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Resource Capital Corp. Reports Operating Results for Third Quarter Ended September 30, 2008
NEW YORK, NY, Nov 05, 2008 (MARKET WIRE via COMTEX News Network) -- Resource Capital Corp. (NYSE: RSO) ("RCC" or the "Company"), a real estate investment trust whose investment strategy focuses on commercial real estate loan assets and, to a lesser extent, commercial finance assets, reported results for the third quarter ended September 30, 2008.

Financial Summary

--  Estimated REIT taxable income, a non-GAAP measure, for the three and
    nine months ended September 30, 2008 was $9.4 million or $0.38 per share-
    diluted and $30.9 million or $1.24 per share-diluted, respectively, as
    compared to $10.9 million or $0.44 per share-diluted and $31.1 million or
    $1.25 per share-diluted for the three and nine months ended September 30,
    2007, respectively, decreases of $1.5 million (14%) and $141,000 (1%),
    respectively.
--  Adjusted net income, a non-GAAP measure excluding the effect of non-
    cash charges and non-operating capital transactions, of $11.1 million, or
    $0.44 per share-diluted for the quarter ended September 30, 2008 as
    compared to $11.9 million, or $0.48 per share-diluted for the quarter ended
    September 30, 2007, a decrease of $857,000 (7%).
--  RCC announced a dividend distribution of $0.39 per common share for
    the quarter ended September 30, 2008, $9.9 million in the aggregate, which
    was paid on October 28, 2008 to stockholders of record as of October 6,
    2008.
--  Economic book value, a non-GAAP measure, was $10.92 per common share
    as of September 30, 2008.
--  GAAP book value was $9.45 per common share as of September 30, 2008.
--  GAAP net income of $0.17 per share-diluted, including non-cash charges
    for loan and lease losses of $27.8 million, or $1.12 per share-diluted, for
    the nine months ended September 30, 2008.  GAAP net income of $0.00 per
    share-diluted, including non-cash charges for loan and lease losses of
    $11.0 million, or $0.44 per share-diluted, for the three months ended
    September 30, 2008.
--  Paydowns totaled $64.7 million, which included $44.4 million on RCC's
    commercial real estate loan portfolio and $20.3 million on RCC's bank loan
    portfolio for the quarter ended September 30, 2008.
--  As of October 31, 2008, short-term repurchase agreement borrowings
    were down to $180,000 from $4.6 million as of June 30, 2008.


Jonathan Cohen, CEO and President of RCC, commented, "The credit quality of our loan portfolio appears to be generally weathering the storm and we are pleased with its performance. We have increased our general reserves, primarily in our bank loan portfolio and took a specific reserve against one loan in our commercial real estate loan portfolio, which prepaid after the end of the quarter at a modest discount -- we were willing to accept this deal to buy other investments in the future at more substantial discounts. As a result of $44.4 million in commercial real estate prepayments during the quarter, we are able to shift loans from our CRE term facility into our CDO structures, utilizing the favorable liabilities in those structures, and simultaneously improving liquidity and de-levering our balance sheet by paying down the CRE term facility. As these prepayments continue to occur, we intend to reinvest at very attractive spreads, look at opportunities to buy our debt at a significant discount and our stock in the market, and generally increase the liquidity of our Company. We also worked hard to eliminate all but $180,000 of short term recourse liabilities."

The following schedules of reconciliations as of September 30, 2008 are included in this release:

--  Schedule I - Reconciliation of GAAP Net Income to Adjusted Net Income;
--  Schedule II - Reconciliation of GAAP Net Income to Estimated REIT
    Taxable Income; and
--  Schedule III - Reconciliation of GAAP Stockholders' Equity to Economic
    Book Value.


Additional financial results for the third quarter ended September 30, 2008 and recent developments include:

General

--  RCC's net interest income decreased by $877,000, or (6%) to $13.6
    million for the third quarter ended September 30, 2008, as compared to
    $14.5 million for the same period in 2007.


Commercial Real Estate

--  RCC originated new commercial real estate ("CRE") loans, on a gross
    basis, of $8.3 million during the third quarter ended September 30, 2008.
    The aggregate net portfolio of CRE loans was reduced by $65.5 million to
    $864.9 million at September 30, 2008, from $930.4 million at September 30,
    2007, not including future funding obligations of $8.8 million.


The following table summarizes RCC's CRE loan origination activities and future funding obligations, at par, for the three, nine and 12 months ended September 30, 2008 (in millions, except percentages):

                         Three      Nine                Floating
                         Months     Months   12 Months  Weighted  Weighted
                         Ended      Ended      Ended    Average   Average
                       September  September  September   Spread     Fixed
                       30, 2008   30, 2008   30, 2008     (1)     Rate (1)
                       ---------  ---------  ---------  --------  --------
Whole loans            $     8.3  $    51.6  $   113.1      2.88%     7.71%
Whole loans, future
 funding obligations           -          -        8.8       N/A       N/A
B notes                        -          -          -      2.78%     7.57%
Mezzanine loans                -          -          -      2.62%     8.15%
CMBS                           -          -          -    N/A (2)     5.96%
                       ---------  ---------  ---------
New loans production         8.3       51.6      121.9
Payoffs                    (34.3)     (45.7)    (120.5)
Principal paydowns         (10.1)     (14.6)     (16.1)
Whole loans, future
 funding obligations           -          -       (8.8)
Sales of CMBS                  -      (10.0)     (10.0)
                       ---------  ---------  ---------
Net - new loans            (36.1)     (18.7)     (33.5)
Other                        0.6        1.6        5.3
                       ---------  ---------  ---------
New loans, net (3)     $   (35.5) $   (17.1) $   (28.2)
                       =========  =========  =========
(1) Reflects rates on our portfolio balance as of September 30, 2008.
(2) Weighted average floating rate coupon of 3.96% at September 30, 2008.
(3) The basis of new net loans does not include provisions for losses on
    commercial real estate loans of $2.8 million for the three months ended
    September 30, 2008, of $14.4 million for the nine months ended
    September 30, 2008 and $17.6 million for the 12 months ended September
    30, 2008.

Commercial Finance

--  RCC's bank loan portfolio ended the third quarter with total
    investments of $936.9 million, at amortized cost, with a weighted-average
    spread of one-month and three-month LIBOR plus 2.28%.  All of RCC's bank
    loan portfolio is match-funded through three collateralized loan obligation
    ("CLO") issuances with a weighted-average cost of three-month LIBOR plus
    0.47%.
--  RCC's commercial finance subsidiary ended the third quarter with
    $106.2 million, at cost, in direct financing leases and notes at a weighted-
    average rate of 9.30%.  RCC's leasing portfolio is fully match-funded
    through a secured term facility, which had a balance of $99.9 million as of
    September 30, 2008 and a weighted-average interest rate of 5.06%.


Book Value

As of September 30, 2008, RCC's GAAP book value per common share was $9.45. Total stockholders' equity was $239.1 million as of September 30, 2008 as compared to $271.6 million as of December 31, 2007. Total common shares outstanding were 25,296,164 as of September 30, 2008 as compared to 25,103,532 as of December 31, 2007.

As of September 30, 2008, RCC's economic book value per common share outstanding, a non-GAAP measure, was $10.92. Economic book value is computed by adding back to GAAP book value any unrealized losses on the Company's investments in CMBS for which it expects to recover full par value at maturity, and on derivatives (cash flow hedges) that are associated with fixed-rate loans which it intends to hold until maturity, in excess of its value at risk, and that have not been adjusted through stockholders' equity for market fluctuations (see Footnote 1 of Schedule III). Economic book value per share is computed by dividing the economic book value by the number of shares outstanding at the end of the period.

Investment Portfolio

The table below summarizes the amortized cost and net carrying amount of the RCC's investment portfolio as of September 30, 2008, classified by interest rate type. The following table includes both (i) the amortized cost of RCC'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 RCC'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, 2008
  Floating rate
CMBS - private
 placement        $   32,130  99.98% $   23,482   73.07% $  (8,648) -26.91%
Other ABS              5,665  94.42%          -    0.00%    (5,665) -94.42%
B notes (1)           22,037 100.01%     21,982   99.76%       (55)  -0.25%
Mezzanine loans
 (1)                 129,600 100.02%    129,276   99.77%      (324)  -0.25%
Whole loans (1)      450,425  99.63%    446,450   98.75%    (3,975)  -0.88%
Bank loans (2)       936,942  99.47% 788,356 (4)  83.69%  (148,586) -15.78%
                  ----------         ----------          ---------
  Total floating
    rate          $1,576,799  99.56% $1,409,546   89.00% $(167,253) -10.56%
                  ==========         ==========          =========
Fixed rate
CMBS - private
 placement        $   38,288  91.00% $   22,739   54.05% $ (15,549) -36.95%
B notes (1)           67,168 100.11%     67,000   99.86%      (168)  -0.25%
Mezzanine loans
 (1)                  81,254  94.69%     68,393   79.70%   (12,861) -14.99%
Whole loans (1)       85,808  99.44%     85,593   99.19%      (215)  -0.25%
Equipment leases
 and notes (3)       106,196 100.02%    105,466   99.33%      (730)  -0.69%
                  ----------         ----------          ---------
  Total fixed rate $ 378,714  97.74% $  349,191   90.12% $ (29,523)  -7.62%
                  ==========         ==========          =========
    Grand total   $1,955,513  99.20% $1,758,737   89.22% $(196,776)  -9.98%
                  ==========         ==========          =========
(1) Net carrying amount includes an allowance for loan losses of $17.6
    million at September 30, 2008, allocated as follows:  B notes (0.2
    million), mezzanine loans ($13.2 million) and whole loans ($4.2
    million).
(2) Net carrying amount includes a $12.4 million allowance for loan losses
    at September 30, 2008.
(3) Net carrying amount includes a $730,000 allowance for lease losses at
    September 30, 2008.
(4) Bank loan portfolio is carried at amortized cost less allowance for
    loan loss and was $924.5 million at September 30, 2008.  Amount
    disclosed in the table represents fair value at September 30, 2008.

Liquidity

At October 31, 2008, RCC's liquidity consists of three primary sources:

--  unrestricted cash and cash equivalents of $2.8 million and restricted
    cash of $11.2 million comprised of $5.3 million in margin call accounts and
    $5.9 million related to its leasing portfolio;
--  capital available for reinvestment in its five collateralized debt
    obligation ("CDO") entities of $74.1 million, which is made up of $59.5
    million of restricted cash and $14.6 million available to finance future
    funding commitments on commercial real estate loans; and
--  financing available under existing borrowing facilities of $10.1
    million, comprised of $0.1 million of available cash from RCC's three year
    non-recourse secured financing facility and $10.0 million of unused
    capacity under its unsecured revolving credit facility.  RCC also has $40.5
    million of unused capacity under a three-year non-recourse commercial real
    estate repurchase facility, which, however, requires approval of individual
    repurchase transactions by the repurchase counterparty.


Capital Allocation

As of September 30, 2008, RCC had allocated its equity capital among its targeted asset classes as follows: 73% in commercial real estate loans, 25% in commercial bank loans and 2% in direct financing leases and notes.

About Resource Capital Corp.

RCC is a diversified real estate finance company that qualifies as a real estate investment trust, or REIT, for federal income tax purposes. RCC's investment strategy focuses on commercial real estate-related assets, and, to a lesser extent, commercial finance assets. RCC invests in the following asset classes: commercial real estate-related assets such as whole loans, A-notes, B-notes, mezzanine loans and mortgage-related securities and commercial finance assets such as other asset-backed securities, bank loans, equipment leases and notes, trust preferred securities, debt tranches of collateralized debt obligations and private equity investments principally issued by financial institutions.

RCC 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 financial fund management, real estate, and commercial finance sectors.

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

Safe Harbor Statement

Statements made in this release include forward-looking statements, which involve substantial risks and uncertainties. RCC'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;
--  capital markets conditions and the availability of financing;
--  defaults or bankruptcies by borrowers on RCC's loans or on loans
    underlying its investments;
--  adverse market trends which may affect the value of real estate and
    other assets underlying RCC's investments;
--  increases in financing or administrative costs; and
--  general business and economic conditions that would impair the credit
    quality of borrowers and RCC'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 RCC is subject, see Item 1A, "Risk Factors" included in its annual report on Form 10-K and in other of its public filings with the Securities and Exchange Commission.

RCC 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 RCC 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, RCC 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 RCC's unaudited consolidated balance sheets, consolidated statements of operations and reconciliations of GAAP net income to adjusted net income, GAAP net income to estimated REIT taxable income and GAAP stockholders' equity to economic book value and supplemental information regarding RCC's commercial real estate, bank loan and equipment leasing portfolios.

                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                    (in thousands, except share data)
                                               September 30,  December 31,
                                                    2008          2007
                                                ------------  ------------
                                                (Unaudited)
ASSETS
   Cash and cash equivalents                    $     12,110  $      6,029
   Restricted cash                                    74,607       119,482
   Investment securities available-for-sale,
    pledged as collateral, at fair value              46,221        65,464
   Loans, pledged as collateral and net of
    allowances of $30.0 million and $5.9
    million                                        1,743,208     1,766,639
   Direct financing leases and notes, pledged
    as collateral and net of allowances of $0.7
    million and $0.3 million and net of
    unearned income                                  105,466        95,030
   Investments in unconsolidated entities              1,548         1,805
   Interest receivable                                 8,635        11,965
   Principal paydown receivables                       5,920           836
   Other assets                                        5,230         4,898
                                                ------------  ------------
      Total assets                              $  2,002,945  $  2,072,148
                                                ============  ============
LIABILITIES
   Borrowings                                   $  1,732,384  $  1,760,969
   Distribution payable                                9,928        10,366
   Accrued interest expense                            4,640         7,209
   Derivatives, at fair value                         12,885        18,040
   Accounts payable and other liabilities              4,007         3,958
                                                ------------  ------------
      Total liabilities                            1,763,844     1,800,542
                                                ------------  ------------
STOCKHOLDERS' EQUITY
   Preferred stock, par value $0.001:
    100,000,000 shares authorized; no shares
    issued and outstanding                                 -             -
   Common stock, par value $0.001:  500,000,000
    shares authorized; 25,296,164 and
    25,103,532 shares issued and outstanding
    (including 475,230 and 581,493 unvested
    restricted shares)                                    25            25
   Additional paid-in capital                        356,104       355,205
   Accumulated other comprehensive loss              (45,121)      (38,323)
   Distributions in excess of earnings               (71,907)      (45,301)
                                                ------------  ------------
      Total stockholders' equity                     239,101       271,606
                                                ------------  ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $  2,002,945  $  2,072,148
                                                ============  ============
                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except share and per share data)
                                (Unaudited)
                              Three Months Ended      Nine Months Ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2008        2007        2008        2007
                            ----------  ----------  ----------  ----------
REVENUES
  Loans                     $   28,903  $   37,398  $   90,028  $  100,786
  Securities                     1,062       8,768       3,401      24,072
  Leases                         1,995       1,856       5,946       5,667
  Interest income - other          352         769       2,178       2,080
                            ----------  ----------  ----------  ----------
  Interest income               32,312      48,791     101,553     132,605
  Interest expense              18,664      34,266      60,736      91,255
                            ----------  ----------  ----------  ----------
    Net interest income         13,648      14,525      40,817      41,350
OPERATING EXPENSES
  Management fees - related
   party                         1,915       1,298       4,824       5,357
  Equity compensation -
   related party                   157          94         779         717
  Professional services            773         772       2,229       2,005
  Insurance expenses               171         116         469         351
  General and
   administrative                  421         405       1,119       1,141
  Income tax expense               (33)         91         134         262
                            ----------  ----------  ----------  ----------
    Total expenses               3,404       2,776       9,554       9,833
                            ----------  ----------  ----------  ----------
NET OPERATING INCOME            10,244      11,749      31,263      31,517
                            ----------  ----------  ----------  ----------
OTHER EXPENSE
  Net realized gains
   (losses) on investments         242         158      (1,651)        513
  Asset impairments                  -     (25,490)          -     (26,277)
  Other income                      27          37          86         110
  Provision for loan and
   lease loss                  (10,999)       (369)    (27,828)       (503)
  Gain on the
   extinguishment of debt
   and loan                        574           -       2,324           -
                            ----------  ----------  ----------  ----------
    Total other expenses       (10,156)    (25,664)    (27,069)    (26,157)
                            ----------  ----------  ----------  ----------
NET INCOME (LOSS)           $       88  $  (13,915) $    4,194  $    5,360
                            ==========  ==========  ==========  ==========
NET INCOME (LOSS) PER SHARE
 - BASIC                    $     0.00  $    (0.56) $     0.17  $     0.22
                            ==========  ==========  ==========  ==========
NET INCOME (LOSS) PER SHARE
 - DILUTED                  $     0.00  $    (0.56) $     0.17  $     0.22
                            ==========  ==========  ==========  ==========
WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING - BASIC 24,814,789  24,807,162  24,719,889  24,650,313
                            ==========  ==========  ==========  ==========
WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING -
 DILUTED                    25,054,296  24,807,162  24,889,965  24,910,848
                            ==========  ==========  ==========  ==========
DIVIDENDS DECLARED PER
 SHARE                      $     0.39  $     0.41  $     1.21  $     1.21
                            ==========  ==========  ==========  ==========
SCHEDULE I
                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
       RECONCILIATION OF GAAP NET INCOME TO ADJUSTED NET INCOME (1)
                  (in thousands, except per share data)
                                (Unaudited)
                                 Three Months Ended     Nine Months Ended
                                    September 30,         September 30,
                                --------------------- --------------------
                                  2008       2007       2008       2007
                                ---------- ---------  ---------  ----------
Net income (loss) - GAAP        $       88 $ (13,915) $   4,194  $    5,360
  Adjustments:
    Provision for loan and lease
     losses (2)                     10,999       369     27,828         503
    Asset impairments related to
     ABS-RMBS Portfolio                  -    25,490          -      26,277
    Capital losses on the sale
     of available-for-sale
     securities                          -         -      2,000           -
    Gain on the extinguishment
     of debt (3)                         -         -     (1,750)          -
                                ---------- ---------  ---------  ----------
  Adjusted net income, excluding
   non-cash charges and
   non-operating capital
   transactions                 $   11,087 $  11,944  $  32,272  $   32,140
                                ========== =========  =========  ==========
  Adjusted net income per share
   - diluted, excluding non-cash
   charges and non-operating
   capital transactions         $     0.44 $    0.48  $    1.30  $     1.29
                                ========== =========  =========  ==========
(1) During 2007, RCC began evaluating its performance based on several
    performance measures, including adjusted net income, in addition to net
    income. Adjusted net income represents net income available to common
    shares, computed in accordance with GAAP, before provision for loan and
    lease losses, gain on the extinguishment of debt and non-operating
    capital items.  These items are recorded in accordance with GAAP and
    are typically non-cash or non-operating items that do not impact RCC's
    operating performance or ability to pay a dividend.
    Management views adjusted net income as a useful and appropriate
    supplement to GAAP net income (loss) because it helps management
    evaluate RCC's performance without the effects of certain GAAP
    adjustments that may not have a direct financial impact on RCC's
    current operating performance and dividend paying ability. Management
    uses adjusted net income to evaluate the performance of RCC's
    investment portfolios, ability to manage its expenses and dividend
    paying ability before the impact of non-cash adjustments and
    non-operating capital gain or loss recorded in accordance with GAAP.
    RCC believes this is a useful performance measure for investors to
    evaluate these aspects of RCC's business as well.  The most significant
    adjustments RCC excludes in determining adjusted earnings as of
    September 30, 2008 are its provision for loan and lease losses, gain on
    the extinguishment of debt and losses on the sale of available-for-sale
    securities.  At September 30, 2007, RCC also excluded asset impairments
    related to its ABS-RMBS portfolio that was deconsolidated on November
    13, 2007.  Management excludes all such items from its calculation of
    adjusted net income because these items are not charges or losses which
    would impact RCC's current operating performance.  However, by
    excluding these significant items, adjusted net income reduces an
    investor's understanding of RCC's operating performance by excluding
    management's expectation of possible future gains or losses from RCC's
    investment portfolio.
    Adjusted net income, as a non-GAAP financial measurement, does not
    purport to be an alternative to GAAP net income (loss), or a measure of
    operating performance or cash flows from operating activities
    determined in accordance with GAAP as a measure of liquidity.  Instead,
    adjusted net income should be reviewed in connection with net income
    (loss) and cash flows from operating, investing and financing
    activities in RCC's consolidated financial statements to help analyze
    management's expectation of potential future losses from RCC's
    investment portfolio and other non-cash or capital matters that impact
    its financial results.  Adjusted net income and other supplemental
    performance measures are defined in various ways throughout the REIT
    industry.  Investors should consider these differences when comparing
    RCC's adjusted net income to these other REITs.
(2) Non-cash charges for loan and lease losses.
(3) Gain on the extinguishment of debt for the three and nine months ended
    September 30, 2008, excludes a gain on the early extinguishment of a
    loan of $574,000 as management views this transaction to be in its
    ordinary course of business.
SCHEDULE II
                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                    RECONCILIATION OF GAAP NET INCOME
                   TO ESTIMATED REIT TAXABLE INCOME (1)
                                (Unaudited)

RCC calculates estimated REIT taxable income, which is a non-GAAP financial measure, according to the requirements of the Internal Revenue Code. The following table reconciles net income to estimated REIT taxable income for the periods presented (in thousands, except per share data):

                                 Three Months Ended     Nine Months Ended
                                    September 30,         September 30,
                                --------------------  --------------------
                                  2008       2007       2008       2007
                                ---------  ---------  ---------  ---------
Net income (loss) - GAAP        $      88  $ (13,915) $   4,194  $   5,360
Adjustments:
   Share-based compensation to
    related parties                  (190)      (385)      (729)      (725)
   Incentive management fee
    expense to related parties
    paid in shares                      -       (417)         -          -
   Capital loss carryover
    (utilization)/losses from
    the sale of securities              -          -      2,000          -
   Provisions for loan and
    lease losses unrealized         2,761          -     14,446          -
   Net book to tax adjustments
    for the Company's taxable
    foreign REIT subsidiaries       7,034          -     11,271          -
   Addback of GAAP loss reserve         -     25,490          -     26,277
   Other net book to tax
    adjustments                      (281)        90       (272)       139
                                ---------  ---------  ---------  ---------
Estimated REIT taxable income   $   9,412  $  10,863  $  30,910  $  31,051
                                =========  =========  =========  =========
Amounts per share - diluted     $    0.38  $    0.44  $    1.24  $    1.25
                                =========  =========  =========  =========
(1) RCC believes that a presentation of estimated REIT taxable income
    provides useful information to investors regarding its financial
    condition and results of income as this measurement is used to
    determine the amount of dividends that RCC is required to declare to
    its stockholders in order to maintain its status as a REIT for federal
    income tax purposes.  Since RCC, as a REIT, expects to make
    distributions based on taxable income, RCC expects that its
    distributions may at times be more or less than its reported income.
    Total taxable income is the aggregate amount of taxable income
    generated by RCC and by its domestic and foreign taxable REIT
    subsidiaries.  Estimated REIT taxable income excludes the undistributed
    taxable income of RCC's domestic taxable REIT subsidiary, if any such
    income exists, which is not included in REIT taxable income until
    distributed to RCC.  There is no requirement that RCC's domestic
    taxable REIT subsidiary distribute its income to RCC.  Estimated REIT
    taxable income, however, includes the taxable income of RCC's foreign
    taxable REIT subsidiaries because RCC generally will be required to
    recognize and report their taxable income on a current basis.  Because
    not all companies use identical calculations, this presentation of
    estimated REIT taxable income may not be comparable to other
    similarly-titled measures of other companies.
SCHEDULE III
                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
RECONCILIATION OF GAAP STOCKHOLDERS' EQUITY TO ECONOMIC BOOK VALUE (1) (2)
                  (in thousands, except per share data)
                                (Unaudited)
                                                                As of
                                                             September 30,
                                                                 2008
                                                            ---------------
Stockholders' equity - GAAP                                 $       239,101
Add:
   Unrealized losses - CMBS portfolio                                24,197
   Unrealized losses recognized in excess of value at risk
    - interest rate swaps                                            12,885
                                                            ---------------
Economic book value                                         $       276,183
                                                            ===============
Shares outstanding as of September 30, 2008                          25,296
                                                            ---------------
Economic book value per share                               $         10.92
                                                            ===============
(1) Management views economic book value, a non-GAAP measure, as a useful
    and appropriate supplement to GAAP stockholders' equity and book value
    per share.  The measure serves as an additional measure of RCC's value
    because it facilitates evaluation of us without the effects of
    unrealized losses on investments for which we expect to recover full
    par value at maturity and on interest rate swaps, which we intend to
    hold to maturity, in excess of RCC's value at risk.  Unrealized losses
    recognized in RCC's financial statements, prepared in accordance with
    GAAP, that are in excess of RCC's maximum value at risk are added back
    to stockholders' equity in arriving at economic book value.  Economic
    book value should be reviewed in connection with GAAP stockholders'
    equity as set forth in RCC's consolidated balance sheets, to help
    analyze RCC's value to investors.  Economic book value is defined in
    various ways throughout the REIT industry.  Investors should consider
    these differences when comparing RCC's economic book value to that of
    other REITs.
(2) RCC adds back unrealized losses on interest rate swaps (cash flow
    hedges) that are associated with fixed-rate loans that have not been
    fair-valued through stockholders' equity.
                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                         SUPPLEMENTAL INFORMATION
                              (in thousands)
                                (Unaudited)

Loans and Leasing Investment Statistics

The following table presents information on RCC's non-performing loans and leases and related allowances as of September 30, 2008 and 2007 (based on par value):

                                                      As of September 30,
                                                      --------------------
                                                        2008       2007
                                                      ---------  ---------
Non-performing:
   Loans and leases                                   $  18,668  $   1,267
   Non-performing as a percentage of total loans and
    leases                                                  1.0%       0.1%
Allowance for loan and lease losses:
   Specific provision                                 $  19,728  $     196
   General provision                                     11,029        130
                                                      ---------  ---------
   Total allowance for loan and leases                $  30,757  $     326
                                                      =========  =========
   Allowance as a percentage of total loans and
    leases                                                  1.6%       0.0%
            RESOURCE CAPITAL CORP. AND SUBSIDIARIES
         SUPPLEMENTAL INFORMATION, A NON-GAAP MEASURE
                         (Unaudited)

The following table presents commercial real estate loan portfolio statistics as of September 30, 2008 (based on par value):

Security type
   Whole loans                                         65.2%
   Mezzanine loans                                     24.0%
   B Notes                                             10.8%
                                                -----------
      Total                                           100.0%
                                                ===========
Collateral type
   Multifamily                                         32.9%
   Hotel                                               26.6%
   Office                                              22.0%
   Retail                                              13.2%
   Condo                                                1.2%
   Flex                                                 0.8%
   Self-storage                                         0.8%
   Other                                                2.5%
                                                -----------
      Total                                           100.0%
                                                ===========
Collateral location
   Southern California                                 24.2%
   Northern California                                 16.6%
   New York                                            11.2%
   Arizona                                              8.2%
   Texas                                                4.9%
   Florida                                              4.6%
   Tennessee                                            3.9%
   Washington                                           3.7%
   Colorado                                             3.7%
   Other                                               19.0%
                                                -----------
      Total                                           100.0%
                                                ===========
                  RESOURCE CAPITAL CORP. AND SUBSIDIARIES
               SUPPLEMENTAL INFORMATION, A NON-GAAP MEASURE
                                (Unaudited)

The following table presents bank loan portfolio statistics by industry as of September 30, 2008 (based on par value):

Industry type
   Healthcare, education and childcare                 11.0%
   Diversified/conglomerate service                     9.0%
   Printing and publishing                              5.9%
   Chemicals, plastics and rubber                       5.9%
   Broadcasting and entertainment                       5.6%
   Retail stores                                        5.2%
   Leisure, amusement, motion pictures,
    entertainment                                       3.9%
   Hotels, motels, inns and gaming                      3.8%
   Automobile                                           3.8%
   Utilities                                            3.6%
   Finance                                              3.6%
   Personal, food and miscellaneous services            3.5%
   Other                                               35.2%
                                                -----------
      Total                                           100.0%
                                                ===========

The following chart describes equipment leases and notes by industry as of September 30, 2008 (based on par value):

Industry type
   Services                                            49.0%
   Retail trade                                        10.8%
   Transportation, communications, electric,
    gas and sanitary services                          10.5%
   Agriculture, forestry and fishing                    7.9%
   Manufacturing                                        5.9%
   Construction                                         4.5%
   Finance, insurance and real estate                   3.8%
   Wholesale trade                                      3.7%
   Other                                                3.9%
                                                -----------
      Total                                           100.0%
                                                ===========

Contact:
David J. Bryant
Chief Financial Officer
Resource Capital Corp.
1845 Walnut Street, 10th Floor
Philadelphia, PA 19103
215/546-5005, 215/546-5388 (fax)


SOURCE: Resource Capital Corp.


Investor News
New York and Philadelphia Locations
712 Fifth Avenue
12th Floor
New York, NY 10019

1845 Walnut Street
18th Floor
Philadelphia, PA 19103
t. 212.506.3899



t. 215.546.5005
RSO (Common Stock)
ExchangeNYSE (US Dollar)
Price$8.37
Change (%) Stock is Down 0.13 (1.53%)
Volume437,480
Data as of 02/27/17 4:00 p.m. ET
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