Let’s dig into the relative performance of Ready Capital (NYSE: RC) and its peers as we unravel the now-completed Q2 thrifts & mortgage finance earnings season.

Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.

The 20 thrifts & mortgage finance stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 26% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 6.4% on average since the latest earnings results.

Ready Capital (NYSE: RC)

Operating as one of only 17 non-bank Small Business Lending Companies with preferred lender status from the SBA, Ready Capital (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, and services commercial real estate loans, small business loans, and other real estate investments.

Ready Capital reported revenues of -$26.37 million, up 29.4% year on year. This print fell short of analysts’ expectations by 155%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ tangible book value per share and net interest income estimates.

“As we begin to emerge from this CRE cycle, several items were completed since the first quarter which we believe will restore us to profitability”, said Thomas Capasse, Ready Capital’s Chairman and Chief Executive Officer.

Ready Capital delivered the weakest performance against analyst estimates of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $4.28.

Read our full report on Ready Capital here, it’s free.

Best Q2: Ellington Financial (NYSE: EFC)

Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial (NYSE: EFC) acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.

Ellington Financial reported revenues of $92.54 million, up 1.5% year on year, outperforming analysts’ expectations by 11.5%. The business had a stunning quarter with a solid beat of analysts’ tangible book value per share estimates and a beat of analysts’ EPS estimates.

The market seems happy with the results as the stock is up 9.8% since reporting. It currently trades at $13.91.

Is now the time to buy Ellington Financial? Access our full analysis of the earnings results here, it’s free.

Franklin BSP Realty Trust (NYSE: FBRT)

Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE: FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.

Franklin BSP Realty Trust reported revenues of $50.78 million, up 171% year on year, falling short of analysts’ expectations by 8.9%. It was a disappointing quarter as it posted a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 12.6% since the results and currently trades at $11.36.

Read our full analysis of Franklin BSP Realty Trust’s results here.

PennyMac Financial Services (NYSE: PFSI)

Founded during the 2008 financial crisis to help address the mortgage market meltdown, PennyMac Financial Services (NYSE: PFSI) is a specialty financial services company that originates, services, and manages investments related to residential mortgage loans in the United States.

PennyMac Financial Services reported revenues of $444.7 million, up 9.5% year on year. This number missed analysts’ expectations by 19.8%. More broadly, it was actually a strong quarter as it put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ net interest income estimates.

The stock is up 4.3% since reporting and currently trades at $108.86.

Read our full, actionable report on PennyMac Financial Services here, it’s free.

Flagstar Financial (NYSE: FLG)

Tracing its roots back to 1859 and rebranded from New York Community Bancorp in 2024, Flagstar Financial (NYSE: FLG) is a bank holding company that offers commercial and consumer banking services, with specialties in multi-family lending, mortgage originations, and warehouse lending.

Flagstar Financial reported revenues of $496 million, down 26.1% year on year. This print came in 4.6% below analysts' expectations. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts’ net interest income estimates and EPS in line with analysts’ estimates.

The stock is up 6.4% since reporting and currently trades at $12.81.

Read our full, actionable report on Flagstar Financial here, it’s free.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.