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Resource Capital Corp. Reports Results for Three Months Ended March 31, 2015

2015-05-05 20:00 ET - News Release

NEW YORK, NY -- (Marketwired) -- 05/05/15

Resource Capital Corp. (NYSE: RSO)

Highlights

  • Adjusted Funds from Operations ("AFFO") of $0.16 per share-diluted (see Schedule I).

  • Total assets increased $204.5 million, or 7.5%, as compared to December 31, 2014.

  • Net interest income increased $5.3 million, or 30.3%, as compared to the three months ended March 31, 2014.

  • Originated $156.8 million in new Commercial Real Estate ("CRE") loans during the period.

  • Originated $58.0 million of middle market loans during the period.

  • GAAP net income allocable to common shares of $0.07 per share-diluted.

  • Closed a $346.2 million CRE securitization at a weighted average cost of LIBOR + 190 bps.

  • Common stock cash dividend of $0.16 per share.

Resource Capital Corp. (NYSE: RSO) ("RSO" or the "Company"), a real estate investment trust, or REIT, whose investment strategy focuses on CRE assets, commercial mortgage-backed securities ("CMBS"), commercial finance assets and other investments, reported results for the three months ended March 31, 2015.

  • AFFO for the three months ended March 31, 2015 was $21.3 million, or $0.16 per share-diluted as compared to $25.0 million, or $0.20 per share-diluted for the three months ended March 31, 2014. A reconciliation of GAAP net income to AFFO is set forth in Schedule I of this release.

  • GAAP net income allocable to common shares for the three months ended March 31, 2015 was $9.4 million, or $0.07 per share-diluted compared to $15.1 million, or $0.12 per share-diluted for the three months ended March 31, 2014.

Additional highlights:

Commercial Real Estate

  • CRE loan portfolio is comprised of approximately 94% senior whole loans as of March 31, 2015, remaining constant as compared to December 31, 2014.

  • RSO has London Interbank Offered Rate ("LIBOR") floors on $1.2 billion of its CRE portfolio, with a weighted average of 0.56%, or 38 basis points above 1-month LIBOR, as of March 31, 2015.

  • CRE portfolio interest income increased by 59.4% to $20.4 million during the first quarter of 2015, from $12.8 million during the first quarter of 2014.

  • RSO closed and funded $709.0 million of new whole loans in the last 12 months with a weighted average yield of 5.71%, including origination fees.

The following table summarizes RSO's CRE loan activities and fundings of previous commitments, at par, for the three and 12 months ended March 31, 2015 (in millions, except percentages):


                              Three                   Floating
                              Months     12 Months    Weighted
                              Ended        Ended       Average    Weighted
                            March 31,    March 31,    Spread(1)   Average
                               2015         2015         (2)     Fixed Rate
                           -----------  -----------  ----------  ----------
New whole loans funded and
 originated                $     149.1  $     709.0        4.86%       3.25%
Unfunded loan commitments          7.7        108.3
                           -----------  -----------
New loans originated             156.8        817.3
Payoffs (3)                      (65.8)      (202.5)
Previous commitments
 funded                           16.5         34.5
Principal pay downs               (0.6)        (5.3)
Unfunded loan commitments         (7.7)      (108.3)
                           -----------  -----------
Loans, net funded          $      99.2  $     535.7
                           ===========  ===========

(1) Represents the weighted-average rate above the one-month LIBOR on loans
    whose interest rate is based on LIBOR as of March 31, 2015. Of the loans
    originated during the first quarter of 2015, $137.2 million have LIBOR
    floors with a weighted average floor of 0.25%.
(2) Reflects rates on new whole loans funded and originated during the three
    months ended March 31, 2015.
(3) CRE loan payoffs and extensions resulted in $367,000 of fees earned
    during the three months ended March 31, 2015.

Residential Mortgage Investments

  • Originated $244.1 million of agency mortgage loans and $32.2 million of jumbo mortgage loans during the quarter ended March 31, 2015, as compared to $71.2 million of agency mortgage loans and no jumbo mortgage loans during the quarter ended March 31, 2014.

  • Primary Capital Mortgage ("PCM"), our wholly-owned subsidiary, services over $1.2 billion of residential mortgage loans as of March 31, 2015.

Commercial Finance

  • Increased the total commitment on a syndicated revolving credit facility used to fund middle market loans by $15.0 million from $125.0 million to $140.0 million in March 2015. At March 31, 2015, $135.0 million was outstanding on the facility.

  • Middle market loan portfolio was $294.8 million at amortized cost, with a weighted-average spread of one-month and three-month LIBOR plus 8.31% at March 31, 2015.

  • Bank loan portfolio, including asset-backed securities ("ABS"), corporate bonds, and loans held for sale was $311.1 million at amortized cost, with a weighted-average spread of one-month and three-month LIBOR plus 3.69% at March 31, 2015. RSO's bank loan portfolio was completely match-funded through two CLO issuances.

  • RSO earned $1.0 million of net fees through its subsidiary, Resource Capital Asset Management, during the three months ended March 31, 2015.

The following table summarizes RSO's middle market loan activities and fundings of previous commitments, at par, for the three months and 12 months ended March 31, 2015 (in millions, except percentages):


                        Three
                        Months   12 Months             Weighted
                        Ended      Ended    Weighted    Average    Weighted
                      March 31,  March 31,   Average     All-in    Average
                         2015       2015    Spread(2)   Rate(1)     Yield
                      ---------  ---------  ---------  ---------  ---------
New middle market
 loans funded and
 originated (2)       $    50.0  $   269.3       8.31%      9.34%      9.90%
Unfunded loan
 commitments                8.0       14.6
                      ---------  ---------
New loans originated       58.0      283.9
Payoffs and Sales         (22.9)     (46.5)
Previous commitments
 funded                     4.2       12.1
Principal pay downs        (1.6)     (12.6)
Unfunded loan
 commitments               (8.0)     (14.6)
                      ---------  ---------
Loans, net            $    29.7  $   222.3
                      =========  =========

(1) Represents the weighted-average rate above the one-month and three-month
    LIBOR on loans whose interest rate is based on LIBOR as of March 31,
    2015, excluding fees. Of these loans, $243.7 million have LIBOR floors
    with a weighted average floor of 1.23%
(2) Reflects rates on RSO's portfolio balance as of March 31, 2015,
    excluding fees.

Corporate

  • RSO sold approximately 139,000 shares of 8.25% Series B Cumulative Preferred Stock, at a weighted average price of $22.34 and with a liquidation preference of $25.00 per share, for net proceeds of $3.0 million during the three months ended March 31, 2015, pursuant to an at-the-market program.

  • RSO issued $100.0 million of 8.0% Convertible Senior Notes, due 2020, generating net proceeds of $97.0 million after underwriter's commissions and discounts. The proceeds will be utilized to fund RSO's growing CRE portfolio, middle market loans and other investment opportunities.

Liquidity

At April 30, 2015, after paying our first quarter 2015 common and preferred stock dividends, our liquidity is derived from three primary sources:

  • unrestricted cash and cash equivalents of $138.2 million, restricted cash of $500,000 in margin call accounts and $750,000 in the form of real estate escrows, reserves and deposits;

  • capital available for reinvestment in one of our CRE CDOs of $250,000 and one of our CRE securitizations of $1.9 million, all of which is designated to finance future funding commitments on CRE loans; and

  • loan principal repayments of $26.8 million that will pay down outstanding CLO note balances as well as interest collections of $3.1 million.

In addition, RSO has $297.1 million and $200.0 million available through two term financing facilities to finance the origination of CRE loans and $75.3 million available through a term financing facility to finance the purchase of CMBS. RSO also has $57.0 million available through a middle market syndicated revolving credit facility to finance the direct origination of middle market loans and purchase of syndicated bank loans.

Capital Allocation

As of March 31, 2015, RSO had allocated its invested equity capital among its targeted asset classes as follows: 72% in CRE assets, 24% in commercial finance assets and 4% in other investments.

Book Value

As of March 31, 2015, RSO's book value per common share was $5.00, a decrease from $5.07 per common share at December 31, 2014. Total stockholders' equity at March 31, 2015, which measures equity before the consideration of non-controlling interests, was $931.1 million, of which $274.7 million was attributable to preferred stock. Total stockholders' equity at December 31, 2014 was $935.5 million of which $271.7 million was attributable to preferred stock. The decrease in book value per common share of $0.07 was due to dividends on common stock paid of $0.16 per share, partially offset by net income allocable to common shares of $0.07, and other net mark to market adjustments of $0.02.

Investment Portfolio

The following table summarizes the amortized cost and net carrying amount of RSO's investment portfolio as of March 31, 2015, classified by asset type:


                                                 Net     Percent    Weighted
                                   Amortized  Carrying      of      Average
                                     Cost      Amount   Portfolio    Coupon
                                  ---------- ---------- ---------  ---------
       As of March 31, 2015
Loans Held for Investment:
  Commercial real estate loans
   (1):
    Whole loans                   $1,362,382 $1,358,459     52.67%   5.30%
    B notes                           16,031     16,009      0.62%   8.68%
    Mezzanine loans                   67,471     67,373      2.61%   7.47%
  Bank loans (4)                     224,317    223,597      8.67%   3.77%
  Middle market loans (5)            294,793    292,281     11.33%   9.34%
  Residential mortgage loans (6)       2,641      2,531      0.10%   4.55%
  Loans receivable-related party       1,229      1,229      0.05%   4.62%
                                  ---------- ---------- ---------
                                   1,968,864  1,961,479     76.05%
                                  ---------- ---------- ---------
Loans held for sale(2):
  Bank loans                          73,892     73,892      2.87%   4.01%
  Residential mortgage loans         174,559    174,362      6.76%   3.95%
                                  ---------- ---------- ---------
                                     248,451    248,254      9.63%
                                  ---------- ---------- ---------
Investments in Available-for-Sale
 Securities:
  CMBS-private placement             188,052    193,768      7.51%   5.19%
  RMBS                                28,964     30,156      1.17%   3.18%
  ABS                                 45,889     57,735      2.24%  N/A (3)
    Corporate Bonds                    2,417      2,411      0.09%   4.88%
                                  ---------- ---------- ---------
                                     265,322    284,070     11.01%
                                  ---------- ---------- ---------
Investment Securities-Trading:
  Structured notes                    31,762     29,770      1.15%  N/A (3)
                                  ---------- ---------- ---------
                                      31,762     29,770      1.15%
                                  ---------- ---------- ---------
Other (non-interest bearing):
  Property held for sale                 180        180      0.01%    N/A
  Investment in unconsolidated
   entities                           55,488     55,488      2.15%    N/A
                                  ---------- ---------- ---------
                                      55,668     55,668      2.16%
                                  ---------- ---------- ---------
Total Investment Portfolio        $2,570,067 $2,579,241    100.00%
                                  ========== ========== =========

(1) Net carrying amount includes allowance for loan losses of $4.0 million
    at March 31, 2015, allocated as follows: general allowance: B notes
    $22,000, mezzanine loans $98,000 and whole loans $1.7 million; specific
    allowance: whole loans $2.2 million.
(2) Loans held for sale are carried at the lower of cost or market.
(3) There is no stated rate associated with these securities.
(4) Net carrying amount includes allowance for loan losses of $720,000 at
    March 31, 2015.
(5) Net carrying amount includes allowance for loan losses of $2.5 million
    at March 31, 2015.
(6) Net carrying amount includes allowance for loan losses of $110,000 at
    March 31, 2015.

Supplemental Information

The following schedules of reconciliations and supplemental information as of March 31, 2015 are included at the end of this release:

  • Schedule I - Reconciliation of GAAP Net Income to Funds from Operations ("FFO") and AFFO.
  • Schedule II - Summary of Securitization Performance Statistics.
  • Supplemental Information regarding loan investment statistics, CRE loans and bank loans.

About Resource Capital Corp.

RSO is a real estate investment trust that is primarily focused on originating, holding and managing commercial mortgage loans and other commercial real estate-related debt and equity investments. RSO also makes other commercial finance and residential mortgage investments.

RSO is externally managed by Resource Capital Manager, Inc., an indirect wholly-owned subsidiary of Resource America, Inc. (NASDAQ: REXI), an asset management company that specializes in real estate and credit investments.

For more information, please visit RSO's website at www.resourcecapitalcorp.com or contact investor relations at pkamdar@resourcecapitalcorp.com.

Safe Harbor Statement

Statements made in this release may include forward-looking statements, which involve substantial risks and uncertainties. RSO's actual results, performance or achievements could differ materially from those expressed or implied in this release. The risks and uncertainties associated with forward-looking statements contained in this release include those related to:

  • fluctuations in interest rates and related hedging activities;
  • the availability of debt and equity capital to acquire and finance investments;
  • defaults or bankruptcies by borrowers on RSO's loans or on loans underlying its investments;
  • adverse market trends have in the past affected and may in the future affect the value of real estate and other assets underlying RSO's investments;
  • increases in financing or administrative costs; and
  • general business and economic conditions have in the past impaired and may in the future impair the credit quality of borrowers and RSO's ability to originate loans.

For further information concerning these and other risks pertaining to the forward-looking statements contained in this release, and to the general risks to which RSO is subject, see Item 1A, "Risk Factors" included in its Annual Report on Form 10-K and the risks expressed in other of its public filings with the Securities and Exchange Commission.

RSO cautions you not to place undue reliance on any forward-looking statements contained in this release, which speak only as of the date of this release. All subsequent written and oral forward-looking statements attributable to RSO or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this release. Except to the extent required by applicable law or regulation, RSO undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this filing or to reflect the occurrence of unanticipated events.

The remainder of this release contains RSO's unaudited consolidated balance sheets, unaudited consolidated statements of income, reconciliation of GAAP net income to FFO and AFFO, summary of securitization performance statistics and supplemental information regarding RSO's CRE loan, bank loan and middle market loan portfolios.


                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
              (in thousands, except share and per share data)

                                                   March 31,   December 31,
                                                     2015          2014
                                                 ------------  ------------
                                                  (unaudited)
ASSETS (1)
  Cash and cash equivalents                      $    217,361  $     79,905
  Restricted cash                                      26,768       122,138
  Investment securities, trading                       29,770        20,786
  Investment securities available-for-sale,
   pledged as collateral, at fair value               161,971       197,800
  Investment securities available-for-sale, at
   fair value                                         122,099        77,920
  Linked transactions, net at fair value                   --        15,367
  Loans held for sale                                 248,254       111,736
  Property held for sale                                  180           180
  Loans, pledged as collateral and net of
   allowances of $7.4 million and $4.6 million      1,960,250     1,925,980
  Loans receivable-related party                        1,229         1,277
  Investments in unconsolidated entities               55,488        59,827
  Derivatives, at fair value                           14,036         5,304
  Interest receivable                                  18,111        16,260
  Deferred tax asset, net                              12,579        12,634
  Principal paydown receivable                         26,906        40,920
  Direct financing leases                               1,951         2,109
  Intangible assets                                     9,229         9,736
  Prepaid expenses                                      4,263         4,196
  Other assets                                         22,761        24,604
                                                 ------------  ------------
    Total assets                                 $  2,933,206  $  2,728,679
                                                 ============  ============
LIABILITIES (2)
  Borrowings                                     $  1,924,598  $  1,716,871
  Distribution payable                                 25,521        30,592
  Accrued interest expense                              5,437         2,123
  Derivatives, at fair value                            8,860         8,476
  Accrued tax liability                                 6,982         9,219
  Accounts payable and other liabilities               13,091         9,287
                                                 ------------  ------------
    Total liabilities                               1,984,489     1,776,568
                                                 ------------  ------------
EQUITY
  Preferred stock, par value $0.001: 10,000,000
   shares authorized 8.50% Series A cumulative
   redeemable preferred shares, liquidation
   preference $25.00 per share, 1,069,016 and
   1,069,016 shares issued and outstanding                  1             1
  Preferred stock, par value $0.001: 10,000,000
   shares authorized 8.25% Series B cumulative
   redeemable preferred shares, liquidation
   preference $25.00 per share 5,740,479 and
   5,601,146 shares issued and outstanding                  6             6
  Preferred stock, par value $0.001: 10,000,000
   shares authorized 8.625% Series C cumulative
   redeemable preferred shares, liquidation
   preference $25.00 per share 4,800,000 and
   4,800,000 shares issued and outstanding                  5             5
  Common stock, par value $0.001: 500,000,000
   shares authorized; 134,158,805 and
   132,975,177 shares issued and outstanding
   (including 2,800,324 and 2,023,639 unvested
   restricted shares)                                     134           133
  Additional paid-in capital                        1,253,556     1,245,245
  Accumulated other comprehensive income (loss)         5,376         6,043
  Distributions in excess of earnings                (327,952)     (315,910)
                                                 ------------  ------------
    Total stockholders' equity                        931,126       935,523
  Non-controlling interests                            17,591        16,588
                                                 ------------  ------------
    Total equity                                      948,717       952,111
                                                 ------------  ------------
TOTAL LIABILITIES AND EQUITY                     $  2,933,206  $  2,728,679
                                                 ============  ============



                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEETS - (Continued)
              (in thousands, except share and per share data)

                                                   March 31,   December 31,
                                                      2015          2014
                                                 ------------  ------------
                                                  (unaudited)
(1) Assets of consolidated Variable Interest
 Entities ("VIEs") included in the total assets
 above:
  Cash and cash equivalents                      $        133  $         25
  Restricted cash                                      25,262       121,247
  Investment securities available-for-sale,
   pledged as collateral, at fair value                94,658       119,203
  Loans held for sale                                  73,892           282
  Loans, pledged as collateral and net of
   allowances of $4.2 million and $3.3 million      1,445,136     1,261,137
  Interest receivable                                   9,895         8,941
  Prepaid expenses                                        193           221
  Principal paydown receivable                         26,700        25,767
  Other assets                                           (742)          (12)
                                                 ------------  ------------
  Total assets of consolidated VIEs              $  1,675,127  $  1,536,811
                                                 ============  ============

(2) Liabilities of consolidated VIEs included in
 the total liabilities above:
  Borrowings                                     $  1,170,687  $  1,046,494
  Accrued interest expense                              1,329         1,000
  Derivatives, at fair value                            7,305         8,439
  Unsettled loan purchases                                 --          (529)
  Accounts payable and other liabilities                   56          (386)
                                                 ------------  ------------
  Total liabilities of consolidated VIEs         $  1,179,377  $  1,055,018
                                                 ============  ============

                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF INCOME
              (in thousands, except share and per share data)
                                (unaudited)

                                                 For the Three Months Ended
                                                          March 31,
                                                 --------------------------
                                                     2015          2014
                                                 ------------  ------------
REVENUES
  Interest income:
    Loans                                        $     32,663  $     20,229
    Securities                                          4,052         4,004
    Leases                                                 95            --
    Interest income - other                               832         2,852
                                                 ------------  ------------
      Total interest income                            37,642        27,085
  Interest expense                                     14,902         9,628
                                                 ------------  ------------
      Net interest income                              22,740        17,457
  Rental income                                            --         5,152
  Dividend income                                          16           136
  Fee income                                            1,605         2,500
                                                 ------------  ------------
    Total revenues                                     24,361        25,245
                                                 ------------  ------------
OPERATING EXPENSES
  Management fees - related party                       3,560         3,080
  Equity compensation - related party                     995         1,667
  Rental operating expense                                  6         3,396
  Lease operating                                          23            --
  General and administrative - Corporate                4,783         2,840
  General and administrative - PCM                      7,079         3,426
  Depreciation and amortization                           565           836
  Impairment losses                                        59            --
  Provision (recovery) for loan losses                  3,990        (3,960)
                                                 ------------  ------------
    Total operating expenses                           21,060        11,285
                                                 ------------  ------------
                                                        3,301        13,960
                                                 ------------  ------------
OTHER INCOME (EXPENSE)
  Equity in earnings of unconsolidated
   subsidiaries                                           706         2,014
  Net realized gain (loss) on sales of
   investment securities available-for-sale and
   loans and derivatives                               14,423         2,088
  Net realized and unrealized gain (loss) on
   investment securities, trading                       2,074        (1,560)
  Unrealized gain (loss) and net interest income
   on linked transactions, net                            235         2,305
  (Loss) on reissuance/gain on extinguishment of
   debt                                                  (900)          (69)
  (Loss) gain on sale of real estate                      (22)           --
  Other income (expense)                                   --        (1,262)
                                                 ------------  ------------
    Total other income (expense)                       16,516         3,516
                                                 ------------  ------------

INCOME (LOSS) BEFORE TAXES                             19,817        17,476
Income tax expense (benefit)                           (1,847)          (16)
                                                 ------------  ------------
NET INCOME (LOSS)                                      17,970        17,460

  Net (income) loss allocated to preferred
   shares                                              (6,091)       (2,400)
  Net (income) loss allocable to non-controlling
   interest, net of taxes                              (2,477)           56
                                                 ------------  ------------
NET INCOME (LOSS) ALLOCABLE TO COMMON SHARES     $      9,402  $     15,116
                                                 ============  ============
NET INCOME (LOSS) PER COMMON SHARE - BASIC       $       0.07  $       0.12
                                                 ============  ============
NET INCOME (LOSS) PER COMMON SHARE - DILUTED     $       0.07  $       0.12
                                                 ============  ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
 OUTSTANDING - BASIC                              131,256,909   125,616,537
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
 OUTSTANDING - DILUTED                            132,304,417   126,667,664



SCHEDULE I


                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES
              RECONCILIATION OF GAAP NET INCOME TO FFO and AFFO
                    (in thousands, except per share data)
                                 (unaudited)

Funds from Operations

The Company evaluates its performance based on several performance measures, including funds from operations, or FFO, and adjusted funds from operations ("AFFO") in addition to net income. The Company computes FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts as net income (computed in accordance with GAAP), excluding gains or losses on the sale of depreciable real estate, the cumulative effect of changes in accounting principles, real estate-related depreciation and amortization, and after adjustments for unconsolidated/uncombined partnerships and joint ventures.

AFFO is a computation made by analysts and investors to measure a real estate company's operating performance. The Company calculates AFFO by adding or subtracting from FFO the impact of non-cash accounting items as well as the effects of items that are deemed to be non-recurring in nature. The Company deems transactions to be non-recurring if a similar transaction has not occurred in the past two years, and if it does not expect a similar transaction to occur in the next two years. The Company adjusts for these non-cash and non-recurring items to analyze its ability to produce cash flow from on-going operations, which is used to pay dividends to its shareholders. Non-cash adjustments to FFO include the following: impairment losses resulting from fair value adjustments on financial instruments; provisions for loan losses; equity investment gains and losses; straight-line rental effects; share-based compensation expense; amortization of various deferred items and intangible assets; gains on sales of property that are wholly owned or owned through a joint venture; the cash impact of capital expenditures that are related to the Company's real estate owned; and REIT tax planning adjustments, which primarily relate to accruals for owned properties for which the Company made a foreclosure election and adjustments to tax estimates with respect to the final resolution of foreclosed property when it is listed for sale. In addition, the Company calculates AFFO by adding and subtracting from FFO the realized cash impacts of the following: extinguishment of debt, reissuances of debt, sales of property and capital expenditures.

Management believes that FFO and AFFO are appropriate measures of the Company's operating performance in that they are frequently used by analysts, investors and other parties in the evaluation of REITs. Management uses FFO and AFFO as measures of the Company's operating performance, and believes they are also useful to investors, because they facilitate an understanding of the Company's operating performance after adjustment for certain non-cash items, such as real estate depreciation, share-based compensation and various other items required by GAAP, and capital expenditures, that may not necessarily be indicative of current operating performance and that may not allow accurate period to period comparisons of the Company's operating performance.

While the Company's calculations of FFO and AFFO may differ from the methodology used for calculating FFO and AFFO by other REITs, and its FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs, the Company also believes that FFO and AFFO may provide the Company and its investors with an additional useful measure to compare its performance with some other REITs. Neither FFO nor AFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and AFFO do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor AFFO should be considered as an alternative to GAAP net income as an indicator of the Company's operating performance or as an alternative to cash flow from operating activities as a measure of its liquidity.

The following table reconciles GAAP net income to FFO and AFFO for the periods presented (unaudited) (in thousands, except share and per share data):


                                                 For the Three Months Ended
                                                          March 31,
                                                 --------------------------
                                                     2015          2014
                                                 ------------  ------------
Net income (loss) allocable to common shares -
 GAAP                                            $      9,402  $     15,116
Adjustments:
  Real estate depreciation and amortization                --           292
  (Gains) Losses on sales of property (1)                  22          (866)
  Gains on sale of preferred equity                        --          (984)
                                                 ------------  ------------
FFO                                                     9,424        13,558
Adjustments:
Non-cash items:
  Provision (recovery) for loan losses                  3,624          (125)
  Amortization of deferred costs (non real
   estate) and intangible assets                        3,183         2,223
  Equity investment (gains) losses                        (52)        1,282
  Share-based compensation                                995         1,667
  Impairment losses                                        59            --
  Unrealized losses (gains) on CMBS marks -
   linked transactions (2)                               (235)       (1,763)
  Unrealized (gains) losses on trading portfolio       (1,164)          442
  Unrealized gains (losses) on derivatives                416            --
  Straight-line rental adjustments                         --             2
  Loss on resale of debt                                  900            69
  PCM provisions on mortgage servicing rights             550           300
  Other adjustments                                       399            --
  REIT tax planning adjustments                           317           957
Cash items:
  Gains (losses) on sale of property (1)                  (22)          866
  Gains on sale of preferred equity                        --           984
  Gain (loss) on extinguishment of debt                 2,880         4,532
  Capital expenditures                                     --           (13)
                                                 ------------  ------------
  AFFO                                           $     21,274  $     24,981
                                                 ============  ============

Weighted average shares - diluted                     132,304       126,668

AFFO per share - diluted                         $       0.16  $       0.20
                                                 ============  ============

(1) Amount represents gains/losses on sales of owned real estate as well as
    sales of joint venture real estate interests that were recorded by RSO
    on an equity basis.
(2) As the result of an accounting standards update adopted on January 1,
    2015, RSO unlinked its previously linked transactions.



SCHEDULE II


                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES
              SUMMARY OF SECURITIZATION PERFORMANCE STATISTICS
                               (in thousands)
                                 (unaudited)

Securitizations - Distributions and Coverage Test Summary

The following table sets forth the distributions made and coverage test summaries for each of our securitizations for the periods presented (in thousands):


                                          Annualized
                                           Interest
                                           Coverage   Overcollateralization
      Name          Cash Distributions     Cushion           Cushion
                 ----------------------- ----------- -----------------------
                    Three
                    Months    Year Ended As of March                As of
                    Ended      December      31,     As of March   Initial
                   March 31,     31,       2015 (2)      31,     Measurement
                   2015 (1)    2014 (1)      (3)       2015 (4)      Date
                 ----------- ----------- ----------- ----------- -----------
Apidos CDO III
 (5)             $       596 $     3,551 $     2,304 $     9,907 $    11,269
Apidos Cinco CDO
 (6)             $     2,043 $     9,757 $     7,004 $    20,863 $    17,774
RREF 2006-1 (7)  $     1,015 $    10,172 $     3,012 $    83,739 $    24,941
RREF 2007-1 (8)  $    10,340 $     7,630 $     3,764 $    65,073 $    26,032
RCC CRE Notes
 2013 (9)        $     2,871 $    11,860         N/A         N/A         N/A
RCC 2014-CRE2
 (10)            $     3,906 $     5,463         N/A $    20,663 $    20,663
RCC 2015-CRE3
 (11)            $       111         N/A         N/A $    20,313 $    20,313
Moselle CLO S.A.
 (12)            $    28,757 $     2,891         N/A         N/A         N/A

* The above table does not include Apidos CDO I, Apidos CLO VIII or Whitney
CLO I, as these CLOs were previously called and were substantially
liquidated.
(1)  Distributions on retained equity interests in CDOs (comprised of note
     investments and preference share ownership) and principal paydowns on
     notes owned; RREF CDO 2006-1 includes $0 and $4.2 million of principal
     paydowns during the three months ended March 31, 2015 and the year
     ended December 31, 2014, respectively.
(2)  Interest coverage includes annualized amounts based on the most recent
     trustee statements.
(3)  Interest coverage cushion represents the amount by which annualized
     interest income expected exceeds the annualized amount payable on all
     classes of CDO notes senior to the Company's preference shares.
(4)  Overcollateralization cushion represents the amount by which the
     collateral held by the CDO issuer exceeds the maximum amount required.
(5)  Apidos CDO III's reinvestment period expired in June 2012.
(6)  Apidos Cinco CDO's reinvestment period expired in May 2014.
(7)  RREF CDO 2006-1's reinvestment period expired in September 2011.
(8)  RREF CDO 2007-1's reinvestment period expired in June 2012.
(9)  Resource Capital Corp. CRE Notes 2013 closed on December 23, 2013.
     There is no reinvestment period for the securitization. Additionally,
     the indenture contains no coverage tests.
(10) Resource Capital Corp. 2014-CRE2 closed on July 30, 2014. There is no
     reinvestment period for the securitization. Additionally, the indenture
     contains no interest coverage test provisions.
(11) Resource Capital Corp. 2015-CRE3 closed on February 24, 2015; the first
     distribution was in March 2015. There is no reinvestment period for the
     securitization. Additionally, the indenture contains no interest
     coverage test provisions.
(12) Moselle CLO S.A. was acquired on February 24, 2014 and the reinvestment
     period for this securitization expired prior to the acquisition. In
     December 2014, the Company liquidated Moselle CLO S.A. and, as a
     result, all of the assets were sold.



                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                          SUPPLEMENTAL INFORMATION
                     (in thousands, except percentages)
                                 (unaudited)

Loan Investment Statistics

The following table presents information on RSO's impaired loans and related allowances for the periods indicated (based on amortized cost):


                                                   March 31,   December 31,
                                                      2015          2014
                                                 ------------  ------------
Allowance for loan losses:
Specific allowance:
  Commercial real estate loans                   $      2,202  $         --
  Bank loans                                               86           570
  Middle market loans                                   2,512            --
  Residential mortgage loans                              110            --
                                                 ------------  ------------
Total specific allowance                                4,910           570
                                                 ------------  ------------
General allowance:
  Commercial real estate loans                          1,841         4,043
  Bank loans                                              634            --
                                                 ------------  ------------
Total general allowance                                 2,475         4,043
                                                 ------------  ------------
Total allowance for loans                        $      7,385  $      4,613
                                                 ============  ============
Allowance as a percentage of total loans                  0.4%          0.2%

Loans held for sale:
  Commercial real estate                         $         --  $         --
  Bank loans                                           73,892           282
  Residential mortgage loans                          174,559       111,454
                                                 ------------  ------------
Total loans held for sale (1)                    $    248,451  $    111,736
                                                 ============  ============

(1) Loans held for sale are presented at the lower of cost or fair value.



                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                          SUPPLEMENTAL INFORMATION
                                 (unaudited)

The following table presents commercial real estate loan portfolio statistics as of March 31, 2015 (based on par value):

         Security type:
         Whole loans                                         94.3%
         Mezzanine loans                                      4.6%
         B Notes                                              1.1%
                                                            -----
         Total                                              100.0%
                                                            =====

         Collateral type:
         Multifamily                                         40.9%
         Office                                              17.3%
         Hotel                                               16.7%
         Retail                                              13.9%
         Student Housing                                      5.7%
         Mixed Use                                            1.4%
         Other                                                4.1%
                                                            -----
         Total                                              100.0%
                                                            =====

         Collateral location:
         Southern California                                 19.5%
         Northern California                                  7.4%
         Texas                                               26.5%
         Arizona                                              6.8%
         North Carolina                                       5.6%
         Florida                                              5.5%
         Georgia                                              4.5%
         Nevada                                               2.9%
         Utah                                                 2.6%
         Pennsylvania                                         2.4%
         Washington                                           2.1%
         Minnesota                                            2.1%
         Other                                               12.1%
                                                            -----
         Total                                              100.0%
                                                            =====



                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                          SUPPLEMENTAL INFORMATION
                                 (unaudited)

The following table presents bank loan portfolio statistics by industry as of March 31, 2015 (based on par value):

         Industry type:
         Healthcare, Education and Childcare                 16.7%
         Diversified/Conglomerate Service                    11.7%
         Automobile                                           9.2%
         Chemicals, Plastics and Rubber                       7.4%
         Retail Stores                                        6.4%
         Broadcasting and Entertainment                       4.1%
         Electronics                                          3.9%
         Telecommunications                                   3.5%
         Hotels, Motels, Inns and Gaming                      3.5%
         Personal Transportation                              3.4%
         Personal, Food and Miscellaneous services            3.2%
         Leisure, Amusement, Motion Pictures, Entertainment   3.2%
         Utilities                                            2.9%
         Finance                                              2.5%
         Banking, Finance, Insurance & Real Estate            2.1%
         Printing and Publishing                              2.1%
         Other                                               14.2%
                                                            -----
         Total                                              100.0%
                                                            =====



The following table presents middle market loan portfolio statistics by industry as of March 31, 2015 (based on par value):

         Industry type:
         Hotels, Motels, Inns, and Gaming                    11.5%
         Personal, Food, and Miscellaneous Services          10.3%
         Healthcare, Education, and Childcare                 9.3%
         Structure Finance Securities                         9.1%
         Telecommunications                                   8.4%
         Finance                                              8.1%
         Leisure, Amusement, Motion Pictures, Entertainment   6.6%
         Personal Transportation                              5.5%
         Diversified/Conglomerate Service                     5.4%
         Buildings and Real Estate                            5.2%
         Cargo Transport                                      4.2%
         Beverage, Food and Tobacco                           4.2%
         Diversified/Conglomerate Manufacturing               3.5%
         Home and Office Furnishings, Housewares, and
          Durable Consumer Products                           3.4%
         Oil and Gas                                          3.3%
         Chemicals, Plastics, and Rubber                      2.0%
                                                            -----
         Total                                              100.0%
                                                            =====


Contact:
David J. Bryant
Chief Financial Officer
Resource Capital Corp.
712 Fifth Ave, 12th Floor
New York, NY 10019
212-506-3870

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