NEW YORK, NY -- (Marketwire) -- 03/04/13 -- Resource Capital Corp. (NYSE: RSO)
Highlights
- Adjusted Funds from Operations ("AFFO") of $0.22 and $0.97 per share-diluted (see Schedule I).
- Book value allocable to common shareholders per share of $5.61 at December 31, 2012 as compared to $5.48 at December 31, 2011 (see Schedule II).
- Total revenues increased by $7.8 million, or 31.1% and $27.7 million, or 28.9% as compared to the three months and year ended December 31, 2011, respectively.
- GAAP net income allocable to common shares of $0.14 and $0.71 per share-diluted.
- Common stock cash dividend of $0.20 and $0.80 per share.
Resource Capital Corp. (NYSE: RSO) ("RSO" or the "Company"), a real estate investment trust, or REIT, whose investment strategy focuses on commercial real estate ("CRE") assets, commercial mortgage-backed securities ("CMBS"), commercial finance assets and other investments, reported results for the three months and year ended December 31, 2012.
- AFFO for the three months and year ended December 31, 2012 was $22.3 million, or $0.22 per share-diluted, and $86.2 million, or $0.97 per share-diluted, respectively. 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 and year ended December 31, 2012 was $14.1 million, or $0.14 per share-diluted and $63.2 million, or $0.71 per share-diluted, respectively as compared to $0.4 million, or $0.01 per share-diluted and $37.7 million, or $0.53 per share-diluted for the three months and year ended December 31, 2011, respectively.
Jonathan Cohen, CEO and President of Resource Capital Corp., commented, "Resource Capital Corp had a very good 2012 and is well positioned for 2013. We continue to source new investments across all of the asset classes in which we participate. With growing revenues, good liquidity, good credit quality and good dividend coverage, I believe that we are in excellent shape. We are very excited about our expanding commercial real estate mortgage business. The re-emergence of loan securitization for this asset class greatly enhances our growth prospects."
Additional highlights:
Commercial Real Estate
- CRE loan portfolio is comprised of approximately 85% senior whole loans as of December 31, 2012, as compared to 87% a year ago.
- RSO closed $157.7 million of new whole loans in the last twelve months with a weighted average yield of 6.7%, including origination fees. RSO also acquired $15.2 million of loans purchased with a weighted average yield of 20.0%. In addition, RSO funded $5.7 million of previous loan commitments on existing loans.
The following table summarizes RSO's CRE loan activities and fundings of previous commitments, at par, for the three months and year ended December 31, 2012 (in millions, except percentages):
Floating
Three Weighted Weighted
Months Year Ended Average Average
Ended Spread Fixed
(1) (2) Rate (2)
December December
31, 31,
2012 2012
---------- ---------- --------- ---------
New whole loans production (3) $ 48.0 $ 163.4 3.43% 6.15%
Acquisition of loans 15.2 15.2 -- 20.00%
---------- ----------
Loan production, gross 63.2 178.6
Payoffs (4) (35.3) (92.0)
Principal paydowns (4.4) (9.4)
---------- ----------
Loans, net (5) $ 23.5 $ 77.2
========== ==========
(1) Represents the weighted average rate above the one-month London
Interbank Offered Rate ("LIBOR") on loans whose interest rate is based on
LIBOR as of December 31, 2012. Of these loans, $168.6 million have LIBOR
floors with a weighted average floor of 2.08%.
(2) Reflects rates on RSO's portfolio balance as of December 31, 2012.
(3) Whole loan production includes funding of previous commitments of $1.5
million for the three months and $5.7 million for the year ended December
31, 2012.
(4) CRE loan payoffs and extensions resulted in $567,000 and $1.7 million in
extension and exit fees during the three months and year ended December 31,
2012, respectively.
(5) The basis of net new loans does not include provisions for losses on
legacy CRE loans of $384,000 for the three months and $5.1 million for the
year ended December 31, 2012.
CMBS
- During the year ended December 31, 2012, RSO acquired $51.3 million, par value, of CMBS. These 2012 CMBS purchases were financed by RSO's Wells Fargo repurchase facility and were AAA rated by at least one rating agency. In addition, RSO acquired $19.7 million, par value, of CMBS which were financed by 30-day repurchase contracts with a repurchase value of $13.2 million. Also, during the year ended December 31, 2012, RSO acquired $43.5 million, par value, of CMBS, which were not financed with debt.
Commercial Finance - Syndicated Bank Loans
- RSO's bank loan portfolio, including asset-backed securities ("ABS") and certain loans held for sale, at the end of the fourth quarter of 2012 was $1.3 billion, at amortized cost, with a weighted-average spread of one-month and three-month LIBOR plus 3.47% at December 31, 2012. RSO's bank loan portfolio is 100% match-funded through five collateralized loan obligation ("CLO") issuances.
- During the three months and year ended December 31, 2012, RSO bought bank loans through its CLOs with a par value of $109.7 million and $479.5 million, respectively, at a net discount of $1.2 million and $7.1 million, respectively. These purchased loans have an aggregate weighted average unlevered annual yield of approximately 5.1% and 4.5%, respectively.
- RSO, through its subsidiary, Resource Capital Asset Management, earned $7.0 million of net fees during the year ended December 31, 2012.
Corporate
- RSO issued 3.9 million shares of its common stock through a dividend reinvestment plan, at a net price of $5.81 per share for net proceeds of $22.6 million during the three months ended December 31, 2012.
- RSO also sold 127,000 shares of its 8.25% Series B cumulative Preferred Stock at a weighted average price of $24.85 with a liquidation preference of $25.00 per share for net proceeds of $3.1 million for the three months ended December 31, 2012 pursuant to an at-the-market program.
Investment Portfolio
The table below summarizes the amortized cost and net carrying amount of RSO's investment portfolio as of December 31, 2012, classified by interest rate and by asset type. The following table includes both (i) the amortized cost of RSO's investment portfolio and the related dollar price, which is computed by dividing amortized cost by par amount, and (ii) the net carrying amount of RSO's investment portfolio and the related dollar price, which is computed by dividing the net carrying amount by par amount (in thousands, except percentages):
Net
carrying
amount
Net less
Amortized Dollar carrying Dollar amortized Dollar
cost price amount price cost price
---------- ------- ---------- ------- --------- --------
December 31, 2012
Floating rate
RMBS $ 6,047 36.14% $ 5,564 33.25% $ (483) (2.89)%
CMBS-private
placement 28,147 100.00% 12,814 45.52% (15,333) (54.48)%
Structured notes 9,413 26.67% 19,279 54.62% 9,866 27.95%
Other ABS -- -- 23 0.27% 23 0.27%
Mezzanine loans (1) 15,845 99.95% 15,644 98.68% (201) (1.27)%
Whole loans (1) 533,938 99.64% 527,018 98.35% (6,920) (1.29)%
Bank loans (2) 1,178,420 97.09% 1,168,715 97.08% (9,705) (0.01)%
Loans held for sale
(3) 48,894 92.42% 48,894 92.38% -- (0.04)%
ABS Securities 26,479 89.42% 27,052 91.36% 573 1.94%
Corporate Bonds 33,767 101.82% 33,700 101.61% (67) (0.21)%
---------- ---------- ---------
Total floating rate 1,880,950 95.98% 1,858,703 94.85% (22,247) (1.13)%
---------- ---------- ---------
Fixed rate
CMBS-private
placement 154,681 68.14% 158,001 69.61% 3,320 1.47%
B notes (1) 16,327 99.30% 16,121 98.05% (206) (1.25)%
Mezzanine loans (1) 66,941 99.70% 66,282 98.73% (659) (0.97)%
Loans receivable-
related party 8,324 100.00% 8,324 100.00% -- --
---------- ---------- ---------
Total fixed rate 246,273 77.23% 248,728 78.00% 2,455 0.77%
---------- ---------- ---------
Other (non-interest
bearing)
Investment in real
estate 75,386 100.00% 75,386 100.00% -- --
Investment in
unconsolidated
entities 45,413 100.00% 45,413 100.00% -- --
---------- ---------- ---------
Total other 120,799 100.00% 120,799 100.00% -- --
---------- ---------- ---------
Grand total $2,248,022 93.70% $2,228,230 92.87% $(19,792) (0.83)%
========== ========== =========
(1). Net carrying amount includes an allowance for loan losses of $8.0
million at December 31, 2012, allocated as follows: B notes ($206,000),
mezzanine loans ($860,000) and whole loans ($6.9) million.
(2) Net carrying amount includes allowance for loan losses of $9.7 million
as of December 31, 2012.
(3) Loans held for sale are carried at the lower of cost or fair market
value. Amortized cost is equal to fair value.
Liquidity
At February 28, 2013, after paying RSO's fourth quarter 2012 common and preferred stock dividends, RSO's liquidity is derived from two primary sources:
- unrestricted cash and cash equivalents of $99.3 million, restricted cash of $500,000 in margin call accounts and $4.1 million in the form of real estate escrows, reserves and deposits; and
- capital available for reinvestment in its seven collateralized debt obligation ("CDO") and CLO entities of $30.0 million, of which $775,000 is designated to finance future funding commitments on CRE loans, loan principal repayments that will pay down outstanding CLO notes of $79.1 million and $11.2 million in interest collections.
In addition, RSO has funds available through two CRE term facilities to finance the purchase of CMBS and the origination of commercial real estate loans of $40.4 million and $56.9 million, respectively.
Capital Allocation
As of December 31, 2012, RSO had allocated its invested equity capital among its targeted asset classes as follows: 83% in CRE assets, 15% in commercial finance assets and 2% in other investments.
Supplemental Information
The following schedules of reconciliations or supplemental information as of December 31, 2012 are included at the end of this release:
- Schedule I - Reconciliation of GAAP Net Income to Funds from Operations ("FFO") and AFFO.
- Schedule II - Book value allocable to common shareholders rollforward.
- Schedule III - Summary of CDO and CLO Performance Statistics.
- Supplemental Information regarding loan investment statistics, CRE loans and bank loans.
About Resource Capital Corp.
RSO is a diversified real estate finance company that is organized and conducts its operations to qualify as a REIT for federal income tax purposes. RSO's investment strategy focuses on CRE assets, and, to a lesser extent, commercial finance assets and other investments. RSO invests in the following asset classes: CRE-related assets such as commercial real estate property, whole loans, A-notes, B-notes, mezzanine loans, CMBS and investments in real estate joint ventures as well as commercial finance assets such as bank loans, lease receivables, other asset-backed securities, corporate bonds, trust preferred securities, debt tranches of CDOs, structured note investments, and private equity investments principally issued by financial institutions.
RSO is externally managed by Resource Capital Manager, Inc., an indirect wholly-owned subsidiary of Resource America, Inc. (NASDAQ: REXI), a specialized asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outside investors in the real estate, financial fund management and commercial finance sectors.
For more information, please visit RSO's website at www.resourcecapitalcorp.com or contact investor relations at pkamdar@resourceamerica.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 which have affected and may continue to 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 that have impaired and may continue to 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, Book value allocable to common shareholders rollforward, summary of CDO and CLO performance statistics and supplemental information regarding RSO's CRE loan and bank loan portfolios.
RESOURCE CAPITAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
December 31, December 31,
2012 2011
-------------- --------------
(unaudited)
ASSETS (1)
Cash and cash equivalents $ 85,278 $ 43,116
Restricted cash 94,112 142,806
Investment securities, trading 24,843 38,673
Investment securities available-for-sale,
pledged as collateral, at fair value 195,200 136,188
Investment securities available-for-sale, at
fair value 36,390 4,678
Linked transactions, net at fair value 6,835 2,275
Loans held for sale 48,894 3,154
Property available-for-sale -- 2,980
Investment in real estate 75,386 48,027
Loans, pledged as collateral and net of
allowances of $17.7 million and $27.5
million 1,793,780 1,772,063
Loans receivable-related party 8,324 9,497
Investments in unconsolidated entities 45,413 47,899
Interest receivable 7,763 8,836
Deferred tax asset 2,766 626
Principal paydown receivable 25,570 --
Intangible assets 13,192 19,813
Prepaid expenses 10,396 648
Other assets 4,109 3,445
------------- -------------
Total assets $ 2,478,251 $ 2,284,724
============= =============
LIABILITIES (2)
Borrowings $ 1,785,600 $ 1,794,083
Distribution payable 21,655 19,979
Accrued interest expense 2,918 3,260
Derivatives, at fair value 14,687 13,210
Accrued tax liability 13,641 12,567
Deferred tax liability 8,376 5,624
Accounts payable and other liabilities 18,029 6,311
------------- -------------
Total liabilities 1,864,906 1,855,034
------------- -------------
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.001: 8.50%
Series A 100,000,000 shares authorized,
676,373 shares issued and outstanding 1 --
Preferred stock, par value $0.001: 8.25%
Series B 100,000,000 shares authorized,
1,126,898 shares issued and outstanding 1 --
Common stock, par value $0.001: 500,000,000
shares authorized; 105,118,093 and
79,877,516 shares issued and outstanding
(including 3,308,343 and 1,428,931 unvested
restricted shares) 105 80
Additional paid-in capital 836,053 659,700
Accumulated other comprehensive loss (27,078) (46,327)
Distributions in excess of earnings (195,737) (183,763)
------------- -------------
Total stockholders' equity 613,345 429,690
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,478,251 $ 2,284,724
============= =============
RESOURCE CAPITAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (Continued)
(in thousands, except share and per share data)
December 31, December 31,
2012 2011
------------- ------------
(1) Assets of consolidated Variable Interest
Entities ("VIEs") included in the total assets
(a)above:
Restricted cash $ 90,108 $ 138,120
Investments securities available-for-sale,
pledged as collateral, at fair value 135,566 89,045
Loans held for sale 14,894 3,154
Property available-for-sale -- 2,980
Loans, pledged as collateral and net of
allowances of $15.2 million and $17.2 million 1,678,719 1,730,950
Interest receivable 5,986 6,003
Prepaid expenses 328 212
Principal paydown receivable 25,570 --
Other assets 333 24
------------- ------------
Total assets of consolidated VIEs $ 1,951,504 $ 1,970,488
============= ============
(2) Liabilities of consolidated VIEs included in
the total liabilities above (b):
Borrowings $ 1,614,882 $ 1,689,638
Accrued interest expense 2,666 2,943
Derivatives, at fair value 14,078 12,000
Accounts payable and other liabilities 698 442
------------- ------------
Total liabilities of consolidated VIEs $ 1,632,324 $ 1,705,023
============= ============
(a) Assets of each of the consolidated VIEs may only be used to settle the
obligations of each respective VIE.
(b) The creditors of the Company's VIEs have no recourse to the general
credit of the Company.
RESOURCE CAPITAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three Months Ended Years Ended
December 31, December 31,
-------------------------- -------------------------
2012 2011 2012 2011
------------- ------------ ------------ ------------
(unaudited) (unaudited)
REVENUES
Interest income:
Loans $ 38,273 $ 26,035 $ 109,030 $ 86,739
Securities 3,776 3,507 14,296 12,424
Interest income
− other 1,800 3,877 10,004 10,711
------------ ----------- ----------- -----------
Total interest
income 43,849 33,419 133,330 109,874
Interest expense 17,332 11,071 42,792 32,186
------------ ----------- ----------- -----------
Net interest
income 26,517 22,348 90,538 77,688
Rental income 4,821 1,884 11,463 3,656
Dividend income 18 518 69 3,045
Equity in (losses)
earnings of
unconsolidated
subsidiaries (1,240) 819 (2,709) 112
Fee income 1,540 1,930 7,068 7,789
Net realized gain
(loss) on sales of
investment
securities
available-for-sale
and loans 1,958 (1,821) 4,106 2,643
Net realized and
unrealized (loss)
gain on investment
securities, trading (915) (560) 12,435 837
Unrealized
gain/(loss) and net
interest income on
linked transactions,
net 342 93 728 216
------------ ----------- ----------- -----------
Total revenues 33,041 25,211 123,698 95,986
------------ ----------- ----------- -----------
OPERATING EXPENSES
Management fees
− related
party 5,000 2,400 18,512 11,022
Equity compensation
− related
party 1,224 1,127 4,636 2,526
Professional services 2,138 1,259 4,700 3,791
Insurance 161 161 639 658
Rental operating
expense 3,590 1,348 8,046 2,743
General and
administrative 1,057 754 4,434 3,950
Depreciation and
amortization 1,911 1,754 5,885 4,619
Income tax expense 7,624 7,767 14,602 12,036
Net impairment losses
recognized in
earnings -- 2,249 180 6,898
Provision for loan
losses 9,017 5,979 16,818 13,896
------------ ----------- ----------- -----------
Total operating
expenses 31,722 24,798 78,452 62,139
------------ ----------- ----------- -----------
1,319 413 45,246 33,847
------------ ----------- ----------- -----------
OTHER REVENUE (EXPENSE)
Gain on consolidation 2,498 -- 2,498 --
Gain on the
extinguishment of
debt 11,235 -- 16,699 3,875
Other expenses -- -- -- (6)
------------ ----------- ----------- -----------
Total other revenue 13,733 -- 19,197 3,869
------------ ----------- ----------- -----------
NET INCOME 15,052 413 64,443 37,716
Net income allocated
to preferred shares (911) -- (1,244) --
------------ ----------- ----------- -----------
NET INCOME ALLOCABLE TO
COMMON SHARES $ 14,141 $ 413 $ 63,199 $ 37,716
============ =========== =========== ===========
NET INCOME PER COMMON
SHARE - BASIC $ 0.14 $ 0.01 $ 0.71 $ 0.54
============ =========== =========== ===========
NET INCOME PER COMMON
SHARE - DILUTED $ 0.14 $ 0.01 $ 0.71 $ 0.53
============ =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OFCOMMON SHARES
OUTSTANDING - BASIC 99,773,470 76,806,318 88,410,272 70,410,131
============ =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OFCOMMON SHARES
OUTSTANDING - DILUTED 100,958,978 77,325,974 89,284,488 70,809,088
============ =========== =========== ===========
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
We evaluate our performance based on several performance measures, including funds from operations, or FFO, and adjusted funds from operations, or AFFO, in addition to net income. We compute 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 cash flow generated by operations. We calculate AFFO by adding or subtracting from FFO the non-cash impacts of the following: non-cash impairment losses resulting from fair value adjustments on financial instruments, provision for loan losses, non-economic income related to VIE accounting, gains on the extinguishment of debt, equity investment gains and losses, straight-line rental effects, share based compensation, amortization of various deferred items and intangible assets, gains on sales of property through a joint venture in addition to the cash impact of capital expenditures that are related to our real estate owned.
Management believes that FFO and AFFO are appropriate measures of our 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 our operating performance, and believes they are also useful to investors, because they facilitate an understanding of our 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 accurately compare our operating performance between periods.
While our calculations of AFFO may differ from the methodology used for calculating AFFO by other REITs and our AFFO may not be comparable to AFFO reported by other REITs, we also believe that FFO and AFFO may provide us and our 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 our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.
The following table reconciles GAAP net income to FFO and AFFO for the periods presented (in thousands):
Three Months Ended Years Ended
December 31, December 31,
------------------------- -------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited)
Net income allocable to
common shares - GAAP $ 14,141 $ 413 $ 63,199 $ 37,716
Adjustments:
Real estate depreciation
and amortization 661 1,112 2,686 2,606
Gains on sales of
properties (1) (224) -- (1,664) --
Impairment charges on
repossessed real estate
assets -- -- -- 1,449
----------- ----------- ----------- -----------
FFO 14,578 1,525 64,221 41,771
Adjustments:
Non-cash items:
Adjust for impact of
imputed interest on VIE
accounting (3,049) -- (3,049) --
Provision for loan
losses 7,900 2,249 12,408 6,898
Amortization of
deferred costs (non
real estate) and
intangible assets 3,140 193 8,896 317
Equity investment
losses (gains) 956 (7) 3,256 (17)
Share-based compensation 1,224 1,127 4,636 2,526
Impairment losses on
real property held for
sale -- 1,771 180 5,870
Straight-line rental
adjustments 1 -- 15 --
Gain on the
extinguishment of debt (11,235) -- (13,070) (3,875)
Incentive Management
Fee adjustment related
to extinguishment of
debt 2,614 -- 2,614 --
REIT tax planning
adjustments 6,810 11,008 6,810 11,751
Cash items:
Gains on sales of
joint venture real
estate interests (1) 224 -- 1,664 --
Gain on the
extinguishment of debt 7 -- 670 --
Capital expenditures (826) (864) (3,081) (1,296)
----------- ------------ ----------- -----------
AFFO $ 22,344 $ 17,002 $ 86,170 $ 63,945
=========== =========== =========== ===========
Weighted average common
shares - diluted 100,959 77,326 89,284 70,809
AFFO per common share -
diluted $ 0.22 $ 0.22 $ 0.97 $ 0.90
=========== =========== =========== ===========
(1) Amount represents gains on sales of joint venture real estate interests
from a joint venture that were recorded by us.
SCHEDULE II
RESOURCE CAPITAL CORP. AND SUBSIDIARIES
BOOK VALUE ALLOCABLE TO COMMON SHAREHOLDERS ROLLFORWARD
(dollars in thousands, except per share data)
(unaudited)
Amount Per Share
---------- ----------
Book value at December 31, 2011, allocable to common
shareholders (1) $ 429,690 $ 5.48
Net income allocable to common shareholders 63,199 0.62
Change in other comprehensive income:
Available for sale securities 20,498 0.20
Derivatives (1,249) (0.01)
Common dividends (75,095) (0.73)
Proceeds/Accretion from additional shares issued
during the year (2) 133,850 0.05
---------- ----------
Total net increases 141,203 0.13
---------- ----------
Book value at December 31, 2012, allocable to common
shareholders (1)(3) $ 570,893 $ 5.61
========== ==========
(1) Per share calculations exclude unvested restricted stock, as disclosed
on the consolidated balance sheet, of 1.4 million and 3.3 million shares
as of December 31, 2011 and December 31, 2012, respectively. The book
value calculations above at December 31, 2011 are revised from previous
disclosures to reflect the adjustment for the exclusion of the unvested
restricted stock.
(2) Includes issuance of common shares from a common stock offering of 9.8
million shares and from our dividend reinvestment plan of 13.1 million
shares and 460,000 combined incentive management fee shares issued to
the Manager and vesting of shares of restricted stock.
(3) Book value is calculated as total stockholder's equity of $613.3 million
less preferred stock equity of $42.4 million.
SCHEDULE III
RESOURCE CAPITAL CORP. AND SUBSIDIARIES
SUMMARY OF CDO AND CLO PERFORMANCE STATISTICS
(in thousands)
(unaudited)
Collateralized Debt Obligations - Distributions and Coverage Test Summary
The following table sets forth cash distributions from RSO's CDO investments
and a summary of coverage test compliance for the CDO issuers for the
periods presented:
Annualized
Interest
Cash Coverage Overcollateralization
Distributions Cushion Cushion
----------------- ------------- ---------------------------
Year Ended As of As of As of Initial
December 31, December 31, December 31, Measurement
-----------------
Name CDO Type 2012 (1) 2011 (1) 2012 (2) (3) 2012 (4) Date
------- -------- -------- -------- ------------- ------------- -------------
(actual) (actual)
Apidos
CDO I
(5) CLO $ 7,971 $ 9,305 $ 5,521 $ 13,386 $ 17,136
Apidos
CDO
III
(6) CLO $ 8,742 $ 8,351 $ 3,997 $ 9,900 $ 11,269
Apidos
Cinco
CDO CLO $ 11,109 $ 9,941 $ 6,420 $ 19,294 $ 17,774
Apidos
CLO
VIII
(7) CLO $ 5,186 $ - $ 4,681 $ 14,610 $ 13,657
Whitney
CLO I
(8) CLO $ 567 $ - $ 22 $ 15,171 $ -
RREF
2006-1
(9) CRE CDO $ 15,032 $ 11,637 $ 10,167 $ 45,837 $ 24,941
RREF
2007-1
(10) CRE CDO $ 13,226 $ 10,743 $ 11,621 $ 32,641 $ 26,032
(1) Distributions on retained equity interests in CDOs (comprised of note
investments and preference share ownership).
(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 RSO'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 I reinvestment period expired in July 2011.
(6) Apidos CDO III reinvestment period expired in June 2012.
(7) Distributions from Apidos CLO VIII, which closed in October 2011,
include $757,000 in subordinated management fees; RSO's contribution of
$15.0 million represents 43% of the subordinated debt.
(8) Whitney CLO I was acquired in October 2012, when RSO purchased 66% of
the outstanding preference shares.
(9) RREF CDO 2006-1 reinvestment period expired in September 2011.
(10) RREF CDO 2007-1 reinvestment period expired in June 2012.
RESOURCE CAPITAL CORP. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(in thousands, except percentages)
Loan Investment Statistics
The following table presents information on RSO's impaired loans and
related allowances for the periods indicated (based on amortized cost):
December 31, December 31,
2012 2011
------------- -------------
(unaudited)
Allowance for loan losses:
Specific allowance:
Commercial real estate loans $ 2,142 $ 17,065
Bank loans 3,236 1,593
------------- -------------
Total specific allowance 5,378 18,658
------------- -------------
General allowance:
Commercial real estate loans 5,844 7,156
Bank loans 6,468 1,704
------------- -------------
Total general allowance 12,312 8,860
------------- -------------
Total allowance for loans $ 17,690 $ 27,518
============= =============
Allowance as a percentage of total loans 0.9% 1.5%
Loans held for sale:
Commercial real estate loans held for sale $ 34,000 $ -
Bank loans held for sale 14,894 3,154
------------- -------------
Total loans held for sale (1) $ 48,894 $ 3,154
============= =============
(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 December 31, 2012 (based on par value):
Security type:
Whole loans 85.1%
Mezzanine loans 12.4%
B Notes 2.5%
------
Total 100.0%
======
Collateral type:
Multifamily 35.6%
Hotel 19.5%
Retail 17.2%
Office 15.6%
Flex 4.9%
Industrial 2.1%
Self-storage 0.9%
Other 4.2%
------
Total 100.0%
======
Collateral location:
Southern California 33.8%
Northern California 13.9%
Texas 11.1%
Arizona 7.9%
Washington 4.5%
Florida 3.3%
Other 25.5%
------
Total 100.0%
======
RESOURCE CAPITAL CORP. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(unaudited)
The following table presents bank loan portfolio statistics by industry as
of December 31, 2012 (based on par value):
Industry type:
Healthcare, education and childcare 13.2%
Diversified/conglomerate service 8.7%
Broadcasting and entertainment 7.5%
Automobile 6.8%
Chemicals, plastics and rubber 5.8%
Retail Stores 5.7%
Electronics 4.9%
Hotels, motels, inns and gaming 4.7%
Telecommunications 3.8%
Personal, food and miscellaneous services 3.4%
Personal transportation 3.1%
Leisure, amusement, motion pictures, entertainment 3.1%
Printing and publishing 2.8%
Other 26.5%
------
Total 100.0%
======
