Ready Capital Corporation (NYSE:RC) Q3 2023 Results Conference Call November 8, 2023 8:30 AM ET
Company Participants
Andrew Ahlborn - CFO
Adam Zausmer - Chief Credit Officer
Tom Capasse - CEO
Conference Call Participants
Sarah Barcomb - BTIG
Jade Rahmani - KBW
Henry Coffey - Wedbush
Matt Howlett - B. Riley Securities
Operator
Greetings, and welcome to the Ready Capital Third Quarter 2023 Earnings Call [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to turn the conference over to the Chief Finance Officer, Andrew Ahlborn. Please go ahead.
Andrew Ahlborn
Thank you, operator, and good morning to those of you on the call. Some of our comments today will be forward-looking statements within the meaning of the federal securities laws. Such statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.
During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company’s operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our third quarter 2023 earnings release and our supplemental information, which can be found in the Investors section of the Ready Capital website.
In addition to Tom and myself on today’s call, we are also joined by Adam Zausmer, Ready Capital’s Chief Credit Officer.
I will now turn it over to Chief Executive Officer, Tom Capasse.
Tom Capasse
Thanks, Andrew, and thank you all for joining the call today. The third quarter results reflect the strength of Ready Capital’s core business and short-term earnings pressure from the ongoing integration of our merger with Broadmark. Our strong relative credit metrics, increased liquidity and lower leverage position the company to grow earnings to target levels against the headwind of the unfolding recession in the CRE sector. The integration of Broadmark is progressing successfully in terms of both financial and product integration.
First, portfolio repayments and liquidations. Since the merger closed, 13% of the portfolio totaling $121 million is either paid off or has been sold at or above our basis. As of September 30, the remaining $853 million portfolio of loans in REO with a blended levered yield of 6%, resulting in a portfolio yield drag of approximately 110 basis points.