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1. Company Snapshot

1.a. Company Description

Ready Capital Corporation operates as a real estate finance company in the United States.The company acquires, originates, manages, services, and finances small to medium balance commercial (SBC) loans, small business administration (SBA) loans, residential mortgage loans, and mortgage backed securities collateralized primarily by SBC loans, or other real estate-related investments.It operates through three segments: SBC Lending and Acquisitions; Small Business Lending; and Residential Mortgage Banking.


The SBC Lending and Acquisitions segment, through its subsidiary, ReadyCap Commercial, LLC, originate SBC loans secured by stabilized or transitional investor properties using various loan origination channels.The Small Business Lending segment, through its subsidiary, ReadyCap Lending, LLC, acquires, originates, and services owner-occupied loans guaranteed by the SBA under its SBA Section 7(a) Program.The Residential Mortgage Banking segment, through its subsidiary, GMFS, LLC, originates residential mortgage loans.


The company qualifies as a real estate investment trust for federal income tax purposes.It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.The company was formerly known as Sutherland Asset Management Corporation and changed its name to Ready Capital Corporation in September 2018.


Ready Capital Corporation was founded in 2007 and is headquartered in New York, New York.

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1.b. Last Insights on RC

Ready Capital Corporation's recent performance was negatively impacted by a quarterly loss of $0.94 per share, significantly lagging revenue estimates. The company's distributable loss per common share was $0.94, with a GAAP loss per common share from continuing operations of $0.13. Analysts have given the stock an average rating of "Reduce" with two sell, five hold, and one buy recommendation. Additionally, the company's high dividend yield of nearly 20% may be unsustainable due to uncovered payouts and mounting losses.

1.c. Company Highlights

2. Ready Capital's Financial Rehabilitation Efforts Continue

Ready Capital reported a GAAP loss from continuing operations of $0.13 per common share and distributable earnings loss of $0.94 per common share, missing analyst estimates of $0.02. Net interest income declined to $10.5 million, and gain-on-sale income decreased to $20 million. The company's financial performance was impacted by the delinquency increase to 5.9% of the total portfolio. Revenue growth is expected to be 3.6% next year, according to analyst estimates.

Publication Date: Nov -15

📋 Highlights
  • Portfolio Sales & Earnings Boost:: Completed two loan sales totaling $1.6B UPB, netting $109M and $0.02/share incremental earnings.
  • Small Business Lending Growth:: Originated $242M in SBA/USDA loans, generating $11M net income despite $650M in 2026 debt maturities.
  • Liquidity & Debt Management:: Maintains $830M unencumbered assets and plans secured debt issuance to address $650M maturing in 2026.
  • Financial Decline:: GAAP loss of $0.13/share and distributable earnings loss of $0.94/share, with book value down to $10.28/share.
  • Portfolio Risk & Yield:: Delinquencies rose to 5.9%, but levered yields increased 10 bps to 11% amid $5.4B UPB portfolio.

Portfolio Yield and Delinquencies

The company's portfolio yield showed a slight improvement, with levered yields increasing 10 basis points to 11%. However, delinquencies increased to 5.9% of the total portfolio, which may be a concern for the company's financial health. The portfolio now totals 1,120 loans with a UPB of $5.4 billion and carrying value of $5.2 billion.

Small Business Lending Operations

The Small Business Lending segment showed positive results, with $175 million of SBA 7(a) loans and $67 million of USDA production originated, generating $11 million in net income. This segment is a key focus area for the company, and the results are a positive sign for its growth prospects.

Debt Management and Liquidity

The company has $650 million of debt maturing in 2026 and is exploring multiple pathways to address these obligations, including $830 million of unencumbered assets and expected net liquidity from portfolio maturities and asset resolutions. The company plans to adopt a more conservative posture, targeting a gross leverage of around 3.5x and a secured debt issuance.

Valuation and Dividend Yield

With a P/B Ratio of 0.0 and a Dividend Yield of 23.58%, the company's valuation metrics indicate a challenging financial situation. The EV/EBITDA ratio is -0.56, suggesting that the company's debt levels are high relative to its earnings. The company will evaluate its dividend policy in December, prioritizing debt reduction and liquidity.

Portfolio Repositioning and Outlook

3. NewsRoom

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Ready Capital: The Good, The Bad, And The Preferreds

Dec -02

Source: seekingalpha.com

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Ready Capital: Value Destruction Proceeds On Schedule

Nov -12

Source: seekingalpha.com

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Ready Capital Corporation (RC) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Ready Capital (RC) Reports Q3 Loss, Lags Revenue Estimates

Nov -07

Source: zacks.com

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Ready Capital Corporation Reports Third Quarter 2025 Results

Nov -06

Source: globenewswire.com

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14% Dividend Yield Is Not Enough

Oct -31

Source: seekingalpha.com

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Ready Capital Corporation Announces Third Quarter 2025 Results and Webcast Call

Oct -30

Source: globenewswire.com

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Ready Capital Corp (NYSE:RC) Given Average Rating of “Reduce” by Brokerages

Oct -24

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.79%)

6. Segments

Lower-to-middle-market Commercial Real Estate

Expected Growth: 8.33%

Ready Capital Corporation's 8.33% growth in Lower-to-middle-market Commercial Real Estate is driven by increasing demand for flexible financing options, rising property values, and a strong economy. Additionally, the company's expertise in small-balance commercial lending and strategic partnerships contribute to its growth. Furthermore, the growing need for renovation and construction loans in this segment also fuels the company's expansion.

Corporate - Other

Expected Growth: 9.33%

Ready Capital Corporation's 9.33% growth in Corporate - Other segment is driven by increasing demand for commercial mortgage banking services, expansion of small business lending, and growth in mortgage loan originations. Additionally, the company's strategic acquisitions and partnerships have contributed to the segment's growth.

Small Business Lending

Expected Growth: 10.27%

Ready Capital Corporation's 10.27% growth in small business lending is driven by increasing demand for alternative financing options, expansion into new markets, and strategic partnerships. Additionally, the company's technology-enabled platform and efficient underwriting process have improved customer experience, leading to increased adoption and retention rates.

7. Detailed Products

Small Business Administration (SBA) Loans

Ready Capital Corporation offers SBA loans to small businesses, providing financing for various business purposes such as expansion, acquisition, and refinancing.

Commercial Mortgage Loans

Ready Capital Corporation provides commercial mortgage loans for property owners and investors, offering financing for acquisition, refinance, and cash-out of commercial properties.

Bridge Loans

Ready Capital Corporation offers bridge loans to provide short-term financing for commercial properties, allowing borrowers to quickly access capital for time-sensitive transactions.

Construction Loans

Ready Capital Corporation provides construction loans for developers and builders, offering financing for ground-up construction, renovation, and redevelopment projects.

Multifamily Loans

Ready Capital Corporation offers multifamily loans for apartment building owners and investors, providing financing for acquisition, refinance, and rehabilitation of multifamily properties.

8. Ready Capital Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Ready Capital Corporation operates in a niche market, providing financing solutions to small businesses. While there are substitutes available, the company's specialized services and strong relationships with its customers reduce the threat of substitutes.

Bargaining Power Of Customers

Ready Capital Corporation's customers are small businesses, which have limited bargaining power due to their size and dependence on the company's financing solutions.

Bargaining Power Of Suppliers

Ready Capital Corporation has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position also gives it negotiating power with its suppliers.

Threat Of New Entrants

The financing industry has high barriers to entry, including regulatory requirements and the need for significant capital. This reduces the threat of new entrants in the market.

Intensity Of Rivalry

The financing industry is competitive, with several established players. However, Ready Capital Corporation's specialized services and strong relationships with its customers help it to differentiate itself from its competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 78.63%
Debt Cost 7.93%
Equity Weight 21.37%
Equity Cost 11.19%
WACC 8.62%
Leverage 367.85%

11. Quality Control: Ready Capital Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Ladder Capital

A-Score: 6.6/10

Value: 6.1

Growth: 4.6

Quality: 5.5

Yield: 10.0

Momentum: 4.0

Volatility: 9.7

1-Year Total Return ->

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Two Harbors Investment

A-Score: 6.6/10

Value: 9.2

Growth: 4.2

Quality: 6.6

Yield: 10.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

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Redwood Trust

A-Score: 6.0/10

Value: 6.8

Growth: 4.0

Quality: 6.0

Yield: 10.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

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Ellington Residential Mortgage REIT

A-Score: 5.7/10

Value: 4.5

Growth: 2.8

Quality: 5.2

Yield: 10.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

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Ready Capital

A-Score: 5.2/10

Value: 7.4

Growth: 5.4

Quality: 2.9

Yield: 10.0

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

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ACRES Commercial Realty

A-Score: 4.7/10

Value: 6.6

Growth: 4.1

Quality: 3.1

Yield: 0.0

Momentum: 7.5

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.62$

Current Price

2.62$

Potential

-0.00%

Expected Cash-Flows