Ready Capital Corporation
03/02/2026 | Press release | Distributed by Public on 03/02/2026 15:35
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Introduction
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to
provide a reader of our consolidated financial statements with a narrative from the perspective of our management on our
financial condition, results of operations, liquidity and certain other factors that may affect our future results. Our
MD&A is presented in five main sections:
•Overview
•Results of Operations
•Liquidity and Capital Resources
•Contractual Obligations and Off-Balance Sheet Arrangements
•Critical Accounting Estimates
The following discussion should be read in conjunction with our consolidated financial statements and accompanying
Notes included inItem 8, "Financial Statements and Supplementary Data," of this Form 10-K. The discussion and
analysis of our financial condition and results of operations is for the year ended December 31, 2025compared with the
year ended December 31, 2024. Discussions of our financial condition and results of operations for the year ended
December 31, 2024compared with the year ended December 31, 2023that have been omitted under this item can be
found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations"
included in our Annual Report on Form 10-K/A for the year ended December 31, 2024, which was filed with the
In addition to historical data, this discussion contains forward-looking statements about our business, operations and
financial performance based on current expectations that involve risks, uncertainties and assumptions. See "Forward-
Looking Statements" and "Critical Accounting Estimates" in this Form 10-K for certain other factors that may cause
actual results to differ, materially, from those anticipated in the forward-looking statements included in this Form 10-K.
Our actual results may differ materially from those in this discussion as a result of various factors, including but not
limited to those discussed in Part, 1. Item 1A, "Risk Factors" in this Form 10-K.
Overview
Our Business
We are a multi-strategy real estate finance company that originates, acquires, finances, and services LMM loans, SBA
loans, construction loans, USDA loans and, to a lesser extent, MBS collateralized primarily by LMM loans, or other real
estate-related investments. Our loans generally range in original principal amounts up to$40 millionand are used by
businesses to purchase real estate used in their operations or by investors seeking to acquire multi-family, office, retail,
mixed use or warehouse properties. Our objective is to provide attractive risk-adjusted returns to our stockholders. In
order to achieve this objective, we intend to grow our investment portfolio and believe that the breadth of our full-service
real estate finance platform will allow us to adapt to market conditions and deploy capital in our asset classes and
segments with the most attractive risk-adjusted returns.
We completed the disposition of our Residential Mortgage Banking segment effective on June 30, 2025. In connection
with this sale, we classified our Residential Mortgage Banking segment as a discontinued operation. For all periods
presented, the operating results for these operations have been removed from continuing operations. Our MD&A has
been adjusted to exclude discontinued operations unless otherwise noted. We report our activities in the following two
operating segments:
•LMM Commercial Real Estate.We originate LMM loans across the full life-cycle of an LMM property
including construction, bridge, stabilized and agency loan origination channels through our subsidiary,
ReadyCap Commercial, LLC. These originated loans are generally held-for-investment or placed into
securitization structures. As part of this segment, we originate and service multi-family loan products under
the Freddie Mac SBL program. These originated loans are held for sale, and subsequently sold to Freddie
Mac. We provide construction and permanent financing for the preservation and construction of affordable
housing, primarily utilizing tax-exempt bonds through Ready Capital Affordable, a subsidiary. In addition,
we acquire LMM loans as part of our business strategy. We hold performing LMM loans to term and seek
to maximize the value of the non-performing LMM loans acquired by us through borrower-based resolution
strategies. We typically acquire non-performing loans at a discount to their unpaid principal balance when
we believe that resolution of the loans will provide attractive risk-adjusted returns.
•Small Business Lending. We acquire, originate and service owner-occupied loans guaranteed by the SBA
under the SBA Section 7(a) Program through our subsidiary, ReadyCap Lending, LLC. We hold an SBA
license as one of only 16 non-bank Small Business Lending Companies and have been granted preferred
lender status by the SBA. These originated loans are either held-for-investment, placed into securitization
structures, or sold. In addition, we originate and service USDA loans through our subsidiary, ReadyCap
Commercial, as well as originate and service small business loans through our subsidiary iBusiness Funding
LLC.
We are organized and conduct our operations to qualify as a REIT under the Internal Revenue Code of 1986, as
amended. To qualify as a REIT, we are required to annually distribute substantially all of our net taxable income,
excluding capital gain, to stockholders. To the extent that we do not distribute all of our net capital gain, or distribute at
least 90%, but less than 100%, of our REIT taxable income, as adjusted, we will be required to pay U.S. federal
corporate income tax on the undistributed income. We are organized in a traditional umbrella partnership REIT
(UpREIT)format pursuant to which we serve as the general partner of, and conduct substantially all of our business
through, Sutherland Partners, LP (our "operating partnership"). We also intend to operate our business in a manner that
will permit us to be excluded from registration as an investment company under the 1940 Act.
Acquisitions
United Development Funding IV. On March 13, 2025, pursuant to the terms of the Agreement and Plan of Merger,
dated as of November 29, 2024, by and among the Company, UDF IV, and RC Merger Sub IV, LLC, a wholly owned
subsidiary of the Company ("RC Merger Sub IV"), the Company acquired UDF IV, a real estate investment trust
providing capital solutions to residential real estate developers and regional homebuilders, (the "UDF IV Merger"). At
the effective time of the UDF IV Merger (the "Effective Time"), each outstanding common share of beneficial interest,
par value$0.01 per share, of UDF IV ("UDF IV Common Shares"), excluding any UDF IV Common Shares held by
UDF IV, the Company, RC Merger Sub IV or their subsidiaries, was automatically cancelled and retired and converted
into the right to receive (i)0.416 shares of Company common stock, (ii)0.416 contingent value rights ("CVRs")
representing the potential right to receive additional shares of Company common stock after the end of each of (1) the
period beginning on October 1, 2024, and ending on December 31, 2025 and (2) thethreesubsequent calendar years,
based, in part, upon cash proceeds received by the Company and its subsidiaries in respect of a portfolio offive UDF IV
loans and (iii) cash consideration in lieu of any fractional shares of Company common stock. Refer to Notes 1 and 5,
included in Part II, Item 8, "Financial Statements and Supplementary Data," of this Form 10-K, for more information
about the UDF IV Merger and the assets acquired and liabilities assumed as a result of the UDF IV Merger.
Funding Circle. On July 1, 2024, the Company acquired Funding Circle through its subsidiary, iBusiness Funding LLC,
for approximately$41.2 million in cash plus the assumption of certain liabilities (the "Funding Circle Acquisition").
Funding Circle is an online lending platform that originates and services small business loans. The Funding Circle
Acquisition integrates Funding Circle's loan origination servicing platform with the Company's Lending as a Service
and LenderAI product offerings.Refer to Notes 1 and 5, included in Part II, Item 8, "Financial Statements and
Supplementary Data," of this Form 10-K, for more information about the Funding Circle Acquisition and the assets
acquired and liabilities assumed as a result of the Funding Circle Acquisition.
Madison One. On June 5, 2024, the Company acquired Madison One,a leading originator and servicer of USDA and
SBA guaranteed loan products, for an initial purchase price of approximately $32.9 million paid in cash (the "Madison
One Acquisition"). Approximately $3.6 million of the initial purchase price was paid as bonuses to certain key Madison
One personnel in cash. Additional purchase price payments, including cash payments and the issuance of shares of
common stock of the Company, may be made over the four years following the acquisition date contingent upon the
Madison One business achieving certain performance metrics. Part of the Company's strategy in acquiring Madison One
included the value of the anticipated synergies arising from the acquisition and the value of the acquired assembled
workforce, neither of which qualify for recognition as an intangible asset.Refer to Notes 1 and 5, included in Part II,
Ready Capital Corporation published this content on March 02, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 02, 2026 at 21:36 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]