Ready Capital Corporation (NYSE:RC) Q4 2022 Earnings Conference Call February 27, 2023 8:00 AM ET

Company Participants

Tom Capasse - CEO

Andrew Ahlborn - CFO

Adam Zausmer - CCO

Conference Call Participants

Crispin Love - Piper Sandler

Stephen Laws - Raymond James

Steven DeLaney - JMP Securities

Christopher Nolan - Ladenburg Thalmann

Jade Rahmani - KBW

Matt Howlett - B. Riley

Operator

Greetings, and welcome to the Ready Capital Corporation fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to Andrew Ahlborn, Chief Financial Officer. Thank you. You may begin.

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 fourth quarter 2022 earnings release and our supplemental information, which can be found in the Investors section of the Ready Capital website.

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. Good morning, and thank you for joining the call today. We have a lot of news and information to share. This morning, we announced a definitive agreement to acquire Broadmark Realty Capital, which we will discuss shortly. First, we'll recap our fourth quarter and full year results. 2022 was another successful year of Ready Capital delivering on our long-term objectives. First, for our customers, Ready Capital remains a leading non-bank lender to CRE lower to middle market sponsors and small businesses nationwide, providing products across the property lifecycle. To that end, in 2022, we originated over 1,200 commercial and small business loans totaling $5.7 billion, and expanded our loan product offerings with the launch of our CRE construction program originating $220 million across four multifamily transactions at expected yields of 20%. Notably, in the fourth quarter, we completed our OneTEAM initiative, consolidating relationship management, providing borrowers with seamless access to all of our products, better customized to their needs. Second, for our shareholders, we continue to set the company apart, as we both preserved and grew book value, while generating a dividend yield of 12%. 2022 marked another banner year, with 12.8% distributable return on average equity, distributable earnings per share of $1.87, and a 1.1 times dividend coverage. Importantly, and further setting us apart, book value per share is up 5% since the first quarter of 2020. To achieve the scale necessary to support our first and second objectives year-over-year, RC increased its capitalization 48% via both secondary markets and through our merger with Mosaic, a leading private credit lender focused on construction lending. We also increased corporate debt 25% via the issuance of $220 million in corporate debt across two transactions. This growth continues to generate significant value for our shareholders.