Ready Capital Q3 Loss Widens to $66.1 Million as It Refinances Debt

Ready Capital lost $66.1 million, or $0.40 a share, in the third quarter, the commercial real estate lender said after the market close on Thursday, Nov. 5, as its interest income barely covered its borrowing costs. A year earlier it lost $20.7 million, or $0.13 a share, according to the results it furnished to the SEC with a Form 8-K.

Ready Capital (NYSE: RC), based in New York, originates, buys, finances and services commercial real estate loans for lower-to-middle-market investors and owner-occupants, plus Small Business Administration loans. Its distributable loss, a non-GAAP measure, was $0.53 a share. Before $51.9 million of after-tax realized losses on investment sales, the distributable loss was $0.21 a share. The board declared a dividend of $0.01 a share, against $0.125 a year earlier.

Why is Ready Capital losing money?

Its loans now earn only about what they cost to fund. Interest income fell to $83.8 million from $137.5 million a year earlier, and interest expense was $83.8 million, leaving net interest income of about $1,000. In the commercial real estate segment, interest expense of $59.2 million exceeded interest income of $51.9 million. The company added $12.7 million to loan loss provisions, down from $38.0 million a year earlier, and booked $16.8 million of net realized losses on financial instruments and foreclosed property.

Measure	Sept. 30, 2026	Dec. 31, 2025
Loans, net	$3.12 billion	$3.50 billion
Loans held for sale	$112.8 million	$585.8 million
Real estate owned	$563.5 million	$620.2 million
Secured borrowings	$1.69 billion	$2.79 billion
Total assets	$5.78 billion	$7.77 billion
Cash and cash equivalents	$157.1 million	$207.8 million

Source: Ready Capital third-quarter 2026 results release, Exhibit 99.1 to Form 8-K.

"Our immediate priorities now turn to bringing distributable earnings and free cash flow to breakeven and resolving the remaining legacy non-performing commercial loan portfolio," Chairman and Chief Executive Thomas Capasse said in the release.

What does Ready Capital's refinancing cost?

More than double the old rate. In the quarter it issued $225.0 million of 10.00% senior secured notes due 2031 and retired all $350.0 million of its 4.50% senior secured notes in September. Capasse said that after it repays its November notes, it will have retired all of its 2026 corporate maturities. A lender's cost of funds sets the floor under what it must charge borrowers; see hard money and private lending rates today for current benchmarks, and our warehouse line of credit guide for how lenders fund loans before they are sold or securitized.

Ready Capital ended the quarter with $157 million of cash and $606 million of unencumbered assets. Total leverage was 2.8 times and recourse leverage 1.5 times. Book value was $6.44 a share.

It still originated $303.4 million of loans, including $132.9 million of commercial real estate loans and $109.3 million of SBA 7(a) loans. At its Portland Ritz-Carlton project, it has sold 52 Ritz-Carlton branded condominium units to date, which the company put at 39% completion. Ready Capital held its earnings call at 8:30 a.m. ET on Friday, Nov. 6. Other lenders reporting this week included Starwood Property Trust, which posted a $389.7 million loss.