Ready Capital Corporation Q1 FY2026 earnings call

• Balance sheet repositioning strategy: Generated $1.4 billion in cash from loan sales/liquidations, paid down warehouse debt, resolved non- and sub-performing positions, transitioning to lower leverage, more capital-efficient platform. - Liquidity plan: Projected to span four quarters, expecting incremental $400 million liquidity from sale and runoff of $2 billion to $2.5 billion of CRE loans and REO assets by year-end. - Business model transition: Focus investment activity on CRE sectors with best relative value, simplify business model with external manager, increase capital allocation to small business lending platform. - RISC property: Largest single equity allocation, sold 43 condos, hotel occupancy increased 5% year-over-year to 46%, ADR up 1%, REVPAR up 13%.

First quarter generated $1.4 billion in cash from loan sales and liquidations, facilitating pay down of over $1.1 billion in warehouse debt and generating $270 million in net liquidity. Recurring revenue was $16.2 million compared to $41.5 million in prior quarter, driven by $28.5 million reduction in net interest income offset by $3 million increase in other income. Operating expenses increased $7.8 million quarter-by-quarter to $67.7 million, primarily due to $6.7 million increase in non-recurring advance payments to servicers.

• Anticipates incremental $400 million liquidity from sale and runoff of $2 billion to $2.5 billion of CRE loans and REO assets by year-end. - Believes remaining actions and current liquidity sufficient to retire remaining 26 maturities and satisfy future cash flow needs. - Expect leverage to stabilize around 2.5x post-completion of liquidity plan. - Pending launch of 158 million SBA 7A securitization expected to generate capacity for $500 million of incremental go-forward volume.

• Statements are forward-looking subject to numerous risks and uncertainties causing actual results to differ materially from expectations. - Legacy portfolio performance impact on financials. - Variability in asset sale execution affecting book value. - Deferred tax assets recoverability risk due to ongoing operating losses.

Q: Where do you expect balance sheet total assets to end after planned asset sales?

A: Expect another $2 to $2.5 billion reduction in loan portfolio, current total assets roughly 6.3, expect to come down closer to $4 billion.

Q: Do you have a range of pro forma book value per share?

A: Not providing guidance at this point, change in book value highly dependent on execution of upcoming trades.

Q: Concern about deferred tax assets write-down risk?

A: Current deferred tax asset is $201.6 million, tax receivable is $16.7 million, heavy focus on growing SBA business which may return it to profitability.

Q: Colors on why core performance CRE portfolio deteriorated?

A: Designation with core and non-core becoming less relevant, sale of assets purposefully executed to improve secondary market price creating roll rate and denominator effect.

Q: Impact on reserve allowance and leverage ratios?

A: Additional provision of under 71 million in quarter, loans on book non- and sub-performing fairly limited, expect leverage to stabilize around 2.5 times.

Q: Does less securitization mean less 7A securitization?

A: No, reference to CRE CLOs with focus on multifamily, once NPLs resolved, immediately accretive as can get allocation from external manager.