SYS-CON MEDIA Authors: Bob Gourley, Lori MacVittie, RealWire News Distribution, Cynthia Dunlop, Mark O'Neill

News Feed Item

Resource Capital Corp. Reports Results for Three Months and Year Ended December 31, 2013

NEW YORK, NY -- (Marketwired) -- 02/25/14 -- Resource Capital Corp. (NYSE: RSO)

Highlights

  • Adjusted Funds from Operations ("AFFO") of $0.14 and $0.74 per share-diluted (see Schedule I).

  • Closed $307.8 million commercial real estate ("CRE") securitization on December 23, 2013 and retained subordinated notes and equity of $46.9 million and expect to earn a return on invested equity of 20%.

  • CRE loan originations of $97.4 million and $344.3 million.

  • Completed $115.0 million 6.0% convertible senior notes offering on October 17, 2013 and received net proceeds of approximately $111.1 million after payment of offering costs.

  • GAAP net income allocable to common shares of $(0.01) and $0.33 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 assets, commercial mortgage-backed securities ("CMBS"), commercial finance assets and other investments, reported results for the three months and year ended December 31, 2013.

  • AFFO for the three months and year ended December 31, 2013 was $17.2 million, or $0.14 per share-diluted, and $88.6 million, or $0.74 per share-diluted, respectively. A reconciliation of GAAP net income to AFFO is set forth in Schedule I of this release.

  • GAAP net loss allocable to common shares for the three months was $948,000, or $(0.01) per share-diluted and GAAP net income allocable to common shares for the year ended December 31, 2013 was $39.2 million, or $0.33 per share-diluted, as compared to net income of $14.1 million, or $0.14 per share-diluted and $63.2 million, or $0.71 per share-diluted for the three months and year ended December 31, 2012, respectively. Included in net (loss) income for the three months and year ended December 31, 2013, was the combined effect of liquidation and deconsolidation of Whitney CLO I and Apidos CLO VIII, respectively. We incurred non-cash charges of approximately $16.0 million from accelerated amortization of notes issued at discounts and deferred costs for the three months ended December 31, 2013 and $18.5 million for these same accelerated items for the year ended December 31, 2013.

Jonathan Cohen, CEO and President of Resource Capital Corp., commented, "Our overall 2013 performance was negatively impacted by the faster than anticipated paydown of our corporate loan portfolio. However, we are already putting cash to work in new investments and expect to further increase our investments in commercial real estate loans, middle market corporate loans and other investments. As we do so, we expect Adjusted Funds from Operations to increase throughout 2014. We have a very strong balance sheet, excellent liquidity and access to capital and growing origination platforms that are generating high quality investments with attractive returns."

Additional highlights:

Commercial Real Estate

  • CRE loan portfolio is comprised of approximately 90% senior whole loans as of December 31, 2013, as compared to 85% a year ago.
  • RSO closed $324.8 million of new whole loans in the last 12 months with a weighted average yield of 6.51%, including origination fees. In addition, RSO funded $19.5 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, 2013 (in millions, except percentages):


                                  Three                 Floating
                                 Months                 Weighted   Weighted
                                  Ended    Year Ended   Average    Average
                                December    December     Spread     Fixed
                                31, 2013    31, 2013    (1) (2)      Rate
                               ----------  ----------  ---------  ---------

New whole loans production (3) $     97.4  $    344.3       5.70%         -%
Payoffs (4)                         (12.6)     (104.0)
Sales                                   -       (63.9)
Principal paydowns                   (0.1)      (15.8)
                               ----------  ----------
Loans, net (5)                 $     84.7       160.6
                               ==========  ==========

(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, 2013. Of these loans, $282.4 million have
     LIBOR floors with a weighted average floor of 0.44%.
(2)  Reflects rates on RSO's portfolio balance as of December 31, 2013.
(3)  Whole loan production includes the funding of previous commitments of
     $5.2 million and $19.5 million for the three months and year ended
     December 31, 2013, respectively.
(4)  CRE loan payoffs and extensions resulted in $7,000 and $1.4 million in
     extension and exit fees during the three months and year ended December
     31, 2013, respectively.
(5)  The basis of net new loans does not include provisions for losses on
     legacy CRE loans of $669,000 and $2.7 million for the three months and
     year ended December 31, 2013, respectively.


CMBS

  • During the year ended December 31, 2013, RSO acquired $42.6 million, par value, of CMBS, which were financed by RSO's Wells Fargo repurchase facility and were AAA rated by at least one rating agency. In addition, RSO acquired $48.8 million, par value, of CMBS which were partially financed by alternate 30-day repurchase contracts with a repurchase value of $33.7 million. Also, during the year ended December 31, 2013, RSO acquired $43.9 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"), corporate bonds and certain loans held for sale, at the end of the fourth quarter of 2013 was $580.0 million, at amortized cost, with a weighted-average spread of one-month and three-month LIBOR plus 3.12% at December 31, 2013. RSO's bank loan portfolio was nearly 100% match-funded through three collateralized loan obligation ("CLO") issuances.

  • During the year ended December 31, 2013, RSO bought bank loans, primarily through reinvestment of its existing CLOs, with a par value of $393.2 million, at a net discount of $3.3 million. These purchased loans have an aggregate weighted average unlevered annual yield of approximately 4.2%.

  • RSO, through its subsidiary Resource Capital Asset Management, earned $5.3 million of net fees during the year ended December 31, 2013.

Corporate

  • RSO also sold 256,000 and 2.4 million shares of its 8.25% Series B cumulative Preferred Stock at a weighted average price of $22.61 and $24.56, with a liquidation preference of $25.00, per share, for net proceeds of $5.7 million and $56.7 million for the three months and year ended December 31, 2013, respectively, 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, 2013, 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, 2013
------------------
   Floating rate
RMBS               $    1,919  20.76% $      451   4.88% $  (1,468) (15.88)%
CMBS-private
 placement             27,138  92.39%     16,496  56.16%   (10,642) (36.23)%
Structured notes        8,057  34.49%     11,107  47.55%     3,050   13.06%
Mezzanine loans
 (1)                   12,455  98.97%     12,455  98.97%         -       -%
Whole loans (1)       745,789  99.56%    736,106  98.27%    (9,683)  (1.29)%
Bank loans (2)        544,923  99.27%    541,532  98.65%    (3,391)  (0.62)%
Middle market
 loans                 10,250 100.00%     10,250 100.00%         -       -%
Loans held for
 sale (3)               6,850  94.82%      6,850  94.82%         -       -%
ABS Securities         25,406  91.39%     26,656  95.88%     1,250    4.50%
Corporate Bonds         2,517  29.32%      2,463  28.69%       (54)  (0.63)%
                   ----------         ----------         ---------
Total floating
 rate               1,385,304  96.71%  1,364,366  95.25%   (20,938)  (1.46)%
                   ----------         ----------         ---------
    Fixed rate
CMBS-private
 placement            158,040  77.87%    164,222  80.91%     6,182    3.04%
CMBS-linked
 transactions          35,736 106.07%     30,066  89.24%    (5,670) (16.83)%
B notes (1)            16,205  99.49%     16,031  98.42%      (174)  (1.07)%
Mezzanine loans
 (1)                   51,862 100.06%     51,303  98.98%      (559)  (1.08)%
Residential
 mortgage loans         1,849  66.27%      1,849  66.27%         -       -%
Loans held for
 sale (3)              15,066 100.00%     15,066 100.00%         -       -%
Loans receivable-
 related party          6,966 100.00%      6,966 100.00%         -       -%
                   ----------         ----------         ---------
Total fixed rate      285,724  86.69%    285,503  86.62%      (221)  (0.07)%
                   ----------         ----------         ---------
    Other (non-
 interest bearing)
Investment in real
 estate                29,778 100.00%     29,778 100.00%         -       -%
Property
 available-for-
 sale                  25,346 100.00%     25,346 100.00%         -       -%
Investment in
 unconsolidated
 entities              74,438 100.00%     74,438 100.00%         -       -%
                   ----------         ----------         ---------
  Total other         129,562 100.00%    129,562 100.00%         -       -%
                   ----------         ----------         ---------
    Grand total    $1,800,590  95.19% $1,779,431  94.07% $ (21,159)  (1.12)%
                   ==========         ==========         =========

(1)  Net carrying amount includes an allowance for loan losses of $10.4
     million at December 31, 2013, allocated as follows: B notes $174,000,
     mezzanine loans $559,000 and whole loans $9.7 million.
(2)  Net carrying amount includes allowance for loan losses of $3.4 million
     at December 31, 2013.
(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 January 31, 2014, after paying RSO's fourth quarter 2013 common and preferred stock dividends, RSO's liquidity is derived from three primary sources:

  • unrestricted cash and cash equivalents of $199.2 million, restricted cash of $500,000 in margin call accounts and $998,000 in the form of real estate escrows, reserves and deposits;

  • capital available for reinvestment in its eight securitizations of $40.5 million, of which $6.4 million is designated to finance future funding commitments on CRE loans; and

  • loan principal repayments that will pay down outstanding CLO notes of $18.9 million and $5.0 million in interest collections.

In addition, RSO has funds available through three term financing facilities to finance the origination of CRE loans of $207.6 million and $200.0 million, respectively, and to finance the purchase of CMBS of $45.7 million.

Capital Allocation

As of December 31, 2013, 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, 2013 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 - Securitizations - Distributions and Coverage Test Summary.
  • 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. The Company also makes other commercial finance 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. The Company's objective is to be best in class among asset managers in the real estate and credit sectors as measured by returns to investors and the quality of the funds and businesses it manages. Resource America's investments emphasize consistent value and long-term returns with an income orientation.

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,
                                                    2013           2012
                                                ------------   ------------
                                                 (unaudited)
ASSETS (1)
  Cash and cash equivalents                     $    262,270   $     85,278
  Restricted cash                                     63,309         94,112
  Investment securities, trading                      11,558         24,843
  Investment securities available-for-sale,
   pledged as collateral, at fair value              162,608        195,200
  Investment securities available-for-sale, at
   fair value                                         47,229         36,390
  Linked transactions, net at fair value              30,066          6,835
  Loans held for sale                                 21,916         48,894
  Property available-for-sale                         25,346              -
  Investment in real estate                           29,778         75,386
  Loans, pledged as collateral and net of
   allowances of $13.8 million and $17.7
   million                                         1,369,526      1,793,780
  Loans receivable-related party                       6,966          8,324
  Investments in unconsolidated entities              74,438         45,413
  Interest receivable                                  8,965          7,763
  Deferred tax asset                                   5,212          2,766
  Principal paydown receivable                         6,821         25,570
  Intangible assets                                   11,822         13,192
  Prepaid expenses                                     2,871         10,396
  Other assets                                        10,726          4,109
                                                ------------   ------------
    Total assets                                $  2,151,427   $  2,478,251
                                                ============   ============
LIABILITIES (2)
  Borrowings                                    $  1,319,810   $  1,785,600
  Distribution payable                                27,023         21,655
  Accrued interest expense                             1,693          2,918
  Derivatives, at fair value                          10,586         14,687
  Accrued tax liability                                1,629         13,641
  Deferred tax liability                               4,112          8,376
  Accounts payable and other liabilities              12,650         18,029
                                                ------------   ------------
    Total liabilities                              1,377,503      1,864,906
                                                ------------   ------------
STOCKHOLDERS' EQUITY
  Preferred stock, par value $0.001:
   100,000,000 shares authorized 8.50% Series
   A cumulative redeemable preferred shares,
   liquidation preference $25.00 per share,
   680,952 and 676,373 shares issued and
   outstanding                                             1              1
  Preferred stock, par value $0.001:
   100,000,000 shares authorized 8.25% Series
   B cumulative redeemable preferred shares,
   liquidation preference $25.00 per share
   3,485,078 and 1,126,898 shares issued and
   outstanding                                             3              1
  Common stock, par value $0.001: 500,000,000
   shares authorized; 127,918,927 and
   105,118,093 shares issued and outstanding
   (including 3,112,595 and 3,308,343 unvested
   restricted shares)                                    128            105
  Additional paid-in capital                       1,042,480        836,053
  Accumulated other comprehensive loss               (14,043)       (27,078)
  Distributions in excess of earnings               (254,645)      (195,737)
                                                ------------   ------------
    Total stockholders' equity                       773,924        613,345
                                                ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $  2,151,427   $  2,478,251
                                                ============   ============






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

                                                  December 31,  December 31,
                                                      2013          2012
                                                  ------------  ------------
                                                   (unaudited)
(1) Assets of consolidated Variable Interest
 Entities ("VIEs") included in the total assets
 (a)above:
    Restricted cash                               $     61,372  $     90,108
    Investment securities available-for-sale,
     pledged as collateral, at fair value              105,846       135,566
    Loans held for sale                                  2,376        14,894
    Property available-for-sale                              -             -
    Loans, pledged as collateral and net of
     allowances of $8.8 million and $15.2
     million                                         1,219,569     1,678,719
    Interest receivable                                  5,627         5,986
    Prepaid expenses                                       247           328
    Principal paydown receivable                         6,821        25,570
    Other assets                                             -           333
                                                  ------------  ------------
    Total assets of consolidated VIEs             $  1,401,858  $  1,951,504
                                                  ============  ============

(2) Liabilities of consolidated VIEs included in
 the total liabilities above (b):
    Borrowings                                    $  1,070,339  $  1,614,882
    Accrued interest expense                               918         2,666
    Derivatives, at fair value                          10,191        14,078
    Accounts payable and other liabilities               1,604           698
                                                  ------------  ------------
    Total liabilities of consolidated VIEs        $  1,083,052  $  1,632,324
                                                  ============  ============

(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,
                     --------------------------  --------------------------
                         2013          2012          2013          2012
                     ------------  ------------  ------------  ------------
                             (unaudited)          (unaudited)
REVENUES
  Interest income:
    Loans            $     21,085  $     38,273  $     99,455  $    109,030
    Securities              3,360         3,776        14,309        14,296
    Interest income
     - other                1,032         1,800         4,212        10,004
                     ------------  ------------  ------------  ------------
      Total interest
       income              25,477        43,849       117,976       133,330
  Interest expense         26,949        17,332        61,010        42,792
                     ------------  ------------  ------------  ------------
      Net interest
       income              (1,472)       26,517        56,966        90,538
  Rental income             4,048         4,821        19,923        11,463
  Dividend income              17            18           273            69
  Equity in net
   earnings (losses)
   of unconsolidated
   subsidiaries             1,837        (1,240)          949        (2,709)
  Fee income                1,893         1,540         6,075         7,068
  Net realized gain
   on sales of
   investment
   securities
   available-for-
   sale and loans           7,631         1,958        10,986         4,106
  Net realized and
   unrealized gain
   (loss) on
   investment
   securities,
   trading                    540          (915)         (324)       12,435
  Unrealized gain
   (loss) and net
   interest income
   on linked
   transactions, net          502           342        (3,841)          728
                     ------------  ------------  ------------  ------------
    Total revenues         14,996        33,041        91,007       123,698
                     ------------  ------------  ------------  ------------

OPERATING EXPENSES
  Management fees -
   related party            3,214         5,000        14,220        18,512
  Equity
   compensation -
   related party            2,606         1,224        10,472         4,636
  Rental operating
   expense                  2,978         3,590        14,062         8,046
  General and
   administrative           7,349         3,356        16,110         9,773
  Depreciation and
   amortization               814         1,911         3,855         5,885
  Income tax
   (benefit) expense       (5,262)        7,624        (1,041)       14,602
  Net impairment
   losses recognized
   in earnings                 52             -           863           180
  Provision for loan
   losses                   2,479         9,017         3,020        16,818
                     ------------  ------------  ------------  ------------
    Total operating
     expenses              14,230        31,722        61,561        78,452
                     ------------  ------------  ------------  ------------
                              766         1,319        29,446        45,246
                     ------------  ------------  ------------  ------------
OTHER REVENUE
  Gain on
   consolidation                -         2,498             -         2,498
  Gain on the
   extinguishment of
   debt                         -        11,235             -        16,699
  Gain on the sale
   of real estate               9             -        16,616             -
  Other income                391             -           391             -
                     ------------  ------------  ------------  ------------
    Total other
     revenue                  400        13,733        17,007        19,197
                     ------------  ------------  ------------  ------------
NET INCOME                  1,166        15,052        46,453        64,443
  Net income
   allocated to
   preferred shares        (2,114)         (911)       (7,221)       (1,244)
                     ------------  ------------  ------------  ------------
NET (LOSS) INCOME
 ALLOCABLE TO COMMON
 SHARES              $       (948) $     14,141  $     39,232  $     63,199
                     ============  ============  ============  ============
NET (LOSS) INCOME
 PER COMMON SHARE -
 BASIC               $      (0.01) $       0.14  $       0.33  $       0.71
                     ============  ============  ============  ============
NET (LOSS) INCOME
 PER COMMON SHARE -
 DILUTED             $      (0.01) $       0.14  $       0.33  $       0.71
                     ============  ============  ============  ============
WEIGHTED AVERAGE
 NUMBER OF COMMON
 SHARES OUTSTANDING
 - BASIC              124,435,700    99,773,470   118,478,672    88,410,272
                     ============  ============  ============  ============
WEIGHTED AVERAGE
 NUMBER OFCOMMON
 SHARES OUTSTANDING
 - DILUTED            124,435,700   100,958,978   120,038,973    89,284,488
                     ============  ============  ============  ============

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, 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 that are wholly owned or through a joint venture in addition to the cash impact of capital expenditures that are related to our real estate owned. In addition, we calculate AFFO by adding and subtracting from FFO the cash impacts of the following: extinguishment of debt, sales of property and capital expenditures.

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 our 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 (unaudited) (in thousands, except per share data):


                                   Three Months Ended       Years Ended
                                      December 31,          December 31,
                                  -------------------   -------------------
                                    2013       2012       2013       2012
                                  --------   --------   --------   --------
Net (loss) income allocable to
 common shares - GAAP             $   (948)  $ 14,141   $ 39,232   $ 63,199
Adjustments:
  Real estate depreciation and
   amortization                        381        661      2,122      2,686
  Gains on sale of property (1)       (333)      (224)   (14,588)    (1,664)
                                  --------   --------   --------   --------
FFO                                   (900)    14,578     26,766     64,221
Adjustments:
Non-cash items:
  Adjust for impact of imputed
   interest on VIE accounting          899     (3,049)       899     (3,049)
  (Benefit) provision for loan
   losses                           (1,186)     7,900     (3,325)    12,408
  Amortization of deferred costs
   (non real estate) and
   intangible assets                 1,151      3,140      6,060      8,896
  Equity investment (earnings)
   losses                             (195)       956        183      3,256
  Share-based compensation           2,605      1,224     10,472      4,636
  Impairment losses                     52          -        863        180
  Unrealized loss on CMBS marks
   - linked transactions               195          -      6,018          -
  Straight-line rental
   adjustments                          (6)         1        (12)        15
  Add-back interest related to
   Whitney note discount
   amortization                          -          -      2,549          -
  Loss on liquidation and
   deconsolidation of Apidos
   VIII                             16,036          -     16,036          -
  Gain on the extinguishment of
   debt                                  -    (11,235)         -    (13,070)
  Incentive Management Fee
   adjustment related to
   extinguishment of debt                -      2,614          -      2,614
REIT tax planning adjustments       (2,189)     6,810        890      6,810
Cash items:
  Gain on sale of property (1)         333        224     14,588      1,664
  Gain on the extinguishment of
   debt                                561          7      7,810        670
  Capital expenditures                (140)      (826)    (1,149)    (3,081)
                                  --------   --------   --------   --------
AFFO                              $ 17,216   $ 22,344   $ 88,648   $ 86,170
                                  ========   ========   ========   ========

Weighted average common shares -
 diluted                           124,436    100,959    120,039     89,284

AFFO per common share - diluted   $   0.14   $   0.22   $   0.74   $   0.97
                                  ========   ========   ========   ========

(1)  Amounts represent gains/losses on sales of joint venture real estate
     interests that were recorded by RSO on an equity basis. Amounts for the
     year ended December 31, 2013, also include net gain on sale of property
     of $16.6 million after deducting incentive management fees paid to our
     manager, Resource Capital Manager, Inc., a subsidiary of Resource
     America, Inc., of $1.9 million.



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, 2012, allocable to
 common shareholders (1)                            $  570,893   $     5.61
Net income allocable to common shareholders             39,232         0.32

Change in other comprehensive income:
  Available for sale securities                          8,399         0.07
  Derivatives                                            4,440         0.04
  Foreign currency conversion                              196            -
Discount on 6.0% convertible senior notes (2)            4,851         0.04
Common dividends                                       (98,016)       (0.80)
Proceeds/Accretion from additional shares issued
 during the year (3)                                   144,686         0.13
                                                    ----------   ----------
Total net increases                                    103,788        (0.20)
                                                    ----------   ----------
Book value at December 31, 2013, allocable to
 common shareholders (1)(4)                         $  674,681   $     5.41
                                                    ==========   ==========

(1)  Per share calculations exclude unvested restricted stock, as disclosed
     on the consolidated balance sheets, of 3.3 million and 3.1 million
     shares as of December 31, 2012 and December 31, 2013, respectively.
(2)  The discount on the 6.0% convertible senior notes reflects the
     difference between the stated value of the debt and the fair value of
     the notes as if they were issued without a conversion feature and at a
     higher rate of interest that we estimate would have been applicable
     without the conversion feature. The discount will be amortized on a
     straight-line basis as additional interest expense through maturity on
     December 1, 2018.
(3)  Includes issuance of common shares from a common stock offering of 18.7
     million shares, our dividend reinvestment plan of 3.1 million shares,
     and 934,000 combined incentive management fee shares issued to the
     Manager and vesting of shares of restricted stock.
(4)  Book value is calculated as total stockholder's equity of $773.9
     million less preferred stock equity of $99.2 million.



SCHEDULE III

                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                SUMMARY OF CDO AND CLO 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 RSO's securitizations for the periods presented (in thousands):


                                           Annualized
                                            Interest
                                            Coverage   Overcollateralization
                       Cash Distributions    Cushion          Cushion
                     --------------------- ---------- ----------------------
                           Year Ended         As of      As of      As of
                          December 31,      December   December    Initial
                     ---------------------     31,        31,    Measurement
         Name         2013 (1)   2012 (1)   2013(2)(3)  2013 (4)      Date
                     ---------- ---------- ---------- ---------- -----------
                      (actual)   (actual)
Apidos CDO I (5)     $    4,615 $    7,971 $    1,583 $   13,252 $    17,136
Apidos CDO III (6)   $    6,495 $    8,742 $    2,385 $    9,700 $    11,269
Apidos Cinco CDO (7) $   12,058 $   11,109 $    5,451 $   19,639 $    17,774
Apidos CLO VIII (8)  $   20,021 $    2,992        N/A        N/A         N/A
Whitney CLO I (9)    $   13,470 $      802        N/A        N/A         N/A
RREF 2006-1 (10)     $   36,828 $   15,050 $    5,675 $   67,512 $    24,941
RREF 2007-1 (11)     $   10,880 $   13,226 $    7,418 $   43,803 $    26,032

(1)  Distributions on retained equity interests in securitizations
     (comprised of note investments and preference share ownership) and
     principal paydowns on notes owned; RREF 2006-1 includes $28.1 million
     and $2.3 million of paydowns for the years ended December 31, 2013, and
     2012, 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 securitization notes senior to RSO's preference shares.
(4)  Overcollateralization cushion represents the amount by which the
     collateral held by the securitization issuer exceeds the maximum amount
     required.
(5)  Apidos CDO I's reinvestment period expired in July 2011.
(6)  Apidos CDO III's reinvestment period expired in June 2012.
(7)  Apidos Cinco CDO's reinvestment period ends in May 2014.
(8)  Distributions from Apidos CLO VIII, include $1.3 million and $752,000
     in collateral management fees for the years ended December 31, 2013 and
     2012, respectively. RSO's contribution of $15.0 million represents 43%
     of the subordinated debt.Apidos CLO VIII's non-call period ended on
     October 17, 2013, at which time all assets were liquidated and all
     outstanding notes were paid off.
(9)  Whitney CLO I was acquired in October 2012. Distributions from Whitney
     CLO I include $442,000 and $236,000 of collateral management fees for
     the years ended December 31, 2013 and 2012, respectively. RSO held
     68.3% of the outstanding preference shares before Whitney CLO I was
     called and substantially liquidated in September 2013.
(10) RREF 2006-1's reinvestment period expired in September 2011.
(11) RREF 2007-1's 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,
                                                    2013           2012
                                                ------------   ------------
Allowance for loan losses:
Specific allowance:
  Commercial real estate loans                  $      4,572   $      2,142
  Bank loans                                           2,621          3,236
                                                ------------   ------------
Total specific allowance                               7,193          5,378
                                                ------------   ------------
General allowance:
  Commercial real estate loans                         5,844          5,844
  Bank loans                                             770          6,469
                                                ------------   ------------
Total general allowance                                6,614         12,313
                                                ------------   ------------
Total allowance for loans                       $     13,807   $     17,691
                                                ============   ============
Allowance as a percentage of total loans                 1.0%           0.9%

Loans held for sale:
  Commercial real estate                        $          -   $     34,000
  Bank loans                                           6,850         14,894
  Residential mortgage loans                          15,066              -
                                                ------------   ------------
Total loans held for sale (1)                   $     21,916   $     48,894
                                                ============   ============

(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, 2013 (based on par value):


             Security type:
             Whole loans                                  90.3%
             Mezzanine loans                               7.8%
             B Notes                                       1.9%
                                                     ---------
             Total                                       100.0%
                                                     =========

             Collateral type:
             Multifamily                                  38.4%
             Retail                                       19.0%
             Hotel                                        18.3%
             Office                                       15.5%
             Mixed Use                                     3.9%
             Industrial                                    1.7%
             Other                                         3.2%
                                                     ---------
             Total                                       100.0%
                                                     =========

             Collateral location:
             Southern California                          28.7%
             Northern California                          10.3%
             Texas                                        14.6%
             Arizona                                       6.4%
             Florida                                       4.5%
             Washington                                    3.6%
             Minnesota                                     3.5%
             Nevada                                        3.0%
             Utah                                          3.0%
             Other                                        22.4%
                                                     ---------
             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, 2013 (based on par value):


             Industry type:
             Healthcare, education and childcare          15.8%
             Diversified/conglomerate service             12.2%
             Chemicals, plastics and rubber                7.3%
             Automobile                                    6.7%
             Broadcasting and entertainment                5.9%
             Retail Stores                                 5.4%
             CDO                                           4.7%
             Electronics                                   3.6%
             Oil and Gas                                   3.4%
             Leisure, amusement, motion pictures,
              entertainment                                3.3%
             Personal, food and miscellaneous
              services                                     3.1%
             Aerospace and Defense                         2.8%
             Telecommunications                            2.6%
             Personal Transportation                       2.6%
             Finance                                       2.0%
             Other                                        18.6%
                                                     ---------
             Total                                       100.0%
                                                     =========

CONTACT:
DAVID J. BRYANT
CHIEF FINANCIAL OFFICER
RESOURCE CAPITAL CORP.
712 Fifth Ave, 12
TH Floor
New York, NY 10019
212-506-3870


More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.