Resource Capital Corp. (NYSE:RSO)
Significant Items and
Highlights
- GAAP net income allocable to common shares of $0.41 and $0.57
per share-diluted for the three and nine months ended
September 30, 2017, respectively.
- Resource Capital Corp. ("RSO") issued $143.8 million of 4.50%
convertible senior notes due 2022 (the "4.50% Convertible Senior
Notes") and extinguished $44.5 million of 6.00% convertible senior
notes due 2018 (the "6.00% Convertible Senior Notes") and $78.8
million of 8.00% convertible senior notes due 2020 (the "8.00%
Convertible Senior Notes") in conjunction with the new
issuance.
- Core Earnings, a non-GAAP measure, of $(0.36) and $(0.56) per
share-diluted (see Schedule I). Core Earnings include a
non-recurring charge of $0.27 per share-diluted, in connection with
the convertible senior notes extinguishment.
- RSO has monetized $324.9 million of the investments that were
included in management's previously communicated strategic plan
(the "Plan") (see Schedule III), of which $128.3 million and $280.3
million were liquidated during the three and nine months ended
September 30, 2017, respectively.
- Common stock cash dividends of $0.05 and $0.15 per share for
the three and nine months ended September 30, 2017,
respectively.
- Book value of $14.91 per common share at September 30,
2017, as compared to $14.12 per common share at June 30,
2017.
Resource Capital Corp. (NYSE:RSO) reported
results for the three and nine months ended September 30,
2017.
Third Quarter 2017 Results
- GAAP net income allocable to common shares was $12.6 million,
or $0.41 per share-diluted, and $17.8 million, or $0.57 per-share
diluted, for the three and nine months ended September 30,
2017, respectively, as compared to a GAAP net loss allocable to
common shares of $51.6 million, or $(1.69) per share-diluted, and
$43.4 million, or $(1.42) per share-diluted, for the three and nine
months ended September 30, 2016, respectively.
- Core Earnings were $(11.2) million, or $(0.36) per
share-diluted, and $(17.4) million, or $(0.56) per share-diluted
for the three and nine months ended September 30, 2017,
respectively. Core Earnings for the three and nine months
ended September 30, 2017 include a non-recurring charge of
$8.5 million, or $(0.27) per share-diluted, related to the
extinguishment of the 6.00% Convertible Senior Notes and 8.00%
Convertible Senior Notes. A reconciliation of GAAP net income
(loss) to Core Earnings is set forth in Schedule I of this
release.
- GAAP net income for the three and nine months ended
September 30, 2017 includes the following activity: - A
realized gain of $41.1 million from the sale of LEAF Commercial
Capital, Inc., recorded in equity in earnings of unconsolidated
entities in the consolidated statements of operations, for both
periods then ended. - A loss of $10.4 million from the
extinguishment of the 6.00% Convertible Senior Notes and the 8.00%
Convertible Senior Notes, for both periods then ended. - A
net loss of $7.1 million and $13.4 million, respectively, incurred
by Primary Capital Mortgage, LLC ("PCM"), attributable primarily to
provisions on mortgage servicing rights ("MSR"), general and
administrative expenses associated with the asset purchase
agreement entered into on June 6, 2017 and the wind down of
operations.
Additional Items
- RSO declared and paid common stock cash dividends of $0.05 per
share for the third quarter and an aggregate of $0.15 per share for
the nine months ended September 30, 2017.
Commercial Real Estate
- Substantially all of RSO's $1.3 billion commercial real estate
("CRE") loan portfolio comprised floating rate senior whole loans
at September 30, 2017.
- RSO's CRE whole loan portfolio had a weighted average spread of
4.87% and a weighted average one-month London Interbank Offered
Rate ("LIBOR") floor of 0.45% at September 30, 2017.
- During the three months ended September 30, 2017, RSO acquired
seven commercial mortgage-backed securities ("CMBS") positions,
with a total face value of $115.0 million.
- In October 2017, RSO acquired the BB rated, B rated and
non-rated bonds of a securitization sponsored by Wells Fargo, with
a total face value of $47.7 million.
The following table summarizes RSO's CRE loan
activities and fundings of previous commitments, at par, for the
three, nine and twelve months ended September 30, 2017 (in
millions, except percentages):
|
Three Months EndedSeptember
30, 2017 |
|
Nine Months EndedSeptember 30,
2017 |
|
Twelve Months EndedSeptember
30, 2017 |
New CRE whole loans
funded |
$ |
|
134.7 |
|
|
$ |
|
324.5 |
|
|
$ |
|
371.6 |
New
unfunded loan commitments |
23.0 |
|
|
46.8 |
|
|
50.3 |
|
Total
CRE whole loan fundings and commitments |
157.7 |
|
|
371.3 |
|
|
421.9 |
|
Payoffs(1) (2) |
(110.9 |
) |
|
(339.7 |
) |
|
(407.8 |
) |
Previous commitments funded |
8.0 |
|
|
27.6 |
|
|
40.5 |
|
Principal paydowns |
(18.6 |
) |
|
(34.1 |
) |
|
(35.1 |
) |
New
unfunded loan commitments |
(23.0 |
) |
|
(46.8 |
) |
|
(50.3 |
) |
CRE whole loans, net
funded/(repaid) |
$ |
13.2 |
|
|
$ |
(21.7 |
) |
|
$ |
(30.8 |
) |
|
|
|
|
|
|
Weighted average
one-month LIBOR floor on new originations |
1.01 |
% |
|
0.83 |
% |
|
0.79 |
% |
Weighted average spread
above one-month LIBOR |
4.19 |
% |
|
4.51 |
% |
|
4.56 |
% |
Weighted average
unlevered yield, including amortization of origination fees |
5.53 |
% |
|
5.66 |
% |
|
5.67 |
% |
|
|
|
|
|
|
|
|
|
(1) CRE
loan payoffs and extensions resulted in $775,000, $2.1 million and
$2.4 million of exit and extension fees during the three, nine and
twelve months ended September 30, 2017, respectively. |
(2)
Activity does not include legacy CRE loans classified as assets
held for sale. |
|
Commercial Finance
- In September 2017, RSO sold five investment securities
available-for-sale, including its investment in Harvest CLO XV, for
total proceeds of $12.6 million. At September 30, 2017,
proceeds of $959,000 from one sale received on October 2, 2017 were
reported in other assets on the consolidated balance sheet.
Discontinued Operations
- Pursuant to the Plan, the assets and liabilities of PCM and
RSO's middle market lending segment, NEW NP, LLC, were reclassified
to held for sale during the fourth quarter of 2016 and are reported
as discontinued operations in the consolidated statements of
operations.
- During the third quarter of 2017, PCM transferred and sold a
majority of its remaining pipeline loans pursuant to the asset
purchase agreement and has entered into letters of intent to sell
its remaining MSR portfolio.
- In September 2017, RSO received payoff proceeds of $11.0
million, representing par, on two middle market syndicated
loans.
- At September 30, 2017, the remaining four middle market
syndicated loans, with an aggregate carrying value of $27.4
million, were current with respect to contractual payments due, and
the one remaining directly originated middle market loan, with a
carrying value of $1.8 million, was in default.
- The middle market portfolio generated net income of $976,000
and $2.7 million for the three and nine months ended
September 30, 2017, respectively.
Liquidity
At October 31, 2017, RSO's liquidity
consisted of two primary sources:
- unrestricted cash and cash equivalents of $185.5 million;
and
- $192.6 million and $187.3 million available under two term
financing facilities to finance originations of CRE loans and $85.6
million available under a term financing facility to finance
investments in CMBS.
Common Stock Book Value and Total
Stockholders' Equity
The following table reconciles RSO's common
stock book value from December 31, 2016 to September 30,
2017 (in thousands, except per share data):
|
|
Amount |
|
Per Share |
Common stock book value
at December 31, 2016(1) |
|
$ |
|
434,211 |
|
|
$ |
|
14.17 |
Net
income allocable to common shares |
|
17,808 |
|
|
0.57 |
|
Change in other comprehensive income: |
|
|
|
|
Available-for-sale securities |
|
(1,825 |
) |
|
(0.06 |
) |
Derivatives |
|
228 |
|
|
0.01 |
|
Common stock dividends |
|
(4,618 |
) |
|
(0.15 |
) |
Common stock dividends on unvested shares |
|
(83 |
) |
|
— |
|
Accretion (dilution) from additional shares issued during the
period |
|
2,606 |
|
|
(0.02 |
) |
Non-cash GAAP discount on the 4.50% Convertible Senior
Notes |
|
14,231 |
|
|
0.46 |
|
Repurchase of conversion option on extinguished convertible
notes |
|
(194 |
) |
|
(0.01 |
) |
4.50%
Convertible Senior Notes offering costs |
|
(385 |
) |
|
(0.01 |
) |
Purchase of non-controlling interest |
|
(1,410 |
) |
|
(0.05 |
) |
Total
net increase |
|
26,358 |
|
|
0.74 |
|
Common stock book value at September 30, 2017(1) (2) |
|
$ |
460,569 |
|
|
$ |
14.91 |
|
|
(1) Per share calculations exclude unvested restricted
stock, as disclosed on the consolidated balance sheets, of 502,593
and 400,050 shares at September 30, 2017 and December 31,
2016, respectively. The denominators for the calculations are
30,881,351 and 30,649,970 at September 30, 2017 and
December 31, 2016, respectively. |
(2) Book value allocable to common shares is
calculated as total stockholders' equity of $730.7 million less
preferred stock equity of $270.1 million at September 30,
2017. |
|
Book value includes $14.9 million of total discount resulting
from the value of the conversion option on RSO's convertible senior
notes, of which $13.9 million relates to the issuance of the 4.50%
Convertible Senior Notes in August 2017. The convertible
senior notes' discounts will be amortized into interest expense
over the remaining life of each note issuance. At
September 30, 2017, book value excluding this item would be
$445.6 million, which equates to $14.43 per share.
Total stockholders’ equity at September 30,
2017, which measures equity before accounting for non-controlling
interests, was $730.7 million, of which $270.1 million was
attributable to preferred stock. Total stockholders’ equity at
December 31, 2016 was $704.3 million, of which $270.1 million
was attributable to preferred stock.
Investment Portfolio
The following table summarizes the amortized
cost and net carrying amount of RSO's investment portfolio at
September 30, 2017, classified by asset type (in thousands,
except percentages):
|
|
Amortized Cost |
|
Net CarryingAmount |
|
Percent of Portfolio |
|
Weighted AverageCoupon |
Loans Held for
Investment: |
|
|
|
|
|
|
|
|
CRE whole
loans(1) |
|
$ |
1,268,341 |
|
|
$ |
1,264,264 |
|
|
80.10 |
% |
|
6.08 |
% |
|
|
|
|
|
|
|
|
|
Loans Held for
Sale: |
|
|
|
|
|
|
|
|
Syndicated corporate loans(2) |
|
38 |
|
|
38 |
|
|
— |
% |
|
N/A |
(5) |
|
|
|
|
|
|
|
|
|
Investment
Securities Available-for-Sale: |
|
|
|
|
|
|
|
|
CMBS |
|
185,508 |
|
|
185,840 |
|
|
11.77 |
% |
|
3.83 |
% |
ABS |
|
1,753 |
|
|
3,333 |
|
|
0.21 |
% |
|
5.00 |
% |
|
|
187,261 |
|
|
189,173 |
|
|
11.98 |
% |
|
|
Investment
Securities, Trading: |
|
|
|
|
|
|
|
|
Structured notes |
|
2,891 |
|
|
162 |
|
|
0.01 |
% |
|
N/A |
(5) |
|
|
|
|
|
|
|
|
|
Other
Investments: |
|
|
|
|
|
|
|
|
Investments in unconsolidated entities |
|
13,916 |
|
|
13,916 |
|
|
0.88 |
% |
|
N/A |
(5) |
Direct
financing leases(3) |
|
902 |
|
|
167 |
|
|
0.01 |
% |
|
5.66 |
% |
|
|
14,818 |
|
|
14,083 |
|
|
0.89 |
% |
|
|
|
|
|
|
|
|
|
|
|
Other Assets
Held for Sale: |
|
|
|
|
|
|
|
|
Residential mortgage loans |
|
3,033 |
|
|
3,033 |
|
|
0.19 |
% |
|
4.05 |
% |
Middle
market loans(4) |
|
41,199 |
|
|
29,176 |
|
|
1.85 |
% |
|
9.09 |
% |
Legacy
CRE loans |
|
78,459 |
|
|
78,459 |
|
|
4.98 |
% |
|
4.72 |
% |
|
|
122,691 |
|
|
110,668 |
|
|
7.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total Investment Portfolio |
|
$ |
1,596,040 |
|
|
$ |
1,578,388 |
|
|
100.00 |
% |
|
|
|
(1) Net carrying amount includes an allowance for loan
losses of $4.1 million at September 30, 2017. |
(2) The fair value option was elected for syndicated
corporate loans held for sale. |
(3) Net carrying amount includes an allowance for
lease losses of $735,000 at September 30, 2017. |
(4) Net carrying amount includes the lower of cost or
market valuation adjustments of $12.0 million at September 30,
2017. |
(5) There are no stated rates associated with these
investments. |
|
Supplemental Information
The following schedules of reconciliations and
supplemental information at September 30, 2017 are included at
the end of this release:
- Schedule I - Reconciliation of GAAP Net Income (Loss) to Core
Earnings;
- Schedule II - Summary of Securitization Performance
Statistics;
- Schedule III - Strategic Plan Update; and
- Supplemental Information.
About Resource Capital
Corp.
RSO is a publicly-traded real estate investment
trust that is primarily focused on originating, holding and
managing commercial mortgage loans and other CRE-related debt
investments. RSO has historically made other commercial finance
investments.
RSO is externally managed by Resource Capital
Manager, Inc., an indirect wholly-owned subsidiary of Resource
America, Inc ("Resource America"). In September 2016, Resource
America was acquired by C-III Capital Partners LLC, a leading CRE
investment management and services company engaged in a broad range
of activities.
For more information, please visit RSO's website
at www.resourcecapitalcorp.com or contact investor relations
at IR@resourcecapitalcorp.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 that 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 for the year ended December 31, 2016 and the risks expressed
in its other 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 release or to reflect the occurrence of
unanticipated events.
Furthermore, certain non-GAAP financial measures
are discussed in this release. RSO's presentation of this
information is not intended to be considered in isolation of or as
a substitute for the financial information presented in accordance
with GAAP. Reconciliations of these non-GAAP financial measures to
the most comparable measures prepared in accordance with GAAP are
set forth in Schedule I of this release and can be accessed through
RSO's filings with the SEC at www.sec.gov.
The remainder of this release contains RSO's
unaudited (2017) and audited (2016) consolidated balance sheets,
unaudited consolidated statements of operations, a reconciliation
of GAAP net income (loss) to Core Earnings, a summary of
securitization performance statistics, an update on RSO's strategic
plan and supplemental information regarding RSO's CRE loan
portfolio and loans held for sale.
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(in thousands, except share and per share
data) |
|
|
September 30,2017 |
|
December 31,2016 |
|
(unaudited) |
|
ASSETS
(1) |
|
|
|
Cash and
cash equivalents |
$ |
282,984 |
|
|
$ |
116,026 |
|
Restricted cash |
14,539 |
|
|
3,399 |
|
Interest
receivable |
6,679 |
|
|
6,404 |
|
CRE
loans, pledged as collateral and net of allowances of $4,077 and
$3,829 |
1,264,264 |
|
|
1,286,278 |
|
Loans
held for sale |
38 |
|
|
1,007 |
|
Principal
paydowns receivable |
10,873 |
|
|
19,280 |
|
Investment securities, trading |
162 |
|
|
4,492 |
|
Investment securities available-for-sale, including securities
pledged as collateral of $165,953and $97,458 |
189,173 |
|
|
124,968 |
|
Investments in unconsolidated entities |
13,916 |
|
|
87,919 |
|
Derivatives, at fair value |
235 |
|
|
647 |
|
Direct
financing leases, net of allowances of $735 and $465 |
167 |
|
|
527 |
|
Intangible assets |
— |
|
|
213 |
|
Other
assets |
8,436 |
|
|
14,673 |
|
Deferred
tax asset, net |
— |
|
|
4,255 |
|
Assets
held for sale (amounts include $78,459 and $158,178 of Legacy CRE
loans held forsale in continuing operations) |
138,193 |
|
|
383,455 |
|
Total
assets |
$ |
1,929,659 |
|
|
$ |
2,053,543 |
|
LIABILITIES (2) |
|
|
|
Accounts
payable and other liabilities |
$ |
4,660 |
|
|
$ |
4,480 |
|
Management fee payable - related party |
3,062 |
|
|
1,318 |
|
Accrued
interest expense |
3,710 |
|
|
4,979 |
|
Borrowings |
1,172,094 |
|
|
1,191,456 |
|
Distributions payable |
5,576 |
|
|
5,560 |
|
Derivatives, at fair value |
229 |
|
|
97 |
|
Liabilities held for sale |
9,371 |
|
|
142,563 |
|
Total
liabilities |
1,199,002 |
|
|
1,350,453 |
|
EQUITY |
|
|
|
Preferred
stock, par value $0.001: 10,000,000 shares authorized 8.50%
Series A cumulativeredeemable preferred shares, liquidation
preference $25.00 per share; 1,069,016 and 1,069,016shares issued
and outstanding |
1 |
|
|
1 |
|
Preferred
stock, par value $0.001: 10,000,000 shares authorized 8.25%
Series B cumulativeredeemable preferred shares, liquidation
preference $25.00 per share; 5,544,579 and 5,544,579shares issued
and outstanding |
6 |
|
|
6 |
|
Preferred
stock, par value $0.001: 10,000,000 shares authorized 8.625%
Series C cumulativeredeemable preferred shares, liquidation
preference $25.00 per share; 4,800,000 and 4,800,000shares issued
and outstanding |
5 |
|
|
5 |
|
Common
stock, par value $0.001: 125,000,000 shares authorized;
31,383,890 and 31,050,020shares issued and outstanding (including
502,539 and 400,050 unvested restricted shares) |
31 |
|
|
31 |
|
Additional paid-in capital |
1,233,200 |
|
|
1,218,352 |
|
Accumulated other comprehensive income |
1,484 |
|
|
3,081 |
|
Distributions in excess of earnings |
(504,070 |
) |
|
(517,177 |
) |
Total
Resource Capital Corp. stockholders’ equity |
730,657 |
|
|
704,299 |
|
Non-controlling
interests |
— |
|
|
(1,209 |
) |
Total equity |
730,657 |
|
|
703,090 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
1,929,659 |
|
|
$ |
2,053,543 |
|
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS -
(Continued)(in thousands, except share and per
share data) |
|
|
September 30,2017 |
|
December 31,2016 |
|
(unaudited) |
|
(1) Assets of
consolidated variable interest entities ("VIEs") included in
total assets above: |
|
|
|
Restricted cash |
$ |
12,859 |
|
|
$ |
3,308 |
|
Interest
receivable |
3,126 |
|
|
3,153 |
|
CRE
loans, pledged as collateral and net of allowances of $838 and
$763 |
733,746 |
|
|
747,726 |
|
Loans
held for sale |
38 |
|
|
1,007 |
|
Principal
paydowns receivable |
— |
|
|
5,820 |
|
Investment securities available-for-sale, including securities
pledged as collateral |
— |
|
|
369 |
|
Other
assets |
9 |
|
|
58 |
|
Total
assets of consolidated VIEs |
$ |
749,778 |
|
|
$ |
761,441 |
|
|
|
|
|
(2) Liabilities
of consolidated VIEs included in total liabilities
above: |
|
|
|
Accounts
payable and other liabilities |
$ |
45 |
|
|
$ |
133 |
|
Accrued
interest expense |
566 |
|
|
519 |
|
Borrowings |
465,531 |
|
|
480,103 |
|
Total
liabilities of consolidated VIEs |
$ |
466,142 |
|
|
$ |
480,755 |
|
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except share and per
share data)(unaudited) |
|
|
|
|
|
For the Three Months Ended |
For the Nine Months Ended |
|
September 30, |
|
September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
REVENUES |
|
|
|
|
|
|
|
Interest
income: |
|
|
|
|
|
|
|
CRE
loans |
$ |
21,953 |
|
|
$ |
21,763 |
|
|
$ |
65,327 |
|
|
$ |
64,565 |
|
Securities |
1,661 |
|
|
4,602 |
|
|
5,298 |
|
|
13,691 |
|
Other |
369 |
|
|
742 |
|
|
2,464 |
|
|
4,275 |
|
Total interest income |
23,983 |
|
|
27,107 |
|
|
73,089 |
|
|
82,531 |
|
Interest
expense |
13,853 |
|
|
13,653 |
|
|
42,454 |
|
|
40,401 |
|
Net interest income |
10,130 |
|
|
13,454 |
|
|
30,635 |
|
|
42,130 |
|
Dividend
income |
21 |
|
|
(188 |
) |
|
60 |
|
|
(153 |
) |
Fee
income |
109 |
|
|
1,035 |
|
|
1,962 |
|
|
2,369 |
|
Total revenues |
10,260 |
|
|
14,301 |
|
|
32,657 |
|
|
44,346 |
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
Management fees - related party |
4,924 |
|
|
3,053 |
|
|
10,242 |
|
|
10,189 |
|
Equity
compensation - related party |
895 |
|
|
1,702 |
|
|
2,417 |
|
|
3,543 |
|
General
and administrative |
4,336 |
|
|
3,507 |
|
|
11,780 |
|
|
10,960 |
|
Depreciation and amortization |
26 |
|
|
364 |
|
|
126 |
|
|
1,234 |
|
Impairment losses |
— |
|
|
25,297 |
|
|
177 |
|
|
25,297 |
|
(Recovery
of) provision for loan and lease losses, net |
(612 |
) |
|
7,562 |
|
|
518 |
|
|
7,639 |
|
Total
operating expenses |
9,569 |
|
|
41,485 |
|
|
25,260 |
|
|
58,862 |
|
|
|
|
|
|
|
|
|
|
691 |
|
|
(27,184 |
) |
|
7,397 |
|
|
(14,516 |
) |
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Equity in
earnings of unconsolidated entities |
41,047 |
|
|
1,032 |
|
|
41,290 |
|
|
5,950 |
|
Net
realized and unrealized (loss) gain on investment
securitiesavailable-for-sale and loans and derivatives |
(1,465 |
) |
|
(475 |
) |
|
15,619 |
|
|
2,012 |
|
Net
realized and unrealized (loss) gain on investment
securities,trading |
(9 |
) |
|
(242 |
) |
|
(970 |
) |
|
86 |
|
Fair
value adjustments on financial assets held for sale |
— |
|
|
— |
|
|
58 |
|
|
— |
|
Loss on
extinguishment of debt |
(10,365 |
) |
|
— |
|
|
(10,365 |
) |
|
— |
|
Other
income (expense) |
(690 |
) |
|
1,508 |
|
|
(604 |
) |
|
1,486 |
|
Total other income |
28,518 |
|
|
1,823 |
|
|
45,028 |
|
|
9,534 |
|
|
|
|
|
|
|
|
|
INCOME (LOSS)
FROM CONTINUING OPERATIONS BEFORE TAXES |
29,209 |
|
|
(25,361 |
) |
|
52,425 |
|
|
(4,982 |
) |
Income
tax expense |
(4,464 |
) |
|
(8,939 |
) |
|
(5,938 |
) |
|
(9,558 |
) |
NET INCOME FROM
CONTINUING OPERATIONS |
24,745 |
|
|
(34,300 |
) |
|
46,487 |
|
|
(14,540 |
) |
NET LOSS FROM
DISCONTINUED OPERATIONS, NET OF TAX |
(6,087 |
) |
|
(11,321 |
) |
|
(10,832 |
) |
|
(12,532 |
) |
|
|
|
|
|
For the Three Months Ended |
For the Nine Months Ended |
|
September 30, |
|
September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
NET
INCOME |
18,658 |
|
|
(45,621 |
) |
|
35,655 |
|
|
(27,072 |
) |
Net
income allocated to preferred shares |
(6,014 |
) |
|
(6,015 |
) |
|
(18,043 |
) |
|
(18,077 |
) |
Carrying
value in excess of consideration paid for preferred shares |
— |
|
|
— |
|
|
— |
|
|
1,500 |
|
Net loss
allocable to non-controlling interests, net of taxes |
— |
|
|
63 |
|
|
196 |
|
|
213 |
|
NET INCOME
(LOSS) ALLOCABLE TO COMMON SHARES |
$ |
12,644 |
|
|
$ |
(51,573 |
) |
|
$ |
17,808 |
|
|
$ |
(43,436 |
) |
NET INCOME
(LOSS) PER COMMON SHARE - BASIC |
|
|
|
|
|
|
|
CONTINUING OPERATIONS |
$ |
0.61 |
|
|
$ |
(1.32 |
) |
|
$ |
0.93 |
|
|
$ |
(1.01 |
) |
DISCONTINUED OPERATIONS |
$ |
(0.20 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.41 |
) |
TOTAL NET
INCOME (LOSS) PER COMMON SHARE - BASIC |
$ |
0.41 |
|
|
$ |
(1.69 |
) |
|
$ |
0.58 |
|
|
$ |
(1.42 |
) |
NET INCOME
(LOSS) PER COMMON SHARE - DILUTED |
|
|
|
|
|
|
|
CONTINUING OPERATIONS |
$ |
0.61 |
|
|
$ |
(1.32 |
) |
|
$ |
0.92 |
|
|
$ |
(1.01 |
) |
DISCONTINUED OPERATIONS |
$ |
(0.20 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.41 |
) |
TOTAL NET
INCOME (LOSS) PER COMMON SHARE - DILUTED |
$ |
0.41 |
|
|
$ |
(1.69 |
) |
|
$ |
0.57 |
|
|
$ |
(1.42 |
) |
WEIGHTED
AVERAGE NUMBER OF COMMON SHARESOUTSTANDING - BASIC |
30,857,232 |
|
|
30,528,368 |
|
|
30,810,259 |
|
|
30,513,131 |
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARESOUTSTANDING - DILUTED |
31,115,152 |
|
|
30,528,368 |
|
|
31,017,108 |
|
|
30,513,131 |
|
SCHEDULE I
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME
(LOSS) TO CORE EARNINGS(unaudited)
Beginning with the three months and year ended
December 31, 2016, RSO uses Core Earnings as a non-GAAP
financial measure to evaluate its operating performance. RSO
previously used Adjusted Funds from Operations as a non-GAAP
measure of operating performance.
Core Earnings exclude the effects of certain
transactions and GAAP adjustments that RSO believes are not
indicative of its current CRE loan portfolio and other CRE related
investments and operations. Core Earnings exclude income
(loss) from all non-core assets, such as Commercial Finance, Middle
Market Lending, Residential Mortgage Lending, legacy CRE loans and
other non-CRE assets designated as assets held for sale at the
initial measurement date.(1)
Core Earnings is defined as GAAP net income
(loss) allocable to common shareholders, excluding (i) non-cash
equity compensation expense, (ii) incentive fees payable to our
external manager, (iii) unrealized gains and losses, (iv) non-cash
provisions for loan losses, (v) non-cash impairments on securities,
(vi) non-cash amortization of discounts or premiums associated with
borrowings, (vii) net income or loss from a limited partnership
interest owned at the initial measurement date, (viii) net income
or loss from non-core assets,(2) (3) (ix) real estate depreciation
and amortization and (x) foreign currency gains or losses. Core
Earnings may also be adjusted periodically to exclude certain
one-time events pursuant to changes in GAAP and certain non-cash
items.
Core Earnings does not represent net income or
cash generated from operating activities and should not be
considered as an alternative to GAAP net income or as a measure of
liquidity under GAAP. RSO's methodology for calculating Core
Earnings may differ from methodologies used by other companies to
calculate similar supplemental performance measures, and,
accordingly, its reported Core Earnings may not be comparable to
similar performance measures used by other companies.
The following table provides a reconciliation
from GAAP net income allocable to common shares to Core Earnings
for the periods presented (in thousands, except per share
data):
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
September 30, |
|
|
September 30, |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
Net income
(loss) allocable to common shares-
GAAP |
$ |
|
|
12,644 |
|
|
$ |
|
(51,573 |
) |
|
$ |
|
|
|
|
|
17,808 |
|
|
$ |
|
(43,436) |
Adjustment for realized
gain on CRE assets |
— |
|
|
(32 |
) |
|
— |
|
|
(875 |
) |
Net income
(loss) allocable to common shares - GAAP, adjusted |
12,644 |
|
|
(51,605 |
) |
|
17,808 |
|
|
(44,311 |
) |
|
|
|
|
|
|
|
|
Reconciling
items from continuing operations: |
|
|
|
|
|
|
|
Non-cash
equity compensation expense |
895 |
|
|
1,702 |
|
|
2,417 |
|
|
3,543 |
|
Incentive
management fees |
2,154 |
|
|
— |
|
|
2,154 |
|
|
— |
|
Non-cash
(recovery of) provision for CRE loan losses |
(612 |
) |
|
7,997 |
|
|
379 |
|
|
7,997 |
|
Unrealized loss on core activities |
1,500 |
|
|
— |
|
|
1,500 |
|
|
— |
|
Non-cash
amortization of discounts or premiums associated with
borrowings |
2,450 |
|
|
414 |
|
|
3,278 |
|
|
1,246 |
|
Impairments on securities |
— |
|
|
732 |
|
|
— |
|
|
732 |
|
Net loss
(income) from limited partnership interest owned at the initial
measurementdate(1) |
703 |
|
|
(132 |
) |
|
1,073 |
|
|
(585 |
) |
Income
tax expense from non-core investments(2) (3) |
4,464 |
|
|
8,939 |
|
|
5,938 |
|
|
8,939 |
|
Net
realized gain on non-core assets(2) (3) |
(39,230 |
) |
|
— |
|
|
(41,015 |
) |
|
— |
|
Net
(income) loss from non-core assets(3) |
(1,432 |
) |
|
979 |
|
|
(5,701 |
) |
|
(8,955 |
) |
|
|
|
|
|
|
|
|
Reconciling
items from discontinued operations and CRE assets: |
|
|
|
|
|
|
|
Net
interest income on legacy CRE loans held for sale |
(947 |
) |
|
— |
|
|
(3,252 |
) |
|
— |
|
Realized
loss (gain) on liquidation of CRE loan |
73 |
|
|
— |
|
|
(12,489 |
) |
|
— |
|
Asset
impairment on CRE securities |
— |
|
|
20,653 |
|
|
— |
|
|
20,653 |
|
Net loss
(income) from other non-CRE investments held for sale |
13 |
|
|
— |
|
|
(286 |
) |
|
— |
|
Loss from
discontinued operations, net of taxes |
6,087 |
|
|
11,321 |
|
|
10,832 |
|
|
12,532 |
|
Core Earnings before
realized gain on CRE assets |
(11,238 |
) |
|
1,000 |
|
|
(17,364 |
) |
|
1,791 |
|
|
|
|
|
|
|
|
|
Adjustment for realized
gain on CRE assets |
— |
|
|
32 |
|
|
— |
|
|
875 |
|
Core Earnings
allocable to common shares(4) |
$ |
(11,238 |
) |
|
$ |
1,032 |
|
|
$ |
(17,364 |
) |
|
$ |
2,666 |
|
Weighted average common
shares – diluted |
31,115 |
|
|
30,528 |
|
|
31,017 |
|
|
30,539 |
|
|
|
|
|
|
|
|
|
Core Earnings
per common share – diluted(4) |
$ |
(0.36 |
) |
|
$ |
0.03 |
|
|
$ |
(0.56 |
) |
|
$ |
0.09 |
|
|
(1)
Initial measurement date is December 31, 2016. |
(2) Income
tax expense from non-core investments and net realized gain on
non-core assets are components of net (income) loss from non-core
assets. |
(3)
Non-core assets are investments and securities owned by RSO at the
initial measurement date in (i) Commercial Finance, (ii) Middle
Market Lending, (iii) Residential Mortgage Lending, (iv) legacy CRE
loans designated as held for sale and (v) other non-CRE assets
included in assets held for sale. |
(4) Core
Earnings for the three and nine months ended September 30,
2017 include a non-recurring charge of $8.5 million, or $(0.27) per
share-diluted, related to the extinguishment of the 6.00%
Convertible Senior Notes and 8.00% Convertible Senior Notes. |
|
RSO has five operating segments: Commercial Real Estate Debt
Investments; Commercial Finance; Middle Market Lending; Residential
Mortgage Lending; and Corporate & Other. The Commercial Real
Estate Debt Investments operating segment includes our activities
and operations related to commercial real estate loans and
commercial real estate-related securities. The Commercial Finance
operating segment includes the activities and operations related to
syndicated corporate loans, syndicated corporate loan-related
securities and direct financing leases. The Middle Market Lending
operating segment includes the activities and operations related to
the origination and purchase of middle market corporate loans. The
Residential Mortgage Lending operating segment includes the
activities and operations related to originating and servicing
residential mortgage loans and investments in residential
mortgage-backed securities. The Corporate & Other segment
includes corporate level interest income, interest expense,
inter-segment eliminations not allocable to any particular
operating segment and general and administrative expense.
As part of the plan to exit non-CRE businesses,
the entire Middle Market Lending and substantially all of the
Residential Mortgage Lending segments are reported as discontinued
operations. The following table presents a reconciliation of
GAAP net income (loss) to Core Earnings for the three months ended
September 30, 2017 presented by operating segment (in thousands,
except per share data):
|
CommercialReal
EstateDebtInvestments |
|
Corporate &Other |
|
CoreSubtotal |
|
CommercialFinance |
|
MiddleMarketLending |
|
ResidentialMortgageLending |
|
Total |
Net income
(loss) allocable to common shares- GAAP |
$ |
|
13,817 |
|
|
$ |
|
(30,835 |
) |
|
$ |
|
(17,018 |
) |
|
$ |
|
36,285 |
|
|
$ |
|
976 |
|
|
$ |
|
(7,599 |
) |
|
$ |
|
12,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
items from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
equity compensation expense |
— |
|
|
895 |
|
|
895 |
|
|
— |
|
|
— |
|
|
— |
|
|
895 |
|
Incentive
management fees |
— |
|
|
2,154 |
|
|
2,154 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,154 |
|
Non-cash
recovery of CRE loan losses |
(612 |
) |
|
— |
|
|
(612 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(612 |
) |
Unrealized loss on core activities |
— |
|
|
1,500 |
|
|
1,500 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,500 |
|
Non-cash
amortization of discounts orpremiums associated with
borrowings |
— |
|
|
2,450 |
|
|
2,450 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,450 |
|
Net loss
from limited partnership interestowned at the initial measurement
date(1) |
703 |
|
|
— |
|
|
703 |
|
|
— |
|
|
— |
|
|
— |
|
|
703 |
|
Income
tax expense from non-core investments(2) (3) |
— |
|
|
— |
|
|
— |
|
|
4,464 |
|
|
— |
|
|
— |
|
|
4,464 |
|
Net
realized gain on non-core assets(2) (3) |
— |
|
|
— |
|
|
— |
|
|
(39,388 |
) |
|
— |
|
|
158 |
|
|
(39,230 |
) |
Net
income from non-core assets(3) |
— |
|
|
— |
|
|
— |
|
|
(1,361 |
) |
|
— |
|
|
(71 |
) |
|
(1,432 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification of allocated expenses to non-CRE activities |
— |
|
|
(449 |
) |
|
(449 |
) |
|
— |
|
|
— |
|
|
449 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
items from discontinuedoperations and CRE assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income on legacy CRE loans heldfor sale |
(947 |
) |
|
— |
|
|
(947 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(947 |
) |
Realized
loss on liquidation of CRE loan |
73 |
|
|
— |
|
|
73 |
|
|
— |
|
|
— |
|
|
— |
|
|
73 |
|
Net loss
from other non-CRE investments heldfor sale |
— |
|
|
13 |
|
|
13 |
|
|
— |
|
|
— |
|
|
— |
|
|
13 |
|
(Income)
loss from discontinued operations,net of taxes |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(976 |
) |
|
7,063 |
|
|
6,087 |
|
Core Earnings
allocable to common shares(4) |
$ |
13,034 |
|
|
$ |
(24,272 |
) |
|
$ |
(11,238 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(11,238 |
) |
Weighted average common
shares – diluted |
31,115 |
|
|
31,115 |
|
|
31,115 |
|
|
31,115 |
|
|
31,115 |
|
|
31,115 |
|
|
31,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Earnings
per common share – diluted(4) |
$ |
0.42 |
|
|
$ |
(0.78 |
) |
|
$ |
(0.36 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.36 |
) |
|
(1)
Initial measurement date is December 31, 2016. |
(2) Income
tax expense from non-core investments and net realized gain on
non-core assets are components of net income from non-core
assets. |
(3)
Non-core assets are investments and securities owned by RSO at the
initial measurement date in (i) Commercial Finance, (ii) Middle
Market Lending, (iii) Residential Mortgage Lending, (iv) legacy CRE
loans designated as held for sale and (v) other non-CRE assets
included in assets held for sale. |
(4) Core
Earnings for the three and nine months ended September 30,
2017 include a non-recurring charge of $8.5 million, or $(0.27) per
share-diluted, related to the extinguishment of the 6.00%
Convertible Senior Notes and 8.00% Convertible Senior Notes. |
|
SCHEDULE II
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESSUMMARY OF SECURITIZATION PERFORMANCE
STATISTICS(unaudited)
Securitizations - Distributions and
Coverage Test Summaries
The following table sets forth the distributions
made by and coverage test summaries for RSO's securitizations for
the periods presented (in thousands):
|
|
|
|
|
Name |
|
Cash Distributions |
|
Overcollateralization Cushion(1) |
|
|
Nine MonthsEndedSeptember 30, |
|
|
Year Ended December 31, |
|
|
At September 30, |
|
|
At the Initial Measurement |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
Date |
|
RCC
2014-CRE2(2) |
|
$ |
33,050 |
|
|
$ |
12,961 |
|
|
|
N/A |
|
|
$ |
20,663 |
|
RCC
2015-CRE3(3) |
|
$ |
6,641 |
|
|
$ |
10,907 |
|
|
$ |
44,005 |
|
|
$ |
20,313 |
|
RCC
2015-CRE4(4) |
|
$ |
6,624 |
|
|
$ |
11,784 |
|
|
$ |
56,772 |
|
|
$ |
9,397 |
|
RCC
2017-CRE5(5) |
|
$ |
2,323 |
|
|
$ |
— |
|
|
$ |
20,727 |
|
|
$ |
20,727 |
|
Apidos Cinco CDO(6) |
|
$ |
2,056 |
|
|
$ |
22,627 |
|
|
|
N/A |
|
|
$ |
17,774 |
|
RREF
CDO 2006-1(7) |
|
$ |
— |
|
|
$ |
1,394 |
|
|
|
N/A |
|
|
$ |
24,941 |
|
RREF
CDO 2007-1(8) |
|
$ |
— |
|
|
$ |
1,890 |
|
|
|
N/A |
|
|
$ |
26,032 |
|
RCC
CRE Notes 2013(9) |
|
$ |
— |
|
|
$ |
37,759 |
|
|
|
N/A |
|
|
|
N/A |
|
Moselle CLO S.A.(10) |
|
$ |
— |
|
|
$ |
183 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Overcollateralization cushion represents the
amount by which the collateral held by the securitization issuer
exceeds the maximum amount required. |
(2) Resource Capital Corp. 2014-CRE2 was liquidated in
August 2017, and, as a result, all $93.0 million of the
remaining assets were returned to RSO in exchange for RSO's
preference share and equity notes in the securitization. RSO also
received $25.6 million in principal on its preference
share and equity notes. |
(3) Resource Capital Corp. 2015-CRE3 has no
reinvestment period; however, until February 2017 principal
repayments could be utilized to purchase loans held outside of the
securitization that represent the funded commitments of existing
collateral in the securitization that were not funded as of the
date the securitization was closed. Additionally, the indenture
does not contain any interest coverage test provisions. |
(4) Resource Capital Corp. 2015-CRE4 has no
reinvestment period; however, until September 2017 principal
repayments could be utilized to purchase loans held outside of the
securitization that represent the funded commitments of existing
collateral in the securitization that were not funded as of the
date the securitization was closed. Additionally, the indenture
does not contain any interest coverage test provisions. |
(5) Resource Capital Corp. 2017-CRE5 has no
reinvestment period; however, until July 2020 principal repayments
may be utilized to purchase loans held outside of the
securitization that represent the funded commitments of existing
collateral in the securitization that were not funded as of the
date the securitization was closed. Additionally, the indenture
does not contain any interest coverage test provisions. |
(6) Apidos Cinco was substantially liquidated on
November 14, 2016. As a result of the liquidation, RSO
received $20.4 million of cash and consolidated the remaining
assets. |
(7) Resource Real Estate Funding CDO 2006-1 was
liquidated on April 25, 2016, and, as a result, all $65.7
million of the remaining assets, at fair value at the date of
liquidation, were returned to RSO in exchange for RSO's preference
share and equity notes in the securitization. |
(8) Resource Real Estate Funding CDO 2007-1 ("RREF CDO
2007-1") was liquidated on November 25, 2016, and, as a result,
all $130.9 million of the remaining assets, at fair value
at the date of liquidation, were returned to RSO in exchange for
RSO's preference share and equity notes in the securitization. |
(9) Resource Capital Corp. CRE Notes 2013 was
liquidated in December 2016, and, as a result, all $13.5
million of the remaining assets were returned to RSO in
exchange for RSO's preference share and equity notes in the
securitization. RSO also received $33.4 million in
principal on its preference share and equity notes. |
(10) Moselle CLO S.A. was acquired on February 24,
2014, and the reinvestment period for this securitization expired
prior to the acquisition. In the fourth quarter of 2014, Moselle
CLO S.A. began liquidating and by January 2015 all of the assets
were sold. |
|
SCHEDULE III
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESSTRATEGIC PLAN
UPDATE(unaudited)
In November 2016, RSO's board of directors
approved the Plan, pursuant to which RSO is focused on making CRE
debt investments going forward. The Plan includes disposing
of certain non-core businesses and investments and underperforming
legacy CRE loans ("Identified Assets"), as well as maintaining a
dividend policy based on sustainable earnings. As part of the Plan,
certain Identified Assets were reclassified as discontinued
operations ("Discops") and/or assets held for sale ("AHFS") during
the fourth quarter of 2016. The following table delineates
these disposable investments by business segment and details the
current net book value of the businesses and investments included
in the Plan (in millions):
|
IdentifiedAssets at PlanInception |
|
Impairments/Adjustmentson
Non-MonetizedAssets(1) (2) |
|
Impairments/Adjustmentson
MonetizedAssets(1) |
|
Monetizedthrough September30,
2017 |
|
Net BookValue atSeptember30, 2017 |
Discops and
AHFS |
Legacy
CRE Loans(3) |
$ |
194.7 |
|
|
$ |
(12.2 |
) |
|
$ |
(11.7 |
) |
|
$ |
(92.3 |
) |
|
$ |
78.5 |
|
Middle
Market Loans |
73.8 |
|
|
(18.5 |
) |
|
0.3 |
|
|
(26.4 |
) |
|
29.2 |
|
Residential Mortgage Lending Segment(4) |
56.6 |
|
|
(8.4 |
) |
|
1.4 |
|
|
(30.6 |
) |
|
19.0 |
|
Other
AHFS |
5.9 |
|
|
1.8 |
|
|
1.4 |
|
|
(2.5 |
) |
|
6.6 |
|
Subtotal - Discops and AHFS |
$ |
331.0 |
|
|
$ |
(37.3 |
) |
|
$ |
(8.6 |
) |
|
$ |
(151.8 |
) |
|
$ |
133.3 |
|
Investments in
Unconsolidated Entities |
86.6 |
|
|
0.6 |
|
|
39.3 |
|
|
(114.2 |
) |
|
12.3 |
|
Commercial
Finance Assets(5) |
62.5 |
|
|
1.3 |
|
|
(1.4 |
) |
|
(58.9 |
) |
|
3.5 |
|
Total |
$ |
480.1 |
|
|
$ |
(35.4 |
) |
|
$ |
29.3 |
|
|
$ |
(324.9 |
) |
|
$ |
149.1 |
|
|
(1)
Reflects adjustments as a result of the designation as AHFS or
Discops, which occurred during the third and fourth quarters of
2016 except as noted in (2) below. |
(2) The
impairment adjustment to middle market loans includes $5.4 million
of fair value adjustments that occurred prior to the inception of
the Plan. |
(3) Legacy
CRE Loans includes $118.2 million par value of loans at the
inception of the Plan that were not reflected on the consolidated
balance sheets until RSO's investment in RREF CDO 2007-1 was
liquidated on November 25, 2016. |
(4)
Includes $4.5 million of cash and cash equivalents not classified
as AHFS in the Residential Mortgage Lending segment at
September 30, 2017. |
(5)
Commercial Finance Assets decreased by $2.3 million related to the
reclassification of certain assets to other assets on the
consolidated balance sheets. |
|
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESSUPPLEMENTAL INFORMATION(in
thousands, except percentages)
Loan Investment Statistics
The following table presents information on
RSO's allowances for loan losses and its loans held for sale
portfolio at the dates indicated (based on amortized cost):
|
|
September 30,2017 |
|
December 31,2016 |
Allowance for
loan losses: |
|
(unaudited) |
|
Specific
allowance: |
|
|
|
|
CRE
loans |
|
$ |
2,500 |
|
|
$ |
2,500 |
|
Total specific
allowance |
|
2,500 |
|
|
2,500 |
|
|
|
|
|
|
General allowance: |
|
|
|
|
CRE
loans |
|
1,577 |
|
|
1,329 |
|
Total general
allowance |
|
1,577 |
|
|
1,329 |
|
Total allowance for
loans |
|
$ |
4,077 |
|
|
$ |
3,829 |
|
Allowance as a
percentage of total loans |
|
0.3 |
% |
|
0.3 |
% |
|
|
|
|
|
Loans held for
sale: |
|
|
|
|
Syndicated corporate loans(1) |
|
$ |
38 |
|
|
$ |
1,007 |
|
Total loans held for
sale |
|
$ |
38 |
|
|
$ |
1,007 |
|
|
(1) The
fair value option was elected for syndicated corporate loans held
for sale. |
|
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESSUPPLEMENTAL
INFORMATION(unaudited)
The following table presents CRE loan portfolio
statistics at September 30, 2017, excluding legacy CRE loans
classified as assets held for sale (based on carrying
value):
Loan type: |
|
Whole
loans |
100.0 |
% |
Total |
100.0 |
% |
|
|
Collateral type: |
|
Multifamily |
41.6 |
% |
Office |
21.1 |
% |
Retail |
19.6 |
% |
Hotel |
17.1 |
% |
Industrial |
0.6 |
% |
Total |
100.0 |
% |
|
|
Collateral by NCREIF U.S. region: |
|
Southwest(1) |
25.1 |
% |
Pacific(2) |
24.2 |
% |
Southeast(3) |
16.9 |
% |
Mountain(4) |
15.6 |
% |
Mid
Atlantic |
7.5 |
% |
Northeast |
5.7 |
% |
East
North Central |
4.3 |
% |
West
North Central |
0.7 |
% |
Total |
100.0 |
% |
|
(1) Whole
loans in Texas represent 25.1% of the total loan pool. |
(2) Whole
loans in Southern and Northern California represent 13.3% and 8.3%,
respectively, of the total loan pool. |
(3) Whole
loans in Florida and Georgia represent 11.7% and 5.2%,
respectively, of the total loan pool. |
(4) Whole
loans in Arizona and Nevada represent 6.6% and 5.2%, respectively,
of the total loan pool. |
|
CONTACT:David J.
BryantChief Financial
OfficerResource Capital Corp.712
Fifth Avenue, 12th FloorNew York, NY
10019212-506-3899
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