Resource Capital Corp. Reports Results for Three and Nine

Resource Capital Corp. Reports Results for Three and Nine Months
Ended September 30, 2012 
NEW YORK, NY -- (Marketwire) -- 10/30/12 --  Resource Capital Corp.
(NYSE: RSO) 
Highlights 


 
--  Adjusted Funds from Operations ("AFFO") of $0.26 and $0.75 per
    share-diluted.
--  GAAP net income to common shares of $0.20 and $0.57 per share-diluted.
--  Common stock cash dividend of $0.20 and $0.60 per share.
--  Book value per share of $5.51 at September 30, 2012 as compared to
    $5.38 at December 31, 2011.
--  Total revenues increased by $3.0 million, or 13% and $11.7 million, or
    18% as compared to the three and nine months ended September 30, 2011.
--  Cash on hand of $169.5 million at September 30, 2012.

  
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 and nine months ended September 30,
2012. 


 
--  AFFO for the three and nine months ended September 30, 2012 was $23.0
    million, or $0.26 per share-diluted and $63.8 million, or $0.75 per
    share-diluted, respectively. A reconciliation of GAAP net income to
    AFFO is set forth in Schedule I of this release.
--  GAAP net income to common shares for the three and nine months ended
    September 30, 2012 was $18.2 million, or $0.20 per share-diluted and
    $49.1 million, or $0.57 per share-diluted, respectively as compared to
    $14.9 million, or $0.20 per share-diluted and $37.3 million, or $0.54
    per share-diluted for the three and nine months ended September 30,
    2011, respectively.

  
Jonathan Cohen, CEO and President of Resource Capital Corp., commented,
"We continue to source new investments across all of the asset
classes in which we participate. With growing revenues, good
liquidity and good dividend coverage, we are in good shape. We look
forward to investing proceeds from our common and preferred share
offerings and substantially enlarging our real estate mortgage
portfolio."  
Additional highlights: 
Commercial Real Estate  


 
--  CRE loan portfolio is comprised of approximately 87% senior whole
  
  loans as of September 30, 2012, as compared to 83% a year ago.
--  RSO closed $152.6 million of new whole loans in the last twelve months
    with a weighted average yield of 6.9%, including origination fees. In
    addition, RSO funded $4.2 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 and nine months ended
September 30, 2012 (in millions, except percentages): 


 
                                                                            
                                                           Floating         
                  Three Months  Nine Months    12 Months   Weighted Weighted
                     Ended         Ended         Ended      Average Average 
                 September 30, September 30, September 30,  Spread    Fixed 
                      2012          2012          2012      (1) (2) Rate (2)
                 ------------- ------------- ------------- -------- --------
New whole loans                                                             
 production (3)  $       32.6  $      115.4  $      152.6    3.45%    9.6%  
Sale of real                                                                
 estate loans              --            --         (14.4)                  
Payoffs                 (34.4)        (56.6)        (66.7)                  
Principal                                                                   
 paydowns                (2.4)         (5.0)         (5.0)                  
                 ------------- ------------- -------------                  
Loans, net (4)   $       (4.2) $       53.8  $       66.5                   
                 ============= ============= =============                  
                                                                            
--------------                                                              
    (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 September 30, 2012. Of these new loans, $145.7 
        million have LIBOR floors with a weighted average floor of 2.68%.   
    (2) Reflects rates on RSO's portfolio balance as of September 30, 2012. 
    (3) Whole loan production includes funding of previous commitments of   
        $1.1 million, $4.2 million and $6.9 million for the three, nine and 
        12 months ended September 30, 2012, respectively.                   
    (4) The basis of new net loans does not include provisions for losses on
        legacy CRE loans of $1.0 million, $4.8 million and $5.7 million for 
        the three, nine and 12 months ended September 30, 2012,             
        respectively.                                                       

 
CMBS Securities 


 
--  During the nine months ended September 30, 2012, RSO acquired $48.3
    million 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. Also, on an unlevered basis, during the nine months
    ended September 30, 2012, RSO acquired $24.0 million, par value, of
    CMBS at a weighted average price of 90.95%.

  
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 third quarter of
    2012 was $1.1 billion, at amortized cost, with a weighted-average
    spread of a weighted-average of one-month and three-month LIBOR plus
    3.49% at September 30, 2012. RSO's bank loan portfolio is 100%
    match-funded through four collateralized loan obligation ("CLO")
    issuances.
--  During the three and nine months ended September 30, 2012, RSO bought
    bank loans through its CLOs with a par value of $108.1 million and
    $369.8 million, respectively, at a net discount of $1.7 million and
    $5.9 million, respectively. These purchased loans have an aggregate
    weighted average unlevered annual yield of approximately 4.6% and
    4.3%, respectively.
--  RSO, through its subsidiary Resource Capital Asset Management, earned
    $5.4 million of net fees during the nine months ended September 30,
    2012.

  
Corporate  


 
--  RSO issued a follow-on common stock offering, including over-allotment
    exercise for a total of 9.8 million shares during September 2012, at a
    net price of $5.69 per share, after underwriting commissions for net
    proceeds of $55.6 million.
--  RSO issued 1.0 million shares of its 8.25% Series B Cumulative
    Redeemable Preferred Stock, at a price of $24.2125 per share with a
    liquidation preference of $25.00 per share for net proceeds of $24.2
    million which were received on October 2, 2012.
--  RSO also sold 411,000 shares of its 8.50% Series A cumulative
    Preferred Stock at a weighted average price of $24.25 for net proceeds
    of $9.8 million through September 30, 2012 through an at-the-market
    prog
ram.

  
Book Value 
As of September 30, 2012, RSO's book value per common share was
$5.51, an increase from $5.38 per common share at December 31, 2011.
Total stockholders' equity was $587.5 million as of September 30,
2012 as compared to $429.7 million as of December 31, 2011. Total
common shares outstanding were 99,482,787 as of September 30, 2012 as
compared to 79,877,516 as of December 31, 2011.  
Investment Portfolio 
The table below summarizes the amortized cost and net carrying amount
of RSO's investment portfolio as of September 30, 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 
                    ---------- ------- ---------- ------- --------- --------
 September 30, 2012                                                         
-------------------                                                         
   Floating rate                                                            
RMBS                $    6,093  36.32% $    5,548  33.07% $   (545)  (3.25)%
CMBS-private                                                                
 placement              28,170 100.00%     12,667  44.97%  (15,503) (55.03)%
Structured notes         9,413  26.67%     20,256  57.39%   10,843   30.72% 
Other ABS                   --     --%         23   0.28%       23    0.28% 
Mezzanine loans (1)     15,842  99.93%     15,641  98.66%     (201)  (1.27)%
Whole loans (1)        521,656  99.66%    515,009  98.39%   (6,647)  (1.27)%
Bank loans (2)       1,106,810  98.15%  1,101,676  97.69%   (5,134)  (0.46)%
Loans held for sale     45,187  89.87%     45,187  89.87%       --      --% 
ABS Securities          27,762  89.36%     27,435  88.31%     (327)  (1.05)%
                    ----------         ----------         ---------         
  Total floating                                                            
   rate              1,760,933  95.86%  1,743,442  94.91%  (17,491)  (0.95)%
                    ----------         ----------         ---------         
     Fixed rate                                                             
CMBS - private                                                              
 placement             164,192  76.37%    164,256  76.40%       64    0.03% 
B notes (1)             16,357  99.26%     16,150  98.00%     (207)  (1.26)%
Mezzanine loans (1)     51,980 100.08%     51,322  98.82%     (658)  (1.26)%
Whole loans (1)             --     --%         --     --%       --      --% 
Loans receivable-                                                           
 related party           9,116 100.00%      9,116 100.00%       --      --% 
                    ----------         ----------         ---------         
Total fixed rate       241,645  82.61%    240,844  82.33%     (801)  (0.28)%
                    ----------         ----------         ---------         
Other (non-interest                                                         
      bearing)                                                              
Investment in real                                                          
 estate                 72,453 100.00%     72,453 100.00%       --      --% 
Investment in                                                               
 unconsolidated                                                             
 entities               47,020 100.00%     47,020 100.00%       --      --% 
                    ----------         ----------         ---------         
  Total other          119,473 100.00%    119,473 100.00%       --      --% 
                    ----------         ----------         ---------         
    Grand total     $2,122,051  94.36% $2,103,759  93.55% $(18,292)  (0.81)%
                    ==========         ==========         =========         
                                                                            
--------------                                                              
    (1) Net carrying amount includes an allowance for loan losses of $7.7   
        million at September 30, 2012, allocated as follows: B notes        
        ($207,000), mezzanine loans ($858,000) and whole loans ($6.6        
        million).                                                           
    (2) Net carrying amount includes an allowance for loan losses of $5.1   
        million at September 30, 2012.                                      

 
Liquidity  
At October 26, 2012, after paying RSO's third quarter common stock
dividend, RSO's liquidity is provided by two primary sources: 


 
--  unrestricted cash and cash equivalents of $98.9 million, restricted
    cash of $500,000 in margin call accounts and $1.4 million in the form
    of real estate escrows, reserves and deposits; and
--  capital available for reinvestment in its six CDO entities of $23.3
    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 $41.2 million and $8.7 million in interest
    collections.

  
In addition, RSO has funds available through two CRE term facilities to
finance the purchase of CMBS securities and origination of commercial
real estate loans of $42.0 million and $121.1 million, respectively.  
Capital Allocation  
As of September 30, 2012, RSO had allocated its invested equity
capital among its targeted asset classes as follows: 70% in CRE
assets, 28% in commercial finance assets and 2% in other investments. 
Supplemental Information 
The following schedules of reconciliations or supplemental
information as of September 30, 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 - 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 and
CRE-related assets, and, to a lesser extent, commercial finance
assets. RSO invests in the following asset classes: CRE-related
assets such as commercial real estate property, whol
e 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, 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 and a 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)              
                                                                            
                                                September 30,  December 31, 
                                                    2012           2011     
                                               -------------- --------------
                                                 (unaudited)                
ASSETS                                                                      
  Cash and cash equivalents                    $     112,732  $      43,116 
  Restricted cash                                     56,718        142,806 
  Investment securities, trading                      25,804         38,673 
  Investment securities available-for-sale,                                 
   pledged as collateral, at fair value              174,243        153,366 
  Investment securities available-for-sale, at                              
   fair value                                         30,138          4,678 
  Loans held for sale                                 45,187          3,154 
  Property available-for-sale                             --          2,980 
  Investment in real estate                           72,453         48,027 
  Loans, pledged as collateral and net of                                   
   allowances of $12.8 million and $27.5                                    
   million                                         1,699,798      1,772,063 
  Loans receivable-related party                       9,116          9,497 
  Investments in unconsolidated entities              47,020         47,899 
  Interest receivable                                  7,239          8,836 
  Deferred tax asset                                     666            626 
  Intangible assets                                   17,104         19,813 
  Prepaid expenses                                     8,507            648 
  Subscription receivable                             24,213             -- 
  Other assets                                         4,884          3,445 
                                               -------------- --------------
    Total assets                               $   2,335,822  $   2,299,627 
                                               ============== ==============
LIABILITIES                                                                 
  Borrowings                                   $   1,683,396  $   1,808,986 
  Distribution payable                                20,136         19,979 
  Accrued interest expense                             3,204          3,260 
  Derivatives, at fair value                          16,195         13,210 
  Accrued tax liability                                7,598         12,567 
  Deferred tax liability                               4,353          5,624 
  Accounts payable and other liabilities              13,449          6,311 
                                               -------------- --------------
    Total liabilities                              1,748,331      1,869,937 
                                               -------------- --------------
STOCKHOLDERS' EQUITY                                                        
  Preferred stock, par value $0.001:                                        
   100,000,000 shares authorized 8.50% Series                               
   A per share, 676,373 shares issued and                                   
   outstanding                                             1             -- 
  Common stock, par value $0.001: 500,000,000                               
   shares authorized; 99,482,787 and                                        
   79,877,516 shares issued and outstanding                                 
   (including 1,637,343 and 1,428,931 unvested                              
   restricted shares)                                    100             80 
  Additional paid-in capital                         809,147        659,700 
  Accumulated other comprehensive loss               (32,903)       (46,327)
  Distributions in excess of earnings               (188,854)      (183,763)
                                               -------------- --------------
    Total stockholders' equity                       587,491        429,690 
                                               -------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $   2,335,822  $   2,299,627 
                                               
============== ==============
                                                                            
                                                                            
                                                                            
                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES                  
                      CONSOLIDATED STATEMENTS OF INCOME                     
               (in thousands, except share and per share data)              
                                 (Unaudited)                                
                                                                            
                             Three Months Ended        Nine Months Ended    
                               September 30,             September 30,      
                         ------------------------- -------------------------
                             2012         2011         2012         2011    
                         ------------ ------------ ------------ ------------
REVENUES                                                                    
  Interest income:                                                          
    Loans                $    24,130  $    18,863  $    70,757  $    60,704 
    Securities                 3,757        3,383       11,093        9,098 
    Interest income -                                                       
     other                     2,218        3,899        8,204        6,834 
                         ------------ ------------ ------------ ------------
      Total interest                                                        
       income                 30,105       26,145       90,054       76,636 
    Interest expense           8,268        7,175       25,647       21,170 
                         ------------ ------------ ------------ ------------
      Net interest                                                          
       income                 21,837       18,970       64,407       55,466 
      Rental income            2,689        1,592        6,642        1,772 
      Dividend income             --          926           --        2,453 
      Fee income               1,969        1,960        6,160        5,859 
                         ------------ ------------ ------------ ------------
    Total revenues            26,495       23,448       77,209       65,550 
                         ------------ ------------ ------------ ------------
OPERATING EXPENSES                                                          
  Management fees -                                                         
   related party               5,521        3,136       13,512        8,622 
  Equity compensation -                                                     
   related party               1,404          316        3,412        1,399 
  Professional services        1,038          624        3,196        2,532 
  Insurance                      161          161          478          497 
  Rental operating                                                          
   expense                     1,827        1,065        4,456        1,395 
  General and                                                               
   administrative                844        1,273        3,377        3,194 
  Depreciation and                                                          
   amortization                1,249        1,856        3,974        2,865 
  Income tax expense           3,979        1,289        6,978        4,269 
                         ------------ ------------ ------------ ------------
    Total operating                                                         
     expenses                 16,023        9,720       39,383       24,773 
                         ------------ ------------ ------------ ------------
                              10,472       13,728       37,826       40,777 
                         ------------ ------------ ------------ ------------
OTHER REVENUE (EXPENSE)                                                     
  Net impairment losses                                                     
   recognized in                                                            
   earnings                       (9)          --         (180)      (4,649)
  Net realized gain on                                                      
   the sales of                                                             
   investment securities                                                    
   available-for-sale                                                       
   and loans                     346          591        2,148        4,443 
  Net realized and                                                          
   unrealized gain on                                                       
   investment                                                               
   securities, trading         9,782       (1,861)      13,350        1,418 
  Provision for loan                                                        
   losses                     (1,370)      (1,198)      (7,801)      (7,917)
  Gain on the                                                               
   extinguishment of                                                        
   debt                           --        3,875        5,464        3,875 
  Other expenses                (761)        (191)      (1,416)        (642)
                         ------------ ------------ ------------ ------------
    Total other revenue                                                     
     (expense)                 7,988        1,216       11,565       (3,472)
                         ------------ ------------ ------------ ------------
NET INCOME                    18,460       14,944       49,391       37,305 
  Net income allocated                                                      
   to preferred shares          (308)          --         (333)          -- 
                         ------------ ------------ ------------ ------------
NET INCOME ALLOCABLE TO                                                     
 COMMON SHARES           $    18,152  $    14,944  $    49,058  $    37,305 
                         ============ ============ ============ ============
NET INCOME PER SHARE -                                                      
 BASIC                   $      0.20  $      0.20  $      0.58  $      0.55 
                         ============ ============ ============ ============
NET INCOME PER SHARE -                                                      
 DILUTED                 $      0.20  $      0.20  $      0.57  $      0.54 
                         ============ ============ ============ ============
WEIGHTED AVERAGE NUMBER                                                     
 OF SHARES OUTSTANDING -                                                    
 BASIC                    89,066,927   73,761,028   84,594,892   68,254,639 
                         ============ ============ ============ ============
WEIGHTED AVERAGE NUMBER                                                     
 OF SHARES OUTSTANDING -                                                    
 DILUTED                  89,965,680   74,283,894   85,365,343   68,613,363 
                         ============ ============ ============ ============
DIVIDENDS DECLARED PER                                                      
 SHARE                   $      0.20  $      0.25  $      0.60  $      0.75 
                         ============ ============ ============ ============
                                                                            
                                                                            
                                                                            
SCHEDULE I                                                                  
                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES                  
              RECONCILIATION OF GAAP NET INCOME T
O FFO and AFFO             
                    (in thousands, except per share data)                   
                                 (unaudited)                                

 
RSO currently evaluates its performance based on several performance
measures, including FFO and AFFO (both non-GAAP measures), in
addition to net income. RSO 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 cash flow generated by operations. RSO
calculates AFFO by adding or subtracting from FFO: non-cash
impairment losses resulting from fair value adjustments on financial
instruments, non-cash impacts of the following: provision for loan
losses, gains on the extinguishment of debt, equity investment
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 and cash impact of
capital expenditures that are related to RSO's real estate owned.  
Management believes that FFO and AFFO are appropriate measures of
RSO'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 RSO's operating
performance, and believes they are also useful to investors, because
they facilitate an understanding of RSO'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
accurately compare RSO's operating performance between periods.  
While RSO's calculation of AFFO may differ from the methodology used
for calculating AFFO by other REITs and its AFFO may not be
comparable to AFFO reported by other REITs, RSO also believes that
FFO and AFFO may provide it 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 net income as an indicator of RSO's operating
performance or as an alternative to cash flow from operating
activities as a measure of its liquidity. 


 
                                                                            
                                       Three Months Ended  Nine Months Ended
                                          September 30,      September 30,  
                                            2012 (1)           2012 (1)     
                                       ------------------ ------------------
Net income allocable to common shares                                       
 - GAAP                                $          18,152  $          49,058 
Adjustments:                                                                
  Real estate depreciation and                                              
   amortization                                      536              2,025 
  Gains on sales of property (2)                    (353)            (1,440)
                                       ------------------ ------------------
FFO (1)                                           18,335             49,643 
Adjustments:                                                                
Non-cash items:                                                             
  Provisions for loan losses                          40              4,508 
  Amortization of deferred costs (non                                       
   real estate) and intangible assets              1,765              5,756 
  Equity investment losses                         1,025              2,300 
  Share-based compensation                         1,404              3,412 
  Impairment losses on real property                                        
   held for sale                                      10                180 
  Straight line rental adjustments                     2                 14 
  Gain on the extinguishment of debt                  --             (1,835)
Cash items:                                                                 
  Gains on sales of joint venture real                                      
   estate interests (2)                              353              1,440 
  Gain on the extinguishment of debt                 663                663 
  Capital expenditures                              (591)            (2,255)
                                       ------------------ ------------------
AFFO                                   $          23,006  $          63,826 
                                       ================== ==================
Weighted average shares - diluted                 89,966             85,365 
AFFO per share - diluted               $            0.26  $            0.75 
                                       ================== ==================
                                                                            
--------------                                                              
    (1) RSO disclosed FFO in the comparable periods of $16.2 million and    
        $40.2 million for the three and nine months ended September 30,     
        2011. Comparative AFFO data is not provided since RSO did not       
        present these metrics in the comparable periods of 2011.            
    (2) Amount represents gains on sales of joint venture real estate       
        interests from a joint venture recorded by RSO.                     

 
SCHEDULE II 


 
                                                                            
                   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                       
                                             Coverage  Overcollateralization
                         Cash Distributions  Cushion          Cushion       
                         ------------------ --------- ----------------------
                                     Nine                                  
                           Year     Months                             
                           Ended    Ended     As of     As of       As of   
                         December September September  September   Initial  
                   CDO   31, 2011  30, 2012  30, 2012  30, 2012  Meas
urement
      Name         Type     (1)      (1)     (2) (3)     (4)        Date    
---------------- ------- -------- --------- --------- --------- ------------
                         (actual)  (actual)                                 
Apidos CDO I (5) CLO     $  9,305 $   6,257 $   6,326 $  13,833 $     17,136
Apidos CDO III                                                              
 (6)             CLO     $  8,351 $   6,161 $   3,518 $   9,634 $     11,269
Apidos Cinco CDO CLO     $  9,941 $   7,924 $   6,147 $  18,930 $     17,774
Apidos CLO VIII                                                             
 (7)             CLO     $     -- $   4,119 $   4,200 $  14,610 $     13,657
RREF 2006-1(8)   CRE CDO $ 11,637 $  12,237 $  11,421 $  45,799 $     24,941
RREF 2007-1(9)   CRE CDO $ 10,743 $  10,099 $  12,036 $  34,845 $     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) Apidos CLO VIII, which closed in October 2011, distributions include
        $757,000 in subordinated management fees; RSO's 43% ownership of the
        preference share was $15.0 million.                                 
    (8) RREF CDO 2006-1 reinvestment period expired in September 2011.      
    (9) RREF CDO 2007-1 reinvestment period expired in June 2012.           
                                                                            
                                                                            
                                                                            
                   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): 


 
                                                                            
                                                September 30,  December 31, 
                                                    2012           2011     
                                               -------------- --------------
Allowance for loan losses:                                                  
Specific allowance:                                                         
Commercial real estate loans                   $       1,869  $      17,065 
Bank loans                                             2,131          1,593 
                                               -------------- --------------
Total specific allowance                               4,000         18,658 
                                               -------------- --------------
General allowance:                                                          
Commercial real estate loans                           5,844          7,156 
Bank loans                                             3,003          1,704 
                                               -------------- --------------
Total general allowance                                8,847          8,860 
                                               -------------- --------------
Total allowance for loans and leases           $      12,847  $      27,518 
                                               ============== ==============
Allowance as a percentage of total loans                 0.7%           1.5%
                                                                            
Loans held for sale:                                                        
Commercial real estate loans held for sale     $      34,000  $          -- 
Bank loans held for sale                              11,187          3,154 
                                               -------------- --------------
Loans held for sale (1)                        $      45,187  $       3,154 
                                               ============== ==============
                                                                            
--------------                                                              
    (1) Loans held for sale are held 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 September 30, 2012 (based on par value):  


 
                                                               
             Security type:                                    
             Whole loans                                  86.9%
             Mezzanine loans                              10.6%
             B Notes                                       2.5%
                                                      ---------
             Total                                       100.0%
                                                      =========
                                                               
             Collateral type:                                  
             Multifamily                                  29.3%
             Hotel                                        23.8%
             Retail                                       22.1%
             Office                                       15.9%
             Flex                                          1.1%
             Industrial                                    1.1%
             Self-storage                                  1.0%
             Other                                         5.7%
                                                      ---------
             Total                                       100.0%
                                                      =========
                                                               
             Collateral location:                              
             Southern California                          33.2%
             Northern California                          12.3%
             Arizona                                       8.9%
             Texas                                         8.2%
             Washington                                    4.7%
             Florida                                       4.6%
             Colorado                                      1.7%
             New York                                
      1.6%
             Other                                        24.8%
                                                      ---------
             Total                                       100.0%
                                                      =========
                                                               
                                                               
                                                                            
                   RESOURCE CAPITAL CORP. AND SUBSIDIARIES                  
                          SUPPLEMENTAL INFORMATION                          
                                 (unaudited)                                
                                                                            
                                                               
             Industry type:                                    
             Healthcare, education and childcare          13.9%
             Diversified/conglomerate service             11.6%
             Broadcasting and entertainment                7.3%
             Automobile                                    6.9%
             Chemicals, plastics and rubber                5.8%
             Retail Stores                                 5.7%
             Electronics                                   4.9%
             Telecommunications                            3.8%
             Hotels, motels, inns and gaming               3.6%
             Personal, food and miscellaneous                  
              services                                     3.1%
             Leisure, amusement, motion pictures,              
              entertainment                                3.0%
             Aerospace and defense                         3.0%
             Other                                        27.4%
                                                      ---------
             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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