Ready Capital Corp
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
RC$0.85-20.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001628280-25-024331
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001628280-25-039276
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 669 previous paragraphs and 693 current paragraphs.
572 unchanged; 68 reworded; 41 added; 23 removed; 6 previous and 12 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
We completed the disposition of our Residential Mortgage Banking segment effective on June 30, 2025. In connection
Current report
with this sale, we classified our Residential Mortgage Banking segment as a discontinued operation. For all periods
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operating segments:
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were floating rate loans, and 17% were fixed rate loans, based on UPB.
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volatility and uncertainty about trade policies, geopolitical tensions, inflationary pressures, and elevated interest rates.
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While the U.S. Federal Reserve lowered rates in 2024, there is uncertainty if and when further decreases will occur.
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FL8, RCMF 2022-FL9 and RCMF 2022-FL10.
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2022-FL8, RCMF 2022-FL9 and RCMF 2022-FL10. Secured borrowings increased$1.5 billion due to the collapse of
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RCMF 2021-FL5, RCMF 2021-FL6, RCMF 2022-FL8, RCMF 2022-FL9 and RCMF 2022-FL10.
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Q2 2025 versus Q2 2024. Interest income of$122.3 million representeda decrease of$79.8 million, primarily due to
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of$42.3 million, driven by decreased loan balances and interest rates. Provision for loan losses of$5.1 million
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representedan increase of$19.6 million, primarily due to an increase in asset specific reserves. Non-interest loss of
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$36.6 million representeda decrease of$48.8 million, primarily due to a decrease inthe valuation allowance related to
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YTD 2025 versus YTD 2024. Interest income of$247.2 million representeda decrease of$155.6 million, primarily due
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sale, partially offset by an increase in asset specific reserves. Non-interest loss of$151.0 million representeda decrease
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realized and unrealized losses on financial instruments and real estate owned. Non-interest expense of$55.3 million
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representeda decrease of$19.4 million, due to a decrease in charge-offs of real estate acquired in settlement of loans.
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an increase in asset specific reserves. Non-interest income of$24.1 million representedan increase of$4.3 million,
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primarily due to loan origination income, partially offset by servicing expenses. Non-interest expense of$27.7 million
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expenses.
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YTD 2025 versus YTD 2024. Interest income of$60.5 million representeda decrease of$3.2 million, primarily due to
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decrease of$9.9 million, driven by decreased debt balances and interest rates. Provision for loan losses of$11.9 million
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and an increase in asset specific reserves. Non-interest income of$60.6 million representedan increase of$20.4 million,
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primarily due to loan origination income and net realized gains on financial instruments, partially offset by servicing
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expenses. Non-interest expense of$57.8 million representedan increase of$22.4 million, primarily due to increases in
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Q2 2025 versus Q2 2024. Non-interest loss of$14.2 million representeda decrease of$2.6 million, primarily due to a
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YTD 2025 versus YTD 2024. Non-interest income of$89.5 million representedan increase of$106.4 million, primarily
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Q2 2025 versus Q2 2024. Consolidated netloss of$53.7 million for thesecond quarter of 2025 representedan increase
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of$19.5 million from thesecond quarter of 2024, primarily due to a decrease in net interest income and an increase in
Current report
provision for loan losses, partially offset by a decrease to the valuation allowance. Consolidated distributable loss before
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realized losses of$12.7 million for thesecond quarter of 2025 representeda decrease of$49.6 million from thesecond
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valuation allowanceand realized losses on sale of investments, partially offset by an increase in provision for loan
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losses. Consolidated distributable losses of$19.8 million for thesecond quarter of 2025 representeda decrease of$36.4
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and LMM loans.
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representedan increase of$136.7 million from thesix months ended June 30, 2024, primarily due to a gain on bargain
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allowances, partially offset by a decrease in net interest income. Consolidated distributable losses before realized losses
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of$8.6 million for thesix months ended June 30, 2025 representeda decrease of$99.4 million from thesix months
Current report
purchase recognized from the UDF IV Merger, a decrease to the valuation allowance andan increase in recovery for
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loan losses. Consolidated distributable losses of$31.2 million for thesix months ended June 30, 2025 representeda
Current report
RCMF 2022-FL9 and RCMF 2022-FL10.
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Removed paragraphs (23)
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resources.
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Our Residential Mortgage Banking segment meets the criteria to be classified as held for sale and presented as a
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approximately 84% of the loans in our portfolio were floating rate mortgages, and 16% were fixed rate mortgages, based
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on UPB.
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commercial real estate sector, inflationary pressures, elevated interest rates, and geopolitical tensions. In aneffort to ease
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borrowing costs and restore price stability, there has been a shift towards a less aggressive monetary policy by the U.S.
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flows.
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primarily due to the collapse of RCMF 2021-FL5, RCMF 2021-FL6, and RCMF 2022-FL8.
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RCMF 2021-FL6, and RCMF 2022-FL8. Secured borrowings increased$678.2 million due to the collapse of RCMF
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2021-FL5, RCMF 2021-FL6, and RCMF 2022-FL8.
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Q1 2025 versus Q1 2024. Interest income of$125.0 million representeda decrease of$75.8 million, primarily due to
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interest loss of$114.5 million representeda decrease of$8.5 million, primarily due to a decrease in the valuation
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partially offset by a decrease in specific loan reserves. Non-interest income of$36.4 million representedan increase of
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$16.1 million, primarily due to net realized gains on financial instruments. Non-interest expense of$30.1 million
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origination expenses.
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Q1 2025 versus Q1 2024. Non-interest income of$103.8 million primarily represented a gain on bargain purchase
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representedan increase of$156.1 million from thethree months ended March 31, 2024, primarily due to a gain on
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valuation allowance related to the transfer of Loans, net to Loans, held for sale. Consolidated distributable earnings
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before realized losses of$4.1 million for thethree months ended March 31, 2025 representeda decrease of$49.8 million
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distributable lossesof$11.4 million for thethree months ended March 31, 2025 representeda decrease of$65.4 million
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assets and LMM loans.
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(9)Interest on the corporate debt is payable quarterly on March 15, June 15, September 15, and December 15 of each year.
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million in aggregate principal amount of its 9.375% Senior Secured Notes due 2028 for net proceeds of $49.3 million
Reworded paragraphs (68)
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•risks associated with the divestiture of our Residential Mortgage Banking segment;
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•risks associated with the completed divestitureof our Residential Mortgage Banking segment;
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•the impact of current or future pandemics and epidemics on our borrowers, the real estate industry and global
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•the impact of future pandemics and epidemics on our borrowers, the real estate industry and global markets, and
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markets, and on our business and operations, financial condition, results of operations, liquidity and capital
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on our business and operations, financial condition, results of operations, liquidity and capital resources.
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discontinued operation. For all periods presented, the operating results for these operations have been removed from
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presented, the operating results for these operations have been removed from continuing operations. Our MD&A has
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continuing operations. Our MD&A has been adjusted to exclude discontinued operations unless otherwise noted. We
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been adjusted to exclude discontinued operations unless otherwise noted. We report our activities in the following two
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Changes in Market Interest Rates. We own and expect to acquire or originate fixed rate mortgages and floating rate
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Changes in Market Interest Rates. We own and expect to acquire or originate fixed rate and floating rate loans with
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mortgages with maturities ranging from two to 30 years. Our loans typically have amortization periods of 15 to 30 years
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maturities ranging from two to 30 years. Our loans typically have amortization periods of 15 to 30 years or balloon
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or balloon payments due in two to 10 years. Fixed rate mortgage loans bear interest that is fixed for the term of the loan
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payments due in two to 10 years. Fixed rate loans bear interest that is fixed for the term of the loan and we typically
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and we typically utilize derivative financial and hedging instruments in an effort to hedge the interest rate risk associated
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utilize derivative financial and hedging instruments in an effort to hedge the interest rate risk associated with such fixed
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with such fixed rate mortgages. As of March 31, 2025, all fixed rate loans are match funded in securitization. Floating
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rate loans. As of June 30, 2025, all fixed rate loans are match funded in securitization. Floating rate loans generally have
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rate mortgage loans generally have an adjustable interest rate equal to the sum of a fixed spread plus an index rate, such
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an adjustable interest rate equal to the sum of a fixed spread plus an index rate, such as the Secured Overnight Financing
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as the Secured Overnight Financing Rate ("SOFR"), which typically resets monthly. As of March 31, 2025,
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Rate (“SOFR”), which typically resets monthly. As of June 30, 2025, approximately 83% of the loans in our portfolio
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Current market conditions. During thefirst quarter, macroeconomic concerns persisted including uncertainty about the
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Current market conditions. During thesecond quarter, macroeconomic concerns persisted including global market
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Federal Reserve. Although the full impact of these changes remains uncertain and difficult to predict, concerns and
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Although the full impact of these changes remains uncertain and difficult to predict, concerns and uncertainties about the
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uncertainties about the economic outlook may adversely impact our financial condition, results of operations and cash
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economic outlook may adversely impact our financial condition, results of operations and cash flows.
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As of March 31, 2025, total assets in our consolidated balance sheet were$10.0 billion, a decrease of$0.2 billion from
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As of June 30, 2025, total assets in our consolidated balance sheet were$9.3 billion, a decrease of$0.8 billion from
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Loans, net. Assets of consolidated VIEs decreased $1.5 billion, primarily due to thecollapseof RCMF 2021-FL5,
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Loans, net. Assets of consolidated VIEs decreased $2.8 billion, primarily due to thecollapseof RCMF 2021-FL5,
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RCMF 2021-FL6, and RCMF 2022-FL8, and paydowns on securitized loans. Loans, netincreased $975.9 million,
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RCMF 2021-FL6, RCMF 2022-FL8, RCMF 2022-FL9 and RCMF 2022-FL10 and paydowns on securitized loans.
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2021-FL5, RCMF 2021-FL6, RCMF 2022-FL8.
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Loans, netincreased $1.7 billion, primarily due to the collapse of RCMF 2021-FL5, RCMF 2021-FL6, RCMF 2022-
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As of March 31, 2025, total liabilities in our consolidated balance sheet were$7.9 billion, a decrease of$0.3 billion from
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As of June 30, 2025, total liabilities in our consolidated balance sheet were$7.4 billion, a decrease of$0.8 billion from
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offset by an increase in Secured borrowings and Senior secured notes, net. Securitized debt obligations of consolidated
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offset by an increase in Secured borrowings. Securitized debt obligations of consolidated VIEs, netdecreased $2.1
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VIEs, netdecreased $1.0 billion due to paydowns on securitized loans including the collapse of RCMF 2021-FL5,
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billion due to paydowns on securitized loans including the collapse of RCMF 2021-FL5, RCMF 2021-FL6, RCMF
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As of March 31, 2025, total stockholders’ equity was$2.0 billion, an increase of$105.4 million from December 31,
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As of June 30, 2025, total stockholders’ equity was$1.9 billion, a decrease of$10.1 million from December 31, 2024,
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common stock repurchased through the Company’s share repurchase program.
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primarily due to dividends paid and common stock repurchased through the Company’s share repurchase program,
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2024, primarily due to shares issued in connection with the acquisition of UDF IV, partially offset by dividends paid and
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partially offset by shares issued in connection with the acquisition of UDF IV.
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by business segments, with the remaining amounts reflected in Corporate –Other.
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by business segments, with the remaining amounts reflected in Unallocated –Corporate.
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non-accrual loans, decreased loan balances and interest rates. Interest expense of$120.4 million representeda decrease
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non-accrual loans, decreased loan balances and interest rates. Interest expense of$116.1 million representeda decrease
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Non-interest expense of$27.8 million representeda decrease of$15.7 million, due to a decrease in charge-offs of real
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loans sold. Non-interest expense of$27.5 million representeda decrease of$3.7 million, due to a decrease in charge-offs
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estate acquired in settlement of loans.
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of real estate acquired in settlement of loans.
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of$38.5 million, driven by decreased loan balances and interest rates. Recovery of loan losses of$117.9 million
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decrease of$80.8 million, driven by decreased loan balances and interest rates. Recovery of loan losses of$112.8
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representedan increase of$87.2 million, primarily due to loans transferred from Loans, net to Loans, held for sale. Non-
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million representedan increase of$67.6 million, primarily due to loans transferred from Loans, net to Loans, held for
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allowance related to loans sold, partially offset by net realized losses on financial instruments and real estate owned.
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of$57.3 million, primarily due to a decrease in the valuation allowance related to loans sold, partially offset by net
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Q1 2025 versus Q1 2024. Interest income of$30.0 million representeda decrease of$1.6 million, primarily due to
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Q2 2025 versus Q2 2024. Interest income of$30.5 million representeda decrease of$1.6 million, primarily due to
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decreases in interest rates, partially offset by increases in loan balances. Interest expense of$20.1 million representeda
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decreases in interest rates, partially offset by increases in loan balances. Interest expense of$19.7 million representeda
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decrease of$4.8 million, driven by decreased debt balances and interest rates. Provision for loan losses of$8.4 million
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decrease of$5.1 million, driven by decreased debt balances and interest rates. Provision for loan losses of$3.5 million
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representedan increase of$12.0 million, primarily due to increases in employee compensation and benefits and loan
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representedan increase of$10.4 million, due to increases in employee compensation and benefits and loan origination
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representedan increase of$4.2 million, due to changes in the forecasted macroeconomic inputs for reserve modeling,
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representedan increase of$12.1 million, due to changes in the forecasted macroeconomic inputs for reserve modeling
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recognized from the UDF IV Merger. Non-interest expense of$14.8 million representeda decrease of$1.9 million,
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loss on bargain purchase recognized from the UDF IV Merger. Non-interest expense of$15.0 million representeda
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primarily due to decreased operating expenses.
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decrease of$3.8 million, primarily due to decreased operating expenses.
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due to a gain on bargain purchase recognized from the UDF IV Merger, an increase in recovery of loan losses, and a
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due to a gain on bargain purchase recognized from the UDF IV Merger. Non-interest expense of$29.8 million
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Rearranged current paragraphs (12)
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to non-accrual loans, decreased loan balances and interest rates. Interest expense of$236.4 million representeda
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representedan increase of$8.0 million, due to changes in the forecasted macroeconomic inputs for reserve modeling and
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decreases in interest rates, partially offset by increases in loan balances. Interest expense of$39.9 million representeda
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employee compensation and benefits and loan origination expenses.
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representeda decrease of$5.8 million, primarily due to decreased operating expenses.
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quarter of 2024. Thedecrease in the distributable earnings reconciling items is primarily due to a decrease to the
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million fromthe second quarter of 2024 due to certain charge-offs and losses realized on sales of real estate owned assets
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sales of real estate owned assets and LMM loans.
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cash used for financing activities. The net cash provided by investing activities primarily reflected proceeds on
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repayments of securitized debt obligations of consolidated VIEs.
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(8)Interest on the corporate debt is payable quarterly on March 15, June 15, September 15, and December 15 of each year.
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Senior Secured Notes for net proceeds of $49.3 million before expenses. The additional notes are fungible with and
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report our activities in the following two operating segments:
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decrease in the valuation allowance related to the transfer of Loans, net to Loans, held for sale. Consolidated
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provided by investing and operating activities. The net cash used for financing activities primarily reflected repayments
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of securitized debt obligations of consolidated VIEs. The net cash provided by investing activities primarily reflected
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(7)Interest on the corporate debt is payable semiannually on January 31 and July 31 of each year.
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9.375% Senior Secured Notes due 2028 issued on February 21, 2025. The Company used the net proceeds from the