Stephen Laws's questions to Ready Capital Corp (RC) leadership • Q3 2024
Question
Stephen Laws asked for details on the CECL reserve build, including its allocation between general and specific reserves and the assets that drove the increase. He also questioned the sustainability of the $0.25 distributable earnings (ex-losses) and whether it could comfortably cover the dividend going forward.
Answer
CEO Thomas Capasse noted the CECL reserve is just over 1%, with 32% in the general bucket. Chief Credit Officer Adam Zausmer added that the quarterly increase was almost entirely related to the M&A portfolio. Executive Adam Zausmer affirmed the $0.25 distributable earnings level is a 'good baseline,' supported by the substantial and growing contribution from the small business lending platform, and sees a growth path as the CRE business normalizes.