Ready Capital Corporation

Greetings. Welcome to Ready Capital's first quarter 2026 earnings call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to Andrew Althorn, Chief Financial Officer. Thank you. You may now begin.

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 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 first quarter 2026 earnings release and our supplemental information, which can be found in the investor section of the Ready Capital website. I will now turn it over to Chief Executive Officer Tom Capaci.

Thank you, Andrew. Good morning, everyone, and thank you for joining today's call. The first quarter of 2026 represents ongoing progress in our balance sheet repositioning strategy initiated in the fourth quarter of 25. First year today, we have generated $1.4 billion in cash from loan sales and liquidations. These proceeds have facilitated the pay down of over $1.1 billion in warehouse debt and generated $270 million in net liquidity, which was utilized to retire $184 million of corporate debt. Second, we are continuing to resolve non- and sub-performing positions to reduce earnings drag and facilitate recycling into current market-yielding opportunities. And third, we are transitioning the business model toward a lower leverage, more capital-efficient platform that positions the company for long-term sustainable earnings growth. As we stated in the fourth quarter of 2025, our liquidity plan is projected to span four quarters. We are confident it is the right approach to reset the company's platform for success in the future. We began the year with $650 million of corporate debt across four different 2026 maturities. Given the company's current cost of funds and performance of the legacy portfolio, we made the decision to de-lever the balance sheet with aggressive asset management focused primarily on loan sales. We retired our $117 million five and three quarters percent senior unsecured bond in February, and our 67 million, 6.2% senior unsecured bond in April, leaving 450 million across our fourth quarter 26 maturities. Year to date, we have generated liquidity from two primary sources. First, the sale of 48 loans with total unpaid principal balance of approximately one billion across four transactions for a net liquidity of 177 million. These sales consisted of 66% performing and 30% non- and subperforming loans. Second, portfolio runoff of $550 million provided $93 million in net liquidity. As we look forward, our liquidity plan contemplates an incremental $400 million liquidity from the sale and runoff of $2 billion to $2.5 billion of CRE loans and REO assets through year-end. Based on current projections, we believe these remaining actions along with current liquidity are sufficient to retire our remaining 26 maturities and satisfy the future cash flow needs of the business. Post-completion of our liquidity plan and the payment of our fourth quarter debt maturities, we believe that the remaining legacy CRE portfolio will total approximately $2 billion. We anticipate this will include $800 million, $900 million of sub- and non-performing loans and REO assets, which we believe have a better net present value via exit from aggressive asset management strategies versus sale at current market discounts. This sub-portfolio of non and sub-performing assets has a current quarterly earnings drag of approximately six cents per share with cash outflows of 9.3 million per quarter. Furthermore, we expect the anticipated long-term benefits of our repositioning plan will be a reset balance sheet to allow for future earnings growth and a more conservative leverage profile anticipated to stabilize around 2.5x. Upon the expected second quarter completion of the final CRE loan pool sale contemplated in our liquidity plan, we anticipate the material book value pressure that the company has experienced in the past several quarters will be substantially behind us. We also expect several changes to the business model that we will discuss in greater detail in subsequent quarters. First, we intend to focus our investment activity on allocations to CRE sectors where we see best relative value. We expect average investment size to double relative to our historical average of $17 million. Similarly, we expect that our financing strategy will be more opportunistic and less securitization-driven. Each change is intended to help scale the business with a more efficient operational footprint and allow us to be flexible in pursuing market opportunities. Second, we intend to simplify our business model through increased integration with our external manager, Waterfall Asset Management, and to refocus on two core businesses – middle market CRE debt vesting, and SBA 7a lending. During this period of constrained investing, we can generate fee income in lieu of net interest margin by originating for Waterfall, where we have funded 172 million year to date, and for third parties, including through our new $1 billion flow arrangement. In the future, as we recycle legacy assets to generate liquidity for CRE investing, we expect that a combination of our right-side CRE operations in concert with allocation from Waterfall's CRE desk, will result in a lower operating expense ratio. And third, we intend to increase capital allocation to our small business lending platform, which we expect to represent 20% of the company's capital going forward. Sequentially, we believe that the high relative ROE of this business will lead the earnings recovery over the period that the legacy CRE portfolio is recycled into new vintage CRE investments. Historically, the small business platform has provided 300 to 500 base points of core ROE alongside the CRE net interest margin. I would also like to provide an update on two additional items. First, the RISC property remains our largest single equity allocation, representing 18% of quarter and stockholders' equity. On the condominiums, we have sold 43 units and have an additional four units under contract, which would bring our total sellout to 36% of the 132 total units. The average selling price of the 32 condos sold year-to-date was $745 per square foot, compared to $900 per square foot for all condos sold. This is a deliberate pricing strategy designed to drive momentum towards a full sellout at higher average prices. The hotel's occupancy increased 5% year-over-year to 46%, marking steady progress towards our 60% target. This increased occupancy, along with a 1% increase in ADR to $482, resulted in a 13% increase in REVPAR to $221. Separately, lower SBA 7A originations in the first quarter reflected the prioritization of capital to debt repayment, limiting new SBA deployment to existing warehouse capacity. We anticipate that will change with the pending launch of our 158 million SBA 7A securitization. We expect second quarter securitization to generate capacity for a $500 million of incremental go-forward volume, resulting in the second half of the year climbing towards historical production levels, which were $1.1 billion in 2024. We continue to take deliberate steps to enhance liquidity and strengthen the platform. Specifically, we have generated 67% of our target liquidity and begun to streamline business lines to reduce operating costs in conjunction with greater integration with our external manager, Waterfall. There's certainly more work ahead, but we are encouraged by the progress made to date and remain focused on disciplined execution. With that said, I'll now turn it over to Andrew for a detailed review of the quarterly results.