SOURCE: Resource Capital Corp.

May 02, 2011 19:20 ET

Resource Capital Corp. Reports Results for Three Months Ended March 31, 2011

NEW YORK, NY--(Marketwire - May 2, 2011) -


Highlights

--  Adjusted net income of $0.26 per share-diluted.
--  GAAP net income of $0.22 per share-diluted.
--  Estimated REIT taxable income of $0.14 per share-diluted.
--  Net interest income increased by $4.5 million, or 33% as compared to
    the three months ended March 31, 2010.
--  Provisions for loan losses decreased by $12.8 million, or 83% as
    compared to the three months ended March 31, 2010.
--  Common stock cash dividend of $0.25 per share.
--  $221.1 million of total cash, including unrestricted cash of $61.5
    million at March 31, 2011.
--  Completed a public offering on March 30, 2011 and issued 6.9 million
    shares which generated net proceeds of $46.6 million at a price of
    $6.76 per common share.
--  Book value per common share increased from $5.99 at December 31, 2010
    to $6.08 at March 31, 2011.

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") loan assets, commercial mortgage-backed securities ("CMBS"), commercial finance assets and structured note investments, reported results for the three months ended March 31, 2011.

--  Adjusted net income, a non-GAAP measure excluding the effect of
    non-cash charges and non-operating capital transactions, was $15.7
    million, or $0.26 per share-diluted for the three months ended March
    31, 2011 as compared to $10.1 million, or $0.27 per share-diluted for
    the three months ended March 31, 2010, an increase of $5.6 million, or
    55%.  For a reconciliation of adjusted net income to GAAP net income,
    see Schedule I to this press release.
--  GAAP net income for the three months ended March 31, 2011 was $13.1
    million, or $0.22 per share-diluted as compared to GAAP net income for
    the three months ended March 31, 2010 of $1.4 million, or $0.04 per
    share-diluted, an increase of $11.7 million, or 835%.
--  Estimated REIT taxable income, a non-GAAP measure, for the three months
    ended March 31, 2011 was $8.6 million, or $0.14 per share-diluted as
    compared to $9.3 million, or $0.24 per share-diluted for the three
    months ended March 31, 2010, a decrease of $719,000, or 8%.  For a
    reconciliation of estimated REIT taxable income to GAAP net income, see
    Schedule II to this press release.

Jonathan Cohen, CEO and President of Resource Capital Corp., commented, "This quarter demonstrates our ability to continue to reduce our real estate legacy assets with very little credit loss and move into higher income producing investments. We are excited by our ability to now increase our commercial real estate business and continue to expand our corporate loan business. I believe the growth in net interest income and book value per share are indicators of the strength of our business."

Additional financial results:

Commercial Real Estate

--  RSO received repayments on CRE loans of $1.9 million and sold two CRE
    loans for proceeds of $24.6 million for the three months ended March
    31, 2011.
--  RSO received repayments on CMBS investments of $1.2 million during the
    three months ended March 31, 2011.
--  During the three months ended March 31, 2011, RSO acquired $22.5
    million par value of CMBS at a weighted average price of 101%.  The
    majority of these purchases were financed by our new Wells Fargo
    facility and are highly rated bonds.  These purchases are anticipated
    to provide a levered yield of approximately 13%.
--  RSO has negotiated and expects to sell two additional CRE positions in
    Q2-2011:
  --  $19.5 million mezzanine position secured by an office property for
      par less associated costs of approximately $0.7 million.
  --  $15.0 million B note secured by a hotel portfolio for a dollar price
      of $85, for which we allowed a $2.25 million loss.

The following table summarizes RSO's CRE loan activities and fundings of previous commitments, at par, for the three months ended March 31, 2011 (in millions, except percentages):

                                                        Floating   Weighted
                         Three Months     12 Months     Weighted    Average
                            Ended           Ended        Average    Fixed
                        March 31, 2011  March 31, 2011  Spread (1) Rate (2)
                        --------------  --------------  ---------  -------
Whole loans             $         18.3  $         36.2
Whole loans -
 future fundings (3)               1.6             4.7       3.10%    8.55%
                        ==============  ==============
New loans production              19.9            40.9
Sale of real estate
 loans                           (24.6)          (61.4)
Payoffs                              -           (17.7)
Principal paydowns                (1.9)          (16.4)
                        --------------  --------------
Loans, net (4)          $         (6.6) $        (54.6)
                        ==============  ==============

(1) Represents the weighted average rate above the London Interbank Offered
    Rate ("LIBOR") on loans whose interest rate is based on LIBOR as of
    March 31, 2011.
(2) Reflects rates on RSO's portfolio balance as of March 31, 2011.
(3) Consists of fundings of previous commitments.
(4) The basis of new net loans does not include provisions for losses on
    CRE loans of $3.1 million for the three months ended March 31, 2011 and
    $32.0 million for the 12 months ended March 31, 2011.

Commercial Finance - Syndicated Bank Loans

--  RSO's bank loan portfolio, including asset-backed securities ("ABS")
    held-to-maturity and certain loans held for sale, ended the first
    quarter with total investments of $905.3 million, at amortized cost,
    with a weighted-average spread of one-month and three-month LIBOR plus
    3.02%.  All of RSO'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% (0.82% at March
    31, 2011).
--  During the three months March 31, 2011, RSO bought bank loans through
    its three CLOs with a par value of $162.0 million at modest net
    discount of $1.6 million.  These purchased loans had an aggregate
    weighted average annual yield of approximately 4.64%.
--  On February 24, 2011, RSO entered into a definitive agreement that will
    expand its management operations in broadly syndicated bank loans.  A
    subsidiary of RSO has purchased 100% of the ownership interests in
    Churchill Pacific Asset Management LLC from Churchill Financial
    Holdings LLC for $22.5 million and renamed it Resource Capital Asset
    Management LLC ("RCAM").  Through RCAM, RSO will be entitled to collect
    senior, subordinated and incentive fees related to five Collateralized
    Loan Obligations ("CLOs") totaling approximately $1.9 billion in assets
    managed by RCAM.  RCAM will be assisted by Apidos Capital Management,
    LLC, in managing the five CLOs.  For the period from acquisition
    through March 31, 2011, RCAM earned $1.6 million of net fees.

Commercial Finance - Preferred Stock Investment

On January 4, 2011, RSO made an investment, in conjunction with a debt financing commitment from Guggenheim Securities, in LEAF Commercial Capital, Inc. ("LCC"). LCC is a newly formed commercial finance company specializing in equipment leasing and is a subsidiary of LEAF Financial Corp ("LEAF"). LEAF contributed its leasing platform and directly-held leases and loans to LCC while RSO and Guggenheim Securities committed to investing up to $44.0 million of capital (which includes the option to invest an additional $10 million at a later date) in the form of preferred stock and subordinated debt, respectively, into LCC. A portion of RSO's investment consisted of the contribution of leases and loans and equity in these investments it had previously acquired from LEAF. In return, RSO received 2,626 shares of LEAF Commercial Series A preferred stock and warrants to purchase 4,800 shares of LCC common stock for an exercise price of $0.01 per share (representing 48% of LCC's common stock on a fully-diluted basis).

RSO's preferred stock investment in LCC has a stated dividend rate of 10% and earned $0.7 million in dividends during the period ended March 31, 2011.

Book Value

As of March 31, 2011, RSO's book value per common share was $6.08, an increase from $5.99 per common share at December 31, 2010. Total stockholders' equity was $427.2 million as of March 31, 2011 as compared to $348.3 million as of December 31, 2010. Total common shares outstanding were 70,320,966 as of March 31, 2011 as compared to 58,183,425 as of December 31, 2010.

Investment Portfolio

The table below summarizes the amortized cost and net carrying amount of RSO's investment portfolio as of March 31, 2011, 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 (3)   price    amount    price    cost      price
                   ---------- ------  ---------- ------  ---------  ------
  March 31, 2011
   Floating rate
CMBS-private
 placement         $   29,946 100.00% $   10,328  34.49% $ (19,618) -65.51%
Structured notes       21,989  26.25%     31,270  37.33%     9,281   11.08%
Other ABS                   -      -%         23   0.26%        23    0.26%
B notes (1)            11,492  99.93%     11,324  98.47%      (168)  -1.46%
Mezzanine
 loans (1)             81,878 100.00%     80,679  98.54%    (1,199)  -1.46%
Whole loans (1)       459,405  99.90%    437,906  95.23%   (21,499)  -4.67%
Bank loans (2)        865,910  97.37%    866,541  97.44%       631    0.07%
Loans held for
 sale (3)              23,316  86.37%     23,316  86.37%         -    0.00%
ABS held-to-
 maturity (4)          29,206  91.46%     26,903  84.26%    (2,303)  -7.20%
                   ----------         ----------         ---------
  Total floating
   rate             1,523,142  93.82%  1,488,290  91.67%   (34,852)  -2.15%
                   ----------         ----------         ---------
    Fixed rate
CMBS - private
 placement             75,532  58.45%     80,738  62.48%     5,206    4.03%
B notes (1)            30,925  99.51%     30,472  98.05%      (453)  -1.46%
Mezzanine
 loans (1)             14,004 100.40%     11,485  82.34%    (2,519) -18.06%
Loans held for
 sale (3)              19,528 100.14%     19,528 100.14%         -    0.00%
Preferred stock        31,213 100.00%     31,213 100.00%         -    0.00%
                   ----------         ----------         ---------
  Total fixed rate    171,202  76.10%    173,436  77.10%     2,234    1.00%
                   ----------         ----------         ---------
    Grand total    $1,694,344  91.66% $1,661,726  89.90% $ (32,618)  -1.76%
                   ==========         ==========         =========

(1) Net carrying amount includes an allowance for loan losses of $25.9
    million at March 31, 2011, allocated as follows:  B notes ($621,000),
    mezzanine loans ($3.7 million) and whole loans ($21.6 million).
(2) The bank loan portfolio is carried at amortized cost less allowance for
    loan loss and was $864.1 million at March 31, 2011. The amount
    disclosed represents net realizable value at March 31, 2011, which
    includes a $1.8 million allowance for loan losses at March 31, 2011.
(3) Loans held for sale are carried at the lower of cost or market.
    Amortized cost is equal to fair value.
(4) ABS held-to-maturity are carried at amortized cost less other-than-
    temporary impairments.

Liquidity

At April 30, 2011, after disbursing the first quarter 2011 dividend, RSO's liquidity of $207.8 million consists of two primary sources:

--  unrestricted cash and cash equivalents of $38.3 million and restricted
    cash of $2.0 million in margin call accounts; and
--  capital available for reinvestment in its five CDO entities of $167.5
    million, of which $0.9 million is designated to finance future funding
    commitments on CRE loans.

Capital Allocation

As of March 31, 2011, RSO had allocated its invested equity capital among its targeted asset classes as follows: 71% in CRE investments, 17% in commercial bank loans, 7% in its preferred equity investment in LCC and 5% in structured notes (trading securities).

Supplemental Information

The following schedules of reconciliations or supplemental information as of March 31, 2011 are included at the end of this release:

--  Schedule I - Reconciliation of GAAP Net Income to Adjusted Net Income;
    and
--  Schedule II - Reconciliation of GAAP Net Income to Estimated REIT
    Taxable Income; and
--  Schedule III - Summary of CDO and CLO Performance Statistics.
--  Supplemental Information regarding loan and leasing 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 whole loans, A-notes, B-notes, mezzanine loans, commercial mortgage-backed securities 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, commercial finance and financial fund management 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;
--  capital markets conditions and the availability of financing;
--  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 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 adjusted net income, a reconciliation of GAAP net income to estimated REIT taxable income 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)


                                                   March 31,   December 31,
                                                      2011         2010
                                                  -----------  -----------
ASSETS                                            (Unaudited)
  Cash and cash equivalents                       $    61,499  $    29,488
  Restricted cash                                     159,639      168,192
  Investment securities-trading                        31,270       17,723
  Investment securities available-for-sale,
   pledged as collateral, at fair value                84,733       57,998
  Investment securities available-for-sale, at
   fair value                                          37,569        5,962
  Investment securities held-to-maturity, pledged
   as collateral                                       29,206       29,036
  Property available-for-sale                           4,444        4,444
  Loans, pledged as collateral and net of
   allowances of $27.6 million and $34.2 million    1,435,945    1,443,271
  Loans held for sale                                  42,844       28,593
  Lease receivables, pledged as collateral, net
   of allowances of $0 and $70,000 and net of
   unearned income                                          -      109,612
  Loans receivable-related party                        9,689        9,927
  Investments in unconsolidated entities                6,789        6,791
  Dividend reinvestment plan proceeds receivable            -       10,000
  Interest receivable                                   5,555        6,330
  Deferred tax asset                                    4,401        4,401
  Intangible asset                                     20,960            -
  Other assets                                          3,093        2,432
                                                  -----------  -----------
    Total assets                                  $ 1,937,636  $ 1,934,200
                                                  ===========  ===========
LIABILITIES
  Borrowings                                      $ 1,463,701  $ 1,543,251
  Distribution payable                                 17,590       14,555
  Accrued interest expense                              1,506        1,618
  Derivatives, at fair value                           12,009       13,292
  Deferred tax liability                                9,798        9,798
  Accounts payable and other liabilities                5,829        3,360
                                                  -----------  -----------
    Total liabilities                               1,510,433    1,585,874
                                                  -----------  -----------
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; 70,320,966 and 58,183,425
   shares issues and outstanding (including
   1,158,875 and 534,957 unvested restricted
   shares)                                                 70           58
  Additional paid-in capital                          605,474      528,373
  Accumulated other comprehensive loss                (27,706)     (33,918)
  Distributions in excess of earnings                (150,635)    (146,187)
                                                  -----------  -----------
    Total stockholders' equity                        427,203      348,326
                                                  -----------  -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 1,937,636  $ 1,934,200
                                                  ===========  ===========






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


                                                     Three Months Ended
                                                          March 31,
                                                  ------------------------
                                                      2011         2010
                                                  -----------  -----------
REVENUES
  Net interest income:
    Loans                                         $    20,148  $    18,385
    Securities                                          2,604        2,874
    Leases                                                  -          235
    Interest income - other                             2,477          215
                                                  -----------  -----------
      Total interest income                            25,229       21,709
    Interest expense                                    6,933        7,937
                                                  -----------  -----------
      Net interest income                              18,296       13,772
      Dividend income                                     661            -
      Fee income                                        1,646            -
                                                  -----------  -----------
    Total revenues                                     20,603       13,772
                                                  -----------  -----------
OPERATING EXPENSES
  Management fees - related party                       2,338        1,152
  Equity compensation - related party                     460          722
  Professional services                                   919          819
  Insurance                                               177          212
  General and administrative                              945          647
  Amortization of intangible asset                        253            -
  Income tax expense                                    1,809          105
                                                  -----------  -----------
    Total expenses                                      6,901        3,657
                                                  -----------  -----------
NET OPERATING INCOME                                   13,702       10,115
                                                  -----------  -----------

OTHER INCOME (EXPENSE)
  Impairment losses on investment securities             (665)      (2,665)
  Recognized in other comprehensive loss                 (665)      (2,665)
                                                  -----------  -----------
  Net impairment losses recognized in earnings              -            -
  Net realized gain on investment securities
   available-for-sale and loans                            35          146
  Net realized gain on investment
   securities-trading                                   2,263            -
  Net unrealized loss on investment
   securities-trading                                    (336)           -
  Provision for loan and lease losses                  (2,606)     (15,371)
  Gain on the extinguishment of debt                        -        6,628
  Other income (expense)                                   84         (112)
                                                  -----------  -----------
    Total other expenses                                 (560)      (8,709)
                                                  -----------  -----------

NET INCOME                                        $    13,142  $     1,406
                                                  ===========  ===========
NET INCOME PER SHARE - BASIC                      $      0.22  $      0.04
                                                  ===========  ===========
NET INCOME PER SHARE - DILUTED                    $      0.22  $      0.04
                                                  ===========  ===========
WEIGHTED AVERAGE NUMBER OF SHARES
 OUTSTANDING - BASIC                               60,147,820   37,987,192
                                                  ===========  ===========
WEIGHTED AVERAGE NUMBER OF SHARES
 OUTSTANDING - DILUTED                             60,397,630   38,150,605
                                                  ===========  ===========
DIVIDENDS DECLARED PER SHARE                      $      0.25  $      0.25
                                                  ===========  ===========






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
                                                          March 31,
                                                  ------------------------
                                                      2011         2010
                                                  -----------  -----------
Net income - GAAP                                 $    13,142  $     1,406
Adjustments:
   Provision for loan and lease losses (2)              2,606       15,371
   Gains on the extinguishment of debt                      -       (6,628)
                                                  -----------  -----------
Adjusted net income, excluding non-cash
 charges (1)                                      $    15,748  $    10,149
                                                  ===========  ===========

Adjusted net income per share - diluted,
 excluding non-cash charges                       $      0.26  $      0.27
                                                  ===========  ===========


(1) RSO evaluates its performance based on several performance measures,
    including adjusted net income, in addition to net income and estimated
    REIT taxable 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 RSO's operating performance or ability to pay a dividend.

    Management views adjusted net income as a useful and appropriate
    supplement to GAAP net income because it helps management evaluate
    RSO's performance without the effects of certain GAAP adjustments that
    may not have a direct financial impact on RSO's current operating
    performance and dividend paying ability. Management uses adjusted net
    income to evaluate the performance of RSO'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. RSO believes this is a useful
    performance measure for investors to evaluate these aspects of RSO's
    business as well. The most significant adjustments RSO excludes in
    determining adjusted earnings as of March 31, 2011 and 2010 are its
    provision for loan and lease losses, loss from asset impairments and
    gain on the extinguishment of debt. Management excludes all such items
    from its calculation of adjusted net income because these items are not
    charges or losses which would impact RSO's current operating
    performance. However, by excluding these significant items, adjusted
    net income reduces an investor's understanding of RSO's operating
    performance by excluding management's expectation of possible future
    gains or losses from RSO's investment portfolio.

    Adjusted net income, as a non-GAAP financial measurement, does not
    purport to be an alternative to GAAP net income, 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
    and cash flows from operating, investing and financing activities in
    RSO's consolidated financial statements to help analyze management's
    expectation of potential future losses from RSO'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 RSO's
    adjusted net income to these other REITs.

(2) Non-cash charges for loan and lease losses.






SCHEDULE II

                 RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                    RECONCILIATION OF GAAP NET INCOME
                  TO ESTIMATED REIT TAXABLE INCOME (1)
                 (in thousands, except per share data)
                               (Unaudited)


RSO 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 GAAP net income to estimated REIT taxable income
for the periods presented (in thousands, except per share data):


                                                     Three Months Ended
                                                          March 31,
                                                  ------------------------
                                                      2011         2010
                                                  -----------  -----------
Net income - GAAP                                 $    13,142  $     1,406
   Taxable REIT subsidiary's (income) loss             (2,004)        (125)
                                                  -----------  -----------
      Adjusted net income                              11,138        1,281
Adjustments:
   Share-based compensation to related parties            (93)        (316)
   Provision for loan and lease losses unrealized       3,122       15,500
   Equity in income of real estate joint venture       (4,473)           -
   Net book to tax adjustment for the inclusion
    of our taxable foreign REIT subsidiaries           (1,098)      (6,378)
   Subpart F income limitation (2)                          -          322
   Other net book to tax adjustments                       11       (1,083)
                                                  -----------  -----------
Estimated REIT taxable income                     $     8,607  $     9,326
                                                  ===========  ===========

Amounts per share - diluted                       $      0.14  $      0.24
                                                  ===========  ===========

(1) RSO believes that a presentation of estimated REIT taxable income
    provides useful information to investors regarding its financial
    condition and results of operations as this measurement is used to
    determine the amount of dividends that RSO is required to declare to
    its stockholders in order to maintain its status as a REIT for federal
    income tax purposes. Since RSO, as a REIT, expects to make
    distributions based on estimated REIT taxable income, RSO expects that
    its distributions may at times be more or less than its reported GAAP
    net income. Total estimated REIT taxable income is the aggregate amount
    of estimated REIT taxable income generated by RSO and by its domestic
    and foreign taxable REIT subsidiaries. Estimated REIT taxable income
    excludes the undistributed taxable income (if any) of RSO's domestic
    taxable REIT subsidiary, which is not included in REIT taxable income
    until distributed to RSO.  There is no requirement that RSO's domestic
    taxable REIT subsidiary distribute its income to RSO. Estimated REIT
    taxable income, however, includes the taxable income of RSO's foreign
    taxable REIT subsidiaries because RSO 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.
(2) U.S. shareholders of controlled foreign corporations are required to
    include their share of such corporations' income on a current basis;
    however, losses sustained by such corporations do not offset income of
    their U.S. shareholders on a current basis.






SCHEDULE III

                 RESOURCE CAPITAL CORP. AND SUBSIDIARIES
              SUMMARY OF CDO AND CLO PERFORMANCE STATISTICS
                             (in thousands)
                               (Unaudited)

Collateralized Debt Obligations - Distributions and Coverage Test Summary

        The following table sets forth collateralized debt obligations -
distributions and coverage test summary for the periods presented:

                                              Annualized
                                               Interest    Overcollateral-
                                               Coverage       ization
                           Cash Distributions  Cushion        Cushion
                           ------------------  --------  ------------------
                                       Three
                                      Months                        As of
                         Year Ended    Ended    As of     As of    Initial
                           December    March    March     March    Measure-
                    CDO    31, 2010  31, 2011  31, 2011  31, 2011    ment
Name               Type      (1)        (1)     (2)(3)      (4)      Date
                  -------  --------  --------  --------  --------  --------
                           (actual)  (actual)
Apidos CDO I         CLO   $  7,695  $  2,057  $  9,639  $ 14,181  $ 17,136
Apidos CDO III       CLO   $  6,552  $  1,961  $  3,885  $  8,951  $ 11,269
Apidos Cinco CDO     CLO   $  7,792  $  2,304  $  5,189  $ 21,906  $ 17,774
RREF 2006-1      CRE CDO   $  8,929  $  1,773  $  6,407  $ 10,512  $ 24,941
RREF 2007-1      CRE CDO   $ 15,068  $  3,317  $  8,355  $ 10,857  $ 26,032


(1) Distributions on retained equity interests in CDOs (comprised of note
    investment and preference share ownership).
(2) Interest coverage cushion 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.






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


Loan and Leasing Investment Statistics

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


                                                   March 31,   December 31,
                                                      2011         2010
                                                  -----------  -----------
Allowance for loan and lease receivable losses:
  Specific allowance:
    Commercial real estate loans                  $    15,300  $    20,844
    Bank loans                                            112          112
                                                  -----------  -----------
      Total specific allowance (1)                     15,412       20,956
                                                  -----------  -----------
  General allowance:
    Commercial real estate loans                       10,538       10,773
    Bank loans                                          1,719        2,504
    Lease receivables                                       -           70
                                                  -----------  -----------
      Total general allowance                          12,257       13,347
                                                  -----------  -----------
  Total allowance for loans and leases            $    27,669  $    34,303
                                                  ===========  ===========
  Allowance as a percentage of total loans and
   lease receivables                                      1.8%         2.1%

Loans held for sale:
  Commercial Real Estate Loans:
    Commercial real estate loans at cost          $    36,198  $    39,187
    Commercial real estate loans provision             (3,244)     (14,621)
                                                  -----------  -----------
      Commercial real estate loans held for sale       32,954       24,566
                                                  -----------  -----------
  Bank Loans:
    Bank loans at cost                            $    10,328  $     5,172
    Bank loans provision                                 (438)      (1,145)
                                                  -----------  -----------
      Bank loans held for sale                          9,890        4,027
                                                  -----------  -----------
Loans held for sale                               $    42,844  $    28,593
                                                  ===========  ===========


(1) Includes allowances on the following assets: commercial real estate
    loans of $36.0 million and bank loans of $361,000. A loan of
    $5.0 million that was fully reserved as of December 31, 2010 was
    charged off as of March 31, 2011.






                 RESOURCE CAPITAL CORP. AND SUBSIDIARIES
              SUPPLEMENTAL INFORMATION, A NON-GAAP MEASURE
                               (Unaudited)


The following table presents commercial real estate loan portfolio
statistics as of March 31, 2011 (based on par value):


Security type:
   Whole loans                                    76.9%
   Mezzanine loans                                16.0%
   B Notes                                         7.1%
                                               -------
      Total                                      100.0%
                                               =======

Collateral type:
   Hotel                                          32.9%
   Multifamily                                    32.7%
   Office                                         14.0%
   Retail                                         12.0%
   Flex                                            1.2%
   Self-storage                                    1.0%
   Other                                           6.2%
                                               -------
      Total                                      100.0%
                                               =======

Collateral location:
   Southern California                            27.9%
   Northern California                            13.8%
   Arizona                                         9.5%
   Florida                                         8.5%
   Texas                                           5.5%
   Washington                                      5.2%
   Colorado                                        4.9%
   New York                                        4.1%
   Tennessee                                       3.7%
   Other                                          16.9%
                                               -------
      Total                                      100.0%
                                               =======






                 RESOURCE CAPITAL CORP. AND SUBSIDIARIES
                        SUPPLEMENTAL INFORMATION
                               (Unaudited)


The following table presents bank loan portfolio statistics by industry as
of March 31, 2011 (based on par value):


Industry type:
   Healthcare, education and childcare            11.1%
                                               -------
   Diversified/conglomerate service                9.5%
   Broadcasting and entertainment                  7.4%
   Printing and publishing                         5.4%
   Telecommunications                              5.3%
   Automobile                                      5.1%
   Personal transportation                         4.8%
                                               -------
   Retail stores                                   4.7%
   Chemicals, plastics and rubber                  4.7%
   Electronics                                     4.5%
   Personal, food and miscellaneous services       4.0%
   Other                                          33.5%
                                               -------
      Total                                      100.0%
                                               =======

Contact Information

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