þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 72-0654145 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
One Crescent Drive, Suite 203, Navy Yard Corporate Center, Philadelphia, PA 19112 | ||
(Address of principal executive offices) (Zip code) | ||
(215) 546-5005 | ||
(Registrant's telephone number, including area code) | ||
Securities registered pursuant to Section 12(g) of the Act: | ||
Common stock, par value $.01 per share | NASDAQ Global Select Market | |
Title of class | Name of exchange on which registered |
Large accelerated filer | o | Accelerated filer | þ | |
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | o |
Page | ||
PART I | ||
Item 1: | Financial Statements | |
Item 2: | ||
Item 3: | ||
Item 4: | ||
PART II | ||
Item 6: | ||
June 30, 2013 | September 30, 2012 | ||||||
ASSETS | (unaudited) | ||||||
Cash | $ | 12,173 | $ | 19,393 | |||
Restricted cash | 561 | 642 | |||||
Receivables | 1,069 | 3,554 | |||||
Receivables from managed entities and related parties, net | 32,433 | 41,051 | |||||
Investments in real estate, net | 17,016 | 19,149 | |||||
Investment securities, at fair value | 31,151 | 22,532 | |||||
Investments in unconsolidated loan manager | 37,326 | 36,356 | |||||
Investments in unconsolidated entities | 13,518 | 12,993 | |||||
Property and equipment, net | 2,496 | 2,732 | |||||
Deferred tax assets, net | 37,292 | 34,565 | |||||
Other assets | 6,257 | 3,776 | |||||
Total assets | $ | 191,292 | $ | 196,743 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Accrued expenses and other liabilities | $ | 18,827 | $ | 23,042 | |||
Payables to managed entities and related parties | 3,251 | 4,380 | |||||
Borrowings | 22,062 | 23,020 | |||||
Total liabilities | 44,140 | 50,442 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none outstanding | — | — | |||||
Common stock, $.01 par value, 49,000,000 shares authorized; 30,330,554 and 29,866,664 shares issued (including nonvested restricted stock of 422,013 and 403,195), respectively | 299 | 294 | |||||
Additional paid-in capital | 287,907 | 285,844 | |||||
Accumulated deficit | (26,076 | ) | (24,508 | ) | |||
Treasury stock, at cost; 9,910,144 and 9,756,955 shares, respectively | (103,392 | ) | (102,457 | ) | |||
Accumulated other comprehensive loss | (11,764 | ) | (13,080 | ) | |||
Total stockholders’ equity | 146,974 | 146,093 | |||||
Noncontrolling interests | 178 | 208 | |||||
Total equity | 147,152 | 146,301 | |||||
$ | 191,292 | $ | 196,743 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 12,153 | $ | 10,921 | $ | 36,647 | $ | 29,303 | |||||||
Financial fund management | 2,445 | 2,991 | 9,407 | 15,874 | |||||||||||
Commercial finance | (35 | ) | (128 | ) | (337 | ) | 2,051 | ||||||||
14,563 | 13,784 | 45,717 | 47,228 | ||||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 8,896 | 7,386 | 26,334 | 21,985 | |||||||||||
Financial fund management | 1,694 | 2,994 | 5,239 | 13,177 | |||||||||||
Commercial finance | (219 | ) | 118 | (223 | ) | 2,311 | |||||||||
Restructuring expenses | — | — | — | 365 | |||||||||||
General and administrative | 2,153 | 2,567 | 6,566 | 7,930 | |||||||||||
Gain on sale of leases and loans | — | — | — | (37 | ) | ||||||||||
Provision for credit losses | 1,647 | 5,698 | 7,137 | 10,910 | |||||||||||
Depreciation and amortization | 489 | 528 | 1,397 | 3,124 | |||||||||||
14,660 | 19,291 | 46,450 | 59,765 | ||||||||||||
OPERATING LOSS | (97 | ) | (5,507 | ) | (733 | ) | (12,537 | ) | |||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain on deconsolidation and sale of subsidiaries | — | 54,682 | — | 63,431 | |||||||||||
Loss on extinguishment of debt | — | — | — | (2,190 | ) | ||||||||||
Gain on sale of investment securities, net | — | — | — | 63 | |||||||||||
Other-than-temporary impairment on investments | — | (214 | ) | (74 | ) | ||||||||||
Interest expense | (501 | ) | (578 | ) | (1,517 | ) | (4,197 | ) | |||||||
Other income, net | 635 | 362 | 1,963 | 1,546 | |||||||||||
134 | 54,466 | 232 | 58,579 | ||||||||||||
Income (loss) from continuing operations before taxes | 37 | 48,959 | (501 | ) | 46,042 | ||||||||||
Income tax (benefit) provision | (1,511 | ) | 18,665 | (1,898 | ) | 17,496 | |||||||||
Income from continuing operations | 1,548 | 30,294 | 1,397 | 28,546 | |||||||||||
Loss from discontinued operations, net of tax | — | (14 | ) | (8 | ) | (50 | ) | ||||||||
Net income | 1,548 | 30,280 | 1,389 | 28,496 | |||||||||||
Net income attributable to noncontrolling interests | (26 | ) | (45 | ) | (570 | ) | (384 | ) | |||||||
Net income attributable to common shareholders | $ | 1,522 | $ | 30,235 | $ | 819 | $ | 28,112 | |||||||
Amounts attributable to common shareholders: | |||||||||||||||
Income from continuing operations | $ | 1,522 | $ | 30,249 | $ | 827 | $ | 28,162 | |||||||
Discontinued operations | — | (14 | ) | (8 | ) | (50 | ) | ||||||||
Net income | $ | 1,522 | $ | 30,235 | $ | 819 | $ | 28,112 | |||||||
Basic earnings per share: | |||||||||||||||
Continuing operations | $ | 0.07 | $ | 1.53 | $ | 0.04 | $ | 1.43 | |||||||
Discontinued operations | — | — | — | — | |||||||||||
Net income | $ | 0.07 | $ | 1.53 | $ | 0.04 | $ | 1.43 | |||||||
Weighted average shares outstanding | 20,297 | 19,815 | 20,165 | 19,618 | |||||||||||
Diluted earnings per share: | |||||||||||||||
Continuing operations | $ | 0.07 | $ | 1.44 | $ | 0.04 | $ | 1.37 | |||||||
Discontinued operations | — | — | — | — | |||||||||||
Net income | $ | 0.07 | $ | 1.44 | $ | 0.04 | $ | 1.37 | |||||||
Weighted average shares outstanding | 22,106 | 21,036 | 21,706 | 20,464 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income | $ | 1,548 | $ | 30,280 | $ | 1,389 | $ | 28,496 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Unrealized (loss) gain on investment securities available-for-sale, net of tax of $(489), $(11), $(756) and $327 | (765 | ) | (17 | ) | 977 | 518 | |||||||||
Less: reclassification for losses realized, net of tax of $0, $0, $83 and $28 | — | — | 131 | 46 | |||||||||||
(765 | ) | (17 | ) | 1,108 | 564 | ||||||||||
Minimum pension liability - reclassification for losses realized, net of tax of $11, $36, $106 and $107 | 42 | 46 | 193 | 140 | |||||||||||
Unrealized gain (loss) on hedging contracts, net of tax of $1, $5, $12 and $2 | 3 | 7 | 15 | (21 | ) | ||||||||||
Deconsolidation of LEAF- unrealized loss on hedging contracts net of tax of $0, $0, $0 and $174 | — | — | — | 255 | |||||||||||
3 | 7 | 15 | 234 | ||||||||||||
Subtotal- other comprehensive (loss) income | (720 | ) | 36 | 1,316 | 938 | ||||||||||
Comprehensive income | 828 | 30,316 | 2,705 | 29,434 | |||||||||||
Comprehensive income attributable to noncontrolling interests | (26 | ) | (45 | ) | (570 | ) | (433 | ) | |||||||
Comprehensive income attributable to common shareholders | $ | 802 | $ | 30,271 | $ | 2,135 | $ | 29,001 |
Attributable to Common Shareholders | ||||||||||||||||||||||||||||||||||
Common Stock Shares | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||
Balance, October 1, 2012 | 20,109,709 | $ | 294 | $ | 285,844 | $ | (24,508 | ) | $ | (102,457 | ) | $ | (13,080 | ) | $ | 146,093 | $ | 208 | $ | 146,301 | ||||||||||||||
Net income | — | — | — | 819 | — | — | 819 | 570 | 1,389 | |||||||||||||||||||||||||
Treasury shares issued | 24,569 | — | (56 | ) | — | 257 | — | 201 | — | 201 | ||||||||||||||||||||||||
Stock-based compensation | 218,302 | 2 | 869 | — | — | — | 871 | — | 871 | |||||||||||||||||||||||||
Repurchases of common stock | (177,758 | ) | — | — | — | (1,192 | ) | — | (1,192 | ) | — | (1,192 | ) | |||||||||||||||||||||
Exercise of warrants | 245,588 | 3 | 1,250 | — | — | — | 1,253 | — | 1,253 | |||||||||||||||||||||||||
Cash dividends | — | — | (2,387 | ) | — | — | (2,387 | ) | — | (2,387 | ) | |||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | (600 | ) | (600 | ) | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 1,316 | 1,316 | — | 1,316 | |||||||||||||||||||||||||
Balance, June 30, 2013 | 20,420,410 | $ | 299 | $ | 287,907 | $ | (26,076 | ) | $ | (103,392 | ) | $ | (11,764 | ) | $ | 146,974 | $ | 178 | $ | 147,152 |
Nine Months Ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 1,389 | $ | 28,496 | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||
Depreciation and amortization | 1,546 | 4,280 | |||||
Provision for credit losses | 7,137 | 10,910 | |||||
Other-than-temporary impairment on investments | 214 | 74 | |||||
Unrealized gain on trading securities | (666 | ) | (175 | ) | |||
Equity in earnings of unconsolidated entities | (2,345 | ) | (501 | ) | |||
Distributions from unconsolidated entities | 2,577 | 2,741 | |||||
Gain on sale of leases and loans | — | (37 | ) | ||||
Gain on sale of investment securities, net | (2,023 | ) | (79 | ) | |||
Gain on sale of assets | (2,454 | ) | — | ||||
Gain on sale and deconsolidation of subsidiaries | — | (63,431 | ) | ||||
Loss on extinguishment of debt | — | 2,190 | |||||
Deferred income tax provision (benefit) | (1,898 | ) | 17,323 | ||||
Equity-based compensation issued | 815 | 1,059 | |||||
Equity-based compensation received | (860 | ) | (153 | ) | |||
Trading securities purchases and sales, net | (2,446 | ) | (3,470 | ) | |||
Loss from discontinued operations | 8 | 50 | |||||
Changes in operating assets and liabilities | (2,659 | ) | (4,047 | ) | |||
Net cash used in operating activities | (1,665 | ) | (4,770 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (554 | ) | (147 | ) | |||
Payments received on real estate loans and real estate | 2,761 | 1,580 | |||||
Investments in real estate and unconsolidated real estate entities | (2,009 | ) | (1,108 | ) | |||
Purchase of commercial finance assets | — | (18,483 | ) | ||||
Principal payments received on leases and loans | — | 9,041 | |||||
Cash divested on deconsolidation of LEAF | — | (2,284 | ) | ||||
Proceeds from sale of Apidos, net of transaction costs and cash divested on deconsolidation | — | 17,864 | |||||
Purchase of investments | (2,845 | ) | (600 | ) | |||
Proceeds from sale of loans and investments | — | 262 | |||||
Net cash (used in) provided by investing activities | (2,647 | ) | 6,125 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Increase in borrowings | 2,000 | 128,845 | |||||
Principal payments on borrowings | (2,472 | ) | (129,333 | ) | |||
Dividends paid | (1,776 | ) | (1,720 | ) | |||
Proceeds from issuance of common stock | 1,253 | 1,056 | |||||
Repurchase of common stock | (1,132 | ) | (955 | ) | |||
Preferred stock dividends paid by LEAF to RSO | — | (188 | ) | ||||
Decrease (increase) in restricted cash | 81 | (647 | ) | ||||
Other | — | (2,275 | ) | ||||
Net cash used in financing activities | (2,046 | ) | (5,217 | ) | |||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||||||
Operating activities | (862 | ) | (924 | ) | |||
Net cash used in discontinued operations | (862 | ) | (924 | ) | |||
Decrease in cash | (7,220 | ) | (4,786 | ) | |||
Cash, beginning of year | 19,393 | 24,455 | |||||
Cash, end of period | $ | 12,173 | $ | 19,669 |
Nine Months Ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
Cash (paid) received: | |||||||
Interest | $ | (1,370 | ) | $ | (3,246 | ) | |
Income tax payments | (977 | ) | (1,200 | ) | |||
Refund of income taxes | 84 | — | |||||
Dividends declared per common share | $ | 0.09 | $ | 0.09 | |||
Non-cash activities: | |||||||
Repurchases of common stock from employees in exchange for the payment of income taxes and option exercises | $ | 58 | $ | 1,187 | |||
Issuance of treasury stock for the Company's investment savings plan | 256 | 457 | |||||
Common stock issued to former director in exchange for vested director units | — | 135 | |||||
Effects from the deconsolidation of entities:(1) | |||||||
Restricted cash | $ | — | $ | 20,282 | |||
Receivables from managed entities and related parties, net | — | (2,696 | ) | ||||
Receivables | — | 954 | |||||
Investments in commercial finance, net | — | 199,955 | |||||
Investments in unconsolidated entities | — | 5,225 | |||||
Property and equipment, net | — | 3,754 | |||||
Deferred tax assets, net | — | 4,558 | |||||
Goodwill | — | 7,969 | |||||
Other assets | — | 6,826 | |||||
Accrued expense and other liabilities | — | (11,146 | ) | ||||
Payables to managed entities and related parties | — | (98 | ) | ||||
Borrowings | — | (202,481 | ) | ||||
Accumulated other comprehensive loss | — | 255 | |||||
Noncontrolling interests | — | (37,668 | ) |
(1) | Reflects the deconsolidation of LEAF Commercial Capital, Inc. ("LEAF") and Apidos Capital Management, LLC ("Apidos") during the nine months ended June 30, 2012. As a result of the deconsolidation of these entities, the amounts noted above were removed from the Company’s consolidated balance sheets. The sum of the assets removed and cash equated to the sum of the liabilities and equity that were similarly eliminated and, as such, there was no change in the Company’s total net assets. |
30-89 Days Past Due | Greater than 90 Days | Greater than 181 Days | Total Past Due | Current | Total | ||||||||||||||||||
Receivables from managed entities and related parties: (1) | |||||||||||||||||||||||
Commercial finance investment entities | $ | — | $ | — | $ | 41,685 | $ | 41,685 | $ | 76 | $ | 41,761 | |||||||||||
Real estate investment entities | 833 | 868 | 16,622 | 18,323 | 2,579 | 20,902 | |||||||||||||||||
Financial fund management entities | 12 | — | 10 | 22 | 2,110 | 2,132 | |||||||||||||||||
RSO | — | — | — | — | 2,087 | 2,087 | |||||||||||||||||
Other | — | — | — | — | 138 | 138 | |||||||||||||||||
845 | 868 | 58,317 | 60,030 | 6,990 | 67,020 | ||||||||||||||||||
Rent receivables - real estate | 7 | 5 | 24 | 36 | 7 | 43 | |||||||||||||||||
Total financing receivables | $ | 852 | $ | 873 | $ | 58,341 | $ | 60,066 | $ | 6,997 | $ | 67,063 |
(1) | Receivables are presented gross of an allowance for credit losses of $33.9 million and $656,000 related to the Company’s commercial finance and financial fund management investment entities, respectively. The remaining receivables from managed entities and related parties have no related allowance for credit losses. |
30-89 Days Past Due | Greater than 90 Days | Greater than 181 Days | Total Past Due | Current | Total | ||||||||||||||||||
Receivables from managed entities and related parties: (1) | |||||||||||||||||||||||
Commercial finance investment entities | $ | — | $ | — | $ | 38,834 | $ | 38,834 | $ | 148 | $ | 38,982 | |||||||||||
Real estate investment entities | 784 | 2,694 | 15,180 | 18,658 | 2,091 | 20,749 | |||||||||||||||||
Financial fund management entities | 6 | — | 46 | 52 | 2,141 | 2,193 | |||||||||||||||||
RSO | — | — | — | — | 6,555 | 6,555 | |||||||||||||||||
Other | — | — | — | — | 152 | 152 | |||||||||||||||||
790 | 2,694 | 54,060 | 57,544 | 11,087 | 68,631 | ||||||||||||||||||
Rent receivables - real estate | 6 | 1 | 32 | 39 | 6 | 45 | |||||||||||||||||
Total financing receivables | $ | 796 | $ | 2,695 | $ | 54,092 | $ | 57,583 | $ | 11,093 | $ | 68,676 |
(1) | Receivables are presented gross of an allowance for credit losses of $25.1 million and $2.5 million related to the Company’s commercial finance and real estate investment entities, respectively. The remaining receivables from managed entities and related parties had no related allowance for credit losses. |
Receivables from Managed Entities | Leases and Loans | Rent Receivables | Total | ||||||||||||
Three Months Ended June 30, 2013: | |||||||||||||||
Balance, beginning of period | $ | 32,906 | $ | — | $ | 54 | $ | 32,960 | |||||||
Provision for (reversal of) credit losses | 1,677 | (4 | ) | (26 | ) | 1,647 | |||||||||
Charge-offs | — | — | 1 | 1 | |||||||||||
Recoveries | 4 | 4 | — | 8 | |||||||||||
Balance, end of period | $ | 34,587 | $ | — | $ | 29 | $ | 34,616 | |||||||
Nine Months Ended June 30, 2013: | |||||||||||||||
Balance, beginning of year | $ | 27,580 | $ | — | $ | 33 | $ | 27,613 | |||||||
Provision for (reversal of) credit losses | 7,127 | (10 | ) | 20 | 7,137 | ||||||||||
Charge-offs | (140 | ) | — | (24 | ) | (164 | ) | ||||||||
Recoveries | 20 | 10 | — | 30 | |||||||||||
Balance, end of period | $ | 34,587 | $ | — | $ | 29 | $ | 34,616 | |||||||
Ending balance, individually evaluated for impairment | $ | 34,587 | $ | — | $ | — | $ | 34,587 | |||||||
Ending balance, collectively evaluated for impairment | — | — | 29 | 29 | |||||||||||
Balance, end of period | $ | 34,587 | $ | — | $ | 29 | $ | 34,616 | |||||||
Three Months Ended June 30, 2012: | |||||||||||||||
Balance, beginning of period | $ | 15,538 | $ | — | $ | 34 | $ | 15,572 | |||||||
Provision for (reversal of) credit losses | 5,711 | (4 | ) | (9 | ) | 5,698 | |||||||||
Recoveries | — | 4 | — | 4 | |||||||||||
Balance, end of period | $ | 21,249 | $ | — | $ | 25 | $ | 21,274 | |||||||
Nine Months Ended June 30, 2012: | |||||||||||||||
Balance, beginning of year | $ | 10,490 | $ | 430 | $ | 15 | $ | 10,935 | |||||||
Provision for credit losses | 10,759 | 141 | 10 | 10,910 | |||||||||||
Charge-offs | — | (124 | ) | — | (124 | ) | |||||||||
Recoveries | — | 35 | — | 35 | |||||||||||
Deconsolidation of LEAF | — | (482 | ) | — | (482 | ) | |||||||||
Balance, end of period | $ | 21,249 | $ | — | $ | 25 | $ | 21,274 | |||||||
Ending balance, individually evaluated for impairment | $ | 21,249 | $ | — | $ | — | $ | 21,249 | |||||||
Ending balance, collectively evaluated for impairment | — | — | 25 | 25 | |||||||||||
Balance, end of period | $ | 21,249 | $ | — | $ | 25 | $ | 21,274 |
Receivables from Managed Entities | Rent Receivables | Total | |||||||||
Ending balance, individually evaluated for impairment | $ | 67,020 | $ | — | $ | 67,020 | |||||
Ending balance, collectively evaluated for impairment | — | 43 | 43 | ||||||||
Balance, end of period | $ | 67,020 | $ | 43 | $ | 67,063 |
Receivables from Managed Entities | Rent Receivables | Total | |||||||||
Ending balance, individually evaluated for impairment | $ | 68,631 | $ | — | $ | 68,631 | |||||
Ending balance, collectively evaluated for impairment | — | 45 | 45 | ||||||||
Balance, end of year | $ | 68,631 | $ | 45 | $ | 68,676 |
Net Balance | Unpaid Balance | Specific Allowance | Average Investment in Impaired Assets | ||||||||||||
As of June 30, 2013 | |||||||||||||||
Financing receivables with a specific valuation allowance: | |||||||||||||||
Receivables from managed entities – commercial finance | $ | 4,656 | $ | 38,587 | $ | 33,931 | $ | 38,236 | |||||||
Receivables from managed entities – financial fund management | 649 | 1,305 | 656 | 1,305 | |||||||||||
Rent receivables – real estate | — | 29 | 29 | 40 | |||||||||||
As of September 30, 2012 | |||||||||||||||
Financing receivables with a specific valuation allowance: | |||||||||||||||
Receivables from managed entities – commercial finance | $ | 12,865 | $ | 37,943 | $ | 25,078 | $ | 38,060 | |||||||
Receivables from managed entities – real estate | 2,181 | 4,683 | 2,502 | 4,511 | |||||||||||
Rent receivables – real estate | 12 | 45 | 33 | 45 |
June 30, 2013 | September 30, 2012 | ||||||
Properties owned, net of accumulated depreciation of $8,263 and $7,783: | |||||||
Hotel property (Savannah, Georgia) | $ | 10,631 | $ | 11,619 | |||
Office building (Philadelphia, Pennsylvania) | 832 | 906 | |||||
11,463 | 12,525 | ||||||
Commercial property (Elkins, West Virginia), net of accumulated depreciation of $0 and $784 | — | 727 | |||||
Partnerships and other investments | 5,553 | 5,897 | |||||
Total investments in real estate, net | $ | 17,016 | $ | 19,149 |
2014 | $ | 869 | |
2015 | 795 | ||
2016 | 514 | ||
2017 | 431 | ||
2018 | 385 | ||
Thereafter | 323 | ||
$ | 3,317 |
June 30, 2013 | September 30, 2012 | ||||||
Available-for-sale securities | $ | 22,949 | $ | 19,468 | |||
Trading securities | 8,202 | 3,064 | |||||
Total investment securities, at fair value | $ | 31,151 | $ | 22,532 |
Cost or Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
June 30, 2013: | |||||||||||||||
Equity securities | $ | 34,219 | $ | 175 | $ | (16,906 | ) | $ | 17,488 | ||||||
CLO securities | 4,574 | 1,074 | (187 | ) | 5,461 | ||||||||||
Total | $ | 38,793 | $ | 1,249 | $ | (17,093 | ) | $ | 22,949 | ||||||
September 30, 2012: | |||||||||||||||
Equity securities | $ | 33,260 | $ | 86 | $ | (17,649 | ) | $ | 15,697 | ||||||
CLO securities | 2,484 | 1,302 | (15 | ) | 3,771 | ||||||||||
Total | $ | 35,744 | $ | 1,388 | $ | (17,664 | ) | $ | 19,468 |
Less than 12 Months | More than 12 Months | ||||||||||||||||||||
Fair Value | Unrealized Loss | Number of Securities | Fair Value | Unrealized Loss | Number of Securities | ||||||||||||||||
June 30, 2013: | |||||||||||||||||||||
Equity securities | $ | 97 | $ | (3 | ) | 1 | $ | 12,718 | $ | (17,417 | ) | 1 | |||||||||
CLO securities | 2,202 | (187 | ) | 2 | — | — | — | ||||||||||||||
Total | $ | 2,299 | $ | (190 | ) | 3 | $ | 12,718 | $ | (17,417 | ) | 1 | |||||||||
September 30, 2012: | |||||||||||||||||||||
Equity securities | $ | — | $ | — | — | $ | 12,161 | $ | (17,976 | ) | 1 | ||||||||||
CLO securities | 1,274 | (15 | ) | 1 | — | — | — | ||||||||||||||
Total | $ | 1,274 | $ | (15 | ) | 1 | $ | 12,161 | $ | (17,976 | ) | 1 |
Range of Combined Ownership Interests | June 30, 2013 | September 30, 2012 | |||||||
Real estate investment entities | 1% – 12% | $ | 8,208 | $ | 8,043 | ||||
Financial fund management partnerships | 3% − 50% | 4,442 | 3,983 | ||||||
Trapeza entities | 33% − 50% | 868 | 967 | ||||||
Investments in unconsolidated entities | $ | 13,518 | $ | 12,993 |
Three Months Ended | Nine Months Ended | ||||||
June 30, 2013 | June 30, 2013 | ||||||
Management fee revenues | $ | 15,841 | $ | 32,809 | |||
Costs and expenses | (17,285 | ) | (29,870 | ) | |||
Net (loss) income | $ | (1,444 | ) | $ | 2,939 | ||
Portion of net (loss) income attributable to the Company | $ | (477 | ) | $ | 970 |
For the period from April 17 to | |||
June 30, 2012 | |||
Management fee revenues | $ | 5,105 | |
Costs and expenses | (4,522 | ) | |
Net income | $ | 583 | |
Portion of net income attributable to the Company | $ | 192 |
September 30, 2012 | |||
Cash and property and equipment, net | $ | 727 | |
Accrued expenses and other liabilities | 189 |
Receivables from Managed Entities and Related Parties, Net (1) | Investments | Maximum Exposure to Loss in Non-consolidated VIEs | |||||||||
RSO | $ | 1,987 | $ | 17,107 | $ | 19,094 | |||||
Trapeza entities | — | 868 | 868 | ||||||||
Ischus entities | 185 | — | 185 | ||||||||
$ | 2,172 | $ | 17,975 | $ | 20,147 |
(1) | Exclusive of expense reimbursements due to the Company. |
June 30, 2013 | September 30, 2012 | ||||||
Accounts payable and other accrued liabilities | $ | 9,901 | $ | 8,627 | |||
SERP liability (see Note 13) | 6,456 | 6,976 | |||||
Accrued wages and benefits | 1,289 | 5,396 | |||||
Trapeza clawback (see Note 16) | 1,181 | 1,181 | |||||
Real estate loan commitment | — | 862 | |||||
Total accrued expenses and other liabilities | $ | 18,827 | $ | 23,042 |
As of June 30, 2013 | September 30, 2012 | ||||||||||
Maximum Amount of Facility | Borrowings Outstanding | Borrowings Outstanding | |||||||||
Credit facilities: | |||||||||||
TD Bank – secured revolving credit facility (1) | $ | 6,997 | $ | — | $ | — | |||||
Republic Bank – secured revolving credit facility | 3,500 | — | — | ||||||||
— | — | ||||||||||
Other Debt: | |||||||||||
Senior Notes | 10,000 | 10,000 | |||||||||
Note payable to RSO | 1,570 | 1,677 | |||||||||
Mortgage debt | 10,380 | 10,531 | |||||||||
Other debt | 112 | 812 | |||||||||
Total borrowings | $ | 22,062 | $ | 23,020 |
(1) | The amount of the facility as shown has been reduced for the outstanding letter of credit of $503,000 at June 30, 2013 and September 30, 2012. |
2014 | $ | 304 | |
2015 | 11,775 | ||
2016 | 217 | ||
2017 | 232 | ||
2018 | 248 | ||
Thereafter | 9,286 | ||
$ | 22,062 |
Investment Securities Available-for-Sale | Cash Flow Hedges | SERP Pension Liability | Total | ||||||||||||
Balance, September 30, 2012, net of tax of $(6,263), $(15) and $(2,328) | $ | (10,013 | ) | $ | (22 | ) | $ | (3,045 | ) | $ | (13,080 | ) | |||
Changes during fiscal 2013 | 1,108 | 15 | 193 | 1,316 | |||||||||||
Balance, June 30, 2013, net of tax of $(6,936), $(3), and $(2,222) | $ | (8,905 | ) | $ | (7 | ) | $ | (2,852 | ) | $ | (11,764 | ) |
Three Months Ended | Nine Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
Shares | |||||||||||
Basic shares outstanding | 20,297 | 19,815 | 20,165 | 19,618 | |||||||
Dilutive effect of outstanding stock options, warrants and director units | 1,809 | 1,221 | 1,541 | 846 | |||||||
Dilutive shares outstanding | 22,106 | 21,036 | 21,706 | 20,464 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Interest cost | $ | 59 | $ | 80 | $ | 178 | $ | 240 | |||||||
Less: expected return on plan assets | (24 | ) | (18 | ) | (71 | ) | (53 | ) | |||||||
Plus: Amortization of unrecognized loss | 99 | 83 | 299 | 248 | |||||||||||
Net benefit cost | $ | 134 | $ | 145 | $ | 406 | $ | 435 |
June 30, 2013 | September 30, 2012 | ||||||
Receivables from managed entities and related parties, net: | |||||||
Real estate investment entities | $ | 20,902 | $ | 18,247 | |||
Commercial finance investment entities (1) | 7,830 | 13,904 | |||||
Financial fund management investment entities | 1,476 | 2,193 | |||||
RSO | 2,087 | 6,555 | |||||
Other | 138 | 152 | |||||
Receivables from managed entities and related parties | $ | 32,433 | $ | 41,051 | |||
Payables due to managed entities and related parties, net: | |||||||
Real estate investment entities (2) | $ | 3,025 | $ | 3,900 | |||
Other | 226 | 480 | |||||
Payables to managed entities and related parties | $ | 3,251 | $ | 4,380 |
(1) | Includes $33.9 million of reserves for credit losses related to management fees owed from three commercial finance investment entities that, based on changes in the estimated cash distributions, are not expected to be collectible. |
(2) | Includes $3.0 million in funds provided by the real estate investment entities, which are held by the Company to self insure the properties held by those entities. |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Fees from unconsolidated investment entities: | |||||||||||||||
Real estate (1) | $ | 5,366 | $ | 4,405 | $ | 13,635 | $ | 12,862 | |||||||
Financial fund management | 786 | 765 | 2,294 | 2,468 | |||||||||||
Commercial finance (2) | — | — | — | — | |||||||||||
RSO: | |||||||||||||||
Management, incentive and other fees | 2,779 | 4,181 | 10,374 | 11,521 | |||||||||||
Dividends paid | 557 | 510 | 1,647 | 1,646 | |||||||||||
Reimbursement of costs and expenses | 926 | 1,134 | 3,300 | 2,731 | |||||||||||
CVC Credit Partners – reimbursement of costs and expenses | 307 | — | 900 | — | |||||||||||
RRE Opportunity REIT: | |||||||||||||||
Reimbursement of costs and expenses | 197 | 150 | 476 | 785 | |||||||||||
Dividends paid | 24 | 14 | 57 | 14 | |||||||||||
LEAF: | |||||||||||||||
Payment for sub-servicing the commercial finance investment partnerships | (243 | ) | (585 | ) | (928 | ) | (1,696 | ) | |||||||
Payment for rent and related expenses | (200 | ) | (193 | ) | (596 | ) | (497 | ) | |||||||
Reimbursement of costs and expenses | 58 | 84 | 174 | 226 | |||||||||||
1845 Walnut Associates Ltd: | |||||||||||||||
Payment for rent and related expenses | (33 | ) | (155 | ) | (344 | ) | (469 | ) | |||||||
Property management fees | 75 | — | 117 | — | |||||||||||
Brandywine Construction & Management, Inc. – payment for property management fees for the hotel property | (70 | ) | (69 | ) | (167 | ) | (167 | ) | |||||||
Atlas Energy, L.P. – reimbursement of costs and expenses | 53 | 160 | 338 | 478 | |||||||||||
Ledgewood P.C. – payment for legal services | (43 | ) | (239 | ) | (157 | ) | (508 | ) | |||||||
Graphic Images, LLC – payment for printing services | (15 | ) | (34 | ) | (66 | ) | (136 | ) | |||||||
The Bancorp, Inc. – reimbursement of costs and expenses | 28 | 32 | 84 | 106 | |||||||||||
9 Henmar, LLC – payment of broker/consulting fees | (17 | ) | (20 | ) | (39 | ) | (42 | ) |
(1) | Includes discounts recorded by the Company of $37,000 and $651,000 recorded in the three and nine months ended June 30, 2013, respectively, and $57,000 and $185,000 in the three and nine months ended June 30, 2012, in connection with management fees from its real estate investment entities that are expected to be received in future periods. |
(2) | During the three and nine months ended June 30, 2013, the Company waived $483,000 and $1.9 million, respectively, and $1.1 million and $3.8 million during the three and nine months ended ended June 30, 2012 , respectively, of fund management fees from its commercial finance investment entities. |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Investment securities | $ | 17,488 | $ | — | $ | 13,663 | $ | 31,151 |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Investment securities | $ | 15,697 | $ | — | $ | 6,835 | $ | 22,532 |
Investment Securities | |||
Balance, beginning of year | $ | 6,835 | |
Purchases | 13,780 | ||
Income accreted | 663 | ||
Payments and distributions received | (4,498 | ) | |
Impairment recognized in earnings | (214 | ) | |
Sales | (5,194 | ) | |
Gain on sales of trading securities | 2,023 | ||
Unrealized holding gain on trading securities | 666 | ||
Change in unrealized losses included in accumulated other comprehensive loss | (398 | ) | |
Balance, end of period | $ | 13,663 |
Investment Securities | Retained Financial Interest | ||||||
Balance, beginning of year | $ | 2,356 | $ | 22 | |||
Purchases | 7,570 | — | |||||
Income accreted | 823 | — | |||||
Payments and distributions received | (2,827 | ) | — | ||||
Sales | (2,999 | ) | — | ||||
Impairment recognized in earnings | (74 | ) | — | ||||
Gains on sales of trading securities | 909 | — | |||||
Unrealized holding gain on trading securities | 1,108 | — | |||||
Deconsolidation of LEAF | — | (22 | ) | ||||
Change in unrealized losses included in accumulated other comprehensive loss | (31 | ) | — | ||||
Balance, end of year | $ | 6,835 | $ | — |
Fair Value at June 30, 2013 | Valuation Technique | Unobservable Inputs | Weighted Average Assumptions | ||||||
CLO securities | $ | 5,461 | Discounted cash flow | Constant default rate | 1% -2% | ||||
Loss severity rate | 25% | ||||||||
Constant prepayment rate- year one | 30% | ||||||||
Constant prepayment rate- year two | 25% | ||||||||
Constant prepayment rate - periods thereafter | 25% | ||||||||
Reinvestment price on collateral | 99.5% - 100% | ||||||||
Discount rates | 13.5% - 20% | ||||||||
Trading securities | $ | 8,202 | Discounted cash flow | Constant default rate | 2% | ||||
Constant prepayment rate | 20% | ||||||||
Loss severity rate | 30% |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Nine Months Ended June 30, 2013: | |||||||||||||||
Asset: | |||||||||||||||
Receivables from managed entities – commercial finance, real estate and financial fund management | $ | — | $ | — | $ | 8,269 | $ | 8,269 | |||||||
Liability: | |||||||||||||||
Apidos contractual commitment | $ | — | $ | — | $ | 1,062 | $ | 1,062 | |||||||
Fiscal Year Ended September 30, 2012: | |||||||||||||||
Assets: | |||||||||||||||
Receivables from managed entities – commercial finance and real estate | $ | — | $ | — | $ | 16,752 | $ | 16,752 | |||||||
Investment in real estate | — | 727 | — | 727 | |||||||||||
Investment in real estate - office building | — | — | 906 | 906 | |||||||||||
Investment in CVC Credit Partners | — | — | 28,600 | 28,600 | |||||||||||
Investment in Apidos-CVC preferred interest | — | — | 6,792 | 6,792 | |||||||||||
Investment in LEAF | — | — | 1,749 | 1,749 | |||||||||||
Total | $ | — | $ | 727 | $ | 54,799 | $ | 55,526 | |||||||
Liability: | |||||||||||||||
Apidos contractual commitment | $ | — | $ | — | $ | 589 | $ | 589 |
June 30, 2013 | September 30, 2012 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
Assets: | |||||||||||||||
Receivables from managed entities | $ | 32,433 | $ | 32,433 | $ | 41,051 | $ | 41,051 | |||||||
$ | 32,433 | $ | 32,433 | $ | 41,051 | $ | 41,051 | ||||||||
Borrowings: | |||||||||||||||
Real estate debt | $ | 10,380 | $ | 11,075 | $ | 10,531 | $ | 11,554 | |||||||
Senior Notes | 10,000 | 11,875 | 10,000 | 11,364 | |||||||||||
Other debt | 1,682 | 1,657 | 2,489 | 2,491 | |||||||||||
$ | 22,062 | $ | 24,607 | $ | 23,020 | $ | 25,409 |
Real Estate | Financial Fund Management | Commercial Finance | All Other (1) | Total | |||||||||||||||
Three Months Ended June 30, 2013: | |||||||||||||||||||
Revenues from external customers | $ | 12,484 | $ | 2,196 | $ | — | $ | — | $ | 14,680 | |||||||||
Equity in (losses) earnings of unconsolidated entities | (331 | ) | 249 | (35 | ) | — | (117 | ) | |||||||||||
Total revenues | 12,153 | 2,445 | (35 | ) | — | 14,563 | |||||||||||||
Segment operating expenses | (8,896 | ) | (1,694 | ) | 219 | — | (10,371 | ) | |||||||||||
General and administrative expenses | (815 | ) | (331 | ) | — | (1,007 | ) | (2,153 | ) | ||||||||||
Provision for credit losses | 30 | (199 | ) | (1,478 | ) | — | (1,647 | ) | |||||||||||
Depreciation and amortization | (317 | ) | (16 | ) | — | (156 | ) | (489 | ) | ||||||||||
Interest expense | (207 | ) | — | — | (294 | ) | (501 | ) | |||||||||||
Other income (expense), net | 173 | 558 | 1 | (97 | ) | 635 | |||||||||||||
Pretax income attributable to noncontrolling interests (2) | (54 | ) | — | — | — | (54 | ) | ||||||||||||
Income (loss) from continuing operations excluding noncontrolling interest before taxes | $ | 2,067 | $ | 763 | $ | (1,293 | ) | $ | (1,554 | ) | $ | (17 | ) |
Real Estate | Financial Fund Management | Commercial Finance | All Other (1) | Total | |||||||||||||||
Nine Months Ended June 30, 2013: | |||||||||||||||||||
Revenues from external customers | $ | 36,937 | $ | 6,435 | $ | — | $ | — | $ | 43,372 | |||||||||
Equity in (losses) earnings of unconsolidated entities | (290 | ) | 2,972 | (337 | ) | — | 2,345 | ||||||||||||
Total revenues | 36,647 | 9,407 | (337 | ) | — | 45,717 | |||||||||||||
Segment operating expenses | (26,334 | ) | (5,239 | ) | 223 | — | (31,350 | ) | |||||||||||
General and administrative expenses | (2,302 | ) | (900 | ) | — | (3,364 | ) | (6,566 | ) | ||||||||||
Provision for credit losses | 2,362 | (656 | ) | (8,843 | ) | — | (7,137 | ) | |||||||||||
Depreciation and amortization | (855 | ) | (58 | ) | — | (484 | ) | (1,397 | ) | ||||||||||
Other-than-temporary impairment on investments | — | (214 | ) | — | — | (214 | ) | ||||||||||||
Interest expense | (616 | ) | — | (1 | ) | (900 | ) | (1,517 | ) | ||||||||||
Other income (expense), net | 633 | 1,670 | 7 | (347 | ) | 1,963 | |||||||||||||
Pretax income attributable to noncontrolling interests (2) | (876 | ) | — | — | — | (876 | ) | ||||||||||||
Income (loss) from continuing operations excluding noncontrolling interests before taxes | $ | 8,659 | $ | 4,010 | $ | (8,951 | ) | $ | (5,095 | ) | $ | (1,377 | ) |
Real Estate | Financial Fund Management | Commercial Finance | All Other (1) | Total | |||||||||||||||
Three Months Ended June 30, 2012: | |||||||||||||||||||
Revenues from external customers | $ | 11,286 | $ | 2,223 | $ | 2 | $ | — | $ | 13,511 | |||||||||
Equity in (losses) earnings of unconsolidated entities | (365 | ) | 768 | (130 | ) | — | 273 | ||||||||||||
Total revenues | 10,921 | 2,991 | (128 | ) | — | 13,784 | |||||||||||||
Segment operating expenses | (7,386 | ) | (2,994 | ) | (118 | ) | — | (10,498 | ) | ||||||||||
General and administrative expenses | (98 | ) | (608 | ) | — | (1,861 | ) | (2,567 | ) | ||||||||||
Provision for credit losses | (52 | ) | — | (5,646 | ) | — | (5,698 | ) | |||||||||||
Depreciation and amortization | (324 | ) | (29 | ) | — | (175 | ) | (528 | ) | ||||||||||
Gain on deconsolidation and sale of subsidiaries | — | 54,682 | — | — | 54,682 | ||||||||||||||
Interest expense | (213 | ) | — | (7 | ) | (358 | ) | (578 | ) | ||||||||||
Other income (expense), net | 148 | 455 | — | (241 | ) | 362 | |||||||||||||
Pretax income attributable to noncontrolling interests (2) | (45 | ) | — | — | — | (45 | ) | ||||||||||||
Income (loss) from continuing operations excluding noncontrolling interest before taxes | $ | 2,951 | $ | 54,497 | $ | (5,899 | ) | $ | (2,635 | ) | $ | 48,914 |
Real Estate | Financial Fund Management | Commercial Finance | All Other (1) | Total | |||||||||||||||
Nine Months Ended June 30, 2012: | |||||||||||||||||||
Revenues from external customers | $ | 29,027 | $ | 13,564 | $ | 4,136 | $ | — | $ | 46,727 | |||||||||
Equity in earnings (losses) of unconsolidated entities | 276 | 2,310 | (2,085 | ) | — | 501 | |||||||||||||
Total revenues | 29,303 | 15,874 | 2,051 | — | 47,228 | ||||||||||||||
Segment operating expenses | (21,985 | ) | (13,177 | ) | (2,311 | ) | — | (37,473 | ) | ||||||||||
Restructuring expenses | — | — | — | (365 | ) | (365 | ) | ||||||||||||
General and administrative expenses | (270 | ) | (2,081 | ) | — | (5,579 | ) | (7,930 | ) | ||||||||||
Gain on sale of leases and loans | — | — | 37 | — | 37 | ||||||||||||||
Provision for credit losses | (259 | ) | — | (10,651 | ) | — | (10,910 | ) | |||||||||||
Depreciation and amortization | (971 | ) | (103 | ) | (1,556 | ) | (494 | ) | (3,124 | ) | |||||||||
Gain on deconsolidation of subsidiary | — | 54,682 | 8,749 | — | 63,431 | ||||||||||||||
Loss on extinguishment of debt | — | — | — | (2,190 | ) | (2,190 | ) | ||||||||||||
Gain on sale of investment securities, net | — | 41 | — | 22 | 63 | ||||||||||||||
Other-than-temporary impairment on investments | — | (74 | ) | — | — | (74 | ) | ||||||||||||
Interest expense | (641 | ) | — | (1,734 | ) | (1,822 | ) | (4,197 | ) | ||||||||||
Other income (expense), net | 394 | 1,570 | — | (418 | ) | 1,546 | |||||||||||||
Pretax income attributable to noncontrolling interests (2) | (31 | ) | — | (224 | ) | — | (255 | ) | |||||||||||
Income (loss) excluding noncontrolling interests before intercompany interest expense and taxes | 5,540 | 56,732 | (5,639 | ) | (10,846 | ) | 45,787 | ||||||||||||
Intercompany interest (expense) income | — | — | (29 | ) | 29 | — | |||||||||||||
Income (loss) from continuing operations excluding noncontrolling interest before taxes | $ | 5,540 | $ | 56,732 | $ | (5,668 | ) | $ | (10,817 | ) | $ | 45,787 |
Real Estate | Financial Fund Management | Commercial Finance | All Other (1) | Total | |||||||||||||||
Segment assets | |||||||||||||||||||
June 30, 2013 | $ | 173,539 | $ | 77,580 | $ | 9,062 | $ | (68,889 | ) | $ | 191,292 | ||||||||
June 30, 2012 | 167,077 | 79,447 | 20,990 | (74,678 | ) | 192,836 |
(1) | Includes general corporate expenses and assets not allocable to any particular segment. |
(2) | In viewing its segment operations, management excludes the pretax (income) loss attributable to noncontrolling interests. However, these interests are included from income (loss) from operations as computed in accordance with U.S. GAAP and should be deducted to compute income (loss) from operations as reflected in the Company’s consolidated statements of operations. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
June 30, 2013 | Increase (Decrease) | ||||||||||||
2013 | 2012 | Amount | Percentage | ||||||||||
Financial fund management (2) | $ | 13,619 | $ | 12,737 | $ | 882 | 7% | ||||||
Real estate | 1,922 | 1,729 | 193 | 11% | |||||||||
Commercial finance | 554 | 528 | 26 | 5% | |||||||||
$ | 16,095 | $ | 14,994 | $ | 1,101 | 7% |
(1) | We describe how we calculate assets under management in the notes to the third table of this section. |
(2) | The increase is primarily due to to the issuance of four new Apidos CLOs ($1.8 billion), and the addition of a London Stock Exchange listed investment company ($456.0 million), both managed through CVC Credit Partners. These increases were offset, in part, by reductions in the eligible collateral bases of the ABS ($251.1 million), corporate loan ($820.6 million) and trust preferred portfolios ($305.2 million) resulting from liquidations, paydowns, call, defaults and sales. |
CDOs and CLOs | Limited Partnerships | TIC Programs | Other Investment Funds | ||||
As of June 30, 2013 | |||||||
Financial fund management | 44 | 13 | — | 3 | |||
Real estate | 2 | 9 | 6 | 5 | |||
Commercial finance | — | 4 | — | 2 | |||
46 | 26 | 6 | 10 | ||||
As of June 30, 2012 | |||||||
Financial fund management | 41 | 13 | — | 3 | |||
Real estate | 2 | 9 | 6 | 5 | |||
Commercial finance | — | 4 | — | 2 | |||
43 | 26 | 6 | 10 |
June 30, 2013 | June 30, 2012 | ||||||||||||||||||
Institutional and Individual Investors | RSO | Company | Total | Total | |||||||||||||||
Bank loans (1) | $ | 6,502 | $ | 2,501 | $ | — | $ | 9,003 | $ | 7,573 | |||||||||
Trust preferred securities (1) | 3,400 | — | — | 3,400 | 3,705 | ||||||||||||||
Asset-backed securities (1) | 1,082 | — | — | 1,082 | 1,333 | ||||||||||||||
Mortgage and other real estate-related loans (2) | 4 | 1,031 | — | 1,035 | 946 | ||||||||||||||
Real properties (2) | 784 | 86 | 16 | 886 | 783 | ||||||||||||||
Commercial finance assets (3) | 554 | — | — | 554 | 528 | ||||||||||||||
Private equity and other assets (1) | 135 | — | — | 135 | 126 | ||||||||||||||
$ | 12,461 | $ | 3,618 | $ | 16 | $ | 16,095 | $ | 14,994 |
(1) | We value these assets at their amortized cost. |
(2) | We value our managed real estate assets as the sum of: (i) the amortized cost of our commercial real estate loans; and (ii) the book value of each of the following: (a) real estate and other assets held by our real estate investment entities, (b) our outstanding legacy loan portfolio, and (c) our interests in real estate. |
(3) | We value our commercial finance assets as the sum of the book values of the financed equipment and leases and loans. |
Total | Real Estate | Financial Fund Management | Corporate/ Other (1) | ||||
June 30, 2013 | |||||||
Investment professionals | 57 | 43 | 11 | 3 | |||
Other | 72 | 18 | 15 | 39 | |||
129 | 61 | 26 | 42 | ||||
Property management | 496 | 496 | — | — | |||
Total | 625 | 557 | 26 | 42 | |||
June 30, 2012 | |||||||
Investment professionals | 56 | 42 | 11 | 3 | |||
Other | 66 | 20 | 11 | 35 | |||
122 | 62 | 22 | 38 | ||||
Property management | 473 | 473 | — | — | |||
Total | 595 | 535 | 22 | 38 |
(1) | As a result of the November 2011 deconsolidation of LEAF, we no longer have any commercial finance employees. |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Fund management revenues (1) | $ | 8,375 | $ | 6,921 | $ | 23,571 | $ | 24,767 | |||||||
Finance and rental revenues (2) | 2,614 | 2,584 | 7,121 | 10,669 | |||||||||||
RSO management fees | 2,561 | 4,098 | 9,794 | 11,163 | |||||||||||
Gains on sale of investments (3) | 17 | 22 | 2,454 | 82 | |||||||||||
Other revenues (4) | 996 | 159 | 2,777 | 547 | |||||||||||
$ | 14,563 | $ | 13,784 | $ | 45,717 | $ | 47,228 |
(1) | Includes fees from each of our real estate, financial fund management and commercial finance operations and our share of the income or loss from limited and general partnership interests we own in our real estate, financial fund management and commercial finance operations. |
(2) | Includes rental income, revenues from certain real estate assets and interest income on bank loans from our financial fund management operations. For periods prior to November 2011, includes interest and rental income from our commercial finance operations. |
(3) | Includes the resolution of loans we hold in our real estate segment. |
(4) | Includes gains (losses) on trading securities. For periods prior to November 2011, primarily includes insurance fees, documentation fees and other charges earned by our commercial finance operations. |
• | the acquisition, ownership and management of portfolios of discounted real estate and real estate related debt, which we have acquired through three sponsored real estate investment entities as well as through joint ventures with institutional investors; |
• | the management of sponsored real estate investment entities that principally invest in multifamily housing; |
• | the management, principally for RSO, of general investments in commercial real estate debt, including first mortgage debt, whole loans, mortgage participations, B notes, mezzanine debt and related commercial real estate securities; and |
• | to a significantly lesser extent, the management and resolution of a portfolio of real estate loans and property interests that we acquired at various times between 1991 and 1999, which we collectively refer to as our legacy portfolio. |
June 30, | |||||||
2013 | 2012 | ||||||
Assets under management (1): | |||||||
Commercial real estate debt | $ | 999 | $ | 857 | |||
Real estate investment funds and programs | 582 | 578 | |||||
RRE Opportunity REIT | 188 | 107 | |||||
Distressed portfolios | 57 | 94 | |||||
Properties managed for RSO | 64 | 60 | |||||
Institutional portfolios | 15 | 15 | |||||
Legacy portfolio | 16 | 18 | |||||
Resource Real Estate Diversifed Income Fund | 1 | — | |||||
$ | 1,922 | $ | 1,729 |
(1) | For information on how we calculate assets under management, see “Assets under Management”, above. |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
Management fees: | |||||||||||||||
Asset management fees | $ | 3,232 | $ | 2,100 | $ | 8,050 | $ | 5,794 | |||||||
Resource Residential property management fees | 2,374 | 1,843 | 6,632 | 5,050 | |||||||||||
RSO management fees | 2,690 | 3,320 | 9,550 | 6,710 | |||||||||||
8,296 | 7,263 | 24,232 | 17,554 | ||||||||||||
Other: | |||||||||||||||
Rental property income and revenues of consolidated VIE (1) | 1,518 | 1,524 | 3,896 | 3,783 | |||||||||||
Master lease revenues | 1,096 | 1,060 | 3,225 | 3,119 | |||||||||||
Fee income from sponsorship of investment entities | 1,557 | 1,418 | 3,130 | 4,490 | |||||||||||
Gains and fees on resolution of loans and other property interests | 17 | 22 | 2,454 | 275 | |||||||||||
Equity in (losses) earnings of unconsolidated entities | (331 | ) | (366 | ) | (290 | ) | 82 | ||||||||
$ | 12,153 | $ | 10,921 | $ | 36,647 | $ | 29,303 | ||||||||
Costs and expenses: | |||||||||||||||
General and administrative expenses | $ | 4,484 | $ | 3,696 | $ | 13,345 | $ | 11,203 | |||||||
Resource Residential property management expenses | 2,194 | 1,685 | 6,638 | 5,031 | |||||||||||
Master lease expenses | 1,387 | 1,060 | 4,039 | 3,118 | |||||||||||
Rental property expenses and expenses of consolidated VIE (1) | 831 | 945 | 2,312 | 2,633 | |||||||||||
$ | 8,896 | $ | 7,386 | $ | 26,334 | $ | 21,985 |
(1) | We generally consolidate a variable interest entity, or VIE, when we are deemed to be the primary beneficiary of the entity. |
• | a $1.1 million and $2.3 million increase, respectively, in asset management fees, reflecting a $981,000 and $2.1 million increase in broker-dealer manager fees earned in conjunction with an increase in the funds raised for RRE Opportunity REIT; |
• | a $531,000 and $1.6 million increase, respectively, in property management fees earned by our property manager, Resource Residential, reflecting a 1,113 unit increase (6%) in multifamily units under management to 19,010 units at June 30, 2013 from 17,897 units at June 30, 2012; and |
• | a $630,000 decrease and a $2.8 million increase, respectively, in RSO management fees. The base management fee increased by $1.1 million and $2.5 million, respectively, due to the increase in the equity of RSO upon which this fee is based. We also earned incentive management fees of $0 and $2.6 million during the three and nine months ended June 30, 2013 as compared to $1.8 million and $2.2 million for the same periods last year. The incentive management fees are based on the adjusted operating earnings of RSO, which varies from period to period. |
• | a $2.2 million increase in gains and fees on resolution of loans and investment entities for the nine months ended June 30, 2013. In January 2013, we sold our 10% interest in a real estate joint venture and recognized a gain of $1.6 million. In October 2012, we sold a commercial property located in Elkins, West Virginia, which was consolidated through a VIE and recognized a gain of $831,000 (of which $793,000 was attributable to noncontrolling interests); and |
• | a $139,000 increase and a $1.4 million decrease, respectively, in fee income in connection with the purchase and third-party financing of properties through our real estate investment entities, as follows: |
• | During the three and nine months ended June 30, 2013, we earned $1.6 million and $3.1 million, respectively, in fees primarily from the following activities: |
• | the acquisition of three and ten properties (valued at $45.8 million and $93.3 million, respectively); and |
• | the sale of one and four properties (valued at $10.2 million and $39.3 million, respectively) and |
• | the refinancing of one property. |
• | the acquisition of one property (valued at $41.3 million) during the three months ended June 30, 2012 and four properties and two loans (valued at $87.8 million) during the nine months ended June 30, 2012; and |
• | the sale of three properties (valued at $44.0 million), including a promoted return of $1.2 million, and two loans (valued at $920,000) for the nine months ended June 30, 2012; and |
• | the refinancing of three properties. |
• | a $35,000 decrease and a $372,000 increase, respectively, in the equity in losses of unconsolidated entities. The nine months ended June 30, 2012 included a $750,000 gain in conjunction with the release of funds from escrow related to the fiscal 2011 sale of a Washington, DC office building held by one of our legacy portfolio investments. |
• | a $788,000 and $2.1 million increase, respectively, in general and administrative expenses principally related to a $1.1 million and $2.1 million increase, respectively, in wages and benefits. The three and nine months ended June 30, 2013 reflect the increase in wages and benefits allocated to our real estate segment in conjunction with the increase in its operating activities as well as the additional staffing required to manage the increased properties under management and to enhance our fundraising capabilities at our broker-dealer Resource Securities, Inc.; and |
• | a $509,000 and $1.6 million increase, respectively, in Resource Real Estate Management, Inc. ("Resource Residential") expenses primarily due to increased wages and benefits as well as information technology expenses due to the increased number of properties under management. |
• | CVC Credit Partners, a joint venture between us and CVC, finances, structures and manages investments in bank loans, high yield bonds and equity investments through CLO issuers, managed accounts and a credit opportunities fund. Prior to April 17, 2012, we conducted these operations through our Apidos subsidiary; |
• | Trapeza Capital Management, LLC, or TCM, a joint venture between us and an unrelated third party, manages investments in trust preferred securities and senior debt securities of banks, bank holding companies, insurance companies and other financial companies through CDO issuers and related partnerships. TCM, together with the Trapeza CDO issuers and Trapeza partnerships, are collectively referred to as Trapeza; |
• | Resource Financial Institutions Group, Inc., or RFIG, serves as the general partner for seven company-sponsored affiliated partnerships which invest in financial institutions; |
• | Ischus Capital Management, LLC, or Ischus, finances, structures and manages investments in ABS including residential mortgage-backed securities, or RMBS, and commercial mortgage-backed securities, or CMBS; |
• | Resource Capital Markets, Inc., or Resource Capital Markets, through our registered broker-dealer subsidiary, Resource Securities, Inc., or Resource Securities, acts as an agent in the primary and secondary markets for structured finance securities and manages accounts for institutional investors; and |
• | Resource Capital Manager, Inc., or RCM, an indirect wholly-owned subsidiary, provides investment management and administrative services to RSO under a management agreement between us, RCM and RSO. |
Institutional and Individual Investors | RSO | Total by Type | |||||||||
June 30, 2013 | |||||||||||
CVC Credit Partners (2) | $ | 6,502 | $ | 2,501 | $ | 9,003 | |||||
Trapeza | 3,400 | — | 3,400 | ||||||||
Ischus | 1,082 | — | 1,082 | ||||||||
Other company-sponsored partnerships | 134 | — | 134 | ||||||||
$ | 11,118 | $ | 2,501 | $ | 13,619 | ||||||
June 30, 2012 | |||||||||||
CVC Credit Partners (2) | 4,718 | $ | 2,855 | $ | 7,573 | ||||||
Trapeza | 3,705 | — | 3,705 | ||||||||
Ischus | 1,333 | — | 1,333 | ||||||||
Other company-sponsored partnerships | 89 | 37 | 126 | ||||||||
$ | 9,845 | $ | 2,892 | $ | 12,737 |
(1) | For information on how we calculate assets under management, see "Assets Under Management”, above. |
(2) | In April 2012, we sold 100% of Apidos to CVC and retained a 33% interest in CVC Credit Partners, which manages the former Apidos portfolio as well as the portfolio contributed by CVC. |
• | Collateral management fees − we receive fees for managing the assets held by CLO and CDO issuers we have sponsored, including subordinate and incentive fees. These fees vary by issuer, with our annual fees ranging between 0.1% and 0.25% of the aggregate principal balance of the eligible collateral owned by the issuers. The indentures to the notes require that certain overcollateralization test ratios, or O/C ratios, be maintained. O/C ratios measure the ratio of assets (collateral) to liabilities (notes) of a given issuer. Losses incurred on collateral due to payment defaults, payment deferrals or rating agency downgrades reduce the O/C ratios. If specified O/C ratios are not met by an issuer, subordinate or incentive management fees, which are discussed in the following sections, are deferred and interest collections from collateral are applied to outstanding principal balances on the notes, typically in order of seniority. |
• | Administration fees − we receive fees for managing the assets held by our company-sponsored partnerships and, through April 2012, our credit opportunities fund (which is now being managed by CVC Credit Partners). These fees vary by limited partnership or fund, with our annual fee ranging between 0.75% and 2.00% of the partnership or fund capital balance. |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
Fund management fees | $ | 711 | $ | 1,295 | $ | 2,182 | $ | 8,810 | |||||||
Fund management fees - incentive | 705 | — | 1,114 | — | |||||||||||
RSO management fees - trading portfolio | (266 | ) | 722 | (48 | ) | 3,417 | |||||||||
RSO management fees | 137 | 56 | 292 | 1,036 | |||||||||||
Introductory agent fees | 162 | 260 | 933 | 980 | |||||||||||
Equity in earnings of unconsolidated CDO issuers | 213 | 195 | 660 | 604 | |||||||||||
Equity in (losses) earnings of CVC Credit Partners | (477 | ) | 192 | 970 | 192 | ||||||||||
Gains, net, on trading securities | 966 | 178 | 2,725 | 178 | |||||||||||
Other revenues | 31 | (21 | ) | 53 | — | ||||||||||
2,182 | 2,877 | 8,881 | 15,217 | ||||||||||||
Total limited and general partner interests | 263 | 114 | 526 | 657 | |||||||||||
$ | 2,445 | $ | 2,991 | $ | 9,407 | $ | 15,874 | ||||||||
Costs and expenses: | |||||||||||||||
General and administrative expenses | $ | 1,694 | $ | 2,994 | $ | 5,239 | $ | 13,177 |
• | a $584,000 decrease in fund management fees, principally due to a $565,000 decrease in CLO collateral management and partnership management fees as a result of the sale of Apidos; |
• | a $988,000 decrease in incentive management fees earned from managing a trading portfolio on behalf of RSO which varies by quarter based on transactional activity; |
• | a $98,000 decrease in introductory agent fees as a result of fees earned in connection with eight structured security transactions with an average fee of $20,000 during fiscal 2013 as compared to 15 structured security transactions with an average fee of $17,000 for the prior year period; and |
• | a $669,000 decrease in earnings on unconsolidated entities, primarily due to the up-front transaction costs associated with the public offering of CVC Credit Partners European Opportunities Limited, a European investment vehicle, listed on the London Stock Exchange, which closed in June 2013. |
• | a $705,000 increase in fund management incentive fees reflecting payments received in connection with retaining 75% of the incentive management fees earned by the legacy Apidos CLOs; |
• | a $81,000 increase in RSO management fees, primarily related to a new oversight fee arrangement for our management of an RSO portfolio of life insurance policies; |
• | a $788,000 increase in realized and unrealized gains and interest recorded on our trading securities portfolio; and |
• | a $149,000 increase in our fair value adjustments recorded for our limited general partner interests in unconsolidated company-sponsored partnerships; the value of these partnerships depends on market conditions and may vary significantly from period to period. |
• | a $6.6 million decrease in fund management fees, principally due to a $6.4 million decrease in CLO collateral management and partnership management fees as a result of the sale of Apidos; |
• | a $744,000 decrease in RSO management fees, reflecting a $1.0 million decrease in RSO base and incentive management fees due to the sale of Apidos, offset by a $293,000 increase in fees related to a new oversight fee charged to RSO for our management of an RSO portfolio of life insurance policies; |
• | a $3.5 million decrease in incentive management fees earned from managing a trading portfolio on behalf of RSO, which varies by quarter based upon transactional activity; |
• | a $131,000 decrease in our share of realized and unrealized fair value adjustments recorded relative to our limited and general partner interests held in unconsolidated company-sponsored partnerships, the value of which depends on market conditions and may vary significantly year to year. |
• | a $1.1 million increase in fund management incentive fees reflecting payments received in connection with retaining 75% of the incentive management fees earned by the legacy Apidos CLOs; |
• | a $778,000 increase in earnings on unconsolidated entities reflecting the results of our joint venture partnership with CVC which commenced in April 2012; and |
• | a $2.5 million increase in realized and unrealized gains, and interest recorded on trading securities, due to increased activity; |
• | a $56,000 net increase in earnings from seven unconsolidated CLO issuers invested in bank loans we previously sponsored and manage, primarily due to four CLO equity purchases since July 2012. |
June 30, | |||||||
2013 | 2012 | ||||||
LEAF | $ | 460 | $ | 307 | |||
Commercial finance investment partnerships | 94 | 221 | |||||
$ | 554 | $ | 528 |
(1) | For information on how we calculate assets under management, see - “Assets under Management”, above. |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues:(1) | |||||||||||||||
Equity in losses of investment entities | $ | (32 | ) | $ | (128 | ) | $ | (324 | ) | $ | (365 | ) | |||
Equity in losses of LEAF | (3 | ) | (2 | ) | (13 | ) | (1,720 | ) | |||||||
(35 | ) | (130 | ) | (337 | ) | (2,085 | ) | ||||||||
Other: | |||||||||||||||
Finance revenues | — | — | — | 3,767 | |||||||||||
Other fees | — | 2 | — | 369 | |||||||||||
$ | (35 | ) | $ | (128 | ) | $ | (337 | ) | $ | 2,051 | |||||
Costs and expenses: | |||||||||||||||
General and administrative expenses - wages and benefit costs | $ | 70 | $ | 58 | $ | 160 | $ | 1,982 | |||||||
General and administrative expenses - other | (289 | ) | 60 | (383 | ) | 981 | |||||||||
Less: deferred initial direct costs and fees | — | — | — | (652 | ) | ||||||||||
$ | (219 | ) | $ | 118 | $ | (223 | ) | $ | 2,311 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Commercial finance: | |||||||||||||||
Receivables from managed entities | $ | 1,482 | $ | 5,650 | $ | 8,853 | $ | 10,510 | |||||||
Leases, loans and future payment card receivables | (4 | ) | (4 | ) | (10 | ) | 141 | ||||||||
Real estate: | |||||||||||||||
Receivables from managed entities | (4 | ) | 61 | (2,382 | ) | 249 | |||||||||
Rent receivables | (26 | ) | (9 | ) | 20 | 10 | |||||||||
Financial Fund Management: | |||||||||||||||
Receivables from managed entities | 199 | — | 656 | — | |||||||||||
$ | 1,647 | $ | 5,698 | $ | 7,137 | $ | 10,910 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Real estate property investments | $ | 240 | $ | 234 | $ | 631 | $ | 698 | |||||||
Other operating segments depreciation on fixed assets | 249 | 294 | 766 | 870 | |||||||||||
LEAF | — | — | — | 1,556 | |||||||||||
Total depreciation expense | $ | 489 | $ | 528 | $ | 1,397 | $ | 3,124 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Corporate | $ | 294 | $ | 358 | $ | 900 | $ | 1,822 | |||||||
Real estate | 207 | 213 | 616 | 641 | |||||||||||
Commercial finance | — | 7 | 1 | 1,734 | |||||||||||
$ | 501 | $ | 578 | $ | 1,517 | $ | 4,197 |
Three Months Ended | Nine Months Ended | ||||||
June 30, | June 30, | ||||||
2013 | 2012 | 2013 | 2012 | ||||
Corporate facilities | |||||||
Senior Notes: (1) | |||||||
Average borrowings | $10.0 | $10.0 | $10.0 | $11.9 | |||
Average interest rates | 9.0% | 9.0% | 9.0% | 10.0% | |||
Secured credit facilities (and TD Bank term note in fiscal 2012): | |||||||
Average borrowings | $— | $4.0 | $0.2 | $5.2 | |||
Average interest rates | —% | 6.0% | 3.2% | 6.0% | |||
Commercial finance (transferred and/or terminated facilities) (2) | |||||||
Secured credit facilities: | |||||||
Average borrowings | $— | $— | $— | $68.8 | |||
Average interest rates | —% | —% | —% | 4.2% | |||
Term securitizations: | |||||||
Average borrowings | $— | $— | $— | $112.8 | |||
Average interest rates | —% | —% | —% | 4.2% |
(1) | In November 2011, we refinanced the Senior Notes through a partial redemption and modification, which reduced the principal balance outstanding from $18.8 million to $10.0 million and reduced the interest rate from 12% to 9%. |
(2) | The amounts presented for commercial finance for fiscal 2012 reflect activity during the period from October 1 to November 16, 2011. Subsequently, we deconsolidated LEAF, including these facilities, from our consolidated financial statements. |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
RSO dividend income | $ | 557 | $ | 510 | $ | 1,647 | $ | 1,646 | |||||||
Opportunity REIT dividend income | 24 | — | 57 | — | |||||||||||
Interest income (1) | 150 | 135 | 577 | 389 | |||||||||||
Amortization of unrecognized loss - retirement plan (2) | (99 | ) | (83 | ) | (299 | ) | (248 | ) | |||||||
Other expense, net | 3 | (200 | ) | (19 | ) | (241 | ) | ||||||||
Other income, net | $ | 635 | $ | 362 | $ | 1,963 | $ | 1,546 |
(1) | Includes accretion of discount on receivables from real estate managed entities of $116,000 and $498,000 for the three and nine months ended June 30, 2013, respectively, and $113,000 and $325,000 for the three and nine months ended June 30, 2012, respectively. |
(2) | Includes amortization of losses in the securities held in the retirement plan for our former Chief Executive Officer. |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Real estate: | |||||||||||||||
Related-party interest in a hotel property, net of tax of $28, $0, $28 and $0 (1) | $ | (26 | ) | $ | (45 | ) | $ | (54 | ) | $ | (31 | ) | |||
Outside interests in a commercial property, net of tax of $0, $0, $278 and $0 (2) | — | — | (516 | ) | — | ||||||||||
Commercial finance: | |||||||||||||||
RSO investment in LEAF preferred stock(3) | — | — | — | (571 | ) | ||||||||||
Stock-based compensation, net of tax of $0, $0, $0 and $130 (4) | — | — | — | 218 | |||||||||||
$ | (26 | ) | $ | (45 | ) | $ | (570 | ) | $ | (384 | ) |
(1) | A related party holds a 19.99% interest in our investment in a hotel property in Savannah, Georgia. |
(2) | A third party's interest in a commercial real estate property in Elkins, West Virginia that we previously consolidated as a VIE. The property underlying the loan was sold and our investment was resolved during the three months ended December 31, 2012. |
(3) | In the January 2011 formation of LEAF, RSO received 3,743 shares of LEAF Series A preferred stock and warrants to purchase 4,800 shares of LEAF common stock at $0.01 per share. The warrants were recorded as a discount to the preferred stock and are being amortized over the five-year term of the warrants. As a result of the deconsolidation of LEAF, this noncontrolling interest was eliminated. |
(4) | Senior executives of LEAF held a 13.9% interest in LEAF Financial as of December 31, 2010. In January 2011, these shares were exchanged for a 21.98% interest in LEAF (10% on a fully diluted basis). As a result of the deconsolidation of LEAF, we no longer record this noncontrolling interest. |
• | cash on hand of $12.2 million; |
• | $10.5 million of availability under our two corporate credit facilities; |
• | potential disposition of non-core assets; and |
• | cash generated from operations. |
Payments Due By Period | |||||||||||||||||||
Total | Less than 1 Year | 1 – 3 Years | 4 – 5 Years | After 5 Years | |||||||||||||||
Contractual obligations: | |||||||||||||||||||
Non-recourse to the Company: | |||||||||||||||||||
Mortgage - hotel property (1) | $ | 10,380 | $ | 192 | $ | 422 | $ | 480 | $ | 9,286 | |||||||||
Recourse to the Company: | |||||||||||||||||||
Other debt (1) | 11,570 | — | 11,570 | — | — | ||||||||||||||
Capital lease obligations (1) | 112 | 112 | — | — | — | ||||||||||||||
11,682 | 112 | 11,570 | — | — | |||||||||||||||
Operating lease obligations | 16,155 | 2,097 | 4,096 | 3,921 | 6,041 | ||||||||||||||
Other long-term liabilities | 8,245 | 838 | 1,609 | 1,486 | 4,312 | ||||||||||||||
Total contractual obligations | $ | 46,462 | $ | 3,239 | $ | 17,697 | $ | 5,887 | $ | 19,639 |
(1) | Not included in the table above are estimated interest payments calculated at rates in effect at June 30, 2013; less than 1 year: $1.7 million; 1-3 years: $2.0 million; 4-5 years: $1.2 million; and after 5 years: $1.8 million. |
Amount of Commitment Expiration Per Period | |||||||||||||||||||
Total | Less than 1 Year | 1 – 3 Years | 4 – 5 Years | After 5 Years | |||||||||||||||
Other commercial commitments: | |||||||||||||||||||
Guarantees | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Real estate commitments | 250 | 250 | — | — | — | ||||||||||||||
Standby letters of credit | 803 | 803 | — | — | — | ||||||||||||||
Total commercial commitments | $ | 1,053 | $ | 1,053 | $ | — | $ | — | $ | — |
• | analyzed and confirmed the accuracy of any significant changes in the methods and assumptions used in valuing our legacy real estate portfolio; and |
• | formalized our new documentation processes and procedures relative to these valuations. |
Exhibit No. | Description | |
3.1 | Restated Certificate of Incorporation of Resource America. (1) | |
3.2 | Amended and Restated Bylaws of Resource America. (1) | |
4.1 | Note Purchase Agreement (including the form of Senior Note and form of Warrant). (2) | |
4.1 (a) | Form of 9% Senior Note due 2015. (14) | |
10.1(a) | Amended and Restated Loan and Security Agreement, dated March 10, 2011, between Resource America, Inc. and TD Bank, N.A. (5) | |
10.1(b) | First Amendment to the Amended and Restated Loan and Security Agreement, dated as of November 29, 2011, between Resource America, Inc. and TD Bank, N.A. (7) | |
10.1(c) | Second Amendment to the Amended and Restated Loan and Security Agreement and Joinder to Loan Documents, dated as of February 15, 2012, between Resource America, Inc. and TD Bank, N.A and the Joining Guarantors set forth therein. (11) | |
10.1(d) | Third Amendment to the Amended and Restated Loan and Security Agreement and Joinder to Loan Documents, dated as of November 16, 2012, between Resource America, Inc. and TD Bank, N.A and the Joining Guarantors set forth therein. (13) | |
10.2 | Amended and Restated Employment Agreement between Michael S. Yecies and Resource America, Inc., dated December 29, 2008. (3) | |
10.3 | Amended and Restated Employment Agreement between Thomas C. Elliott and Resource America, Inc., dated December 29, 2008. (3) | |
10.4 | Amended and Restated Employment Agreement between Jeffrey F. Brotman and Resource America, Inc., dated December 29, 2008. (3) | |
10.5 | Amended and Restated Employment Agreement between Jonathan Z. Cohen and Resource America, Inc., dated December 29, 2008. (3) | |
10.6 | Amended and Restated Employment Agreement between Steven J. Kessler and Resource America, Inc., dated December 29, 2008. (3) | |
10.7(a) | Loan Agreement between and among Republic First Bank (d/b/a Republic Bank) and Resource Capital Investor, Inc. and Resource Properties XXX, Inc. (4) | |
10.7(b) | Loan Modification Agreement between and among Republic First Bank (d/b/a Republic Bank) and Resource Capital Investor, Inc. and Resource Properties XXX, Inc. (6) | |
10.7(c) | Second Loan Modification Agreement between and among Republic First Bank (d/b/a Republic Bank) and Resource Capital Investor, Inc. and Resource Properties XXX, Inc. (9) | |
10.7(d) | Third Loan Modification Agreement between and among Republic First Bank (d/b/a Republic Bank) and Resource Capital Investor, Inc. and Resource Properties XXX, Inc. (12) | |
10.8 | Settlement Agreement, dated January 9, 2012, by and among Raging Capital Group and Resource America, Inc. (8) | |
10.9 | Sale and Purchase Agreement between Resource America, Inc. and CVC Capital Partners SICAV-FIS, S.A. dated December 29, 2011. (10) | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Chief Financial Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
99.1 | Stock Purchase Agreement by and among LEAF Commercial Capital, Inc., LEAF Financial Corporation, Resource TRS, Inc., Resource Capital Corp., Resource America, Inc. and the Purchasers named therein, dated November 16, 2011. (10) | |
99.2 | Amended and Restated Certificate of Incorporation of LEAF Commercial Capital, Inc., dated November 16, 2011. (10) | |
99.3 | LEAF Commercial Capital, Inc. Stockholders' Agreement, dated November 16, 2011. (10) | |
101 | Interactive Data Files |
(1) | Filed previously as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended December 31, 1999 and by this reference incorporated herein. |
(2) | Files previously as an exhibit to our Current Report on Form 8-K filed on October 1, 2009 and by this reference incorporated herein. |
(3) | Filed previously as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 and by this reference incorporated herein. |
(4) | Filed previously as an exhibit to our Current Report on Form 8-K filed on March 3, 2011 and by this reference incorporated herein. |
(5) | Filed previously as an exhibit to our Current Report on Form 8-K filed on March 15, 2011 and by this reference incorporated herein. |
(6) | Filed previously as an exhibit to our Current Report on Form 8-K filed on September 28, 2011 and by this reference incorporated herein. |
(7) | Filed previously as an exhibit to our Current Report on Form 8-K filed on December 2, 2011 and by this reference incorporated herein. |
(8) | Filed previously as an exhibit to our Current Report on Form 8-K filed on January 11, 2012 and by this reference incorporated herein. |
(9) | Filed previously as an exhibit to our Current Report on Form 8-K filed on January 17, 2012 and by this reference incorporated herein. |
(10) | Filed previously as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, and by this reference incorporated herein. |
(11) | Filed previously as an exhibit to our Current Report on Form 8-K filed on February 15, 2012, and by this reference incorporated herein. |
(12) | Filed previously as an exhibit to our Current Report on Form 8-K filed on October 31, 2012 and by this reference incorporated herein. |
(13) | Filed previously as an exhibit to our Current Report on Form 8-K filed on November 19, 2012 and by this reference incorporated herein. |
(14) | Filed previously as an exhibit to our Current Report on Form 8-K filed on December 18, 2012 and by this reference incorporated herein. |
RESOURCE AMERICA, INC. | ||
(Registrant) | ||
August 8, 2013 | By: | /s/ Thomas C. Elliott |
THOMAS C. ELLIOTT | ||
Senior Vice President and Chief Financial Officer | ||
August 8, 2013 | By: | /s/ Arthur J. Miller |
ARTHUR J. MILLER | ||
Vice President and Chief Accounting Officer |
1) | I have reviewed this report on Form 10-Q for the quarterly period ended June 30, 2013 of Resource America, Inc.; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5) | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jonathan Z. Cohen | |
Date: August 8, 2013 | Jonathan Z. Cohen |
Chief Executive Officer |
1) | I have reviewed this report on Form 10-Q for the quarterly period ended June 30, 2013 of Resource America, Inc.; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5) | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Thomas C. Elliott | |
Date: August 8, 2013 | Thomas C. Elliott |
Senior Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jonathan Z. Cohen | |
Date: August 8, 2013 | Jonathan Z. Cohen |
Chief Executive Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Thomas C. Elliott | |
Date: August 8, 2013 | Thomas C. Elliott |
Senior Vice President and Chief Financial Officer |
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FAIR VALUE (Assets and Liabilities Recorded at Fair Value on Recurring Basis) (Details) (Recurring Basis [Member], USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Sep. 30, 2012
|
---|---|---|
Asset: | ||
Investment securities | $ 31,151 | $ 22,532 |
Level 1 [Member]
|
||
Asset: | ||
Investment securities | 17,488 | 15,697 |
Level 2 [Member]
|
||
Asset: | ||
Investment securities | 0 | 0 |
Level 3 [Member]
|
||
Asset: | ||
Investment securities | $ 13,663 | $ 6,835 |
ACCRUED EXPENSES AND OTHER LIABILITIES
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER LIABILITIES The following is a summary of the components of accrued expenses and other liabilities (in thousands):
|
INVESTMENTS IN UNCONSOLIDATED ENTITIES AND LOAN MANAGER (Narrative) (Details) (USD $)
|
1 Months Ended | 9 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jan. 31, 2013
|
Jun. 30, 2013
|
Jun. 30, 2013
Resource Real Estate Opportunity REIT Inc [Member]
|
Jun. 30, 2013
Parent [Member]
General Partner [Member]
|
Jun. 30, 2013
CVC Credit Partners, L.P. [Member]
Parent [Member]
Limited Partner [Member]
|
Jun. 30, 2013
Resource Real Estate Opportunity REIT Inc [Member]
|
Jun. 30, 2013
Trapeza Entities [Member]
Entity
|
|
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest in real estate joint venture | 10.00% | ||||||
Proceeds from sale of ownership interest in real estate joint venture | $ 3,000,000 | ||||||
Gain on sale of investments | 1,600,000 | ||||||
Number of entities owned by entity and co-managing partner | 2 | ||||||
Cost-method investments, book value | $ 6,800,000 | $ 2,500,000 | |||||
Ownership interest, cost method (less than 1%) | 1.00% | ||||||
Percentage interest in limited partnership formed | 33.00% | ||||||
Preferred equity interest retained as a percentage of incentive management fees | 75.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
9 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements reflect the Company's accounts and the accounts of the Company's majority-owned and/or controlled subsidiaries. The Company also consolidates entities that are variable interest entities (“VIEs”) where it has determined that it is the primary beneficiary of such entities. Once it is determined that the Company holds a variable interest in a VIE, management must perform a qualitative analysis to determine (i) if the Company has the power to direct the matters that most significantly impact the VIE's financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. If the Company's interest possesses both of these characteristics, the Company is deemed to be the primary beneficiary and would be required to consolidate the VIE. The Company will continually assess its involvement with VIEs and reevaluate the requirement to consolidate them. The portions of these entities that the Company does not own are presented as noncontrolling interests as of the dates and for the periods presented in the consolidated financial statements. Variable interests in the Company's real estate segment have historically related to subordinated financings in the form of mezzanine loans or unconsolidated real estate interests. As of September 30, 2012, the Company had one such variable interest that it consolidated. The property underlying this loan was subsequently sold in November 2012 and the loan was resolved. See Note 8 for additional disclosures pertaining to VIEs. All intercompany transactions and balances have been eliminated in the Company's consolidated financial statements. Financing Receivables Receivables from managed entities. The Company performs a review of the collectability of its receivables from managed entities on a quarterly basis. If upon review there is an indication of impairment, the Company will analyze the future cash flows of the managed entity. With respect to the receivables from its commercial finance investment partnerships, this takes into consideration several assumptions by management, primarily concerning estimations of future bad debts and recoveries. For the receivables from the real estate investment entities for which there are indications of impairment, the Company estimates the cash flows through the sale of the underlying properties, which is based on projected net operating income as a multiple of published capitalization rates, which is then reduced by the underlying mortgage balances and priority distributions due to the investors in the entity. Real estate - rent receivables. The Company evaluates the collectability of the rent receivables for the properties it owns and fully reserves for amounts after they are 90 days past due. Amounts are charged off when they are deemed to be uncollectible. Recent Accounting Standards Newly-Adopted Accounting Principle The Company’s adoption of the following standard during fiscal 2013 did not have a material impact on its consolidated financial position, results of operations or cash flows: Comprehensive income (loss). In June 2011, the Financial Accounting Standards Board ("FASB") issued an amendment to eliminate the option to present components of other comprehensive income (loss) as part of the statement of changes in stockholders' equity. The amendment requires that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income (loss) or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income (loss) and its components followed consecutively by a second statement that should present total other comprehensive income (loss), the components of other comprehensive income (loss), and the total of comprehensive income (loss). In December 2011, the FASB updated the guidance to defer the requirement related to the presentation of reclassification adjustments. This guidance became effective for the Company beginning October 1, 2012 and the Company has presented the required disclosures. Accounting Standards Issued But Not Yet Effective The FASB issued the following accounting standards which were not yet effective for the Company as of June 30, 2013: Comprehensive income (loss). In February 2013, the FASB issued guidance that requires an entity to disclose information showing the effect of items reclassified from accumulated other comprehensive income on the line items of net income. The Company plans to provide the enhanced footnote disclosure as required by this amendment beginning October 1, 2013. In March 2013, the FASB issued guidance on a parent's accounting for the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The new guidance will be effective for the Company beginning October 1, 2013. The Company does not anticipate the adoption of this guidance will have a material impact on its consolidated financial statements. |
COMMITMENTS AND CONTINGENCIES
|
9 Months Ended |
---|---|
Jun. 30, 2013
|
|
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES LEAF lease valuation commitment. In conjunction with the third-party equity investment in LEAF, the Company and RSO have undertaken a contingent obligation with respect to the value of the equity on the balance sheet of LRF3. To the extent that the value of the equity on the balance sheet of LRF3 is less than $18.7 million (the value of the equity of LRF3 on the date it was contributed by RSO to LEAF), as of the final testing date within 90 days of December 31, 2013, the Company and RSO have agreed to be jointly and severally obligated to contribute cash to LEAF to the extent of any shortfall. The LRF3 equity as of June 30, 2013 was in excess of this commitment and, therefore, the Company was not required to record a liability with respect to this obligation. Limited loan guarantee. The Company and two of its commercial finance investment partnerships, Lease Equity Appreciation Fund I, L.P. (“LEAF I”) and Lease Equity Appreciation Fund II, L.P. (“LEAF II”), have provided a limited guarantee to a lender to the LEAF partnerships in exchange for a waiver of any existing defaulted loan covenants and certain future financial covenants. The loans mature at the earlier of (a) the maturity date (March 20, 2014 for LEAF I and December 21, 2013 for LEAF II), or (b) the date on which an event of default under the loan agreement occurs. The maximum guarantee provided by the Company is up to $3.7 million ($1.8 million for LEAF I and $1.9 million for LEAF II) as of June 30, 2013. If the Company were required to make any such payments under the guarantee in the future, it would have the option to either step in as the lender or otherwise make a capital contribution to the LEAF partnerships for the amount of the required guarantee payment. Under certain circumstances, the lender will also discount its loans by approximately $250,000 for LEAF I and $347,500 for LEAF II. Management has determined that, based on projected cash flows from the underlying lease and loan portfolios collateralizing the loans, there should be sufficient funds to repay the LEAF partnerships' outstanding loan balances and, accordingly, the Company was not required to record a liability with respect to the guarantee. Broker-Dealer Capital Requirement. Resource Securities serves as a dealer-manager for the sale of securities of direct participation investment programs, both public and private, sponsored by subsidiaries of the Company who also serve as general partners and/or managers of these programs. Additionally, Resource Securities serves as an introducing agent for transactions involving sales of securities of financial services companies, REITs and insurance companies for the Company and for RSO. As a broker-dealer, Resource Securities is required to maintain minimum net capital, as defined in regulations under the Securities Exchange Act of 1934, as amended, which was $133,000 and $100,000 as of June 30, 2013 and September 30, 2012, respectively. As of June 30, 2013 and September 30, 2012, Resource Securities net capital was $639,000 and $447,000, respectively, which exceeded the minimum requirements by $506,000 and $347,000, respectively. Clawback liability. On November 1, 2009 and January 28, 2010, the general partners of two of the Trapeza entities, which are owned equally by the Company and its co-managing partner, repurchased substantially all of the remaining limited partnership interests in the two Trapeza entities with potential clawback liabilities for $4.4 million. The Company contributed $2.2 million (its 50% share). The clawback liability was $1.2 million at June 30, 2013 and September 30, 2012. Legal proceedings. In September 2011, First Community Bank, (“First Community”) filed a complaint against First Tennessee Bank and approximately thirty other defendants consisting of investment banks, rating agencies, collateral managers, including Trapeza Capital Management, LLC (“TCM”), and issuers of CDOs, including Trapeza CDO XIII, Ltd. and Trapeza CDO XIII, Inc. TCM and the Trapeza CDO issuers are collectively referred to as Trapeza. The complaint includes causes of action against TCM for fraud, negligent misrepresentation, violation of the Tennessee Securities Act of 1980 and unjust enrichment. First Community alleges, among other things, that it invested in certain CDOs, that the defendant rating agencies assigned inflated investment grade ratings to the CDOs, and that the defendant investment banks, collateral managers and issuers (including Trapeza) fraudulently and/or negligently made “materially false and misleading representations and omissions” that First Community relied on in investing in the CDOs, including both written representations in offering materials and unspecified oral representations. Specifically, with respect to Trapeza, First Community alleges that it purchased $20.0 million of notes in the D tranche of the Trapeza CDO XIII transaction from J.P. Morgan. The Court dismissed this matter in June 2012. First Community filed a Notice of Appeal in July 2012. The Company is also a party to various routine legal proceedings arising out of the ordinary course of business. Management believes that none of these actions, individually or, in the aggregate, will have a material adverse effect on the Company's consolidated financial condition or operations. In July 2011, the Company entered into an agreement with one of the tenant-in-common ("TIC") real estate programs it sponsored and manages. This agreement requires the Company to fund up to $1.9 million for capital improvements for the TIC property over the next two years. The Company has advanced funds totaling $1.7 million as of June 30, 2013, which is included in Investments in real estate on the consolidated balance sheets. The liabilities for the real estate commitments will be recorded in the future as amounts become due and payable. General corporate commitments. The Company is also party to employment agreements with certain executives that provide for compensation and other benefits, including severance payments under specified circumstances. As of June 30, 2013, except for the clawback liability recorded for the two Trapeza entities and executive compensation, the Company did not believe it was probable that any payments would be required under any of its commitments and contingencies and, accordingly, no liabilities for these obligations were recorded in the consolidated financial statements. |
EARNINGS (LOSS) PER SHARE (Reconciliation) (Details)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Reconciliation of the components used in the computation of Basic and Diluted EPS [Abstract] | ||||
Basic shares outstanding (in shares) | 20,297 | 19,815 | 20,165 | 19,618 |
Dilutive effect of outstanding stock options, warrants and director units (in shares) | 1,809 | 1,221 | 1,541 | 846 |
Dilutive shares outstanding (in shares) | 22,106 | 21,036 | 21,706 | 20,464 |
VARIABLE INTEREST ENTITIES (Consolidated and Nonconsolidated VIEs) (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
---|---|
Variable Interest Entities [Abstract] | |
Cash and property and equipment, net | $ 727 |
Accrued expenses and other liabilities | $ 189 |
BORROWINGS
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWINGS | BORROWINGS The credit facilities and other debt of the Company and related borrowings outstanding are as follows (in thousands):
Credit Facilities TD Bank, N.A. (“TD Bank”). On November 19, 2012, the Company amended its agreement with TD Bank to extend the maturity of the TD Bank facility to December 31, 2014, to set the interest rate on borrowings as either (a) the prime rate of interest plus 2.25% or (b) the London Interbank Offered Rate ("LIBOR") plus 3% and to eliminate the previous floor of 6.0%. The LIBOR rate used varies from one to six months, depending upon the period of the borrowing, at the Company's election. The Company is charged an annual fee of 0.5% on the unused facility amount as well as a 5.25% fee on the $503,000 outstanding letter of credit. Borrowings are secured by a first priority security interest in certain of the Company's assets and the guarantees of certain subsidiaries, including (i) the present and future fees and investment income earned in connection with the management of, and investments in, sponsored CDO issuers, (ii) a pledge of 18,972 shares of TBBK common stock, and (iii) the pledge of 2,080,482 shares of RSO common stock. Availability under the facility is limited to the lesser of (a) 75% of the net present value of future RSO base management fees to be earned or (b) the maximum revolving credit facility amount. There were no borrowings outstanding as of June 30, 2013 on the secured credit facility and the availability on the facility was $7.0 million, as reduced for outstanding letters of credit. Weighted average borrowings on the line of credit for the three and nine months ended June 30, 2013 were $0 and $198,000 at weighted average borrowing rates of 0.0% and 3.2%. Weighted average borrowings on the line of credit for the three and nine months ended June 30, 2012 were $4.0 million and $4.9 million at a weighted average borrowing rate of 6.0% for both periods, with effective interest rates of 11.2% and 10.5%, respectively. Weighted average borrowings for the term note portion of the facility (which was repaid in full by the Company in November 2011) for the nine months ended June 30, 2012 were $259,000 at a weighted average borrowing rate of 6.0% and an effective interest rate of 38.2%. Republic First Bank (“Republic Bank”). In February 2011, the Company entered into a $3.5 million revolving credit facility with Republic Bank. The facility bears interest at the prime rate of interest plus 1% with a floor of 4.5%. The loan is secured by a pledge of 700,000 shares of RSO stock and a first priority security interest in the office building the Company owns in Philadelphia, Pennsylvania. Availability under this facility is limited to the lesser of (a) the sum of (i) 25% of the appraised value of the office building, based upon the most recent appraisal and (ii) 100% of the cash and 75% of the market value of the pledged RSO shares held in the pledged account; and (b) 100% of the cash and 100% of the market value of the pledged RSO shares held in the pledged account. The Company also is charged an unused annual facility fee equal to 0.25%. In October 2012, the Company amended this facility to extend the maturity date to December 28, 2014. There were no borrowings under this facility during the three and nine months ended June 30, 2013 and 2012 and the availability as of June 30, 2013 was $3.5 million. Senior Notes In December 2012, the Company modified the terms of $10.0 million of its 9% Senior Notes that remain outstanding (following the partial repayment referred to below) to extend the maturity date from October 2013 to March 31, 2015. In connection with the modification, the Company paid a modification incentive payment equal to 1.0% of the aggregate principal amount of each note. The detachable 5-year warrants to purchase 3,690,195 shares of common stock issued with the original notes were unaffected and, as of June 30, 2013, 3,444,607 remain outstanding. The Company had accounted for these warrants as a discount to the original notes. Upon the modification and partial repayment of the Senior Notes in November 2011, the Company expensed the remaining $2.2 million of unamortized discount. The effective interest rates for the three and nine months ended June 30, 2013 were 9.9% and 9.6%, respectively. The effective interest rate (inclusive of the amortization of deferred finance fees and the discount for the warrants) for the three and nine months ended June 30, 2012 were 9.3% and 14.3%, respectively. Until all of the Senior Notes are paid in full, retired or repurchased, the Company cannot declare or pay future quarterly cash dividends in excess of $0.03 per share without the prior approval of all of the holders of the Senior Notes unless basic earnings per common share from continuing operations from the preceding fiscal quarter exceed $0.25 per share. Terminated and/or Transferred Facilities and Loans Commercial Finance Debt. The Company was not an obligor or a guarantor of these facilities and these facilities were non-recourse to the Company, except for the obligation with respect to the Series 2010-2 term securitization (see Note 16). Due to the November 2011 deconsolidation of LEAF, the Company's commercial finance debt, as follows, is no longer included in the Company's consolidated financial statements. Securitization of leases and loans. On October 28, 2011, LEAF completed a $105.0 million securitization. A subsidiary of LEAF issued eight classes of notes which are asset-backed debt, secured and payable by certain assets of LEAF. The notes included interest rates ranging from 0.4% to 5.5%, rated by both Dominion Bond Rating Service, Inc. (“DBRS”) and Moody's Investors Services, Inc., and mature from October 2012 to March 2019. The weighted average borrowings for the period from October 1 to November 16, 2011 were $42.7 million, at a weighted average borrowing rate of 2.6% and an effective interest rate (inclusive of amortization of deferred financing costs and interest rate swaps) of 5.6%. Guggenheim Securities LLC (“Guggenheim”). At December 31, 2010, LEAF Financial Corporation ("LEAF Financial") had a short-term bridge loan with Guggenheim for borrowings up to $21.8 million. The bridge facility was repaid on January 4, 2011 and terminated on February 28, 2011. Beginning in January 2011, Guggenheim provided LEAF with a revolving warehouse credit facility with availability up to $110.0 million and committed to further expand the borrowing limit to $150.0 million. LEAF, through its wholly-owned subsidiary, issued to Guggenheim, as initial purchaser, six classes of DBRS-rated variable funding notes, with ratings ranging from “AAA” to “B”, for up to $110.0 million. The notes were secured and payable only from the underlying equipment leases and loans. Interest was calculated at a rate of 30-day LIBOR plus a margin rate applicable to each class of notes. The revolving facility ended on December 31, 2012 and the stated maturity of the notes is December 15, 2020, unless there is a mutual agreement to extend. The weighted average borrowings for the period from October 1 to November 16, 2011 (prior to the LEAF deconsolidation) were $68.8 million, at a weighted average borrowing rate of 4.2% and an effective interest rate of 5.1%. Series 2010-2 term securitization. In May 2010, LEAF Receivables Funding 3, LLC, a subsidiary of LEAF (“LRF3”), issued $120.0 million of equipment contract-backed notes (“Series 2010-2”) to provide financing for leases and loans. In the connection with the formation of LEAF in January 2011, RSO contributed the Series 2010-2 notes, along with the underlying lease portfolio, to LEAF. LRF3 is the sole obligor on these notes. The weighted average borrowings for the period from October 1 to November 16, 2011 were $70.1 million at a weighted average borrowing rate of 5.1% and an effective interest rate of 8.5%. Note payable to RSO − commercial finance. On July 20, 2011, RSO entered into an agreement with LEAF pursuant to which RSO agreed to provide a $10.0 million loan to LEAF, of which $6.9 million was funded as of September 30, 2011, with additional funding of $3.1 million prior to the November 16, 2011 deconsolidation. The loan bore interest at a fixed rate of 8.0% per annum on the unpaid principal balance, payable quarterly. The loan was secured by the commercial finance assets of LEAF and LEAF's interest in LRF3. In November 2011, RSO received $8.5 million from LEAF in payment of the outstanding balance and extinguished the loan. Debt repayments Annual principal payments on the Company’s aggregate borrowings for the next five succeeding annual periods ending June 30, and thereafter, are as follows (in thousands):
Covenants The TD Bank credit facility is subject to certain financial covenants, which are customary for the type and size of the facility, including debt service coverage and debt to equity ratios. The debt to equity ratio restricts the amount of recourse debt the Company can incur based on a ratio of recourse debt to net worth. The mortgage on the Company's hotel property contains financial covenants related to the net worth and liquid assets of the Company. Although non-recourse in nature, the loan is subject to limited standard exceptions (or “carveouts”) which the Company has guaranteed. These carveouts will expire as the loan is paid down over the next ten years. The Company has control over the operations of the underlying property, which mitigates the potential risk associated with these carveouts and, accordingly, no liabilities for these obligations have been recorded in the consolidated financial statements. To date, the Company has not been required to make any carveout payments. The Company was in compliance with all of its financial debt covenants as of June 30, 2013. |
INVESTMENTS IN REAL ESTATE (Operating Leases) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
---|---|
Real Estate Investments, Net [Abstract] | |
2014 | $ 869 |
2015 | 795 |
2016 | 514 |
2017 | 431 |
2018 | 385 |
Thereafter | 323 |
Total | $ 3,317 |
FAIR VALUE (Fair Value of Financial Instruments, Excluding Instruments Valued on a Recurring Basis) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Sep. 30, 2012
|
---|---|---|
Carrying Amount [Member]
|
||
Assets: | ||
Receivables from managed entities | $ 32,433 | $ 41,051 |
Total | 32,433 | 41,051 |
Borrowings: | ||
Total | 22,062 | 23,020 |
Carrying Amount [Member] | Real Estate Debt [Member]
|
||
Borrowings: | ||
Real estate debt | 10,380 | 10,531 |
Carrying Amount [Member] | Senior Notes [Member]
|
||
Borrowings: | ||
Senior Notes | 10,000 | 10,000 |
Carrying Amount [Member] | Other Debt [Member]
|
||
Borrowings: | ||
Other debt | 1,682 | 2,489 |
Estimated Fair Value [Member]
|
||
Assets: | ||
Receivables from managed entities | 32,433 | 41,051 |
Total | 32,433 | 41,051 |
Borrowings: | ||
Total | 24,607 | 25,409 |
Estimated Fair Value [Member] | Real Estate Debt [Member]
|
||
Borrowings: | ||
Real estate debt | 11,075 | 11,554 |
Estimated Fair Value [Member] | Senior Notes [Member]
|
||
Borrowings: | ||
Senior Notes | 11,875 | 11,364 |
Estimated Fair Value [Member] | Other Debt [Member]
|
||
Borrowings: | ||
Other debt | $ 1,657 | $ 2,491 |
VARIABLE INTEREST ENTITIES (Schedule of Carrying Amount of Assets Related to VIEs) (Details) (USD $)
In Thousands, unless otherwise specified |
1 Months Ended | 9 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 31, 2013
|
Jun. 30, 2013
|
Sep. 30, 2012
|
Jun. 30, 2013
Variable Interest Entity, Primary Beneficiary [Member]
|
Jun. 30, 2013
Variable Interest Entity, Not Primary Beneficiary [Member]
|
Jun. 30, 2013
Variable Interest Entity, Not Primary Beneficiary [Member]
Resource Capital Corp [Member]
|
Jun. 30, 2013
Variable Interest Entity, Not Primary Beneficiary [Member]
Trapeza Entities [Member]
|
Jun. 30, 2013
Variable Interest Entity, Not Primary Beneficiary [Member]
Ischus Entities [Member]
|
Jun. 30, 2013
Receivables from Managed Entities and Related Parties [Member]
|
Jun. 30, 2013
Receivables from Managed Entities and Related Parties [Member]
Resource Capital Corp [Member]
|
Jun. 30, 2013
Receivables from Managed Entities and Related Parties [Member]
Trapeza Entities [Member]
|
Jun. 30, 2013
Receivables from Managed Entities and Related Parties [Member]
Ischus Entities [Member]
|
Jun. 30, 2013
Investments [Member]
|
Jun. 30, 2013
Investments [Member]
Resource Capital Corp [Member]
|
Jun. 30, 2013
Investments [Member]
Trapeza Entities [Member]
|
Jun. 30, 2013
Investments [Member]
Ischus Entities [Member]
|
||||||
Variable Interest Entity [Line Items] | |||||||||||||||||||||
Gain on sale of investments | $ 1,600 | $ 831 | |||||||||||||||||||
Gain on sale of investment, portion attributable to noncontrolling interest | 793 | ||||||||||||||||||||
Carrying amounts of assets of nonconsolidated VIEs and maximum exposure to loss associated with these VIEs [Abstract] | |||||||||||||||||||||
Receivables from managed entities and related parties, net | 32,433 | 41,051 | 2,172 | [1] | 1,987 | [1] | 0 | 185 | [1] | ||||||||||||
Investments | 17,975 | 17,107 | 868 | 0 | |||||||||||||||||
Maximum Exposure to Loss in Non-consolidated VIEs | $ 20,147 | $ 19,094 | $ 868 | $ 185 | |||||||||||||||||
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BENEFIT PLANS (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Costs for the SERP | The components of net periodic benefit costs for the SERP were as follows (in thousands):
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
|
9 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements reflect the Company's accounts and the accounts of the Company's majority-owned and/or controlled subsidiaries. The Company also consolidates entities that are variable interest entities (“VIEs”) where it has determined that it is the primary beneficiary of such entities. Once it is determined that the Company holds a variable interest in a VIE, management must perform a qualitative analysis to determine (i) if the Company has the power to direct the matters that most significantly impact the VIE's financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. If the Company's interest possesses both of these characteristics, the Company is deemed to be the primary beneficiary and would be required to consolidate the VIE. The Company will continually assess its involvement with VIEs and reevaluate the requirement to consolidate them. The portions of these entities that the Company does not own are presented as noncontrolling interests as of the dates and for the periods presented in the consolidated financial statements. Variable interests in the Company's real estate segment have historically related to subordinated financings in the form of mezzanine loans or unconsolidated real estate interests. As of September 30, 2012, the Company had one such variable interest that it consolidated. The property underlying this loan was subsequently sold in November 2012 and the loan was resolved. See Note 8 for additional disclosures pertaining to VIEs. All intercompany transactions and balances have been eliminated in the Company's consolidated financial statements. |
Financing Receivables | Receivables from managed entities. The Company performs a review of the collectability of its receivables from managed entities on a quarterly basis. If upon review there is an indication of impairment, the Company will analyze the future cash flows of the managed entity. With respect to the receivables from its commercial finance investment partnerships, this takes into consideration several assumptions by management, primarily concerning estimations of future bad debts and recoveries. For the receivables from the real estate investment entities for which there are indications of impairment, the Company estimates the cash flows through the sale of the underlying properties, which is based on projected net operating income as a multiple of published capitalization rates, which is then reduced by the underlying mortgage balances and priority distributions due to the investors in the entity. Real estate - rent receivables. The Company evaluates the collectability of the rent receivables for the properties it owns and fully reserves for amounts after they are 90 days past due. Amounts are charged off when they are deemed to be uncollectible. |
Recent Accounting Standards | Newly-Adopted Accounting Principle The Company’s adoption of the following standard during fiscal 2013 did not have a material impact on its consolidated financial position, results of operations or cash flows: Comprehensive income (loss). In June 2011, the Financial Accounting Standards Board ("FASB") issued an amendment to eliminate the option to present components of other comprehensive income (loss) as part of the statement of changes in stockholders' equity. The amendment requires that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income (loss) or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income (loss) and its components followed consecutively by a second statement that should present total other comprehensive income (loss), the components of other comprehensive income (loss), and the total of comprehensive income (loss). In December 2011, the FASB updated the guidance to defer the requirement related to the presentation of reclassification adjustments. This guidance became effective for the Company beginning October 1, 2012 and the Company has presented the required disclosures. Accounting Standards Issued But Not Yet Effective The FASB issued the following accounting standards which were not yet effective for the Company as of June 30, 2013: Comprehensive income (loss). In February 2013, the FASB issued guidance that requires an entity to disclose information showing the effect of items reclassified from accumulated other comprehensive income on the line items of net income. The Company plans to provide the enhanced footnote disclosure as required by this amendment beginning October 1, 2013. In March 2013, the FASB issued guidance on a parent's accounting for the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The new guidance will be effective for the Company beginning October 1, 2013. The Company does not anticipate the adoption of this guidance will have a material impact on its consolidated financial statements. |
SUBSEQUENT EVENTS
|
9 Months Ended |
---|---|
Jun. 30, 2013
|
|
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated subsequent events and determined that no events have occurred which would require an adjustment to the consolidated financial statements. |
FINANCING RECEIVABLES (Impaired Financing Receivables) (Details) (USD $)
|
9 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2013
|
Sep. 30, 2012
|
|
Financing Receivables Without a Specific Valuation Allowance [Member]
|
||
Impaired financing receivables [Abstract] | ||
Impaired financing receivables without a specific allowance | $ 0 | $ 0 |
Receivables from Managed Entities - Commercial Finance [Member]
|
||
Impaired financing receivables [Abstract] | ||
Specific Allowance | 25,078,000 | |
Receivables from Managed Entities - Commercial Finance [Member] | Financing receivables with a specific valuation allowance [Member]
|
||
Impaired financing receivables [Abstract] | ||
Net Balance | 4,656,000 | 12,865,000 |
Unpaid Balance | 38,587,000 | 37,943,000 |
Specific Allowance | 33,931,000 | 25,078,000 |
Average Investment in Impaired Assets | 38,236,000 | 38,060,000 |
Receivables from managed entities financial fund management [Member] [Domain] | Financing receivables with a specific valuation allowance [Member]
|
||
Impaired financing receivables [Abstract] | ||
Net Balance | 649,000 | |
Unpaid Balance | 1,305,000 | |
Specific Allowance | 656,000 | |
Average Investment in Impaired Assets | 1,305,000 | |
Receivables from Managed Entities - Real Estate [Member]
|
||
Impaired financing receivables [Abstract] | ||
Specific Allowance | 2,502,000 | |
Receivables from Managed Entities - Real Estate [Member] | Financing receivables with a specific valuation allowance [Member]
|
||
Impaired financing receivables [Abstract] | ||
Net Balance | 2,181,000 | |
Unpaid Balance | 4,683,000 | |
Specific Allowance | 2,502,000 | |
Average Investment in Impaired Assets | 4,511,000 | |
Rent Receivables - Real Estate [Member] | Financing receivables with a specific valuation allowance [Member]
|
||
Impaired financing receivables [Abstract] | ||
Net Balance | 0 | 12,000 |
Unpaid Balance | 29,000 | 45,000 |
Specific Allowance | 29,000 | 33,000 |
Average Investment in Impaired Assets | $ 40,000 | $ 45,000 |
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Accrued Expenses and Other Liabilities | The following is a summary of the components of accrued expenses and other liabilities (in thousands):
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FAIR VALUE (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Asset Recorded at Fair Value on Recurring Basis | As of June 30, 2013, the fair values of the Company’s assets recorded at fair value on a recurring basis were as follows (in thousands):
As of September 30, 2012, the fair values of the Company’s assets recorded at fair value on a recurring basis were as follows (in thousands):
|
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Additional Information about Assets Measured at Fair Value on Recurring Basis for which the Company Has Utilized Level 3 Inputs to Determine Fair Value | The following table presents additional information about assets which were measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value during the nine months ended June 30, 2013 (in thousands):
The following table presents additional information about assets which were measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value during fiscal 2012 (in thousands):
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Quantitative Inputs and Assumptions in Determining the Fair Value of Items Categorized in Level 3 | The following table presents the Company's quantitative inputs and assumptions used in determining the fair value of items categorized in Level 3 (in thousands, except percentages):
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Changes in Carrying Value of Assets and Liabilities Measured at Fair Value on Non-recurring Basis | The Company recognized the following changes in carrying value of the assets and liabilities measured at fair value on a non-recurring basis, as follows (in thousands):
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Fair Value of Financial Instruments | The fair value of financial instruments required to be disclosed at fair value, excluding instruments valued on a recurring basis, is as follows (in thousands):
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INVESTMENT SECURITIES (Narrative) (Details) (USD $)
|
3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2012
The Bancorp, Inc. [Member]
|
Jun. 30, 2012
The Bancorp, Inc. [Member]
|
Jun. 30, 2013
Equity Securities [Member]
Resource Capital Corp [Member]
|
Jun. 30, 2013
Equity Securities [Member]
Resource Real Estate Diversified Income Fund [Member]
|
Jun. 30, 2013
Equity Securities [Member]
The Bancorp, Inc. [Member]
|
Jun. 30, 2013
Equity Securities [Member]
Common Stock [Member]
Resource Capital Corp [Member]
|
Jun. 30, 2013
CDO Securities [Member]
Issuer
|
Sep. 30, 2012
CDO Securities [Member]
Issuer
|
Jun. 30, 2013
CDO Securities [Member]
Apidos CLO II [Member]
|
|
Equity Securities [Abstract] | |||||||||||||
Number of shares held (in shares) | 10,000 | 18,972 | 2,800,000 | ||||||||||
Options to acquire an additional number of shares (in shares) | 2,166 | ||||||||||||
Options exercise price (in dollars per share) | $ 15.00 | ||||||||||||
Payments to Acquire Investments | $ 2,845,000 | $ 600,000 | $ 100,000 | ||||||||||
CDO securities [Abstract] | |||||||||||||
Number of CDO issuers that represent the retained equity interest | 7 | 4 | |||||||||||
Minimum investment requirement | 2,000,000 | ||||||||||||
Trading Securities [Abstract] | |||||||||||||
Unrealized gain on trading securities | 666,000 | 175,000 | |||||||||||
Realized gain on trading securities | 1,199,000 | 2,023,000 | 22,000 | ||||||||||
Trading Securities, Unrealized Holding Loss | (243,000) | ||||||||||||
Number of shares sold that were held in trust (in shares) | 33,509 | ||||||||||||
Other-than-Temporary Impairment Losses [Abstract] | |||||||||||||
Other-than-temporary impairment on investments | $ 0 | $ 214,000 | $ 74,000 |
INVESTMENT SECURITIES (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of the Company's Investment Securities | Components of investment securities are as follows (in thousands):
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Pre-tax Unrealized Gains (Losses) Relating to the Company's Investments in Equity and Collateralized Debt Obligation Securities | Available-for-sale securities. The following table discloses the pre-tax unrealized gains (losses) relating to the Company’s investments in available-for-sale securities (in thousands):
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Unrealized Losses Along with the Related Fair Value, Aggregated by the Length of Time the Investments were in a Continuous Unrealized Loss Position | Unrealized losses, along with the related fair values and aggregated by the length of time the investments were in a continuous unrealized loss position, are as follows (in thousands, except number of securities):
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BORROWINGS (Covenants) (Details)
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9 Months Ended |
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |
Expiration of carveout over repayment term | 10 years |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Relationship with Brandywine Construction & Management, Inc. (“BCMI”)) (Details) (Brandywine Construction & Management, Inc. (BCMI) [Member], USD $)
In Thousands, unless otherwise specified |
1 Months Ended | |
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Nov. 30, 2012
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Jun. 30, 2013
Real_Estate_Investment_Trust
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Brandywine Construction & Management, Inc. (BCMI) [Member]
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Related Party Transaction [Line Items] | ||
Number of entities managed by related parties | 1 | |
Costs and Expenses, Related Party | $ 95 |
BORROWINGS (Debt Repayments) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Sep. 30, 2012
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Debt Disclosure [Abstract] | ||
2014 | $ 304 | |
2015 | 11,775 | |
2016 | 217 | |
2017 | 232 | |
2018 | 248 | |
Thereafter | 9,286 | |
Total | $ 22,062 | $ 23,020 |
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
9 Months Ended | |||||
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Jun. 30, 2013
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Jun. 30, 2012
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Cash (paid) received: | ||||||
Interest | $ (1,370) | $ (3,246) | ||||
Income tax payments | (977) | (1,200) | ||||
Refund of income taxes | 84 | 0 | ||||
Dividends declared per common share | $ 0.09 | $ 0.09 | ||||
Non-cash activities: | ||||||
Repurchases of common stock from employees in exchange for the payment of income taxes and option exercises | 58 | 1,187 | ||||
Issuance of treasury stock for the Company's investment savings plan | 256 | 457 | ||||
Common stock issued to former director in exchange for vested director units | 0 | 135 | ||||
Effects from the deconsolidation of entities: | ||||||
Restricted cash | 0 | [1] | 20,282 | [1] | ||
Receivables from managed entities and related parties, net | 0 | [1] | (2,696) | [1] | ||
Receivables | 0 | [1] | 954 | [1] | ||
Investments in commercial finance, net | 0 | [1] | 199,955 | [1] | ||
Investments in unconsolidated entities | 0 | [1] | 5,225 | [1] | ||
Property and equipment, net | 0 | [1] | 3,754 | [1] | ||
Deferred tax assets, net | 0 | [1] | 4,558 | [1] | ||
Goodwill | 0 | 7,969 | [1] | |||
Other assets | 0 | [1] | 6,826 | [1] | ||
Accrued expense and other liabilities | 0 | [1] | (11,146) | [1] | ||
Payables to managed entities and related parties | 0 | [1] | (98) | [1] | ||
Borrowings | 0 | [1] | (202,481) | [1] | ||
Accumulated other comprehensive loss | 0 | [1] | 255 | [1] | ||
Noncontrolling interests | $ 0 | [1] | $ (37,668) | [1] | ||
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Receivables and Payables from Related Party) (Details) (USD $)
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Jun. 30, 2013
Entity
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Sep. 30, 2012
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Related Party Transaction [Line Items] | ||||||||
Receivables from managed entities and related parties | $ 32,433,000 | $ 41,051,000 | ||||||
Payables to managed entities and related parties | 3,251,000 | 4,380,000 | ||||||
Number of investment entities that are not expected to be collectible | 3 | |||||||
Receivables from Managed Entities - Commercial Finance [Member]
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Related Party Transaction [Line Items] | ||||||||
Specific Allowance | 25,078,000 | |||||||
Real Estate Investment Entities [Member]
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Related Party Transaction [Line Items] | ||||||||
Specific Allowance | 2,502,000 | |||||||
Payable to real estate investment entities, self insurance | 3,000,000 | |||||||
Financing receivables with a specific valuation allowance [Member] | Receivables from Managed Entities - Commercial Finance [Member]
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Related Party Transaction [Line Items] | ||||||||
Specific Allowance | 33,931,000 | 25,078,000 | ||||||
Financing receivables with a specific valuation allowance [Member] | Real Estate Investment Entities [Member]
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Related Party Transaction [Line Items] | ||||||||
Specific Allowance | 2,502,000 | |||||||
Real Estate Investment Entities [Member]
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Related Party Transaction [Line Items] | ||||||||
Receivables from managed entities and related parties | 20,902,000 | 18,247,000 | ||||||
Payables to managed entities and related parties | 3,025,000 | [1] | 3,900,000 | [1] | ||||
Commercial Finance Investment Entities [Member]
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Related Party Transaction [Line Items] | ||||||||
Receivables from managed entities and related parties | 7,830,000 | [2] | 13,904,000 | [2] | ||||
Financial Fund Management Investment Entities [Member]
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Related Party Transaction [Line Items] | ||||||||
Receivables from managed entities and related parties | 1,476,000 | 2,193,000 | ||||||
Resource Capital Corp [Member]
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Related Party Transaction [Line Items] | ||||||||
Receivables from managed entities and related parties | 2,087,000 | 6,555,000 | ||||||
Other [Member]
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Related Party Transaction [Line Items] | ||||||||
Receivables from managed entities and related parties | 138,000 | 152,000 | ||||||
Payables to managed entities and related parties | $ 226,000 | $ 480,000 | ||||||
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OPERATING SEGMENTS
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING SEGMENTS | OPERATING SEGMENTS The Company’s operations include three reportable operating segments that reflect the way the Company manages its operations and makes business decisions. In addition to its reporting operating segments, certain other activities are reported in the “all other” category. Summarized operating segment data are as follows (in thousands):
Geographic information. There were no revenues generated from the Company's European operations during the three and nine months ended June 30, 2013 and 2012. Included in segment assets as of June 30, 2013 and 2012 were $590,000 and $559,000, respectively, of European assets. Major customer. During the three and nine months ended June 30, 2013, the total of management, incentive and other fees that the Company received from RSO were 19% and 23%, respectively. RSO fees represented 30% and 24% for the three and nine months ended June 30, 2012, respectively, of the Company's total consolidated revenues. These fees have been reported as revenues by each of the Company’s operating segments. |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Parenthetical (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Statement of Other Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on investment securities available-for-sale, tax | $ (489) | $ (11) | $ (756) | $ 327 |
Reclassification for losses realized, tax | 0 | 0 | 83 | 28 |
Minimum pension liability - reclassification for losses realized, tax | 11 | 36 | 106 | 107 |
Unrealized gain (loss) on hedging contracts, tax | 1 | 5 | 12 | 2 |
Deconsolidation of LEAF- unrealized loss on hedging contracts, tax | $ 0 | $ 0 | $ 0 | $ 174 |
SUPPLEMENTAL CASH FLOW INFORMATION
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Supplemental disclosure of cash flow information (in thousands):
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Advances to Affiliated Real Estate Limited Partnership) (Details) (Affiliated Real Estate Limited Partnership [Member], USD $)
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3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Sep. 30, 2012
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Affiliated Real Estate Limited Partnership [Member]
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Related Party Transaction [Line Items] | |||||
Maximum revolving note, related party | $ 3,000,000 | $ 3,000,000 | |||
Interest rate description | bearing interest at the prime rate | ||||
Notes receivable, related party | 2,600,000 | 2,600,000 | 2,400,000 | ||
Other revenues from transactions with related party | $ 18,000 | $ 17,000 | $ 54,000 | $ 49,000 |
NATURE OF OPERATIONS
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9 Months Ended |
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Jun. 30, 2013
|
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Resource America, Inc. (the "Company") (NASDAQ: REXI) is a specialized asset management company that uses industry specific expertise to evaluate, originate, service and manage investment opportunities through its real estate, financial fund management, and commercial finance operating segments. As a specialized asset manager, the Company seeks to develop investment funds for outside investors for which the Company provides asset management services, typically under long-term management and operating arrangements either through a contract with, or as the manager or general partner of, the sponsored fund. The Company limits its investment funds to investment areas where it owns existing operating companies or has specific expertise. The Company manages assets on behalf of institutional and individual investors and Resource Capital Corp. (“RSO”) (NYSE: RSO), a diversified real estate finance company that qualifies as a real estate investment trust (“REIT”). The consolidated financial statements and the information and tables contained in the notes to the consolidated financial statements are unaudited. However, in the opinion of management, these interim financial statements include all adjustments necessary to fairly present the results of the interim periods presented. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended September 30, 2012. The results of operations for the three and nine months ended June 30, 2013 may not necessarily be indicative of the results of operations for the full year ending September 30, 2013. |
OPERATING SEGMENTS (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Operating Segment Data | Summarized operating segment data are as follows (in thousands):
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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | Supplemental disclosure of cash flow information (in thousands):
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INVESTMENTS IN UNCONSOLIDATED ENTITIES AND LOAN MANAGER (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Investments in Unconsolidated Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Company's Investments in Investment Vehicles, Including the Range of Interests it Owns | The following table details the Company’s investments in these vehicles, including the range of ownership interests owned (in thousands, except percentages):
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Summarized Financial Information of Equity Method Investment | Summarized operating data for CVC Credit Partners is presented below for 2013 (in thousands):
Summarized operating data for CVC Credit Partners is presented below for 2012 (in thousands):
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Purchases of related party trading securities) (Details) (Alesco Financial Inc [Member], USD $)
|
9 Months Ended |
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Jun. 30, 2013
|
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Alesco Financial Inc [Member]
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Related Party Transaction [Line Items] | |
Notional value of notes purchased | $ 5,900,000 |
Trading securities sold | 239,000 |
Gain on sale of trading securities | $ 121,000 |
EARNINGS (LOSS) PER SHARE (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Components Used in Computation of Basic and Diluted EPS | The following table presents a reconciliation of the shares used in the computation of Basic EPS and Diluted EPS (in thousands):
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Fees From Unconsolidated Investment Entities) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Commercial Finance, Four Investment Entities [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Amount waived of the fund management fees from commercial finance investment entities | $ 483 | $ 1,100 | $ 1,900 | $ 3,800 | ||||||||
Real Estate Investment Entities [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Fees from unconsolidated investment entities | 5,366 | [1] | 4,405 | [1] | 13,635 | [1] | 12,862 | [1] | ||||
Discounts recorded | 37 | 57 | 651 | 185 | ||||||||
Financial Fund Management Investment Entities [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Fees from unconsolidated investment entities | 786 | 765 | 2,294 | 2,468 | ||||||||
Commercial Finance Investment Entities [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Fees from unconsolidated investment entities | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | ||||
Resource Capital Corp [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Management, incentive and other fees | 2,779 | 4,181 | 10,374 | 11,521 | ||||||||
Dividends paid | 557 | 510 | 1,647 | 1,646 | ||||||||
Reimbursement of costs and expenses | 926 | 1,134 | 3,300 | 2,731 | ||||||||
CVC Credit Partners, L.P. [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Reimbursement of costs and expenses | 307 | 0 | 900 | 0 | ||||||||
Resource Real Estate Opportunity REIT Inc [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Dividends paid | 24 | 14 | 57 | 14 | ||||||||
Reimbursement of costs and expenses | 197 | 150 | 476 | 785 | ||||||||
LEAF [Member]
|
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Related Party Transaction [Line Items] | ||||||||||||
Reimbursement of costs and expenses | 58 | 84 | 174 | 226 | ||||||||
Payment for sub-servicing the commercial finance investment partnerships | (243) | (585) | (928) | (1,696) | ||||||||
Payment for rent and related expenses | (200) | (193) | (596) | (497) | ||||||||
1845 Walnut Associates Ltd. [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
1845 Walnut Associates Ltd. – payment of rent and operating expenses | (33) | (155) | (344) | (469) | ||||||||
Property Management Fee Revenue | 75 | 0 | 117 | 0 | ||||||||
Brandywine Construction & Management, Inc. (BCMI) [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Payments for Property Management | (70) | (69) | (167) | (167) | ||||||||
Atlas Energy, L.P. [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Reimbursement of costs and expenses | 53 | 160 | 338 | 478 | ||||||||
Ledgewood P.C. [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ledgewood P.C. – payment for legal services | (43) | (239) | (157) | (508) | ||||||||
Graphic Images, LLC [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Graphic Images, LLC – payment for printing services | (15) | (34) | (66) | (136) | ||||||||
The Bancorp, Inc. [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Reimbursement of costs and expenses | 28 | 32 | 84 | 106 | ||||||||
9 Henmar LLC [Member]
|
||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
9 Henmar, LLC – payment of broker/consulting fees | $ (17) | $ (20) | $ (39) | $ (42) | ||||||||
|
INVESTMENTS IN UNCONSOLIDATED ENTITIES AND LOAN MANAGER Summarized operating data (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Schedule of Equity Method Investments [Line Items] | ||||
Portion of net (loss) income attributable to the Company | $ (117) | $ 273 | $ 2,345 | $ 501 |
CVC Credit Partners [Member]
|
||||
Schedule of Equity Method Investments [Line Items] | ||||
Management fee revenues | 15,841 | 5,105 | 32,809 | |
Costs and expenses | (17,285) | (4,522) | (29,870) | |
Net (loss) income | (1,444) | 583 | 2,939 | |
Portion of net (loss) income attributable to the Company | $ (477) | $ 192 | $ 970 |