Residential Mortgage Banking Overview
Return on Equity
Segment
Levered
Yield (1)
Distributable
Levered
Yield (1)
Equity
Allocation
SBC Lending and Acquisitions
Small Business Lending
10.8 %
10.8 %
43.7 %
43.7 %
Residential Mortgage Banking
(3)
15.9 %
7.5 %
91.8 %
4.4 %
3.8 %
+
READY CAPITAL.
GAAP ROE
(2)
Distributable ROE
(2)
Q3'23
Q2'23
Q3'23
Q2'23
12.4 %
14.2 %
12.1 %
13.0 %
Corporate leverage, net of non-earning assets
0.6
2.2
0.5
1.7
Gross return on equity
13.0 %
16.4 %
12.6 %
14.7 %
Realized & unrealized gains, net
2.0
1.8
2.0
1.8
Loan loss recovery (provision)
1.9
(3.7)
PPP revenue, net of direct expenses(4)
Non-recurring gains, losses and expenses s (5)
1.5
2.1
1.5
2.1
(3.1)
40.9
Operating expenses
(6.0)
(7.3)
(6.0)
(7.0)
Investment advisory fees
(1.2)
(1.1)
(1.2)
(1.1)
Provision for income taxes
(0.6)
(1.0)
(0.6)
(0.8)
Dividends on preferred stock
(0.3)
(0.4)
(0.3)
(0.4)
Return on equity
7.2 %
47.7 %
8.0 %
9.3 %
1. Levered yield includes interest income, accretion of discount, MSR creation, income from
unconsolidated joint ventures, realized gains (losses) on loans held for sale, unrealized
gains (losses) on loans held for sale and servicing income net of interest expense and
amortization of deferred financing costs on an annualized basis.
2. GAAP ROE is based on GAAP Net Income, while Distributable ROE is based on
Distributable Earnings, which adjusts GAAP Net Income for certain items detailed on the
"Distributable Earnings Reconciliation" slide.
3. ROE based on net income before tax of the Residential Mortgage Banking business line
divided by the business line's average monthly equity.
4. Includes Employee Retention Credit processing fee income.
5. Non-recurring gains, losses and expenses before applicable tax expenses.
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