Ready Capital Merges with Broadmark, Shares Drop 1.6%

By Bobby Samwell • Thursday, December 26 10:14 • Permanent Link

Ready Capital Corporation and RCC Merger Sub, LLC completed a merger with Broadmark Realty Capital Inc. on May 31, 2023. As a result of the merger, each outstanding share of Broadmark Common Stock was converted into 0.47233 newly issued shares of Ready Capital Common Stock. The total purchase price for the merger was $637.2 million, consisting of the Ready Capital Common Stock issued based on a share price of $10.24.

The unaudited pro forma condensed combined statement of income for the year ended December 31, 2023, reveals significant changes in various financial metrics. Interest income increased from $31.778 million (Broadmark) to $945.814 million (Ready Capital), resulting in a combined interest income of $977.592 million. Non-interest income also saw a notable increase, rising from $8.913 million (Broadmark) to $408.468 million (Ready Capital), leading to a combined non-interest income of $399.048 million.

On the expense side, non-interest expenses for Ready Capital were $272.165 million, while Broadmark's non-interest expenses stood at $33.534 million. The combined non-interest expenses after adjustments were $309.194 million.

Net income attributable to Ready Capital Corporation was $331.454 million, while Broadmark reported a net loss of $2.248 million. However, after pro forma merger adjustments, the net income attributable to the combined company was $307.597 million.

The weighted average shares outstanding for Ready Capital were 146,841,594, while 62,229,429 shares of Ready Capital Common Stock were issued to Broadmark stockholders, resulting in a pro forma weighted average common shares outstanding of 146,841,594.

The earnings per common share from continuing operations for Ready Capital was $2.27, whereas Broadmark reported a loss of $0.02 per common share from continuing operations. The pro forma combined earnings per common share from continuing operations after adjustments for the merger was $2.11.

As a result of these announcements, the company's shares have moved -1.6% on the market, and are now trading at a price of $7.27. For the full picture, make sure to review Ready Capital's 8-K report.

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