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Resource America, Inc. Reports Operating Results for the Fourth Quarter and Year Ended December 31, 2014

2015-03-04 20:46 ET - News Release

PHILADELPHIA, PA -- (Marketwired) -- 03/04/15

Resource America, Inc. (NASDAQ: REXI)

Fourth Quarter 2014 Highlights

  • Adjusted net income attributable to common shareholders of $2.1 million (see Schedule I)

  • Increased gross assets under management by 17% to $20.2 billion since December 31, 2013

    • Gross real estate assets under management increased 35% to $3.4 billion

    • Gross financial fund management assets under management increased 14% to $16.1 billion

    • Net assets under management increased 22% to $9.7 billion

  • Book value per common share of $7.47

  • Repurchased 239,790 shares at $9.31

Fourth Quarter 2014 Results

Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $2.1 million, or $0.09 per common share-diluted, and $12.1 million, or $0.54 per common share-diluted, for the three months and year ended December 31, 2014, respectively, as compared to adjusted net income attributable to common shareholders of $3.5 million, or $0.16 per common share-diluted, and $11.8 million, or $0.54 per common share-diluted, for the three months and year ended December 31, 2013, respectively. A reconciliation of the Company's reported GAAP net income attributable to common shareholders to adjusted net income attributable to common shareholders, a non-GAAP measure, is included as Schedule I to this release.

The Company reported GAAP net income attributable to common shareholders of $1.7 million, or $0.08 per common share-diluted, and $7.0 million, or $0.31 per common share-diluted, for the three months and year ended December 31, 2014, respectively, as compared to GAAP net income attributable to common shareholders of $1.4 million, or $0.06 per common share-diluted, and $6.4 million, or $0.29 per common share-diluted, for the three months and year ended December 31, 2013.

Assets Under Management

The following table details the Company's assets under management by operating segment which, in gross, increased by $2.9 billion (17%) from December 31, 2013 to 2014 (in billions):


                                                         December 31,
                                                 ---------------------------
                                                      2014          2013
                                                 ------------- -------------
Financial fund management                        $        16.1 $        14.2
Real estate                                                3.4           2.5
Commercial finance                                         0.7           0.6
                                                 ------------- -------------
                                                 $        20.2 $        17.3
                                                 ============= =============

  Net assets under management (1)                $         9.7 $         7.9
                                                 ============= =============

(1) Net assets under management represents the proportionate share of assets
    managed by the Company after reflecting joint venture arrangements.

A description of how the Company calculates assets under management is set forth in Item 1 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Highlights for the Fourth Quarter and Year Ended December 31, 2014 and Recent Developments

REAL ESTATE ASSET MANAGEMENT:

Equity Asset Management

Resource Real Estate Opportunity REIT, Inc. ("Opportunity REIT I"), a public non-traded real estate investment trust ("REIT") managed by the Company which specializes in acquiring and managing distressed real estate assets, had the following highlights:

  • Increased total assets to $978.4 million at December 31, 2014, an increase of $299.8 million, or 44%, from $678.6 million at December 31, 2013.

  • Acquired $19.9 million and $427.0 million of multifamily assets and placed financing of $57.3 million and $347.8 million during the three months and year ended December 31, 2014. In addition, disposed of $30.1 million of multifamily assets during the year ended December 31, 2014.

  • In October 2014, the Board of Directors of Opportunity REIT I authorized a 50% increase to the annual distribution rate to 6% from 4%.

Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II"), a public non-traded real estate investment trust ("REIT") managed by the Company, commenced its initial public offering in early 2014. Opportunity REIT II is offering up to $1.0 billion in common stock and specializes in acquiring multifamily rental properties and selected loans. Opportunity REIT II had the following highlights:

  • Raised $47.2 million as of December 31, 2014 and $90.4 million through March 3, 2015.

  • Acquired $54.3 million and $67.0 million of multifamily assets and placed financing of $31.1 million and $38.5 during the three months and year ended December 31, 2014.

Debt Asset Management

Resource Capital Corp. ("RSO"), a publicly-traded REIT managed by the Company which focuses on commercial real estate assets, had the following highlights:

  • Originated $302.3 million and $777.3 million in new commercial real estate loans during the three months and year ended December 31, 2014.

  • During the three months and year ended December 31, 2014, raised $25.5 million and $202.7 million in equity capital through its DRIP and preferred equity programs.

  • In October 2014, RSO's Board of Directors authorized RSO to repurchase up to $50.0 million of its outstanding common stock.

  • In January 2015, completed a $100.0 million public offering of its 8.00% convertible senior notes due 2020.

  • In February 2015, completed a $346.2 million commercial real estate securitization that issued $282.1 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.90%.

The following additional highlight contributed to our real estate asset management operations:

  • The Company's real estate operating segment increased its gross assets under management at December 31, 2014 to $3.4 billion, an increase of $865.0 million, or 35%, from December 31, 2013.

FINANCIAL FUND MANAGEMENT:

Credit Asset Management

CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XIX, Ltd. (issuing notes with a par value of $500.0 million) and CVC Cordatus Loan Fund IV Limited (issuing notes with a par of EUR400.0 million) during the quarter. In February 2015, CCP closed Apidos CLO XX, Ltd. (issuing notes with a par value of $500.0 million). Since creating this joint venture in April 2012, CCP has closed 13 collateralized loan obligation issuers (issuing notes with a total par value of $6.8 billion) and expects to receive approximately $31.8 million in fees on an annual run rate basis. The Company has a 33% interest in this joint venture.

The following additional highlights contributed to our financial fund asset management operations:

  • The Company's financial fund management operating segment increased its gross assets under management at December 31, 2014 to $16.1 billion, an increase of $1.9 billion, or 14%, from December 31, 2013.

  • Financial fund management revenues increased 68% and 44%, to $7.6 million and $28.4 million, for the three months and year ended December 31, 2014, respectively, as compared to $4.5 million and $19.8 million for the three months and year ended December 31, 2013, respectively.

CORPORATE/OTHER:

Share Repurchases

  • In September 2014, the Company's Board of Directors authorized the Company to repurchase up to an additional 1.5 million shares of its outstanding common stock.

  • The Company repurchased 239,790 of its shares during the fourth quarter ended December 31, 2014 at an average price of $9.31 per share.

Dividends

  • The Company's Board of Directors authorized a cash dividend of $0.06 per share on the Company's common stock which was paid on January 30, 2015 to holders of record as of the close of business on January 16, 2015.

  • RSO's Board of Directors declared a cash dividend of $0.20 per common share for its three months ended December 31, 2014.

Resource America, Inc. is a specialized asset management company that uses industry specific expertise to evaluate, originate, service and manage investment opportunities for its own account, for its joint ventures, and for outside investors in the real estate, financial fund management and commercial finance sectors.

For more information, please visit our website at www.resourceamerica.com or contact investor relations at pkamdar@resourceamerica.com.

Statements made in this release include forward-looking statements, which involve substantial risks and uncertainties. The Company's actual results, performance or achievements could differ materially from those expressed or implied in this release and its other reports filed with the Securities and Exchange Commission, or SEC. For information pertaining to risks relating to these forward-looking statements, reference is made to the section "Risk Factors" contained in Item 1A of the Company's Annual Report on Form 10-K and in other of its public filings with the SEC. The Company undertakes no obligation to update or revise any forward-looking statements to reflect new or changing information or events except as may be required by law.

A registration statement relating to securities offered by Opportunity REIT II was declared effective by the SEC on February 6, 2014. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The remainder of this release contains the Company's unaudited consolidated balance sheets, consolidated statements of operations, consolidating statements of operations and reconciliation of GAAP net income attributable to common shareholders to adjusted net income attributable to common shareholders.


                           RESOURCE AMERICA, INC
                        CONSOLIDATED BALANCE SHEETS
                     (in thousands, except share data)
                                (unaudited)

                                                         December 31,
                                                   ------------------------
                                                       2014         2013
                                                   -----------  -----------

ASSETS
  Cash                                             $    28,031  $    19,853
  Restricted cash                                          725          571
  Receivables                                              636          541
  Loans and receivables from managed entities and
   related parties, net                                 30,303       30,923
  Investments in real estate, net                       17,097       17,696
  Investment securities, at fair value                   9,540        7,839
  Investments in unconsolidated loan manager            39,655       37,821
  Investments in unconsolidated entities                13,089       14,342
  Assets of consolidated variable interest entity
   ("VIE") - RSO
    Cash and cash equivalents (including restricted
     cash)                                             202,043      325,579
    Investments, at fair value                         296,506      221,395
    Loans                                            2,038,435    1,397,458
    Investments in real estate and unconsolidated
     entities                                           60,007      129,562
    Other assets                                       131,481       76,467
                                                   -----------  -----------
      Total assets of consolidated VIE - RSO         2,728,472    2,150,461
                                                   -----------  -----------

  Property and equipment, net                            5,063        5,844
  Deferred tax assets, net                              23,304       27,769
    Other assets                                         5,416        4,791
                                                   -----------  -----------
  Total assets                                     $ 2,901,331  $ 2,318,451
                                                   ===========  ===========

LIABILITIES AND EQUITY
Liabilities:
  Accrued expenses and other liabilities           $    22,279  $    22,134
  Payables to managed entities and related parties       3,504        3,110
  Borrowings                                            20,412       20,619
  Liabilities of consolidated VIE - RSO
    Borrowings                                       1,717,132    1,320,015
    Other liabilities                                   57,561       55,247
                                                   -----------  -----------
    Total liabilities of consolidated VIE - RSO      1,774,693    1,375,262
                                                   -----------  -----------
      Total liabilities                              1,820,888    1,421,125
                                                   -----------  -----------

Commitments and contingencies

Equity:
  Preferred stock, $1.00 par value, 1,000,000
   shares authorized; none outstanding                       -            -
  Common stock, $.01 par value, 49,000,000 shares
   authorized;34,489,568 and 30,378,339 shares
   issued (including nonvested restricted stock of
   833,082 and 400,194), respectively                      335          299
  Additional paid-in capital                           308,134      288,555
  Accumulated deficit                                  (23,663)     (26,025)
  Treasury stock, at cost; 11,764,417 and
   10,434,436 shares, respectively                    (120,182)    (107,874)
  Accumulated other comprehensive loss                  (1,030)      (1,231)
                                                   -----------  -----------
    Total stockholders' equity                         163,594      153,724
  Noncontrolling interests                                 306          238
  Noncontrolling interests attributable to RSO         916,543      743,364
                                                   -----------  -----------
    Total equity                                     1,080,443      897,326
                                                   -----------  -----------
                                                   $ 2,901,331  $ 2,318,451
                                                   ===========  ===========



                           RESOURCE AMERICA, INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                   (in thousands, except per share data)
                                (unaudited)

                                  Three Months Ended        Years Ended
                                     December 31,          December 31,
                                 --------------------  --------------------
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
REVENUES:
Real estate (includes revenues
 of $2,721, $2,806, $10,349 and
 $12,600 related to RSO)         $  13,849  $  17,700  $  54,861  $  57,143
Financial fund management
 (includes revenues of $498,
 $400, $2,983 and $1,120 related
 to RSO)                             7,627      4,539     28,400     19,773
Commercial finance (no revenues
 related to RSO)                        (6)       (98)      (164)      (341)
                                 ---------  ---------  ---------  ---------
                                    21,470     22,141     83,097     76,575
Revenues from consolidated VIE -
 RSO                                24,563      4,232     99,446     82,983
Elimination of consolidated VIE
 - RSO revenues attributed to
 operating segments                 (3,208)    (3,226)   (13,264)   (13,834)
                                 ---------  ---------  ---------  ---------
  Total revenues                    42,825     23,147    169,279    145,724
                                 ---------  ---------  ---------  ---------
COSTS AND EXPENSES:
Real estate                         10,047     11,098     37,411     40,612
Financial fund management            4,844      2,386     14,824     10,155
Commercial finance                     396        155        979         56
General and administrative           3,041      3,461     11,118     10,268
Provision for credit losses           (284)       472      3,058      4,265
Depreciation and amortization          450        618      1,819      1,936
                                 ---------  ---------  ---------  ---------
                                    18,494     18,190     69,209     67,292
Expenses from consolidated VIE -
 RSO                                21,411     17,889     64,995     60,999
Elimination of consolidated VIE
 expenses attributed to
 operating segments                 (3,227)    (3,037)   (12,601)   (13,215)
                                 ---------  ---------  ---------  ---------
  Total expenses                    36,678     33,042    121,603    115,076
                                 ---------  ---------  ---------  ---------
OPERATING INCOME (LOSS)              6,147     (9,895)    47,676     30,648
                                 ---------  ---------  ---------  ---------

OTHER INCOME (EXPENSE):
Gain on sale of investment
 securities, net                         6          -        445          -
Other-than-temporary impairment
 on investments                          -          -          -       (214)
Interest expense                      (458)      (511)    (1,905)    (2,036)
Other income, net                      (20)       175        243        575
Other income, net, from
 consolidated VIE - RSO              7,978      9,561     25,505     23,428
Elimination of consolidated VIE
 other income attributed to
 operating segments                     11         20         51        244
                                 ---------  ---------  ---------  ---------
                                     7,517      9,245     24,339     21,997
                                 ---------  ---------  ---------  ---------
Income (loss) from continuing
 operations before taxes            13,664       (650)    72,015     52,645
Income tax provision                   862      2,053      5,853      1,657
Income tax benefit - RSO            (1,545)    (5,262)    (2,212)    (1,041)
                                 ---------  ---------  ---------  ---------
Income from continuing
 operations                         14,347      2,559     68,374     52,029
Loss from discontinued
 operations, net of tax                  -          -          -         (2)
                                 ---------  ---------  ---------  ---------
Net income                          14,347      2,559     68,374     52,027
Net (income) loss attributable
 to noncontrolling interest            (56)         3        (89)       (20)
Net income attributable to
 noncontrolling interests of
 consolidated VIE - RSO            (12,547)    (1,187)   (61,317)   (45,581)
                                 ---------  ---------  ---------  ---------
Net income attributable to
 common shareholders             $   1,744  $   1,375  $   6,968  $   6,426
                                 =========  =========  =========  =========

Amounts attributable to common
 shareholders:
Income from continuing
 operations                      $   1,744  $   1,375  $   6,968  $   6,428
Discontinued operations                  -          -          -         (2)
                                 ---------  ---------  ---------  ---------
Net income                       $   1,744  $   1,375  $   6,968  $   6,426
                                 =========  =========  =========  =========



                           RESOURCE AMERICA, INC.
            CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued)
                   (in thousands, except per share data)
                                (unaudited)

                                  Three Months Ended        Years Ended
                                     December 31,          December 31,
                                 --------------------  --------------------
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
Basic earnings per share:
Continuing operations            $    0.08  $    0.07  $    0.33  $    0.32
Discontinued operations                  -          -          -          -
                                 ---------  ---------  ---------  ---------
Net income                       $    0.08  $    0.07  $    0.33  $    0.32
                                 ---------  ---------  ---------  ---------
Weighted average shares
 outstanding                        22,817     20,104     21,148     20,217
                                 =========  =========  =========  =========

Diluted earnings per share:
Continuing operations            $    0.08  $    0.06  $    0.31  $    0.29
Discontinued operations                  -          -          -          -
                                 ---------  ---------  ---------  ---------
Net income                       $    0.08  $    0.06  $    0.31  $    0.29
                                 =========  =========  =========  =========
Weighted average shares
 outstanding                        23,094     21,828     22,371     21,905
                                 =========  =========  =========  =========



                           RESOURCE AMERICA, INC.
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                               (in thousands)
                                (unaudited)

 The following table presents the consolidating statement of operations for
                 the fourth quarter ended December 31, 2014:

                              RAI        RSO     Eliminations  Consolidated
                           ---------  ---------  ------------  ------------
REVENUES:
Real estate                $  13,849  $       -  $          -  $     13,849
Financial fund management      7,627          -             -         7,627
Commercial finance                (6)         -             -            (6)
                           ---------  ---------  ------------  ------------
                              21,470          -             -        21,470
Revenues from consolidated
 VIE - RSO                         -     24,563             -        24,563
Elimination of consolidated
 VIE revenues attributed to
 operating segments                -          -        (3,208)       (3,208)
                           ---------  ---------  ------------  ------------
  Total revenues              21,470     24,563        (3,208)       42,825
                           ---------  ---------  ------------  ------------

COSTS AND EXPENSES:
Real estate                   10,047          -             -        10,047
Financial fund management      4,844          -             -         4,844
Commercial finance               396          -             -           396
General and administrative     3,041          -             -         3,041
Provision for credit losses     (284)         -             -          (284)
Depreciation and
 amortization                    450          -             -           450
                           ---------  ---------  ------------  ------------
                              18,494          -             -        18,494
Expenses from consolidated
 VIE - RSO                         -     19,866         1,545        21,411
Elimination of consolidated
 VIE expenses attributed to
 operating segments                -          -        (3,227)       (3,227)
                           ---------  ---------  ------------  ------------
  Total expenses              18,494     19,866        (1,682)       36,678
                           ---------  ---------  ------------  ------------
OPERATING INCOME               2,976      4,697        (1,526)        6,147
                           ---------  ---------  ------------  ------------

OTHER INCOME (EXPENSE):
Gain on sale of investment
 securities, net                   6          -             -             6
Interest expense                (458)         -             -          (458)
Other income, net                553          -          (573)          (20)
Other income, net, from
 consolidated VIE - RSO            -      7,978             -         7,978
Elimination of consolidated
 VIE other income, net             -          -            11            11
                           ---------  ---------  ------------  ------------
                                 101      7,978          (562)        7,517
                           ---------  ---------  ------------  ------------
Income before taxes            3,077     12,675        (2,088)       13,664
Income tax provision
 (benefit)                       862          -        (1,545)         (683)
                           ---------  ---------  ------------  ------------
Net income                     2,215     12,675          (543)       14,347
Net income attributable to
 noncontrolling interests        (56)         -             -           (56)
Net income attributable to
 noncontrolling interests -
 RSO                               -     (5,769)       (6,778)      (12,547)
                           ---------  ---------  ------------  ------------
Net income attributable to
 common shareholders       $   2,159  $   6,906  $     (7,321) $      1,744
                           =========  =========  ============  ============



                           RESOURCE AMERICA, INC.
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                               (in thousands)
                                (unaudited)

 The following table presents the consolidating statement of operations for
                 the fourth quarter ended December 31, 2013:

                              RAI        RSO     Eliminations  Consolidated
                           ---------  ---------  ------------  ------------
REVENUES:
Real estate                $  17,700  $       -  $          -  $     17,700
Financial fund management      4,539          -             -         4,539
Commercial finance               (98)         -             -           (98)
                           ---------  ---------  ------------  ------------
                              22,141          -             -        22,141
Revenues from consolidated
 VIE - RSO                         -      4,232             -         4,232
Elimination of consolidated
 VIE revenues attributed to
 operating segments                -          -        (3,226)       (3,226)
                           ---------  ---------  ------------  ------------
Total revenues                22,141      4,232        (3,226)       23,147
                           ---------  ---------  ------------  ------------

COSTS AND EXPENSES:
Real estate                   11,098          -             -        11,098
Financial fund management      2,386          -             -         2,386
Commercial finance               155          -             -           155
General and administrative     3,461          -             -         3,461
Provision for credit losses      472          -             -           472
Depreciation and
 amortization                    618          -             -           618
                           ---------  ---------  ------------  ------------
                              18,190          -             -        18,190
Expenses from consolidated
 VIE - RSO                         -     12,627         5,262        17,889
Elimination of consolidated
 VIE expenses attributed to
 operating segments                -          -        (3,037)       (3,037)
                           ---------  ---------  ------------  ------------
Total expenses                18,190     12,627         2,225        33,042
                           ---------  ---------  ------------  ------------
OPERATING INCOME (LOSS)        3,951     (8,395)       (5,451)       (9,895)
                           ---------  ---------  ------------  ------------

OTHER INCOME (EXPENSE):
Interest expense                (511)         -             -          (511)
Other income, net                747          -          (572)          175
Other income, net, from
 consolidated VIE - RSO            -      9,561             -         9,561
Elimination of consolidated
 VIE other income, net             -          -            20            20
                           ---------  ---------  ------------  ------------
                                 236      9,561          (552)        9,245
                           ---------  ---------  ------------  ------------
Income before taxes            4,187      1,166        (6,003)         (650)
Income tax provision
 (benefit)                     2,053          -        (5,262)       (3,209)
                           ---------  ---------  ------------  ------------
Net income                     2,134      1,166          (741)        2,559
Net loss attributable to
 noncontrolling interests          3          -             -             3
Net income attributable to
 noncontrolling interests -
 RSO                               -     (2,114)          927        (1,187)
                           ---------  ---------  ------------  ------------
Net income (loss)
 attributable to common
 shareholders              $   2,137  $    (948) $        186  $      1,375
                           =========  =========  ============  ============



                           RESOURCE AMERICA, INC.
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                               (in thousands)
                                (unaudited)

 The following table presents the consolidating statement of operations for
                      the year ended December 31, 2014:

                              RAI        RSO     Eliminations  Consolidated
                           ---------  ---------  ------------  ------------
REVENUES:
Real estate                $  54,861  $       -  $          -  $     54,861
Financial fund management     28,400          -             -        28,400
Commercial finance              (164)         -             -          (164)
                           ---------  ---------  ------------  ------------
                              83,097          -             -        83,097
Revenues from consolidated
 VIE - RSO                         -     99,446             -        99,446
Elimination of consolidated
 VIE - RSO revenues
 attributed to operating
 segments                          -          -       (13,264)      (13,264)
                           ---------  ---------  ------------  ------------
  Total revenues              83,097     99,446       (13,264)      169,279
                           ---------  ---------  ------------  ------------

COSTS AND EXPENSES:
Real estate                   37,411          -             -        37,411
Financial fund management     14,824          -             -        14,824
Commercial finance               979          -             -           979
General and administrative    11,118          -             -        11,118
Provision for credit losses    3,058          -             -         3,058
Depreciation and
 amortization                  1,819          -             -         1,819
                           ---------  ---------  ------------  ------------
                              69,209          -             -        69,209
Expenses from consolidated
 VIE - RSO                         -     62,783         2,212        64,995
Elimination of consolidated
 VIE - RSO expenses
 attributed to operating
 segments                          -          -       (12,601)      (12,601)
                           ---------  ---------  ------------  ------------
  Total expenses              69,209     62,783       (10,389)      121,603
                           ---------  ---------  ------------  ------------
OPERATING INCOME              13,888     36,663        (2,875)       47,676
                           ---------  ---------  ------------  ------------

OTHER INCOME (EXPENSE):
Gain on sale of investment
 securities, net                 445          -             -           445
Interest expense              (1,905)         -             -        (1,905)
Other income, net              2,532          -        (2,289)          243
Other income, net, from
 consolidated VIE - RSO            -     25,505             -        25,505
Elimination of consolidated
 VIE -RSO other income, net        -          -            51            51
                           ---------  ---------  ------------  ------------
                               1,072     25,505        (2,238)       24,339
                           ---------  ---------  ------------  ------------
Income from operations
 before taxes                 14,960     62,168        (5,113)       72,015
Income tax provision           5,853          -        (2,212)        3,641
                           ---------  ---------  ------------  ------------
Net income                     9,107     62,168        (2,901)       68,374
Net income attributable to
 noncontrolling interests        (89)         -             -           (89)
Net income attributable to
 noncontrolling interests -
 RSO                               -    (18,141)      (43,176)      (61,317)
                           ---------  ---------  ------------  ------------
Net income attributable to
 common shareholders       $   9,018  $  44,027  $    (46,077) $      6,968
                           =========  =========  ============  ============



                           RESOURCE AMERICA, INC.
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                               (in thousands)
                                (unaudited)

 The following table presents the consolidating statement of operations for
                      the year ended December 31, 2013:

                              RAI        RSO     Eliminations  Consolidated
                           ---------  ---------  ------------  ------------
REVENUES:
Real estate                $  57,143  $       -  $          -  $     57,143
Financial fund management     19,773          -             -        19,773
Commercial finance              (341)         -             -          (341)
                           ---------  ---------  ------------  ------------
                              76,575          -             -        76,575
Revenues from consolidated
 VIE - RSO                         -     82,983             -        82,983
Elimination of consolidated
 VIE revenues attributed to
 operating segments                -          -       (13,834)      (13,834)
                           ---------  ---------  ------------  ------------
Total revenues                76,575     82,983       (13,834)      145,724
                           ---------  ---------  ------------  ------------
COSTS AND EXPENSES:
Real estate                   40,612          -             -        40,612
Financial fund management     10,155          -             -        10,155
Commercial finance                56          -             -            56
General and administrative    10,268          -             -        10,268
Provision for credit losses    4,265          -             -         4,265
Depreciation and
 amortization                  1,936          -             -         1,936
                           ---------  ---------  ------------  ------------
                              67,292          -             -        67,292
Expenses from consolidated
 VIE - RSO                         -     59,958         1,041        60,999
Elimination of consolidated
 VIE expenses attributed to
 operating segments                -          -       (13,215)      (13,215)
                           ---------  ---------  ------------  ------------
Total expenses                67,292     59,958       (12,174)      115,076
                           ---------  ---------  ------------  ------------
OPERATING INCOME               9,283     23,025        (1,660)       30,648
                           ---------  ---------  ------------  ------------

OTHER INCOME (EXPENSE):
Other-than-temporary
 impairment on investments      (214)         -             -          (214)
Interest expense              (2,036)         -             -        (2,036)
Other income, net              2,816          -        (2,241)          575
Other income, net, from
 consolidated VIE - RSO            -     23,428             -        23,428
Elimination of consolidated
 VIE other income, net             -          -           244           244
                           ---------  ---------  ------------  ------------
                                 566     23,428        (1,997)       21,997
                           ---------  ---------  ------------  ------------
Income from continuing
 operations before taxes       9,849     46,453        (3,657)       52,645
Income tax provision           1,657          -        (1,041)          616
                           ---------  ---------  ------------  ------------
Income from continuing
 operations                    8,192     46,453        (2,616)       52,029
Loss from discontinued
 operations, net of tax           (2)         -             -            (2)
                           ---------  ---------  ------------  ------------
Net income                     8,190     46,453        (2,616)       52,027
Net income attributable to
 noncontrolling interests        (20)         -             -           (20)
Net income attributable to
 noncontrolling interests -
 RSO                               -     (7,221)      (38,360)      (45,581)
                           ---------  ---------  ------------  ------------
Net income attributable to
 common shareholders       $   8,170  $  39,232  $    (40,976) $      6,426
                           =========  =========  ============  ============



Schedule I



  RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO
        ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (1)
                   (in thousands, except per share data)
                                (unaudited)


                                    Three Months Ended      Years Ended
                                       December 31,         December 31,
                                   -------------------- -------------------
                                      2014       2013      2014      2013
                                   ---------  --------- --------- ---------
Net income attributable to common
 shareholders - GAAP               $   1,744  $   1,375 $   6,968 $   6,426

Adjustments, net of tax:
Loss, net of eliminations,
 attributable to consolidation of
 RSO                                     415        762     2,050     1,744
Loss attributable to commercial
 finance                                  81        464     2,661     4,430
Deferred tax (benefit) provision        (105)       887       380      (805)
                                   ---------  --------- --------- ---------
Adjusted net income attributable
 to common shareholders            $   2,135  $   3,488 $  12,059 $  11,795
                                   =========  ========= ========= =========

Adjusted weighted average diluted
 shares outstanding                   23,094     21,828    22,371    21,905
                                   =========  ========= ========= =========

Adjusted net income attributable
 to common shareholders per common
 per share-diluted                 $    0.09  $    0.16 $    0.54 $    0.54
                                   =========  ========= ========= =========

(1) Adjusted net income attributable to common shareholders presents the
    Company's operations prior to the consolidation of RSO and without the
    effect of its commercial finance operations and deferred tax (benefit)
    provision. The Company believes that this provides useful information to
    investors since it allows investors to evaluate the Company's progress
    in both its real estate and financial fund management segments for the
    three months and year ended December 31, 2014 and 2013 separately from
    its commercial finance operations, RSO and deferred tax (benefit)
    provision. Adjusted net income attributable to common shareholders
    should not be considered as an alternative to net income attributable to
    common shareholders (computed in accordance with GAAP). Instead,
    adjusted net income attributable to common shareholders should be
    reviewed in connection with net income attributable to common
    shareholders in the Company's consolidated financial statements, to help
    analyze how the Company's business is performing.


Contact:
Thomas C. Elliott
Chief Financial Officer
Resource America, Inc.
One Crescent Drive, Suite 203
Philadelphia, PA 19112
(215) 546-5005
(215) 640-6357 (fax)


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