Resource Capital Corp. (NYSE:RSO) reports results
for the three months and year ended December 31, 2017.
Significant Items and Highlights
- GAAP net loss allocable to common
shares of $(0.39) per share-diluted and GAAP net income allocable
to common shares of $0.18 per share-diluted for the three months
and year ended December 31, 2017, respectively.
- RSO announced the redemption of all
of its outstanding 8.50% Series A Cumulative Redeemable Preferred
Stock ("Series A Preferred Stock") and 8.25% Series B Cumulative
Redeemable Preferred Stock ("Series B Preferred Stock").
- Core Earnings, a non-GAAP measure,
of $(0.14) and $(0.77) per common share-diluted (see Schedule I).
Core Earnings include a non-recurring charge of $0.12 per common
share-diluted in connection with the January 2018 preferred stock
redemptions announced on December 18, 2017.
- RSO has monetized $364.0 million of
the investments that were included in management's previously
communicated strategic plan (the "Plan") (see Schedule III), of
which $39.1 million and $319.4 million were liquidated during the
three months and year ended December 31, 2017,
respectively.
- RSO originated $229.0 million and
$600.3 million of new commercial real estate ("CRE") loans during
the three months and year ended December 31, 2017,
respectively.
- Common stock cash dividends of
$0.05 and $0.20 per share for the three months and year ended
December 31, 2017, respectively.
- Book value of $14.46 per common
share at December 31, 2017, as compared to $14.91 per common
share at September 30, 2017.
Three Months and Year Ended
December 31, 2017 Results
- GAAP net loss allocable to common
shares of $12.1 million, or $(0.39) per share-diluted, and GAAP net
income allocable to common shares of $5.7 million, or $0.18 per
share-diluted, for the three months and year ended
December 31, 2017, respectively, as compared to a GAAP net
loss allocable to common shares of $9.5 million, or $(0.31) per
share-diluted, and $53.0 million, or $(1.73) per share-diluted, for
the three months and year ended December 31, 2016,
respectively.
- Core Earnings were $(4.2) million,
or $(0.14) per common share-diluted, and $(23.9) million, or
$(0.77) per common share-diluted, for the three months and year
ended December 31, 2017, respectively.
- GAAP net loss allocable to common
shares and Core Earnings for the three months ended December 31,
2017 include a charge of $3.8 million related to the January 2018
redemption of all shares of Series A Preferred Stock and 930,983
shares of Series B Preferred Stock. The charge represents the
difference between the carrying values and the redemption prices of
the redeemed Series A Preferred Stock and Series B Preferred
Stock.
Additional Items
Commercial Real Estate
- Substantially all of RSO's $1.3
billion CRE loan portfolio comprised floating rate senior whole
loans at December 31, 2017.
- RSO's CRE whole loan portfolio had
a weighted average spread of 4.71% over the London Interbank
Offered Rate ("LIBOR") of 1.56% at December 31, 2017.
The following table summarizes RSO's CRE loan
activities and fundings of previous commitments, at par, for the
three months and year ended December 31, 2017 (in millions,
except percentages):
|
Three Months
Ended December 31, 2017 |
|
Year Ended December 31,
2017 |
New
CRE whole loans funded |
$ |
204.4 |
|
|
$ |
528.9 |
|
New
unfunded loan commitments |
24.6 |
|
|
71.4 |
|
Total
CRE whole loan fundings and commitments |
229.0 |
|
|
600.3 |
|
Payoffs (1)(2) |
(185.5 |
) |
|
(525.2 |
) |
Previous commitments funded |
4.0 |
|
|
31.6 |
|
Principal paydowns |
(0.2 |
) |
|
(34.3 |
) |
New
unfunded loan commitments |
(24.6 |
) |
|
(71.4 |
) |
CRE whole loans, net
funded |
$ |
22.7 |
|
|
$ |
1.0 |
|
|
|
|
|
Weighted average
one-month LIBOR floor on new originations |
1.20 |
% |
|
0.97 |
% |
Weighted average spread
above one-month LIBOR |
4.26 |
% |
|
4.41 |
% |
Weighted average
unlevered yield, including amortization of origination fees |
5.79 |
% |
|
5.71 |
% |
(1) CRE loan payoffs and extensions resulted in $949,000 and
$3.0 million of exit and extension fees during the three months and
year ended December 31, 2017, respectively.(2) Activity
does not include legacy CRE loans classified as assets held for
sale.
Commercial Mortgage-Backed Securities
- RSO acquired commercial mortgage-backed securities ("CMBS")
with total face values of $77.7 million and $212.0 million during
the three months and year ended December 31, 2017,
respectively.
- CMBS acquired during the year ended December 31, 2017 had
a weighted average coupon of 3.63%.
- RSO's CMBS portfolio had a carrying value of $211.6 million and
a weighted average coupon of 4.35% at December 31, 2017.
Discontinued Operations
- Pursuant to the Plan, the assets
and liabilities of Primary Capital Mortgage, LLC ("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 on the consolidated statements of
operations.
- In the fourth quarter of 2017, PCM
sold its remaining mortgage servicing rights portfolio and a
portion of its loans held for sale generating total proceeds of
$20.4 million, of which $15.3 million had been received in cash at
December 31, 2017. PCM recognized a net loss of $4.1 million
for the three months ended December 31, 2017, including a $1.3
million net realized loss on these sales.
- At December 31, 2017, the
remaining four middle market syndicated loans, with an aggregate
carrying value of $27.3 million, were current with respect to
contractual payments due, and the one remaining directly originated
middle market loan, with a carrying value of $2.0 million, was
extended to facilitate a sale of the borrower. The middle market
portfolio generated net income of $784,000 for the three months
ended December 31, 2017.
Liquidity
At February 28, 2018, RSO's liquidity consisted
of two primary sources:
- unrestricted cash and cash equivalents of $200.4 million;
and
- $160.7 million and $95.3 million available under two term
financing facilities to finance CRE loans.
Common Stock Book Value and Total
Stockholders' Equity
The following table reconciles RSO's common
stock book value from December 31, 2016 to December 31,
2017 (in thousands, except per share data):
|
|
Total Amount |
|
Per Share Amount |
Common stock book value at December 31, 2016 (1) |
|
$ |
434,211 |
|
|
$ |
14.17 |
|
Net
income allocable to common shares |
|
5,677 |
|
|
0.18 |
|
Change in other comprehensive income: |
|
|
|
|
Available-for-sale securities |
|
(2,403 |
) |
|
(0.08 |
) |
Derivatives |
|
619 |
|
|
0.02 |
|
Common stock dividends |
|
(6,166 |
) |
|
(0.20 |
) |
Common stock dividends on unvested shares |
|
(107 |
) |
|
— |
|
Accretion (dilution)
from additional shares outstanding at December 31, 2017 (2) |
|
3,561 |
|
|
(0.02 |
) |
Non-cash GAAP discount on the 4.50% Convertible Senior Notes
issuance |
|
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 |
|
13,423 |
|
|
0.29 |
|
Common stock book value at December 31, 2017 (1)(3) |
|
$ |
447,634 |
|
|
$ |
14.46 |
|
|
|
|
|
|
|
|
|
|
(1) Per share calculations exclude unvested restricted
stock, as disclosed on the consolidated balance sheets, of 483,073
and 400,050 shares at December 31, 2017 and 2016,
respectively. The denominators for the calculations are 30,946,819
and 30,649,970 at December 31, 2017 and 2016,
respectively.(2) Per share amount calculation includes the
impact of 296,849 additional shares.(3) Common stock book
value is calculated as total stockholders' equity of $671.5 million
less preferred stock equity of $223.8 million at December 31,
2017.
Book value includes $14.2 million of unamortized
discount resulting from the value of the conversion option on RSO's
convertible senior notes, of which $13.3 million relates to the
4.50% convertible senior notes due 2022 ("4.50% Convertible Senior
Notes"). The convertible senior notes' discounts will be amortized
into interest expense over the remaining life of each note
issuance. At December 31, 2017, book value excluding this item
would have been $433.5 million, or $14.01 per common share.
Total stockholders' equity at December 31,
2017, which measures equity before accounting for non-controlling
interests, was $671.5 million, of which $223.8 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.
Preferred Stock Redemptions
- On January 31, 2018, RSO redeemed
all of its outstanding Series A Preferred Stock and 930,983 shares
of its outstanding Series B Preferred Stock.
- On February 21, 2018, RSO announced
the full redemption of its remaining outstanding shares of Series B
Preferred Stock to occur on March 26, 2018.
- Upon completion in March 2018, the
full redemptions of RSO's Series A Preferred Stock and Series B
Preferred Stock will eliminate approximately $13.7 million of
preferred stock dividends on an annual basis, or $0.44 per common
share.
Litigation
- On February 5, 2018, RSO entered
into a settlement agreement with the plaintiff in the Levin v.
Resource Capital Corp. securities class action litigation, under
which all claims of the plaintiff class would be released in
exchange for settlement consideration of $9.5 million, excluding
legal fees, substantially all of which would be funded by insurance
proceeds. Consummation of the settlement is subject to various
customary conditions that are not guaranteed to occur, including
court approval.
- On February 23, 2018, the
consolidated complaint in the In Re Resource Capital Corp.
Shareholder Derivative Litigation Demand Refused Actions, which
consolidates three shareholder derivative suits against certain
current and former officers and directors, was dismissed, but
remains subject to the plaintiffs' appeal rights.
Investment Portfolio
The following table summarizes the amortized
cost and net carrying amount of RSO's investment portfolio at
December 31, 2017, classified by asset type (in thousands,
except percentages):
At December 31, 2017 |
|
Amortized Cost |
|
Net Carrying Amount |
|
Percent of Portfolio |
|
Weighted Average Coupon |
Core
Assets: |
|
|
|
|
|
|
|
|
CRE whole
loans (1) |
|
$ |
1,290,150 |
|
|
$ |
1,284,822 |
|
|
80.02% |
|
|
6.09% |
CMBS
(2) |
|
210,806 |
|
|
211,579 |
|
|
13.18% |
|
|
4.35% |
Total
Core Assets |
|
1,500,956 |
|
|
1,496,401 |
|
|
93.20% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Core
Assets: |
|
|
|
|
|
|
|
|
|
ABS
(2) |
|
259 |
|
|
158 |
|
|
0.01% |
|
|
N/A
(10) |
Structured notes (3) |
|
2,891 |
|
|
178 |
|
|
0.01% |
|
|
N/A
(10) |
Syndicated corporate loans held for sale (4) |
|
13 |
|
|
13 |
|
|
—% |
|
|
N/A
(10) |
Investment in an unconsolidated entity (5) |
|
10,503 |
|
|
10,503 |
|
|
0.65% |
|
|
N/A
(10) |
Direct
financing leases (6) |
|
886 |
|
|
151 |
|
|
0.01% |
|
|
5.66% |
Life
settlement contracts (7) |
|
5,130 |
|
|
5,130 |
|
|
0.32% |
|
|
N/A
(10) |
Residential mortgage loans held for sale (7) |
|
1,913 |
|
|
1,913 |
|
|
0.12% |
|
|
3.92% |
Middle
market loans held for sale (7)(8) |
|
41,199 |
|
|
29,308 |
|
|
1.83% |
|
|
5.06% |
Legacy
CRE loans held for sale (7)(9) |
|
63,341 |
|
|
61,841 |
|
|
3.85% |
|
|
1.64% |
Total
Non-Core Assets |
|
126,135 |
|
|
109,195 |
|
|
6.80% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment portfolio |
|
$ |
1,627,091 |
|
|
$ |
1,605,596 |
|
|
100.0% |
|
|
|
(1) Net carrying amount includes an allowance for loan losses of
$5.3 million at December 31, 2017.(2) Classified as
investment securities available-for-sale on the consolidated
balance sheets.(3) Classified as investment securities,
trading on the consolidated balance sheets.(4) The fair value
option was elected for syndicated corporate loans held for
sale.(5) Classified as investments in unconsolidated entities
on the consolidated balance sheets.(6) Net carrying amount
includes an allowance for lease losses of $735,000 at
December 31, 2017.(7) Classified as assets held for sale
on the consolidated balance sheets.(8) Net carrying amount
includes the lower of cost or market value adjustments of $11.9
million at December 31, 2017.(9) Net carrying amount
includes a lower of cost or market value adjustment of $1.5 million
at December 31, 2017.(10) There are no stated rates
associated with these investments.
Supplemental Information
The following schedules of reconciliations and
supplemental information at December 31, 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
- Schedule IV - Supplemental Information.
About Resource Capital
Corp.
Resource Capital Corp. is a real estate
investment trust that is primarily focused on originating, holding
and managing commercial mortgage loans and commercial real
estate-related debt investments.
The Company is externally managed by Resource
Capital Manager, Inc. (the "Manager"), which is an indirect
wholly-owned subsidiary of C-III Capital Partners LLC, a leading
commercial real estate 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 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 (fourth quarter ended 2017 and 2016 and year ended
2017) and audited (year ended 2016) 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) |
|
|
December 31,2017 |
|
December 31,2016 |
|
(unaudited) |
|
|
ASSETS
(1) |
|
|
|
Cash and
cash equivalents |
$ |
181,490 |
|
|
$ |
116,026 |
|
Restricted cash |
22,874 |
|
|
3,399 |
|
Interest
receivable |
6,859 |
|
|
6,404 |
|
CRE
loans, pledged as collateral and net of allowances of $5,328 and
$3,829 |
1,284,822 |
|
|
1,286,278 |
|
Investment securities available-for-sale, including securities
pledged as collateral of $169,582 and $97,458 |
211,737 |
|
|
124,968 |
|
Investment securities, trading |
178 |
|
|
4,492 |
|
Loans
held for sale |
13 |
|
|
1,007 |
|
Principal
paydowns receivable |
76,129 |
|
|
19,280 |
|
Investments in unconsolidated entities |
12,051 |
|
|
87,919 |
|
Derivatives, at fair value |
602 |
|
|
647 |
|
Direct
financing leases, net of allowances of $735 and $465 |
151 |
|
|
527 |
|
Intangible assets |
— |
|
|
213 |
|
Other
assets |
7,451 |
|
|
14,673 |
|
Deferred
tax asset, net |
— |
|
|
4,255 |
|
Assets
held for sale (amounts include $61,841 and $158,178 of legacy CRE
loans held for sale in continuing operations, see Note 24) |
107,718 |
|
|
383,455 |
|
Total
assets |
$ |
1,912,075 |
|
|
$ |
2,053,543 |
|
LIABILITIES (2) |
|
|
|
Accounts
payable and other liabilities |
$ |
5,153 |
|
|
$ |
4,480 |
|
Management fee payable - related party |
1,035 |
|
|
1,318 |
|
Accrued
interest expense |
4,387 |
|
|
4,979 |
|
Borrowings |
1,163,485 |
|
|
1,191,456 |
|
Distributions payable |
5,581 |
|
|
5,560 |
|
Preferred
stock redemption liability |
50,000 |
|
|
— |
|
Accrued
tax liability |
540 |
|
|
— |
|
Derivatives, at fair value |
76 |
|
|
97 |
|
Liabilities held for sale (see Note 24) |
10,342 |
|
|
142,563 |
|
Total
liabilities |
1,240,599 |
|
|
1,350,453 |
|
EQUITY |
|
|
|
Preferred
stock, par value $0.001: 10,000,000 shares authorized 8.50%
Series A Cumulative Redeemable Preferred Stock, liquidation
preference $25.00 per share; 0 and 1,069,016 shares issued and
outstanding |
— |
|
|
1 |
|
Preferred
stock, par value $0.001: 10,000,000 shares authorized 8.25%
Series B Cumulative Redeemable Preferred Stock, liquidation
preference $25.00 per share; 4,613,596 and 5,544,579 shares issued
and outstanding |
5 |
|
|
6 |
|
Preferred
stock, par value $0.001: 10,000,000 shares authorized 8.625%
Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock,
liquidation preference $25.00 per share; 4,800,000 and 4,800,000
shares issued and outstanding |
5 |
|
|
5 |
|
Common
stock, par value $0.001: 125,000,000 shares authorized;
31,429,892 and 31,050,020 shares issued and outstanding (including
483,073 and 400,050 unvested restricted shares) |
31 |
|
|
31 |
|
Additional paid-in capital |
1,187,911 |
|
|
1,218,352 |
|
Accumulated other comprehensive income |
1,297 |
|
|
3,081 |
|
Distributions in excess of earnings |
(517,773 |
) |
|
(517,177 |
) |
Total
Resource Capital Corp. stockholders' equity |
671,476 |
|
|
704,299 |
|
Non-controlling interests |
— |
|
|
(1,209 |
) |
Total
equity |
671,476 |
|
|
703,090 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
1,912,075 |
|
|
$ |
2,053,543 |
|
|
|
|
|
|
|
|
|
|
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS - (Continued)(in thousands,
except share and per share data) |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
(unaudited) |
|
|
(1) Assets of
consolidated variable interest entities ("VIEs") included in total
assets above: |
|
|
|
Restricted cash |
$ |
20,846 |
|
|
$ |
3,308 |
|
Interest
receivable |
3,347 |
|
|
3,153 |
|
CRE
loans, pledged as collateral and net of allowances of $1,330 and
$763 |
603,110 |
|
|
747,726 |
|
Investment securities available-for-sale, pledged as collateral, at
fair value |
— |
|
|
369 |
|
Loans
held for sale |
13 |
|
|
1,007 |
|
Principal
paydowns receivable |
72,207 |
|
|
5,820 |
|
Other
assets |
73 |
|
|
58 |
|
Total
assets of consolidated VIEs |
$ |
699,596 |
|
|
$ |
761,441 |
|
|
|
|
|
(2) Liabilities
of consolidated VIEs included in total liabilities
above: |
|
|
|
Accounts
payable and other liabilities |
$ |
96 |
|
|
$ |
133 |
|
Accrued
interest expense |
592 |
|
|
519 |
|
Borrowings |
416,655 |
|
|
480,103 |
|
Total
liabilities of consolidated VIEs |
$ |
417,343 |
|
|
$ |
480,755 |
|
|
|
|
|
|
|
|
|
|
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands,
except share and per share data) |
|
|
For the Three Months Ended |
|
For the Year Ended |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
REVENUES |
|
|
|
|
|
|
|
Interest
income: |
|
|
|
|
|
|
|
CRE
loans |
$ |
22,941 |
|
|
$ |
20,664 |
|
|
$ |
88,268 |
|
|
$ |
85,229 |
|
Securities |
3,203 |
|
|
8,693 |
|
|
8,501 |
|
|
22,384 |
|
Other |
85 |
|
|
730 |
|
|
2,549 |
|
|
5,005 |
|
Total
interest income |
26,229 |
|
|
30,087 |
|
|
99,318 |
|
|
112,618 |
|
Interest
expense |
15,203 |
|
|
13,346 |
|
|
57,657 |
|
|
53,747 |
|
Net
interest income |
11,026 |
|
|
16,741 |
|
|
41,661 |
|
|
58,871 |
|
Other
revenue |
26 |
|
|
1,593 |
|
|
2,048 |
|
|
3,809 |
|
Total
revenues |
11,052 |
|
|
18,334 |
|
|
43,709 |
|
|
62,680 |
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
Management fees - related party |
2,875 |
|
|
2,802 |
|
|
13,117 |
|
|
12,991 |
|
Equity
compensation - related party |
321 |
|
|
(518 |
) |
|
2,738 |
|
|
3,025 |
|
General
and administrative |
4,066 |
|
|
4,237 |
|
|
15,846 |
|
|
15,197 |
|
Depreciation and amortization |
13 |
|
|
332 |
|
|
139 |
|
|
1,566 |
|
Impairment losses |
— |
|
|
1,173 |
|
|
177 |
|
|
26,470 |
|
Provision
for loan and lease losses, net |
1,254 |
|
|
10,126 |
|
|
1,772 |
|
|
17,765 |
|
Total
operating expenses |
8,529 |
|
|
18,152 |
|
|
33,789 |
|
|
77,014 |
|
|
|
|
|
|
|
|
|
|
2,523 |
|
|
182 |
|
|
9,920 |
|
|
(14,334 |
) |
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Equity in
(losses) earnings of unconsolidated entities |
(1,745 |
) |
|
23 |
|
|
39,545 |
|
|
5,973 |
|
Net
realized and unrealized gain on investment securities
available-for-sale and loans and derivatives |
2,715 |
|
|
2,054 |
|
|
18,334 |
|
|
4,066 |
|
Net
realized and unrealized gain (loss) on investment securities,
trading |
16 |
|
|
2,312 |
|
|
(954 |
) |
|
2,398 |
|
Fair
value adjustments on financial assets held for sale |
(1,889 |
) |
|
— |
|
|
(1,831 |
) |
|
— |
|
Loss on
extinguishment of debt |
— |
|
|
— |
|
|
(10,365 |
) |
|
— |
|
Other
income (expense) |
25 |
|
|
69 |
|
|
(579 |
) |
|
1,555 |
|
Total
other income |
(878 |
) |
|
4,458 |
|
|
44,150 |
|
|
13,992 |
|
|
|
|
|
|
|
|
|
INCOME (LOSS)
FROM CONTINUING OPERATIONS BEFORE TAXES |
1,645 |
|
|
4,640 |
|
|
54,070 |
|
|
(342 |
) |
Income
tax expense |
(675 |
) |
|
(1,434 |
) |
|
(6,613 |
) |
|
(10,992 |
) |
NET INCOME
(LOSS) FROM CONTINUING OPERATIONS |
970 |
|
|
3,206 |
|
|
47,457 |
|
|
(11,334 |
) |
NET LOSS FROM
DISCONTINUED OPERATIONS, NET OF TAX |
(3,284 |
) |
|
(6,728 |
) |
|
(14,116 |
) |
|
(19,260 |
) |
NET (LOSS)
INCOME |
(2,314 |
) |
|
(3,522 |
) |
|
33,341 |
|
|
(30,594 |
) |
Net
income allocated to preferred shares |
(6,014 |
) |
|
(6,014 |
) |
|
(24,057 |
) |
|
(24,091 |
) |
Carrying
value (less than) in excess of consideration paid for preferred
shares |
(3,803 |
) |
|
— |
|
|
(3,803 |
) |
|
1,500 |
|
Net loss
allocable to non-controlling interest, net of taxes |
— |
|
|
16 |
|
|
196 |
|
|
229 |
|
NET (LOSS)
INCOME ALLOCABLE TO COMMON SHARES |
$ |
(12,131 |
) |
|
$ |
(9,520 |
) |
|
$ |
5,677 |
|
|
$ |
(52,956 |
) |
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Year Ended |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
NET (LOSS)
INCOME PER COMMON SHARE - BASIC: |
|
|
|
|
|
|
|
CONTINUING OPERATIONS |
$ |
(0.28 |
) |
|
$ |
(0.09 |
) |
|
$ |
0.64 |
|
|
$ |
(1.10 |
) |
DISCONTINUED OPERATIONS |
$ |
(0.11 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.63 |
) |
TOTAL NET
(LOSS) INCOME PER COMMON SHARE - BASIC |
$ |
(0.39 |
) |
|
$ |
(0.31 |
) |
|
$ |
0.18 |
|
|
$ |
(1.73 |
) |
NET (LOSS)
INCOME PER COMMON SHARE - DILUTED: |
|
|
|
|
|
|
|
CONTINUING OPERATIONS |
$ |
(0.28 |
) |
|
$ |
(0.09 |
) |
|
$ |
0.64 |
|
|
$ |
(1.10 |
) |
DISCONTINUED OPERATIONS |
$ |
(0.11 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.63 |
) |
TOTAL NET
(LOSS) INCOME PER COMMON SHARE - DILUTED |
$ |
(0.39 |
) |
|
$ |
(0.31 |
) |
|
$ |
0.18 |
|
|
$ |
(1.73 |
) |
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC |
30,914,269 |
|
|
30,617,512 |
|
|
30,836,400 |
|
|
30,539,369 |
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED |
30,914,269 |
|
|
30,617,512 |
|
|
31,075,787 |
|
|
30,539,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE I
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME
(LOSS) TO CORE EARNINGS(unaudited)
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, certain legacy CRE loans and
other non-CRE assets designated as assets held for sale at the
initial measurement date.(1)
Core Earnings, for reporting purposes, is
defined as GAAP net income (loss) allocable to common shareholders,
excluding (i) non-cash equity compensation expense, (ii) unrealized
gains and losses, (iii) non-cash provisions for loan losses, (iv)
non-cash impairments on securities, (v) non-cash amortization of
discounts or premiums associated with borrowings, (vi) net income
or loss from a limited partnership interest owned at the initial
measurement date, (vii) net income or loss from non-core assets,(2)
(3) (viii) real estate depreciation and amortization, (ix) foreign
currency gains or losses and (x) income or loss from discontinued
operations. Core Earnings may also be adjusted periodically to
exclude certain one-time events pursuant to changes in GAAP and
certain non-cash items.
Although pursuant to the Third Amended and
Restated Management Agreement RSO calculates incentive compensation
using Core Earnings excluding incentive fees payable to the
Manager, beginning with the three months and year ended
December 31, 2017 RSO includes incentive fees payable to the
Manager in Core Earnings for reporting purposes.
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 (loss) income allocable to common shares to Core
Earnings allocable to common shares for the periods presented (in
thousands, except per share data):
|
For the Three Months Ended |
|
For the Year Ended |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net (loss)
income allocable to common shares - GAAP |
$ |
(12,131 |
) |
|
$ |
(9,520 |
) |
|
$ |
5,677 |
|
|
$ |
(52,956 |
) |
Adjustment for loss on
CRE assets |
— |
|
|
1,145 |
|
|
— |
|
|
270 |
|
Net (loss)
income allocable to common shares - GAAP, adjusted |
(12,131 |
) |
|
(8,375 |
) |
|
5,677 |
|
|
(52,686 |
) |
|
|
|
|
|
|
|
|
Reconciling
items from continuing operations: |
|
|
|
|
|
|
|
Non-cash
equity compensation expense |
321 |
|
|
(518 |
) |
|
2,738 |
|
|
3,025 |
|
Non-cash
provision for CRE loan losses |
1,254 |
|
|
2,467 |
|
|
1,502 |
|
|
10,464 |
|
Unrealized loss (gain) on core activities |
667 |
|
|
(732 |
) |
|
2,167 |
|
|
— |
|
Non-cash
amortization of discounts or premiums associated with
borrowings |
780 |
|
|
414 |
|
|
4,058 |
|
|
1,660 |
|
Deferred
tax asset valuation allowance (4) |
— |
|
|
1,434 |
|
|
— |
|
|
10,373 |
|
Net
(income) loss from limited partnership interest owned at the
initial measurement date (1) |
— |
|
|
(440 |
) |
|
1,073 |
|
|
(1,025 |
) |
Income
tax expense from non-core investments (2)(3) |
674 |
|
|
— |
|
|
6,637 |
|
|
— |
|
Net
realized gain on non-core assets (2)(3) |
(1,387 |
) |
|
— |
|
|
(42,402 |
) |
|
— |
|
Net loss
(income) from non-core assets (3) |
1,010 |
|
|
(8,196 |
) |
|
(4,691 |
) |
|
(17,151 |
) |
|
|
|
|
|
|
|
|
Reconciling
items from discontinued operations and CRE assets: |
|
|
|
|
|
|
|
Net
interest income on legacy CRE loans held for sale |
(71 |
) |
|
(355 |
) |
|
(3,323 |
) |
|
(355 |
) |
Realized
loss (gain) on liquidation of CRE loans |
103 |
|
|
(2,084 |
) |
|
(12,386 |
) |
|
(2,084 |
) |
Asset
impairment on CRE securities |
— |
|
|
(723 |
) |
|
— |
|
|
19,930 |
|
Fair
value adjustments on legacy CRE loans held for sale |
1,942 |
|
|
7,719 |
|
|
1,942 |
|
|
7,719 |
|
Net
(income) loss from other non-CRE investments held for sale |
(688 |
) |
|
113 |
|
|
(974 |
) |
|
113 |
|
Loss from
discontinued operations, net of taxes |
3,284 |
|
|
6,728 |
|
|
14,116 |
|
|
19,260 |
|
Core Earnings before
realized loss on CRE assets |
(4,242 |
) |
|
(2,548 |
) |
|
(23,866 |
) |
|
(757 |
) |
|
|
|
|
|
|
|
|
Adjustment for realized
loss on CRE assets |
— |
|
|
(1,145 |
) |
|
— |
|
|
(270 |
) |
Core Earnings
allocable to common shares (5) |
$ |
(4,242 |
) |
|
$ |
(3,693 |
) |
|
$ |
(23,866 |
) |
|
$ |
(1,027 |
) |
Weighted average common
shares - diluted |
30,914 |
|
|
30,618 |
|
|
30,836 |
|
|
30,539 |
|
|
|
|
|
|
|
|
|
Core Earnings
per common share - diluted (5) |
$ |
(0.14 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.77 |
) |
|
$ |
(0.03 |
) |
(1) Initial measurement date is December 31,
2016.(2) Income tax expense from non-core investments and net
realized gain (loss) on non-core assets are components of net
income or 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) Upon making the decision to dispose of the
non-core asset classes, RSO re-evaluated its net deferred tax
asset, which resulted in a net $10.4 million write down of its
valuation allowance for the year ended December 31,
2016.(5) Core Earnings include non-recurring charges of $8.5
million, or $(0.28) per common share-diluted, for the year
ended December 31, 2017, in connection with the extinguishment
of the 6.00% convertible senior notes due 2018 and 8.00%
convertible senior notes due 2020, and $3.8 million, or $(0.12) per
common share-diluted, for the three months and year ended
December 31, 2017, in connection with the redemptions of
Series A Preferred Stock and Series B Preferred Stock.
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) allocable to common shares to Core Earnings
allocable to common shares for the three months ended December 31,
2017 presented by operating segment (in thousands, except per share
data):
|
Commercial Real EstateDebt
Investments |
|
Corporate & Other |
|
Core Subtotal |
|
Commercial Finance |
|
Middle Market Lending |
|
Residential Mortgage Lending |
|
Total |
Net income
(loss) allocable to common shares - GAAP |
$ |
11,836 |
|
|
$ |
(18,436 |
) |
|
$ |
(6,600 |
) |
|
$ |
(2,557 |
) |
|
$ |
784 |
|
|
$ |
(3,758 |
) |
|
$ |
(12,131 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
items from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
equity compensation expense |
— |
|
|
321 |
|
|
321 |
|
|
— |
|
|
— |
|
|
— |
|
|
321 |
|
Non-cash
provision for CRE loan losses |
1,254 |
|
|
— |
|
|
1,254 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,254 |
|
Unrealized loss on core activities |
— |
|
|
667 |
|
|
667 |
|
|
— |
|
|
— |
|
|
— |
|
|
667 |
|
Non-cash
amortization of discounts or premiums associated with
borrowings |
— |
|
|
780 |
|
|
780 |
|
|
— |
|
|
— |
|
|
— |
|
|
780 |
|
Income
tax expense from non-core investments (2)(3) |
— |
|
|
— |
|
|
— |
|
|
674 |
|
|
— |
|
|
— |
|
|
674 |
|
Net
realized gain on non-core assets (2)(3) |
— |
|
|
— |
|
|
— |
|
|
(1,387 |
) |
|
— |
|
|
— |
|
|
(1,387 |
) |
Net loss
from non-core assets (3) |
— |
|
|
— |
|
|
— |
|
|
1,031 |
|
|
— |
|
|
(21 |
) |
|
1,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification of allocated expenses to non-CRE activities |
— |
|
|
(1,950 |
) |
|
(1,950 |
) |
|
2,239 |
|
|
— |
|
|
(289 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
items from discontinued operations and CRE assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income on legacy CRE loans held for sale |
(71 |
) |
|
— |
|
|
(71 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(71 |
) |
Realized
loss on liquidation of CRE loan |
103 |
|
|
— |
|
|
103 |
|
|
— |
|
|
— |
|
|
— |
|
|
103 |
|
Fair
value adjustments on legacy CRE loans held for sale |
1,942 |
|
|
— |
|
|
1,942 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,942 |
|
Net
income from other non-CRE investments held for sale |
— |
|
|
(688 |
) |
|
(688 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(688 |
) |
(Income)
loss from discontinued operations, net of taxes |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(784 |
) |
|
4,068 |
|
|
3,284 |
|
Core Earnings
allocable to common shares (4) |
$ |
15,064 |
|
|
$ |
(19,306 |
) |
|
$ |
(4,242 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(4,242 |
) |
Weighted average common
shares - diluted |
30,914 |
|
|
30,914 |
|
|
30,914 |
|
|
30,914 |
|
|
30,914 |
|
|
30,914 |
|
|
30,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Earnings
per common share - diluted (4) |
$ |
0.49 |
|
|
$ |
(0.63 |
) |
|
$ |
(0.14 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 or
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 months ended December 31,
2017 include a non-recurring charge of $3.8 million, or $(0.12)
per common share-diluted, in connection with the redemptions
of Series A Preferred Stock and Series B Preferred Stock.
SCHEDULE II
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESSUMMARY OF SECURITIZATION PERFORMANCE
STATISTICS(unaudited)
Securitizations - Distributions,
Coverage Test and Liquidation Summaries
The following table sets forth the distributions
made by and coverage test summaries for RSO's active
securitizations for the periods presented (in thousands):
|
|
Cash Distributions |
|
Overcollateralization Cushion (1) |
|
End of Designated |
|
|
For the Year Ended |
|
At December 31, |
|
At the Initial |
|
Principal Reinvestment |
Name |
|
December 31, 2017 |
|
December 31, 2016 |
|
2017 |
|
Measurement Date |
|
Period |
RCC
2015-CRE3 (2) |
|
$ |
8,672 |
|
|
$ |
10,907 |
|
|
$ |
50,743 |
|
|
$ |
20,313 |
|
|
February 2017 |
RCC
2015-CRE4 (2) |
|
$ |
8,554 |
|
|
$ |
11,784 |
|
|
$ |
56,772 |
|
|
$ |
9,397 |
|
|
September 2017 |
RCC
2017-CRE5 (2) |
|
$ |
6,643 |
|
|
$ |
— |
|
|
$ |
23,706 |
|
|
$ |
20,727 |
|
|
July 2020 |
Apidos Cinco CDO (3) |
|
$ |
2,056 |
|
|
$ |
22,627 |
|
|
N/A |
|
|
$ |
17,774 |
|
|
N/A |
(1) Overcollateralization cushion represents the
amount by which the collateral held by the securitization issuer
exceeds the maximum amount required.(2) The designated
principal reinvestment period for Resource Capital Corp. 2015-CRE3,
Resource Capital Corp. 2015-CRE4 and Resource Capital Corp.
2017-CRE5 is the period in which principal repayments can be
utilized to purchase loans held outside of the respective
securitization that represent the funded commitments of existing
collateral in the respective securitization that were not funded as
of the date the respective securitization was closed. Additionally,
the indenture for each securitization does not contain any interest
coverage test provisions.(3) Apidos Cinco was substantially
liquidated in November 2016. As a result of the liquidation, RSO
received $20.4 million of cash and consolidated the remaining
assets.
The following table sets forth the distributions
made by and liquidation details for RSO's liquidated
securitizations for the periods presented (in thousands):
|
|
Cash Distributions |
|
Liquidation Details |
|
|
For the Year Ended |
|
|
|
Remaining Assets at |
Name |
|
December 31, 2017 |
|
December 31, 2016 |
|
Liquidation Date |
|
the Liquidation Date (1) |
RCC
2014-CRE2 (2) |
|
$ |
33,050 |
|
|
$ |
12,961 |
|
|
August 2017 |
|
$ |
92,980 |
|
RREF
CDO 2006-1 |
|
$ |
— |
|
|
$ |
1,394 |
|
|
April 2016 |
|
$ |
65,730 |
|
RREF
CDO 2007-1 |
|
$ |
— |
|
|
$ |
1,890 |
|
|
November 2016 |
|
$ |
130,857 |
|
RCC
CRE Notes 2013 (2) |
|
$ |
— |
|
|
$ |
37,759 |
|
|
December 2016 |
|
$ |
13,500 |
|
Moselle CLO S.A. (3) |
|
$ |
— |
|
|
$ |
183 |
|
|
January 2015 |
|
$ |
— |
|
(1) The remaining assets at the liquidation date
were measured at fair value and returned to RSO in exchange for its
preference share and equity notes in the respective
securitization.(2) Cash distributions for the year ended
December 31, 2017 includes preference share and equity notes
distributions at liquidation of $25.6 million for Resource Capital
Corp. 2014-CRE2. Cash distributions for the year ended
December 31, 2016 includes preference share and equity notes
distributions at liquidation of $33.4 million for Resource Capital
Corp. CRE Notes 2013.(3) Moselle CLO S.A. completed the sale
of all of its remaining assets by January 2015.
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 primarily focused on
making CRE debt investments. 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):
|
Identified Assets at Plan
Inception |
|
Impairments/Adjustments on Non-Monetized Assets
(1)(2) |
|
Impairments/Adjustments on Monetized Assets
(1) |
|
Monetized through December 31, 2017
(3) |
|
Net Book Value at December 31, 2017
(3) |
Discops and
AHFS |
|
|
|
|
|
|
|
|
|
Legacy
CRE Loans (4) |
$ |
194.7 |
|
|
$ |
(13.8 |
) |
|
$ |
(11.7 |
) |
|
$ |
(107.4 |
) |
|
$ |
61.8 |
|
Middle
Market Loans |
73.8 |
|
|
(18.3 |
) |
|
0.3 |
|
|
(26.4 |
) |
|
29.4 |
|
Residential Mortgage Lending Segment (5) |
56.6 |
|
|
(1.2 |
) |
|
(9.6 |
) |
|
(45.1 |
) |
|
0.7 |
|
Other
AHFS |
5.9 |
|
|
2.5 |
|
|
1.6 |
|
|
(3.4 |
) |
|
6.6 |
|
Subtotal - Discops and AHFS |
$ |
331.0 |
|
|
$ |
(30.8 |
) |
|
$ |
(19.4 |
) |
|
$ |
(182.3 |
) |
|
$ |
98.5 |
|
Investments in
Unconsolidated Entities |
86.6 |
|
|
(1.9 |
) |
|
40.1 |
|
|
(119.4 |
) |
|
5.4 |
|
Commercial
Finance Assets (6) |
62.5 |
|
|
(0.3 |
) |
|
0.4 |
|
|
(62.3 |
) |
|
0.3 |
|
Total |
$ |
480.1 |
|
|
$ |
(33.0 |
) |
|
$ |
21.1 |
|
|
$ |
(364.0 |
) |
|
$ |
104.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Investments in unconsolidated entities include a
pro forma adjustment for a $5.1 million distribution from Pelium
Capital, L.P. received in January 2018.(4) 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 Resource Real Estate Funding CDO 2007-1
was liquidated in November 2016.(5) Includes $1.1 million of
cash and cash equivalents not classified as AHFS in the Residential
Mortgage Lending segment at December 31,
2017.(6) Commercial Finance assets decreased by $2.3 million
related to the reclassification of certain assets to other assets
on the consolidated balance sheets.
SCHEDULE IV
RESOURCE CAPITAL CORP. AND
SUBSIDIARIESSUPPLEMENTAL INFORMATION
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 (amounts in thousands, percentages
based on amortized cost):
|
|
December 31, 2017 |
|
December 31, 2016 |
Allowance for
loan losses: |
|
(unaudited) |
|
|
Specific
allowance: |
|
|
|
|
CRE whole
loans |
|
$ |
2,500 |
|
|
$ |
2,500 |
|
Total specific
allowance |
|
2,500 |
|
|
2,500 |
|
|
|
|
|
|
General allowance: |
|
|
|
|
CRE whole
loans |
|
2,828 |
|
|
1,329 |
|
Total general
allowance |
|
2,828 |
|
|
1,329 |
|
Total allowance for
loans |
|
$ |
5,328 |
|
|
$ |
3,829 |
|
Allowance as a
percentage of total loans |
|
0.4 |
% |
|
0.3 |
% |
|
|
|
|
|
Loans held for
sale: |
|
|
|
|
Syndicated corporate loans (1) |
|
$ |
13 |
|
|
$ |
1,007 |
|
Total loans held for
sale |
|
$ |
13 |
|
|
$ |
1,007 |
|
|
|
|
|
|
|
|
|
|
(1) The fair value option was elected for syndicated corporate
loans held for sale.
The following table presents unaudited CRE whole
loan portfolio statistics at December 31, 2017, excluding
legacy CRE loans classified as assets held for sale (percentages
based on carrying value at December 31, 2017):
Loan type: |
|
Whole
loans |
100.0 |
% |
Total |
100.0 |
% |
|
|
|
Collateral type: |
|
|
Multifamily |
46.8 |
% |
Office |
21.6 |
% |
Retail |
19.4 |
% |
Hotel |
8.3 |
% |
Industrial |
1.5 |
% |
Manufactured Housing |
1.5 |
% |
Self-Storage |
0.9 |
% |
Total |
100.0 |
% |
|
|
|
Collateral by NCREIF U.S. region: |
|
|
Southwest
(1) |
28.0 |
% |
Pacific
(2) |
24.3 |
% |
Mountain
(3) |
12.5 |
% |
Southeast
(4) |
11.2 |
% |
Mid
Atlantic (5) |
9.4 |
% |
Northeast
(6) |
8.2 |
% |
East
North Central |
5.7 |
% |
West
North Central |
0.7 |
% |
Total |
100.0 |
% |
|
|
|
(1) Whole loans in Texas represent 28.0% of the total loan
portfolio.(2) Whole loans in Southern and Northern California
represent 13.4% and 8.2%, respectively, of the total loan
portfolio.(3) Whole loans in Nevada represent 5.1% of the
total loan portfolio.(4) Whole loans in Florida represent 8.3%
of the total loan portfolio.(5) Whole loans in North Carolina
represent 6.2% of the total loan portfolio.(6) Whole loans in
Pennsylvania represent 5.6% of the total loan portfolio.
CONTACT: DAVID J. BRYANTCHIEF FINANCIAL
OFFICERRESOURCE CAPITAL CORP.717 Fifth AvenueNew York, NY
10022212-705-5000
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