Ready Capital Corp. (RC) reported a net loss of $430.4 million for the fiscal year ended December 31, 2024, compared to a net income of $348.4 million in 2023. The significant decrease was primarily attributed to a $285.5 million increase in the provision for loan losses, a $154.9 million net realized loss on financial instruments and real estate owned, and a $191.8 million decrease in other income. Distributable earnings, a non-GAAP measure, were $28.4 million in 2024, down from $190.1 million in 2023, primarily due to charge-offs and losses on real estate sales and LMM loans. The company declared dividends of $1.10 per common share in 2024.
Significant changes in the company's financial performance were driven by several factors. A substantial increase in CECL reserves contributed to the rise in loan loss provisions. The company also experienced net realized losses on financial instruments and real estate owned, and a decrease in other income, largely due to the absence of a bargain purchase gain recognized in the prior year from the Broadmark Merger. The company's loan portfolio decreased by $642 million, primarily due to increased CECL reserves and loans transferred to the "held for sale" category.
During the year, Ready Capital completed several strategic acquisitions. On November 29, 2024, the company entered into a definitive merger agreement with United Development Funding IV, expected to close in the first half of 2025. The company also acquired Funding Circle in July 2024 for approximately $41.2 million and Madison One in June 2024 for an initial purchase price of $32.9 million. The Broadmark Merger, completed in May 2023, further diversified the company's business. As of December 31, 2024, Ready Capital had 475 full-time employees.
The company's loan portfolio totaled $8.5 billion (excluding PPP loans) as of December 31, 2024, comprised of 8,422 loans across 50 states and Europe. The portfolio allocation between LMM Commercial Real Estate and Small Business Lending was 84.7% and 15.3%, respectively. The company's LMM loan originations had a 24.2% compound annual growth rate since inception in 2013. The company's financing strategy utilizes leverage, with a total leverage ratio of 3.8x and a recourse leverage ratio of 1.3x as of December 31, 2024.
Ready Capital's outlook includes the anticipated closing of the UDF IV merger in the first half of 2025, which is subject to shareholder approval and other customary closing conditions. The company also noted several risk factors, including market volatility, interest rate fluctuations, credit risk, and the integration of recently acquired businesses. The company's continued success is dependent on its ability to manage these risks and capitalize on opportunities within the LMM and small business lending markets.
About Ready Capital Corp
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