Maryland | 1-32733 | 20-2287134 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of Incorporation) | File Number) | Identification No.) | ||
712 Fifth Avenue, 12th Floor New York, NY | 10019 | |||
(Address of principal executive offices) | (Zip Code) |
(d) | The exhibit furnished as part of this report is identified in the Exhibit Index immediately following the signature page of this report. Such Exhibit Index is incorporated herein by this reference. |
Resource Capital Corp. | ||||
/s/ David J. Bryant | ||||
Date: | November 14, 2016 | David J. Bryant Chief Financial Officer |
Exhibit No. | Description | |||
EX 99.1 | Press Release |
CONTACT: | DAVID J. BRYANT |
• | GAAP net loss allocable to common shares was $(1.69) and $(1.42) per share-diluted and Adjusted Funds From Operations ("AFFO") was $0.42 and $1.38 per share-diluted (see Schedule I). |
• | On September 8, 2016, Resource America, Inc., the parent company of Resource Capital Corp.'s ("RSO" or the "Company") external manager, was acquired by C-III Capital Partners LLC ("C-III"), a leading commercial real estate investment management and services company engaged in a broad range of activities. In conjunction with the closing, Robert C. Lieber has succeeded Jonathan Z. Cohen as Chief Executive Officer and President of RSO. Andrew L. Farkas and Jeffrey P. Cohen joined the board of directors, replacing Edward E. Cohen and Jonathan Z. Cohen, who have stepped down. |
• | In November, the board of directors approved a strategic plan (the "Plan") that will allow RSO to focus on making commercial real estate ("CRE") debt investments. The Plan will include exiting underperforming non-CRE businesses and investments, disposing of certain underperforming legacy CRE debt investments and establishing a dividend policy based on sustainable earnings. |
• | As part of the Plan, certain non-CRE businesses and investments and certain underperforming legacy CRE debt investments will be reclassified as held for sale during the fourth quarter of 2016. This reclassification will result in certain non-CRE businesses being reported as discontinued operations, and impairments of $11.0 million to $14.0 million to the fair values of those assets and liabilities are expected in the fourth quarter. |
• | RSO's board of directors anticipates that it will declare a cash dividend of $0.05 per share on its common stock for the fourth quarter of 2016 and for each of the four quarters of 2017. |
• | GAAP net loss allocable to common shares for the three and nine months ended September 30, 2016 was $51.6 million, or $(1.69) per share-diluted and $43.4 million, or $(1.42) per share-diluted, respectively, as compared to GAAP net income allocable to common shares of $6.8 million, or $0.21 per share-diluted, for the three months ended September 30, 2015, and a GAAP net loss allocable to common shares of $14.8 million, or $(0.45) per share-diluted, for the nine months ended September 30, 2015. |
• | GAAP net loss for the three and nine months ended September 30, 2016 includes provisions for loan losses of $8.1 million on two legacy CRE loans, additional unrealized losses of $9.6 million on a previously impaired middle market loan, and other-than-temporary impairments on securities available for sale and intangible assets of $25.3 million, of which $20.7 million is related to collateral in the legacy CRE portfolio that underlies the Company's CRE securitization issued in 2007. In addition, upon making the decision to exit non-CRE businesses, which have been funded primarily in taxable REIT subsidiaries, the Company re-evaluated its deferred tax asset and recognized a write-down of $12.3 million. |
• | AFFO for the three and nine months ended September 30, 2016 was $12.9 million, or $0.42 per share-diluted, and $42.1 million, or $1.38 per share-diluted, as compared to $14.6 million, or $0.44 per share-diluted, and $56.0 million, or $1.71 per share-diluted, for the three and nine months ended September 30, 2015. A reconciliation of net income (loss) in accordance with accounting principles generally accepted in the United States ("GAAP") to AFFO is set forth in Schedule I of this release. |
• | RSO received a $1.5 million consent fee and accelerated 129,553 restricted shares in connection with the acquisition of Resource America by C-III. |
• | RSO declared and paid a common stock cash dividend of $0.42 for the third quarter and $1.26 per share for the first nine months of 2016. |
• | Substantially all of the $1.4 billion CRE loan portfolio comprises senior whole loans at September 30, 2016. |
• | Of this CRE loan portfolio, 98% of the loans are floating rate senior whole loans and they had a weighted average London Interbank Offered Rate ("LIBOR") floor of 0.29% at September 30, 2016. |
• | Interest income on whole loans increased by $1.1 million and $6.6 million, or 5.88% and 12.40%, to $20.3 million and $59.9 million during the three and nine months ended September 30, 2016, respectively, as compared to $19.2 million and $53.3 million during the three and nine months ended September 30, 2015, respectively. For comparison purposes, this excludes income in the 2015 period from our legacy CRE collateralized debt obligations ("CDOs") that were deconsolidated in the first quarter of 2016. |
• | RSO closed and funded $354.7 million of new whole loans during the twelve months ended September 30, 2016, with a weighted average unlevered yield of 5.60% including amortization of origination fees. |
Three Months Ended | Nine Months Ended | Twelve Months Ended | Weighted Average Spread (1) (2) | |||||||||||
September 30, 2016 | September 30, 2016 | September 30, 2016 | ||||||||||||
New whole loans funded and originated | $ | 79.8 | $ | 125.9 | $ | 354.7 | 5.28 | % | ||||||
Unfunded loan commitments | 6.7 | 20.2 | 46.5 | |||||||||||
New loans originated | 86.5 | 146.1 | 401.2 | |||||||||||
Payoffs (3) | (155.9 | ) | (287.5 | ) | (498.9 | ) | ||||||||
Previous commitments funded | 15.4 | 54.4 | 65.3 | |||||||||||
Principal paydowns | — | — | — | |||||||||||
Unfunded loan commitments | (6.7 | ) | (20.2 | ) | (46.5 | ) | ||||||||
Loans, net funded/(repaid) | $ | (60.7 | ) | $ | (107.2 | ) | $ | (78.9 | ) |
(1) | Represents the weighted-average rate above the one-month LIBOR on loans whose interest rate is based on LIBOR at September 30, 2016. During the nine months ended September 30, 2016, $125.9 million of loans originated have LIBOR floors, with a weighted average floor of 0.39%. |
(2) | Reflects rates on new whole loans funded and originated during the nine months ended September 30, 2016. |
(3) | CRE loan payoffs and extensions resulted in $898,000 and $1.5 million of exit and extension fees earned during the three and nine months ended September 30, 2016, respectively. |
• | RSO recorded other-than-temporary impairment of $20.7 million during the three months ended September 30, 2016 on its interest in a CRE CDO, Resource Real Estate Funding CDO 2007-1 ("RREF 07-1"), which was previously consolidated and is now classified as an investment security available-for-sale. RSO's security interest in the vehicle is supported by twelve commercial mortgage backed securities ("CMBS") and seven CRE loans. Third-party appraisals were obtained for six of the legacy CRE loans that comprise part of RREF 07-1's collateral pool. The remaining legacy loan in the vehicle is under an agreement of sale. As a result of having the properties supporting the loans appraised, two of the CRE loans were determined to have cost bases in excess of their appraised fair values, causing a collective impairment charge to the cash flows of the vehicle of $20.7 million. The impairment charge on the security reflects the credit impact to the fair value of the security given the results of the appraisal and reduces the RSO cost basis in the security permanently. |
• | RSO recorded provisions for loan losses of $8.1 million during the three months ended September 30, 2016 on two legacy CRE loans, which resulted from appraisals obtained during the quarter. |
• | On July 21, 2016, RSO, through its subsidiary RCC Real Estate SPE 4, LLC, agreed to a modification of the terms of its $400.0 million CRE repurchase agreement financing facility with Wells Fargo. The modification extends the facility's maturity date to July 21, 2018, subject to RSO’s three one-year extension rights that may extend the maturity to July 21, 2021. The amendment also modified certain financing rates and required debt yields. RSO paid an extension fee as well as other reasonable closing costs. |
• | On August 4, 2016, RSO completed the sale of Northport TRS, LLC ("Northport"), and retained substantially all of the portfolio of broadly syndicated loans and one directly originated loan, classified as held for sale, with an aggregate carrying value of $58.7 million at September 30, 2016. These loans had a weighted average spread of 7.6% over one-month and three-month LIBOR at September 30, 2016. During the three months ended September 30, 2016, an updated third party valuation analysis was obtained and RSO recorded a loss of $9.6 million on the directly originated loan. |
• | On September 28, 2016, RSO issued a call notice to the trustee and issuer of Apidos CDO Cinco, LTD. Apidos CDO Cinco, which owns syndicated bank loans, was previously consolidated and is now classified as an investment security available-for-sale. RSO expects to receive the majority of the call proceeds from its investment on November 14, 2016. |
• | unrestricted cash and cash equivalents of $108.9 million and restricted cash of $30,000 in margin call accounts; |
• | capital available for reinvestment in two of RSO's CRE securitizations of $4.9 million, all of which is designated to finance future funding commitments on CRE loans; and |
• | loan principal repayments of $491,000, which will be used to pay down outstanding collateralized loan obligation note balances, as well as interest collections of $80,000. |
Amortized Cost | Net Carrying Amount | Percent of Portfolio | Weighted Average Coupon | |||||||||
As of September 30, 2016 | ||||||||||||
Loans Held for Investment: | ||||||||||||
CRE whole loans(1) | $ | 1,361,183 | $ | 1,351,761 | 69.92 | % | 5.54% | |||||
Middle market loans | 51,539 | 51,539 | 2.67 | % | 8.57% | |||||||
Residential mortgage loans(2) | 3,292 | 3,281 | 0.17 | % | 4.15% | |||||||
1,416,014 | 1,406,581 | 72.76 | % | |||||||||
Loans Held for Sale (3): | ||||||||||||
Middle market loans | 7,182 | 7,182 | 0.37 | % | 10.24% | |||||||
Residential mortgage loans | 190,433 | 190,433 | 9.85 | % | 3.63% | |||||||
197,615 | 197,615 | 10.22 | % | |||||||||
Investments in Available-for-Sale Securities: | ||||||||||||
CMBS - private placement | 82,595 | 81,761 | 4.23 | % | 4.13% | |||||||
RMBS | 1,624 | 1,798 | 0.09 | % | 5.29% | |||||||
ABS | 149,320 | 153,146 | 7.92 | % | N/A(4) | |||||||
233,539 | 236,705 | 12.24 | % | |||||||||
Investment Securities-Trading: | ||||||||||||
Structured notes | 5,914 | 3,747 | 0.19 | % | N/A(4) | |||||||
5,914 | 3,747 | 0.19 | % | |||||||||
Other (non-interest bearing): | ||||||||||||
Investment in unconsolidated entities | 88,149 | 88,149 | 4.56 | % | N/A(4) | |||||||
Direct financing leases(5) | 1,036 | 571 | 0.03 | % | 5.66% | |||||||
89,185 | 88,720 | 4.59 | % | |||||||||
Total Investment Portfolio | $ | 1,942,267 | $ | 1,933,368 | 100.00 | % |
(1) | Net carrying amount includes allowance for loan losses of $9.4 million at September 30, 2016. |
(2) | Net carrying amount includes allowance for loan losses of $11,000 at September 30, 2016. |
(3) | Loans held for sale are carried at the lower of cost or fair market value. |
(4) | There is no stated rate associated with these securities. |
(5) | Net carrying amount includes allowance for lease losses of $465,000 at September 30, 2016. |
• | Schedule I - Reconciliation of GAAP Net Income (Loss) to Funds from Operations (“FFO”) and AFFO; |
• | Schedule II - Summary of General and Administrative Expenses; |
• | Schedule III - Summary of Securitization Performance Statistics; and |
• | Supplemental Information. |
• | 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; |
• | estimates of future impairments; and |
• | changes in general business and economic conditions that in the past have impaired and may in the future impair the credit quality of borrowers and RSO's ability to originate loans. |
September 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
ASSETS (1) | |||||||
Cash and cash equivalents | $ | 114,552 | $ | 78,756 | |||
Restricted cash | 5,701 | 40,635 | |||||
Investment securities, trading | 3,747 | 25,550 | |||||
Investment securities available-for-sale, pledged as collateral, at fair value | 82,114 | 162,306 | |||||
Investment securities available-for-sale, at fair value | 154,591 | 45,782 | |||||
Loans held for sale ($197.6 million and $94.5 million at fair value) | 197,615 | 95,946 | |||||
Loans, pledged as collateral and net of allowances of $9.4 million and $47.1 million | 1,406,581 | 2,160,751 | |||||
Investments in unconsolidated entities | 88,149 | 50,030 | |||||
Derivatives, at fair value | 4,052 | 3,446 | |||||
Interest receivable | 6,623 | 14,009 | |||||
Deferred tax asset, net | 5,565 | 12,646 | |||||
Principal paydown receivable | 44,600 | 17,941 | |||||
Direct financing leases, net of allowances of $0.5 million | 571 | 931 | |||||
Intangible assets | 25,886 | 26,228 | |||||
Prepaid expenses | 4,615 | 3,180 | |||||
Other assets | 12,516 | 22,295 | |||||
Total assets | $ | 2,157,478 | $ | 2,760,432 | |||
LIABILITIES (2) | |||||||
Borrowings | $ | 1,401,842 | $ | 1,895,288 | |||
Distribution payable | 17,022 | 17,351 | |||||
Accrued interest expense | 4,913 | 5,604 | |||||
Derivatives, at fair value | 2,158 | 3,941 | |||||
Accrued tax liability | 51 | 549 | |||||
Accounts payable and other liabilities | 12,933 | 10,939 | |||||
Total liabilities | 1,438,919 | 1,933,672 | |||||
EQUITY | |||||||
Preferred stock, par value $0.001: 10,000,000 shares authorized 8.50% Series A cumulative redeemable preferred shares, liquidation preference $25.00 per share 1,069,016 and 1,069,016 shares issued and outstanding | 1 | 1 | |||||
Preferred stock, par value $0.001: 10,000,000 shares authorized 8.25% Series B cumulative redeemable preferred shares, liquidation preference $25.00 per share 5,544,579 and 5,740,479 shares issued and outstanding | 6 | 6 | |||||
Preferred stock, par value $0.001: 10,000,000 shares authorized 8.625% Series C cumulative redeemable preferred shares, 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; 31,071,737 and 31,562,724 shares issued and outstanding (including 496,756 and 691,369 unvested restricted shares) | 31 | 32 | |||||
Additional paid-in capital | 1,218,907 | 1,228,346 | |||||
Accumulated other comprehensive income (loss) | 6,909 | (2,923 | ) | ||||
Distributions in excess of earnings | (506,107 | ) | (406,603 | ) | |||
Total stockholders’ equity | 719,752 | 818,864 | |||||
Non-controlling interests | (1,193 | ) | 7,896 | ||||
Total equity | 718,559 | 826,760 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 2,157,478 | $ | 2,760,432 |
September 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
(1) Assets of consolidated Variable Interest Entities ("VIEs") included in the total assets above: | |||||||
Cash and cash equivalents | $ | — | $ | 95 | |||
Restricted cash | 5,473 | 39,061 | |||||
Investment securities available-for-sale, pledged as collateral, at fair value | — | 66,137 | |||||
Loans held for sale | — | 1,475 | |||||
Loans, pledged as collateral and net of allowances of $827,000 and $42.8 million | 801,742 | 1,416,441 | |||||
Interest receivable | 3,389 | 6,592 | |||||
Prepaid expenses | 21 | 238 | |||||
Principal paydown receivable | 44,600 | 17,800 | |||||
Other assets | 253 | 833 | |||||
Total assets of consolidated VIEs | $ | 855,478 | $ | 1,548,672 | |||
(2) Liabilities of consolidated VIEs included in the total liabilities above: | |||||||
Borrowings | $ | 528,971 | $ | 1,032,581 | |||
Accrued interest expense | 500 | 923 | |||||
Derivatives, at fair value | — | 3,346 | |||||
Accounts payable and other liabilities | 147 | (117 | ) | ||||
Total liabilities of consolidated VIEs | $ | 529,618 | $ | 1,036,733 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
REVENUES | |||||||||||||||
Interest income: | |||||||||||||||
Loans | $ | 26,003 | $ | 32,497 | $ | 89,227 | $ | 92,623 | |||||||
Securities | 4,602 | 4,866 | 13,691 | 14,418 | |||||||||||
Leases | (22 | ) | (8 | ) | (37 | ) | 250 | ||||||||
Interest income - other | 769 | 968 | 4,317 | 2,919 | |||||||||||
Total interest income | 31,352 | 38,323 | 107,198 | 110,210 | |||||||||||
Interest expense | 14,120 | 16,330 | 46,581 | 45,334 | |||||||||||
Net interest income | 17,232 | 21,993 | 60,617 | 64,876 | |||||||||||
Gain (loss) on sale of residential mortgage loans | 6,026 | 3,154 | 15,607 | 11,594 | |||||||||||
Dividend income | (188 | ) | 17 | (153 | ) | 50 | |||||||||
Fee income | 2,023 | 781 | 1,425 | 4,767 | |||||||||||
Total revenues | 25,093 | 25,945 | 77,496 | 81,287 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Management fees - related party | 3,053 | 3,252 | 10,189 | 10,312 | |||||||||||
Equity compensation - related party | 1,766 | (225 | ) | 4,444 | 1,561 | ||||||||||
Rental operating expense | — | — | — | 6 | |||||||||||
Lease operating | 1 | (33 | ) | 5 | 14 | ||||||||||
General and administrative | 12,341 | 10,223 | 33,353 | 29,641 | |||||||||||
Depreciation and amortization | 505 | 628 | 1,650 | 1,814 | |||||||||||
Impairment losses | 25,297 | — | 25,297 | 59 | |||||||||||
Provision (recovery) for loan and lease losses | 7,683 | 1,034 | 19,819 | 43,834 | |||||||||||
Total operating expenses | 50,646 | 14,879 | 94,757 | 87,241 | |||||||||||
(25,553 | ) | 11,066 | (17,261 | ) | (5,954 | ) | |||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Equity in earnings of unconsolidated subsidiaries | 1,032 | 334 | 5,950 | 1,702 | |||||||||||
Net realized and unrealized gain (loss) on sales of investment securities available-for-sale and loans and derivatives | (10,106 | ) | 2,457 | (7,817 | ) | 16,612 | |||||||||
Net realized and unrealized gain (loss) on investment securities, trading | (242 | ) | (580 | ) | 86 | 1,773 | |||||||||
Unrealized gain (loss) and net interest income on linked transactions, net | — | — | — | 235 | |||||||||||
(Loss) on reissuance/gain on extinguishment of debt | — | (332 | ) | — | (1,403 | ) | |||||||||
(Loss) gain on sale of real estate | 31 | (19 | ) | 28 | (19 | ) | |||||||||
Other income (expense) | 1,500 | — | 1,500 | — | |||||||||||
Total other income (expense) | (7,785 | ) | 1,860 | (253 | ) | 18,900 | |||||||||
INCOME (LOSS) BEFORE TAXES | (33,338 | ) | 12,926 | (17,514 | ) | 12,946 | |||||||||
Income tax (expense) benefit | (12,283 | ) | 1,796 | (9,558 | ) | (2,969 | ) | ||||||||
NET INCOME (LOSS) | (45,621 | ) | 14,722 | (27,072 | ) | 9,977 | |||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net (income) loss allocated to preferred shares | (6,015 | ) | (6,115 | ) | (18,077 | ) | (18,322 | ) | |||||||
Carrying value in excess of consideration paid for preferred shares | — | — | 1,500 | — | |||||||||||
Net (income) loss allocable to non-controlling interest, net of taxes | 63 | (1,829 | ) | 213 | (6,486 | ) | |||||||||
NET INCOME (LOSS) ALLOCABLE TO COMMON SHARES | $ | (51,573 | ) | $ | 6,778 | $ | (43,436 | ) | $ | (14,831 | ) | ||||
NET INCOME (LOSS) PER COMMON SHARE – BASIC | $ | (1.69 | ) | $ | 0.21 | $ | (1.42 | ) | $ | (0.45 | ) | ||||
NET INCOME (LOSS) PER COMMON SHARE – DILUTED | $ | (1.69 | ) | $ | 0.21 | $ | (1.42 | ) | $ | (0.45 | ) | ||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC | 30,528,368 | 32,515,226 | 30,513,131 | 32,726,194 | |||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED | 30,528,368 | 32,951,217 | 30,513,131 | 32,726,194 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) allocable to common shares - GAAP | $ | (51,573 | ) | $ | 6,778 | $ | (43,436 | ) | $ | (14,831 | ) | ||||
Adjustments: | |||||||||||||||
(Gains) losses on sales of property (1) | (32 | ) | 19 | (63 | ) | 19 | |||||||||
FFO allocable to common shares | (51,605 | ) | 6,797 | (43,499 | ) | (14,812 | ) | ||||||||
Adjustments: | |||||||||||||||
Non-cash items: | |||||||||||||||
Provision (recovery) for loan losses | 7,997 | 830 | 9,418 | 42,570 | |||||||||||
Amortization of deferred costs (non-real estate) and intangible assets | 3,643 | 3,900 | 10,135 | 9,754 | |||||||||||
Amortization of discount on convertible senior notes | 709 | 708 | 2,123 | 1,656 | |||||||||||
Impairment charge on intangible asset | 3,671 | — | 3,671 | — | |||||||||||
Acceleration of deferred debt issuance costs from sale of Northport loans | — | — | 2,560 | — | |||||||||||
Equity investment (gains) losses | (415 | ) | (961 | ) | (2,759 | ) | (1,363 | ) | |||||||
Share-based compensation | 1,766 | (225 | ) | 4,444 | 1,560 | ||||||||||
Impairment losses on trading and available-for-sale securities | 22,351 | — | 22,351 | 59 | |||||||||||
Unrealized losses (gains) on CMBS marks - linked transactions (2) | — | — | — | (235 | ) | ||||||||||
Unrealized (gains) losses on trading portfolio | 242 | 1,054 | 124 | (264 | ) | ||||||||||
Unrealized (gains) losses on foreign exchange transactions | 280 | (2,750 | ) | 34 | 2,101 | ||||||||||
Unrealized (gains) losses on derivatives | 227 | 1,248 | (1,984 | ) | 2,324 | ||||||||||
Unrealized (gains) losses on loans held for sale | 9,631 | — | 9,631 | — | |||||||||||
Loss on resale of debt | — | 332 | — | 1,403 | |||||||||||
Change in mortgage servicing rights valuation reserve | 800 | 900 | 5,600 | 650 | |||||||||||
Change in residential loan warranty reserve | 1,268 | 201 | 1,600 | 601 | |||||||||||
Dead deal costs | — | — | — | 399 | |||||||||||
REIT tax adjustments | 12,283 | — | 12,283 | 317 | |||||||||||
Cash items: | |||||||||||||||
Gains (losses) on sale of property (1) | 32 | (19 | ) | 63 | (19 | ) | |||||||||
Gains (losses) on extinguishment of debt | — | 2,607 | 6,303 | 9,252 | |||||||||||
AFFO allocable to common shares | $ | 12,880 | $ | 14,622 | $ | 42,098 | $ | 55,953 | |||||||
Weighted average common shares – diluted | 30,528 | 32,951 | 30,513 | 32,726 | |||||||||||
AFFO per common share – diluted | $ | 0.42 | $ | 0.44 | $ | 1.38 | $ | 1.71 |
(1) | Amount represents gains/losses on sales of owned real estate as well as sales of joint venture real estate interests that were recorded by RSO on an equity basis. |
(2) | As the result of an accounting standards update adopted on January 1, 2015, RSO unlinked its previously linked transactions. |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
General and administrative expenses: | ||||||||||||||||
Corporate | $ | 4,432 | $ | 4,053 | $ | 12,617 | $ | 12,902 | ||||||||
PCM | 7,909 | 6,170 | 20,736 | 16,739 | ||||||||||||
Total | $ | 12,341 | $ | 10,223 | $ | 33,353 | $ | 29,641 |
Name | Cash Distributions | Annualized Interest Coverage Cushion | Overcollateralization Cushion | |||||||||||||||||
Nine Months Ended September 30, | Year Ended December 31, | As of September 30, | As of September 30, | As of Initial Measurement Date | ||||||||||||||||
2016 | 2015 | 2016 (1) (2) | 2016 (3) | |||||||||||||||||
Apidos Cinco CDO (4) | $ | 2,254 | $ | 6,336 | $ | 1,926 | $ | 21,441 | $ | 17,774 | ||||||||||
RREF CDO 2006-1(4) (9) | $ | 1,394 | $ | 3,451 | $ | — | $ | — | $ | 24,941 | ||||||||||
RREF CDO 2007-1(4) | $ | 1,435 | $ | 6,102 | $ | 917 | $ | 68,847 | $ | 26,032 | ||||||||||
RCC CRE Notes 2013 | $ | 3,525 | $ | 9,129 | N/A | N/A | N/A | |||||||||||||
RCC 2014-CRE2 (5) | $ | 9,954 | $ | 15,826 | N/A | $ | 61,189 | $ | 20,663 | |||||||||||
RCC 2015-CRE3 (6) | $ | 8,559 | $ | 9,186 | N/A | $ | 29,960 | $ | 20,313 | |||||||||||
RCC 2015-CRE4 (7) | $ | 9,220 | $ | 3,291 | N/A | $ | 29,319 | $ | 9,397 | |||||||||||
Moselle CLO S.A. (8) | $ | 183 | $ | 29,099 | N/A | N/A | N/A |
(1) | Interest coverage includes annualized amounts based on the most recent trustee statements. |
(2) | Interest coverage cushion represents the amount by which annualized interest income expected exceeds the annualized amount payable on all classes of securitization notes senior to the Company's preference shares. |
(3) | Overcollateralization cushion represents the amount by which the collateral held by the securitization issuer exceeds the maximum amount required. |
(4) | Apidos Cinco CDO, RREF CDO 2006-1 and RREF CDO 2007-1 were deconsolidated as a result of the new consolidation accounting guidance adopted effective January 1, 2016. |
(5) | Resource Capital Corp. 2014-CRE2 has no reinvestment period; however, principal repayments, for a period which ended in July 2016, may be designated 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) | Resource Capital Corp. 2015-CRE3 closed on February 24, 2015; the first distribution was in March 2015. There is no reinvestment period; however, principal repayments, for a period ending in February 2017, may be designated 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. |
(7) | Resource Capital Corp. 2015-CRE4 closed on August 18, 2015; the first distribution was in September 2015. There is no reinvestment period; however, principal repayments, for a period ending in August 2017, may be designated 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. |
(8) | 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, RSO began to liquidate Moselle CLO S.A. and, by January 2015, all of the assets were sold. |
(9) | RREF CDO 2006-1 was liquidated on April 25, 2016 and, as a result, all $66.3 million of the remaining assets were returned to RSO in exchange for RSO's preference shares and equity notes in the securitization. |
September 30, 2016 | December 31, 2015 | |||||||
Allowance for loan losses: | ||||||||
Specific allowance: | ||||||||
Commercial real estate loans | $ | 8,059 | $ | 40,274 | ||||
Bank loans | — | 1,282 | ||||||
Total specific allowance | 8,059 | 41,556 | ||||||
General allowance: | ||||||||
Commercial real estate loans | 1,363 | 1,565 | ||||||
Middle market loans | — | 3,939 | ||||||
Residential mortgage loans | 11 | 11 | ||||||
Total general allowance | 1,374 | 5,515 | ||||||
Total allowance for loans | $ | 9,433 | $ | 47,071 | ||||
Allowance as a percentage of total loans | 0.7 | % | 2.1 | % | ||||
Loans held for sale: (1) | ||||||||
Bank loans | $ | — | $ | 1,475 | ||||
Middle market loans | 7,182 | — | ||||||
Residential mortgage loans | 190,433 | 94,471 | ||||||
Total loans held for sale | $ | 197,615 | $ | 95,946 |
(1) | Loans held for sale are presented at the lower of cost or fair market value. |
Security type: | ||
Whole loans | 100.0 | % |
Total | 100.0 | % |
Collateral type: | ||
Multifamily | 47.1 | % |
Office | 20.7 | % |
Retail | 16.8 | % |
Hotel | 14.8 | % |
Industrial | 0.6 | % |
Total | 100.0 | % |
Collateral location: | ||
Texas | 30.4 | % |
Southern California | 13.4 | % |
Northern California | 10.8 | % |
Georgia | 7.2 | % |
Florida | 7.1 | % |
Nevada | 5.4 | % |
North Carolina | 3.6 | % |
Colorado | 3.3 | % |
Pennsylvania | 2.6 | % |
Minnesota | 2.4 | % |
Maryland | 2.2 | % |
Other | 11.6 | % |
Total | 100.0 | % |
Industry type: | ||
Beverage, Food and Tobacco | 17.8 | % |
Healthcare, Education and Childcare | 16.8 | % |
Diversified/Conglomerate Manufacturing | 12.3 | % |
Insurance | 12.0 | % |
Diversified/Conglomerate Service | 11.8 | % |
Cargo Transport | 10.3 | % |
Hotels, Motels, Inns and Gaming | 7.9 | % |
Buildings and Real Estate | 6.7 | % |
Oil and Gas | 4.4 | % |
Total | 100.0 | % |