currently of $XX most is expectation quarter is roughly mentioned, million net the side, MSRs refi of are any of those Tom the itself year clears of transaction settles sale market. first next $XX in

to So, Absent normal of and earn-out assets to million. roughly off, of going clear the upfront cash component, the the are there'll And those $XX roughly just we the have that, expect the of million flow should into main the but be then that will cadence year, do be as paying settlement or next cash portfolio items. some $XX you're well. but so remaining

Matthew Howlett

Okay.

out like up have My then million. assets million in secured? those banks? two, Could So, quarter. assuming question do year, next small cash. with like you really in We're Why that's of And to they is want hearing worst you is this, you the with go an buyback banks It is the you you Obviously, Obviously, are value have didn't stock any book. stock deal? there, this, have wouldn't over, to $XXX are could obviously aggressive talking I maturity seems $XXX lend. book. you to sales. one mean, financing, that's going My question the the there's you unsecured XX% at I'm since back this buy in not SBA get reflected

over? of and both the we'll think here take I aggressive this is agree discount that. Why get worst you wouldn't advantage

Thomas Capasse

Maybe there. X I'll components take

I to year, we debt into positioning the think we from it's to our expect agree said, looks months. in the counterparts the certainly being stock price, not that on a are program, take a I new banking issuance. buyback from the all we those And attractive and that lenders this previous about at you buyback should then company maturity And the something cash do of next will maturity materialize. that in for are see perspective. upcoming of that With company care talking On refi the

Matthew Howlett

options? are really Okay. pledge. mean I do I you're financing mean, it's in other you not any mean say other I enormously at when you basis. accretive on discount. can but obviously, this I cash, are could math, a recourse But levered paying there the we there mean,

Matthew Howlett

refi all those, exploring of issuance. we Yes, an into unsecured are

that sheet secured of unencumbered on structures balance the We use exploring. assets have are amount also issuance. other a variety we There's significant for of a we could

preferred that obviously path. is So the

make we months. that, to just conservative; an issue planning the be sure that think not also for profile is company's us upcoming in I liquidity maturity to are the

Thomas Capasse

Yes.

leader PPP, we loans So, you And capital-light can initiative small a to adopted they group regulated then emphasize $XXX,XXX, iBusiness in which business pat government a And think to in it's business. peer below are of which that tech see They the in aspect, the insured SBA there's the been within small our given women-owned purchased accretive. in But XXXX. is just businesses. were was their lending. them back -- the terms very it and nuanced then, unsecured many times I significantly minority underappreciated the since

been so by significant initiative a And SBA. that's the

done. could methodology, underwrite we've similar very And a how scorecard use loans. you which So, what there, is unsecured to you

a model tech underwriting stack, the mostly the loans, So, do to -- SBA Even $X what we've do loans, million larger for which we've developed all. for iBusiness at developed a has above is they banks. if focus it's Banks marketed $XXX third-party not done again, being as just is now million.

with valuation you is grow nowhere it the the if be iBusiness So, revenue it pointed a you near what stream in idea mortgage from then achieves, And is will, as stand-alone once software-based C-corp. in the business. out, would the, REIT this to a

then would of these of businesses businesses has off. fund equity ability that scale, the of a IPO kind Capital how if to look as to finance think spin the be achieve venture So, tax-free very for Again, it's we to kind idea cheaply versus that a capital at these spin-off via and capital-light a private we're in shareholders. it Ready a backdoor way, that's a

anyway, $XXX run SBA million quarter loan long-winded the rate in well. large past this X(a) strategy question, that small basis achieving in answer a a million as business we're on the growth our to that roughly in seen and the is around $XXX testimony loan but So to traditional your you've

Matthew Howlett

point, on could multiple off it's the that begin Will But and separate you providing data on it? to some that doing a financials revenue. trade what at a

Thomas Capasse

Yes.

believe achieves be to relates and what streams of of scale as scales do it to would that, As the to in revenue number the we and bank terms customers segment business we reporting. look

Operator

question-and-answer concludes session. any That hand remarks. our closing Thomas I'd to call over back the like Capasse to for

Thomas Capasse

We quarter's appreciate everybody's look forward and time next call. to

Operator

teleconference. That you. your does participation. appreciate today's Thank We conclude

Enjoy this rest your You disconnect of your the may at lines time. day.

Ready Capital (RC) 8 Nov 242024 Q3 Earnings call transcript