Ready Capital Accelerates Earnings Recovery with Strategic Repositioning
Ready Capital Corporation has made significant progress in its balance sheet repositioning strategy during the second quarter of 2026, according to a recent conference call. Chief Executive Officer Thomas Capasse highlighted the company's efforts to strengthen liquidity, resolve non- and sub-performing CRE assets, transition to a lower-cost business model, and focus on growth in small business SBA 7 lending.
Capasse noted that the company has completed several important financings, including the securitization of $158 million of unguaranteed SBA 7 loans at a 92% advance priced at SOFR plus 240 basis points. This transaction generated $25 million of net liquidity and $500 million of additional funding capacity for 7 production.
The company has also made progress on its liquidity plan, with approximately $1.9 billion of cash generated through loan sales, portfolio runoff, and other initiatives. This amount has been used to pay down $1.7 billion of asset level and corporate debt, achieving around 81% of the target liquidity objective.
Three initiatives are currently underway to complete the final leg of the liquidity plan: optimizing the financing of approximately $950 million of CRE loans, selling or refinancing the company's $118 million joint venture position, and realizing the second half anticipated runoff of approximately $900 million of CRE loans. Additionally, the potential refinance of a portion of the October maturity is being evaluated to further accelerate earnings recovery.
The legacy loan book stands at around $2.7 billion across 172 positions with an additional $218 million of CMBS exposure. Roughly $1 billion or 37% of the loan book comprises sub and non-performing assets that are currently producing a greater net present value through active asset management on the company's balance sheet versus sales in the secondary market.
The sub and non-performing loans have an average duration of 11 months, average market to market LTVs of 82%, and are marked at 85%. The current equity held in these loans is $436 million. In contrast, the performing loan book has a leverage yield equal to 10.1% as of quarter end.
Capasse emphasized that the company's efforts have been focused on creating sustainable profitability and improving its financial position. With a solid foundation established, Ready Capital is poised for growth and success in the future.
