Ready Capital Corporation (NYSE:RC) Q2 2020 Earnings Conference Call - Final Transcript

Aug 07, 2020 • 08:30 am ET


Ready Capital Corporation (NYSE:RC) Q2 2020 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Thank you for standing by. This is the conference operator. Welcome to the Ready Capital Corporation Second Quarter 2020 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to Andrew Ahlborn, Chief Financial Officer. Please go ahead.

Andrew Ahlborn

Thank you, operator, and good morning, and thanks to those of you on the call for joining us this morning. 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 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 second quarter 2020 earnings release and our supplemental information.

Yesterday evening, we issued a press release with the presentation of our results along with our supplemental financial information presentation. These materials can be found in the Investor Relations section of the Ready Capital website and have been filed with the SEC. We plan to file our second quarter 2020 10-Q this evening.

In addition to Tom and myself, we are also joined by Adam Zausmer, Head of Credit, on today's call. I will now turn it over to Tom Capasse, our CEO.

Thomas Edward Capasse

Thanks, Andrew, and good morning. We appreciate you joining the call, in what continue to be unprecedented and challenging times. Our thoughts remain with you and your loved ones and hope that you are help -- safe and healthy. As the lending business had historically adept at remote operations, we have readily adapted to the COVID environment, managing greater work demands with equal or greater productivity. In response to the pandemic, our management team undertook a 3 phase process. Phase 1 was defense. We harvested liquidity and preserved book value via holistic asset management with aggressive loss mitigation during the second quarter, we preserved much of our book value from the first quarter as the decline was only 10% with a current 60-day delinquency rate of 2.2% versus over 7% for our large balance commercial peers.

Phase 2 is offense. Armed with over $260 million of liquidity today, we've completed a strategic review of our diverse businesses to chart the path forward. We will continue to expand our government-sponsored lending segments and plan relaunch of our CRE acquisition and lending businesses, including the introduction of new products. Operating expenses were also reduced in line with reduced CRE loan volume and a planned greater reliance on technology. Phase 3 is implementation from the early third quarter to