VARIABLE INTEREST ENTITIES (Tables)

12 Months Ended

Dec. 31, 2013

Variable Interest Entity [Line Items]

Property and Equipment, Net

Property and equipment, net, consist of the following (in thousands):

	Estimated Useful Life	December 31,
		2013			2012
Leasehold improvements	1-10 years	$	4,575		$	2,410
Furniture and equipment	3-7 years	3,692			3,295
Computer equipment	3-5 years	3,093			2,908
		11,360			8,613
Accumulated depreciation and amortization		(5,516		)	(6,023		)
Property and equipment, net		$	5,844		$	2,590

Schedule of Variable Interest Entities

The following table presents the carrying amounts of the assets in the Company's consolidated balance sheets that relate to the Company's variable interests in identified nonconsolidated VIEs and the Company's maximum exposure to loss associated with these VIEs in which it holds variable interests at December 31, 2013 (in thousands):

	Receivables from Managed Entities and Related Parties, Net (1)		Investments		Maximum Exposure to Loss in Non-consolidated VIEs
RRE Opportunity REIT I	$	—	$	2,549	$	2,549
Ischus entities	204		—		204
Trapeza entities	—		777		777
	$	204	$	3,326	$	3,530

(1) Exclusive of expense reimbursements due to the Company.

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information are as follows (in thousands, per share data):

	Years Ended December 31,
	2013			2012			2011
Cash (paid) received:
Interest	$	(1,690	)	$	(1,980	)	$	(10,745	)
Income tax payments	(1,651		)	(1,367		)	(1,063		)
Refund of income taxes	99			83			691
Dividends paid per common share	$	0.13		$	0.12		$	0.12
Non-cash activities:
Repurchases of common stock from employees in exchange for the payment of income taxes and option exercises	$	136		$	1,719		$	121
Issuance of treasury stock for the Company's investment savings plan	341			485			856
Common stock issued to former director in exchange for vested director units	—			135			—
Leasehold improvements paid by the landlord	1,496			—			—
Effects from the deconsolidation of entities: (1)
Restricted cash	$	—		$	—		$	20,282
Receivables from managed entities and related parties, net	—			715			(3,411		)
Receivables	—			—			954
Investments in commercial finance, net	—			—			199,955
Investments in unconsolidated entities	—			(1,824		)	7,049
Property and equipment, net	—			—			3,754
Deferred tax assets, net	—			—			4,558
Goodwill	—			—			7,969
Other assets	—			20			6,806
Accrued expense and other liabilities	—			(938		)	(10,208		)
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 Apidos and LEAF during 2012 and 2011, respectively. 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.

Available-for-sale Securities

The following table summarizes RSO's sales of investment securities available-for-sale during the period indicated, (in thousands, except number of securities):

	Positions Sold	Par Amount Sold		Realized Gain (Loss)
December 31, 2013:
CMBS position	4	$	14,500	$	466
Corporate bond position	35	$	34,253	$	(474	)
December 31, 2012:
CMBS position	7	$	31,000	$	1,372
ABS position	5	$	4,255	$	147
Corporate bond position	1	$	2,250	$	27

The aggregate discount (premium) due to interest rate changes were as follows (in thousands):

	December 31,
	2013			2012
CMBS	$	6,583		$	8,011
ABS	$	2,394		$	3,145
Corporate bond	$	(68	)	$	(479	)

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 value 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):

	Less than 12 Months						More than 12 Months
	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses		Number of Securities
December 31, 2013:
CLO securities	$	2,312	$	(196	)	3	$	—	$	—	—
Equity securities	92		(8		)	1	—		—		—
Total	$	2,404	$	(204	)	4	$	—	$	—	—

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table sets forth the allocation of the purchase price (in thousands):

Assets acquired:
Cash and cash equivalents	$	1,233
Loans held for sale	15,021
Loans held for investment	2,071
Wholesale and correspondent relationships	600
Other assets	5,828
Total assets	24,753
Less: Liabilities assumed:
Borrowings	14,584
Other liabilities	2,165
Total liabilities	16,749
Gain on bargain purchase	391
Total cash purchase price	$	7,613

Summarization of Activity in the Allowance for Credit Losses for the Company's Financing Receivables

The following table summarizes the activity in the allowance for credit losses for all financing receivables (in thousands):

	Receivables from Managed Entities			Leases and Loans			Rent Receivables			Total
Year Ended December 31, 2013:
Balance, beginning of year	$	32,560		$	—		$	68		$	32,628
Provision for credit losses	4,324			(42		)	(17		)	4,265
Charge-offs	(675		)	—			(37		)	(712		)
Recoveries	20			42			—			62
Balance, end of year	$	36,229		$	—		$	14		$	36,243
Ending balance, individually evaluated for impairment	$	36,229		$	—		$	—		$	36,229
Ending balance, collectively evaluated for impairment	—			—			14			14
Balance, end of year	$	36,229		$	—		$	14		$	36,243
Year Ended December 31, 2012:
Balance, beginning of year	$	12,575		$	—		$	29		$	12,604
Provision for credit losses	20,125			(16		)	39			20,148
Charge-offs	(140		)	—			—			(140		)
Recoveries	—			16			—			16
Balance, end of year	$	32,560		$	—		$	68		$	32,628
Ending balance, individually evaluated for impairment	$	32,560		$	—		$	—		$	32,560
Ending balance, collectively evaluated for impairment	—			—			68			68
Balance, end of year	$	32,560		$	—		$	68		$	32,628

			Investments in Commercial Finance
	Receivables from Managed Entities		Leases and Loans			Future Payment Card Receivables			Rent Receivables		Total
Year Ended December 31, 2011:
Balance, beginning of year	$	2,486	$	80		$	130		$	—	$	2,696
Provision for credit losses	10,089		1,105			82			29		11,305
Charge-offs	—		(888		)	(260		)	—		(1,148		)
Recoveries	—		185			48			—		233
Deconsolidation of LEAF	—		(482		)	—			—		(482		)
Balance, end of year	$	12,575	$	—		$	—		$	29	$	12,604
Ending balance, individually evaluated for impairment	$	12,575	$	—		$	—		$	—	$	12,575
Ending balance, collectively evaluated for impairment	—		—			—			29		29
Balance, end of year	$	12,575	$	—		$	—		$	29	$	12,604

Aging of the Company's Past Due Financing Receivables, Gross of Allowances for Credit Losses

The following table is the aging of the Company’s past due financing receivables (presented gross of allowance for credit losses) as of December 31, 2013 (in thousands):

	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	$	—	$	—	$	44,355	$	44,355	$	48	$	44,403
Real estate investment entities	793		1,229		16,323		18,345		3,142		21,487
Financial fund management entities	35		3		29		67		1,071		1,138
Other	33		21		—		54		70		124
	861		1,253		60,707		62,821		4,331		67,152
Rent receivables - real estate	14		4		10		28		63		91
Total financing receivables	$	875	$	1,257	$	60,717	$	62,849	$	4,394	$	67,243

(1) Receivables are presented gross of an allowance for credit losses of $36.2 million related to the Company’s commercial finance investment entities.  The remaining receivables from managed entities and related parties have no related allowance for credit losses.

The following table is the aging of the Company’s past due financing receivables (presented gross of allowance for credit losses) as of December 31, 2012 (in thousands):

	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	$	—	$	—	$	40,112	$	40,112	$	118	$	40,230
Real estate investment entities	779		744		17,062		18,585		1,992		20,577
Financial fund management entities	6		—		47		53		2,140		2,193
Other	41		—		—		41		137		178
	826		744		57,221		58,791		4,387		63,178
Rent receivables - real estate	4		10		58		72		40		112
Total financing receivables	$	830	$	754	$	57,279	$	58,863	$	4,427	$	63,290

(1) Receivables are presented gross of an allowance for credit losses of $29.6 million, $2.5 million and $457,000 related to the Company’s commercial finance, real estate investment entities and financial fund management entities, respectively.  The remaining receivables from managed entities and related parties have no related allowance for credit losses.

Information about Company's Impaired Financing Receivables

The following table discloses information about the Company’s impaired financing receivables (in thousands):

	Net Balance		Unpaid Balance		Specific Allowance		Average Investment in Impaired Assets
As of December 31, 2013
Financing receivables with a specific valuation allowance:
Receivables from managed entities – commercial finance	$	2,690	$	38,919	$	36,229	$	38,649
Rent receivables – real estate	—		14		14		32
As of December 31, 2012
Financing receivables with a specific valuation allowance:
Receivables from managed entities – commercial finance	$	8,633	$	38,219	$	29,586	$	38,110
Receivables from managed entities – real estate	2,291		4,808		2,517		4,630
Receivables from managed entities – financial fund management	848		1,305		457		1,305
Rent receivables – real estate	—		68		68		40

Credit Facilities and Other Debt of the Company and Related Borrowings Outstanding

The credit facilities and other debt of the Company and related borrowings outstanding are as follows (in thousands): 

	As of December 31, 2013				December 31, 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
Mortgage debt			10,287		10,473
Other debt			332		262
Total borrowings outstanding			$	20,619	$	20,735

(1) The amount of the facility as shown has been reduced for outstanding letters of credit of $503,000 at December 31, 2013.

Company's Asset Recorded at Fair Value on Recurring Basis

As of December 31, 2013, the fair values of the Company’s assets recorded at fair value on a recurring basis were as follows (in thousands): 

	Level 1		Level 2		Level 3		Total
Assets:
Investment securities	$	432	$	—	$	7,407	$	7,839

As of December 31, 2012, the fair values of the Company’s assets recorded at fair value on a recurring basis were as follows (in thousands): 

	Level 1		Level 2		Level 3		Total
Assets:
Investment securities	$	209	$	—	$	10,367	$	10,576

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 2013 (in thousands):

	Investment Securities
Balance, beginning of year	$	10,367
Purchases	11,630
Income accreted	899
Payments and distributions received	(14,058		)
Sales	(6,286		)
Impairment recognized in earnings	(214		)
Gains on sales of trading securities	6,294
Unrealized holding losses on trading securities	(1,055		)
Change in unrealized losses included in accumulated other comprehensive loss	(170		)
Balance, end of year	$	7,407

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 2012 (in thousands):

	Investment Securities
Balance, beginning of year	$	2,981
Purchases	11,578
Income accreted	853
Payment and distributions received	(3,201		)
Sales	(4,159		)
Impairment recognized in earnings	(74		)
Gains on sales of trading securities	1,216
Unrealized holding gains on trading securities	1,272
Change in unrealized losses included in accumulated other comprehensive loss	(99		)
Balance, end of year	$	10,367

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):

	Level 1		Level 2		Level 3		Total
Year Ended December 31, 2013
Assets:
Receivables from managed entities – commercial finance and real estate	$	—	$	—	$	4,528	$	4,528
Liability:
Apidos contractual commitment	$	—	$	—	$	995	$	995
Year Ended December 31, 2012
Assets:
Receivables from managed entities – commercial finance and real estate	$	—	$	—	$	14,506	$	14,506
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
Total	$	—	$	727	$	50,804	$	51,531
Liability:
Apidos contractual commitment	$	—	$	—	$	589	$	589

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):

	December 31, 2013				December 31, 2012
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Receivables from managed entities	$	30,923	$	30,923	$	30,618	$	30,618
Borrowings:
Real estate debt	$	10,287	$	10,702	$	10,473	$	11,398
Senior Notes	10,000		12,619		10,000		11,728
Other debt	332		332		262		262
	$	20,619	$	23,653	$	20,735	$	23,388

Components of Income Taxes

The following table details the allocation of the Company's provision (benefit) for income taxes from continuing operations between RAI and RSO:

	Years Ended December 31,
	2013			2012		2011
RAI	$	1,657		$	13,117	(3,811		)
RSO, net of eliminations	(1,041		)	14,602		12,036
Total	$	616		$	27,719	$	8,225

The following table details the components of the Company's provision (benefit) for income taxes from continuing operations excluding RSO (in thousands): 

	Years Ended December 31,
	2013			2012			2011
Current tax provision:
Federal	$	746		$	—		$	(29	)
State	1,042			1,225			(328		)
Foreign	(156		)	56			(243		)
Total current tax provision (benefit)	1,632			1,281			(600		)
Deferred tax provision (benefit)
Federal	1,399			13,045			(2,650		)
State	(1,374		)	(1,209		)	(1,167		)
Foreign	—			—			606
Total deferred tax provision (benefit)	25			11,836			(3,211		)
Total income tax provision (benefit)	$	1,657		$	13,117		$	(3,811	)

Reconciliation Between Federal Statutory Income Tax Rate and Effective Income Tax Rate

A reconciliation between the federal statutory income tax rate and the Company's effective income tax rate excluding RSO is as follows:

	Years Ended December 31,
	2013		2012		2011
Statutory tax rate	35	%	35	%	35	%
State and local taxes, net of federal benefit	(10	)	3		9
Deconsolidation adjustment	—		(6	)	—
Return permanent adjustments	—		—		15
Foreign adjustment	(2	)	—		(5	)
Valuation allowance for deferred tax assets	—		3		—
Equity-based compensation expense (benefit)	1		—		(4	)
Dividend received deduction	(2	)	—		—
Other items	(5	)	—		2
	17	%	35	%	52	%

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets, net, excluding RSO are as follows (in thousands):

	December 31,
	2013			2012
Deferred tax assets related to:
Federal, foreign, state and local operating loss carryforwards	$	8,999		$	22,384
Capital loss carryforwards	450			1,316
Unrealized loss on investments	3,664			2,743
Investment in partnerships	2,572			—
Provision for credit losses	15,600			13,295
Accrued expenses	2,142			1,848
Employee equity compensation awards	1,005			814
Investments in real estate assets	—			136
Property and equipment basis differences	96			—
Gross deferred tax assets	34,528			42,536
Less:  valuation allowance	(4,584		)	(6,350		)
	29,944			36,186
Deferred tax liabilities related to:
Investments in partnership interests	—			(5,481		)
Deferred income	(2,175		)	(2,343		)
Property and equipment basis differences	—			(88		)
	(2,175		)	(7,912		)
Deferred tax assets, net	$	27,769		$	28,274

RSO [Member]

Variable Interest Entity [Line Items]

Schedule of Linked Transactions [Table Text Block]

The assets in the following table are accounted for as linked transactions. These linked repurchase agreements are not included in borrowings on RSO's consolidated balance sheets.

	December 31, 2013						December 31, 2012
	Borrowings Under Linked Transactions (1)		Value of Collateral Under Linked Transactions		Number of Positions as Collateral Under Linked Transactions	Weighted Average Interest Rate of Linked Transactions	Borrowings Under Linked Transactions (1)		Value of Collateral Under Linked Transactions		Number of Positions as Collateral Under Linked Transactions	Weighted Average Interest Rate of Linked Transactions
CMBS Term    Repurchase    Facility
Wells Fargo Bank	$	6,506	$	8,345	7	1.65%	$	12,180	$	14,586	6	1.40%
CRE Term    Repurchase    Facility
Wells Fargo Bank	—		—		—	—%	—		—		—	—%
Short-Term    Repurchase    Agreements -    CMBS
JP Morgan Securities, LLC	17,020		24,814		4	0.99%	4,703		7,221		1	1.01%
Wells Fargo Securities, LLC	21,969		30,803		9	1.19%	3,533		5,444		1	1.46%
Deutsche Bank Securities, LLC	18,599		29,861		9	1.43%	—		—		—	—%
Totals	$	64,094	$	93,823			$	20,416	$	27,251

Schedule of Short-term Debt [Table Text Block]

The following table sets forth certain information with respect to RSO's borrowings at December 31, 2013 and 2012 (dollars in thousands):

	December 31, 2013							December 31, 2012
	Outstanding Borrowings			Value of Collateral		Number of Positions as Collateral	Weighted Average Interest Rate	Outstanding Borrowings		Value of Collateral		Number of Positions as Collateral	Weighted Average Interest Rate
CMBS Term Repurchase Facility
Wells Fargo Bank (1)	$	47,601		$	56,949	44	1.38%	$	42,530	$	51,636	33	1.52%
CRE Term Repurchase Facilities
Wells Fargo Bank (2)	30,003			48,186		3	2.67%	58,834		85,390		8	2.89%
Deutsche Bank AG (3)	(300		)	—		—	—%	N/A		N/A		N/A	N/A
Short-Term Repurchase Agreements - CMBS
Wells Fargo Securities, LLC	—			—		—	—%	1,862		3,098		1	1.46%
Deutsche Bank Securities, LLC	—			—		—	—%	3,077		5,111		1	1.46%
Residential Mortgage Financing Agreements
New Century Bank	11,916			13,089		74	4.17%	N/A		N/A		N/A	N/A
ViewPoint Bank, NA	2,711			3,398		17	4.58%	N/A		N/A		N/A	N/A
Totals	$	91,931		$	121,622			$	106,303	$	145,235

(1) The Wells Fargo CMBS term facility borrowing includes $12,000 and $23,000, of deferred debt issuance costs as of December 31, 2013 and 2012, respectively.

(2) The Wells Fargo CRE term repurchase facility borrowing includes $732,000 and $348,000 of deferred debt issuance costs as of December 31, 2013 and 2012, respectively.

(3) The Deutsche Bank term repurchase facility has not been utilized through December 31, 2013 and the borrowing includes $300,000 of deferred debt issuance costs as of December 31, 2013.

Condensed Financial Statements

The following reflects the assets and liabilities and operations of RSO which was consolidated by the Company:

RSO Balance Sheets Detail (in thousands):
	December 31,
	2013			2012
ASSETS (1)
Cash and cash equivalents	$	262,270		$	85,278
Restricted cash	63,309			94,112
Subtotal- Cash and cash equivalents	325,579			179,390
Investment securities, trading	11,558			24,843
Investment securities available-for-sale, pledged as collateral, at fair value	162,608			195,200
Investment securities available-for-sale, at fair value	47,229			36,390
Subtotal - Investments, at fair value	221,395			256,433
Loans, pledged as collateral and net of allowances of $13.8 million and $17.7 million	1,369,526			1,793,780
Loans receivable–related party	6,966			8,324
Loans held for sale	21,916			48,894
Subtotal - Loans, before eliminations	1,398,408			1,850,998
Eliminations	(950		)	(1,570		)
Subtotal - Loans	1,397,458			1,849,428
Property available-for-sale	25,346			—
Investment in real estate	29,778			75,386
Investments in unconsolidated entities	74,438			45,413
Subtotal, Investments in real estate and unconsolidated entities, before eliminations	129,562			120,799
Eliminations	—			(93		)
Subtotal, Investments in real estate and unconsolidated entities	129,562			120,706
Line items included in "other assets":
Linked transactions, net at fair value	30,066			6,835
Interest receivable	8,965			7,763
Deferred tax asset	5,212			2,766
Principal paydown receivable	6,821			25,570
Intangible assets	11,822			13,192
Prepaid expenses	2,871			10,396
Other assets	10,726			4,109
Subtotal - Other assets, before eliminations	76,483			70,631
Eliminations	(16		)	(31		)
Subtotal - Other assets	76,467			70,600
Total assets (excluding eliminations)	$	2,151,427		$	2,478,251
Total assets (including eliminations)	$	2,150,461		$	2,476,557
LIABILITIES (2)
Borrowings	$	1,319,810		$	1,785,600
Eliminations	205			—
Subtotal Borrowings	1,320,015			1,785,600
Distribution payable	27,023			21,655
Accrued interest expense	1,693			2,918
Derivatives, at fair value	10,586			14,687
Accrued tax liability	1,629			13,641
Deferred tax liability	4,112			8,376
Accounts payable and other liabilities	12,650			18,029
Subtotal - Other liabilities, before eliminations	57,693			79,306
Eliminations	(2,446		)	(8,067		)
Subtotal - Other liabilities	55,247			71,239
Total liabilities (before eliminations)	$	1,377,503		$	1,864,906
Total liabilities (after eliminations)	$	1,375,262		$	1,856,839

RSO Balance Sheets Detail (in thousands):
	December 31,
	2013		2012
(1) Assets of consolidated RSO's VIEs included in the total assets above:
Restricted cash	$	61,372	$	90,108
Investments securities available-for-sale, pledged as collateral, at fair value	105,846		135,566
Loans held for sale	2,376		14,894
Loans, pledged as collateral and net of allowances of $8.8 million and $15.2 million	1,219,569		1,678,719
Interest receivable	5,627		5,986
Prepaid expenses	247		328
Principal receivable	6,821		25,570
Other assets	—		333
Total assets of consolidated VIEs	$	1,401,858	$	1,951,504
(2) Liabilities of consolidated RSO's VIEs included in the total liabilities above:
Borrowings	$	1,070,339	$	1,614,882
Accrued interest expense	918		2,666
Derivatives, at fair value	10,191		14,078
Accounts payable and other liabilities	1,604		698
Total liabilities of consolidated VIEs	$	1,083,052	$	1,632,324

The following table presents detail of noncontrolling interests attributable to RSO:

	December 31,
	2013			2012
Total stockholders' equity per RSO balance sheet	$	773,924		$	613,345
Eliminations	(30,560		)	(31,022		)
Noncontrolling interests attributable to RSO	$	743,364		$	582,323

RSO Income Statement Detail (in thousands):
	Years Ended December 31,
	2013			2012			2011
REVENUES
Interest income:
Loans	$	99,455		$	109,030		$	86,739
Securities	14,309			14,296			12,424
Interest income − other	4,212			10,004			10,711
Total interest income	117,976			133,330			109,874
Interest expense	61,010			42,792			32,186
Net interest income	56,966			90,538			77,688
Rental income	19,923			11,463			3,656
Dividend income	273			69			3,045
Equity in net earnings (losses) of unconsolidated subsidiaries	949			(2,709		)	112
Fee income	6,075			7,068			7,789
Net realized gain on sales of investment securities available-for-sale and loans	10,986			4,106			2,643
Net realized and unrealized (loss) gain on investment securities, trading	(324		)	12,435			837
Unrealized (loss) gain and net interest income on linked transactions, net	(3,841		)	728			216
Revenues from consolidated VIE - RSO	91,007			123,698			95,986
OPERATING EXPENSES
Management fees − related party	14,220			18,512			11,022
Equity compensation − related party	10,472			4,636			2,526
Rental operating expense	14,062			8,046			2,743
General and administrative	16,110			9,773			8,399
Depreciation and amortization	3,855			5,885			4,619
Income tax (benefit) expense	(1,041		)	14,602			12,036
Net impairment losses recognized in earnings	863			180			6,898
Provision for loan losses	3,020			16,818			13,896
Total operating expenses	61,561			78,452			62,139
Reclassification of income tax expense	1,041			(14,602		)	(12,036		)
Expenses of consolidated VIE - RSO	62,602			63,850			50,103
Adjusted operating income	28,405			59,848			45,883
OTHER REVENUE (EXPENSE)
Gain on consolidation	—			2,498			—
Gains on the extinguishment of debt	—			16,699			3,875
Gains on the sale of real estate	16,616			—			—
Other expenses	391			—			(6		)
Other income, net, from consolidated VIE - RSO	17,007			19,197			3,869
Income from continuing operations	45,412			79,045			49,752
Income tax provision - RSO	(1,041		)	14,602			12,036
NET INCOME	46,453			64,443			37,716
Net income allocated to preferred shares	(7,221		)	(1,244		)	—
NET INCOME ALLOCABLE TO RSO COMMON SHAREHOLDERS	$	39,232		$	63,199		$	37,716

RSO Cash Flow Detail (in thousands)
	Years Ended December 31,
	2013			2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	46,453		$	64,443		$	37,716
Items included in "Change in cash attributable to consolidated VIE - RSO":
Provision for loan losses	3,020			16,818			13,896
Depreciation of investments in real estate and other	1,946			1,838			729
Amortization of intangible assets	1,970			4,047			3,890
Amortization of term facilities	1,395			957			570
Accretion of net discounts on loans held for investment	(9,521		)	(17,817		)	(15,588		)
Accretion of net discounts on securities available-for-sale	(2,712		)	(3,177		)	(3,698		)
Amortization of discount on notes of securitizations	14,524			2,470			274
Amortization of debt issuance costs on notes of securitizations	7,426			4,700			3,341
Amortization of stock-based compensation	10,472			4,636			2,526
Amortization of terminated derivative instruments	339			227			227
Accretion of interest-only available-for-sales securities	(1,005		)	(719		)	—
Distribution accrued to preferred stockholders	(7,221		)	(1,244		)	—
Deferred income tax benefits	(6,710		)	2,329			(399		)
Purchase of mortgage loans held for sale	(60,514		)	—			—
Payments on mortgage loans held for sale	3			—			—
Proceeds from sale of mortgage loans held for sale	60,365			—			—
Purchase of securities, trading	(11,044		)	(8,348		)	(38,904		)
Principal payments on securities, trading	4,309			1,027			643
Proceeds from sales of securities, trading	19,696			33,579			18,131
Net realized and unrealized loss (gain) on investment securities, trading	324			(12,435		)	(837		)
Net realized gains on sales of investment securities available-for-sale and loans	(10,986		)	(4,106		)	(2,643		)
Gain on early extinguishment of debt	—			(16,699		)	(3,875		)
Gain on sale of real estate	(16,616		)	—			—
Net impairment losses recognized in earnings	855			180			6,898
Gain on consolidation	—			(2,498		)	—
Linked Transactions fair value adjustments	6,018			(168		)	—
Equity in net (earnings) losses of unconsolidated subsidiaries	(949		)	2,709			(112		)
Adjust for impact of imputed interest on VIE accounting	—			1,879			—
Changes in operating assets and liabilities, net of acquisitions
Decrease (increase) in restricted cash	8,445			(2,062		)	(5,628		)
(Increase) decrease in interest receivable, net of purchased interest	(1,108		)	987			(2,513		)
Decrease (increase) in principal paydowns receivable	18,749			(25,465		)	363
(Decrease) increase in management fee payable	(6,357		)	3,929			974
(Decrease) increase in security deposits	(337		)	25			80
(Decrease) increase in accounts payable and accrued liabilities	(9,106		)	7,573			15,370
(Decrease) increase in accrued interest expense	(1,445		)	(193		)	1,696
Decrease (increase) in other assets	7,259			(20,007		)	(520		)
Subtotal - consolidated VIE - RSO operating activity	21,484			(25,028		)	(5,109		)
Change in consolidated VIE - RSO cash for the period	(176,992		)	(42,162		)	(13,628		)
Subtotal - Change in cash attributable to consolidated VIE - RSO before eliminations	(155,508		)	(67,190		)	(18,737		)
Elimination of intercompany activity	(712		)	932			2,179
Subtotal - Change in cash attributable to consolidated VIE - RSO	(156,220		)	(66,258		)	(16,558		)
Non-cash incentive compensation to RAI	484			1,468			430
Elimination of intercompany activity	(484		)	(1,468		)	(430		)
Non-cash incentive compensation to RAI, after eliminations	—			—			—
Net cash provided by operating activities (excluding eliminations)	68,421			40,883			33,037

	Years Ended December 31,
	2013		2012		2011
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of loans	(725,657	)	(649,983	)	(970,309	)
Purchase of securities available-for-sale	(136,282	)	(119,779	)	(117,044	)
Subtotal - Purchase of loans and securities by consolidated VIE - RSO, before eliminations	(861,939	)	(769,762	)	(1,087,353	)
Eliminations	—		—		15,221
Subtotal - Purchase of loans and securities by consolidated VIE - RSO	(861,939	)	(769,762	)	(1,072,132	)
Principal payments received on loans	571,914		570,276		424,600
Proceeds from sale of loans	674,977		173,378		212,042
Principal payments on securities available-for-sale	52,812		47,284		11,810
Proceeds from sale of securities available-for-sale	11,893		28,652		13,747
Proceeds from sale of real estate held-for-sale	37,001		2,886		1,464
Subtotal - principal payments and proceeds from sales received by consolidated VIE - RSO, before eliminations	1,348,597		822,476		663,663
Decrease in restricted cash	22,248		50,756		31,014
Items included in "Other -VIE, investing activity":
Acquisition of Primary Capital Advisors, LC	(7,613	)	—		—
Investment in unconsolidated entity	(28,034	)	474		(4,762	)
Equity contribution to VIE	—		(710	)	—
Minority interest equity	5,531		114		—
Improvement of real estate held-for-sale	(404	)	(138	)	—
Purchase of investments in real estate	—		—		(19,299	)
Distributions from investments in real estate	1,094		1,152		—
Improvements in investments in real estate	(365	)	(3,878	)	—
Purchase of intangible asset	—		—		(21,213	)
Investment in loans - related parties	(1,241	)	—		(10,000	)
Principal payments received on loans – related parties	1,685		1,251		10,430
Purchase of furniture and fixtures	(133	)	—		—
Acquisition of property and equipment	(373	)	—		—
Investments in real estate assets	—		—		(689	)
Subtotal - Other consolidated VIE - investing activity, before eliminations	(29,853	)	(1,735	)	(45,533	)
Eliminations	(593	)	(47	)	(262	)
Subtotal - Other consolidated VIE - investing activity	(30,446	)	(1,782	)	(45,795	)
Net cash provided by (used in) investing activities (excluding eliminations)	479,053		101,735		(438,209	)

	Years Ended December 31,
	2013			2012			2011
CASH FLOWS FROM FINANCING ACTIVITIES:
Items included in "Net borrowings (repayments) of debt by consolidated VIE - RSO"
Proceeds from borrowings:
Repurchase agreements	15,226			71,121			55,852
Collateralized debt obligations	—			—			323,244
CRE Securitization	260,840			—			—
6.0% Convertible senior notes	115,000			—			—
Mortgage payable	—			—			13,600
Payments on borrowings:
Collateralized debt obligations	(797,573		)	(243,539		)	(21,428		)
Mortgage payable	(13,600		)	—			—
Repurchase of issued bonds	—			—			(6,125		)
Retirement of debt	—			(20,365		)	—
Subtotal - net (repayments) borrowings of debt by consolidated VIE - RSO	(420,107		)	(192,783		)	365,143
Distributions paid on common stock	(93,458		)	(74,050		)	(69,869		)
Elimination of dividends paid to RAI	2,203			2,174			2,454
Distribution paid on common stock, after elimination	(91,255		)	(71,876		)	(67,415		)
Net proceeds from issuances of common stock (net of offering costs of $3,837, $2,165 and $1,263)	114,454			55,502			46,347
Net proceeds from dividend reinvestment and stock purchase plan (net of offering costs of $0, $19 and $11)	19,211			73,044			83,564
Proceeds from issuance of 8.5% Series A redeemable preferred shares (net of offering costs of $3, $781 and $0)	112			16,411			—
Proceeds from issuance of 8.25% Series B redeemable preferred shares (net of offering costs of $1,670, $1,201 and $0)	56,214			26,099			—
Subtotal - net proceeds from issuance of stock by consolidated VIE	189,991			171,056			129,911
Payment of debt issuance costs	(9,786		)	(586		)	(6,385		)
Payment of equity to third party sub-note holders	(30,709		)	(3,480		)	—
Distributions paid on preferred stock	(6,413		)	(613		)	—
Subtotal - Other consolidated VIE -RSO financing activity, before elimination	(46,908		)	(4,679		)	(6,385		)
Elimination	205			—			—
Subtotal - Other consolidated VIE -RSO financing activity after elimination	(46,703		)	$	(4,679	)	$	(6,385	)
Net cash (used in) provided by financing activities (excluding eliminations)	$	(370,482	)	$	(100,456	)	$	418,800
NET INCREASE IN CASH AND CASH EQUIVALENTS	176,992			42,162			13,628
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	85,278			43,116			29,488
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	262,270		$	85,278		$	43,116
SUPPLEMENTAL DISCLOSURE:
Interest expense paid in cash	$	41,453		$	41,369		$	32,596
Income taxes paid in cash	$	10,710		$	22,758		$	—

Property and Equipment, Net

RSO depreciates real property using the straight-line method over the estimated useful lives of the assets as follows:

Category	Term
Building	25 - 40 years
Site improvements	Lesser of the remaining life of building or useful lives

Schedule of Variable Interest Entities

The following table shows the classification, carrying value and maximum exposure to loss with respect to RSO’s unconsolidated VIEs as of December 31, 2013 (in thousands):

	Unconsolidated Variable Interest Entities
	LEAF Commercial Capital, Inc.		Unsecured Junior Subordinated Debentures			Resource Capital Asset Management CDOs		RRE VIP Borrower, LLC		Värde Investment Partners, LP		Life Care Funding		CVC Global Opps Fund		Harvest CLO VII		Total		Maximum Exposure to Loss (1)
Investment in unconsolidated entities	$	41,016	$	1,548		$	—	$	—	$	674	$	1,530	$	16,177	$	5,369	$	66,314	66,314
Intangible assets	—		—			11,233		—		—		—		—		—		11,233		11,233
Total assets	41,016		1,548			11,233		—		674		1,530		16,177		5,369		77,547
Borrowings	—		51,005			—		—		—		—		—		—		51,005		N/A
Total liabilities	—		51,005			—		—		—		—		—		—		51,005		N/A
Net asset (liability)	$	41,016	$	(49,457	)	11,233		—		674		$	1,530	$	16,177	$	5,369	$	26,542	N/A

(1) RSO's maximum exposure to loss at December 31, 2013 does not exceed the carrying amount of its investment, subject to the LRF 3's contingent obligation as described above.

The following table shows the classification and carrying value of assets and liabilities of consolidated VIEs as of December 31, 2013 (in thousands):

	Apidos I			Apidos III		Apidos Cinco		Apidos VIII		Whitney CLO I		RREF 2006		RREF 2007		CRE Notes 2013		Total
ASSETS
Restricted cash (1)	$	12,432		$	9,477	$	30,009	$	849	$	1,009	$	20	$	430	$	7,146	$	61,372
Investment securities available-for-sale, pledged    as collateral, at fair value	8,187			5,394		15,537		—		—		10,178		66,550		—		105,846
Loans, pledged as collateral	82,573			129,435		299,923		—		71		158,938		250,155		298,474		1,219,569
Loans held for sale	536			651		1,189		—		—		—		—		—		2,376
Interest receivable	(153		)	639		1,034		—		7		1,628		2,068		404		5,627
Prepaid assets	35			26		43		—		—		83		60		—		247
Principal paydown receivable	—			—		1		—		—		—		6,820		—		6,821
Total assets (2)	$	103,610		$	145,622	$	347,736	$	849	$	1,087	$	170,847	$	326,083	$	306,024	$	1,401,858
LIABILITIES
Borrowings	$	87,131		$	133,209	$	321,147	$	—	$	440	$	94,004	$	177,837	$	256,571	$	1,070,339
Accrued interest expense	269			62		313		—		—		44		113		117		918
Derivatives, at fair value	—			—		—		—		—		1,186		9,005		—		10,191
Accounts payable and    other liabilities	162			19		25		973		394		30		1		—		1,604
Total liabilities	$	87,562		$	133,290	$	321,485	$	973	$	834	$	95,264	$	186,956	$	256,688	$	1,083,052

(1) Includes $35.1 million available for reinvestment in certain of the securitizations.

(2) Assets of each of the consolidated VIEs may only be used to settle the obligations of each respective VIE.

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information (in thousands):

	Years Ended
	December 31,
	2013		2012			2011
Non-cash investing activities include the following:
Contribution of lease receivables and other assets	$	—	$	—		$	117,840
Conversion of equity in LRF 3 to preferred stock and warrants	$	—	$	—		$	(21,000	)
Acquisition of real estate investments	$	—	$	(21,661	)	$	(33,073	)
Conversion of loans to investment in real estate	$	—	$	21,661		$	34,550
Conversion of PIK interest in securities available-for-sale	$	—	$	—		$	2,364
Net purchase of loans on warehouse line	$	—	$	—		$	(52,735	)
Acquisition of loans, pledged as collateral	$	—	$	(230,152	)	$	—
Non-cash financing activities include the following:
Distributions on common stock declared but not paid	$	25,536	$	21,024		$	19,979
Distribution on preferred stock declared but not paid	$	2,159	$	1,244		$	—
Issuance of restricted stock	$	823	$	2,189		$	1,203
Contribution of equipment-backed securitized notes and other liability	$	—	$	—		$	(96,840	)
Subscription receivable	$	—	$	1,248		$	—
Assumption of collateralized debt obligations	$	—	$	206,408		$	—
Acquisition of loans on warehouse line	$	—	$	—		$	52,735

Investment Trading Securities at Fair Value

The following table summarizes RSO's structured notes and residential mortgage-backed securities (“RMBS”) which are classified as investment securities, trading and carried at fair value (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
December 31, 2013
Structured notes	$	8,057	$	4,050	$	(1,000	)	$	11,107
RMBS	1,919		—		(1,468		)	451
Total	$	9,976	$	4,050	$	(2,468	)	$	11,558
December 31, 2012
Structured notes	$	9,413	$	10,894	$	(1,028	)	$	19,279
RMBS	6,047		858		(1,341		)	5,564
Total	$	15,460	$	11,752	$	(2,369	)	$	24,843

Available-for-sale Securities

The following table summarizes RSO's investment securities, including those pledged as collateral and classified as available-for-sale, which are carried at fair value (in thousands):

	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value
December 31, 2013:
CMBS	$	185,178	$	7,570	$	(12,030	)	180,718
ABS	25,406		1,644		(394		)	26,656
Corporate Bonds	2,517		16		(70		)	2,463
Total	$	213,101	$	9,230	$	(12,494	)	$	209,837
December 31, 2012:
CMBS	$	182,828	$	4,626	$	(16,639	)	$	170,815
ABS	25,885		1,700		(1,115		)	26,470
Corporate Bonds	34,361		111		(190		)	34,282
Other asset-backed	—		23		—			23
Total	$	243,074	$	6,460	$	(17,944	)	$	231,590

(1) As of December 31, 2013 and 2012, $162.6 million and $195.2 million, respectively, of securities were pledged as collateral security under related financings.

Estimated maturities of available for sale securities

The following table summarizes the estimated maturities of RSO’s CMBS, ABS and corporate bonds according to their estimated weighted average life classifications (in thousands, except percentages):

Weighted Average Life	Fair Value			Amortized Cost		Weighted Average Coupon
December 31, 2013:
Less than one year	$	39,256	(1)	$	40,931	5.25	%
Greater than one year and less than five years	139,700			141,760		4.69	%
Greater than five years and less than ten years	26,526			25,707		1.10	%
Greater than ten years	4,355			4,703		4.03	%
Total	$	209,837		$	213,101	4.32	%
December 31, 2012:
Less than one year	$	42,618	(1)	$	46,522	4.09	%
Greater than one year and less than five years	122,509			131,076		4.55	%
Greater than five years and less than ten years	61,780			60,801		3.31	%
Greater than ten years	4,683			4,675		4.03	%
Total	$	231,590		$	243,074	4.12	%

(1) RSO expects that the maturity date of these CMBS will either be extended or the CMBS will be paid in full.

Unrealized Losses Along with the Related Fair Value, Aggregated by the Length of Time the Investments were in a Continuous Unrealized Loss Position

The following table shows the fair value, gross unrealized losses and number of securities aggregated by investment category and length of time, of those individual investment securities available-for-sale that have been in a continuous unrealized loss position during the periods specified (in thousands, except number of securities):

	Less than 12 Months						More than 12 Months						Total
	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities
December 31, 2013:
CMBS	$	52,012	$	(7,496	)	34	$	14,159	$	(4,534	)	10	$	66,171	$	(12,030	)	44
ABS	143		(1		)	1	6,692		(393		)	9	6,835		(394		)	10
Corporate Bonds	865		(70		)	1	—		—			—	865		(70		)	1
Total temporarily impaired securities	$	53,020	$	(7,567	)	36	$	20,851	$	(4,927	)	19	$	73,871	$	(12,494	)	55
December 31, 2012:
CMBS	$	25,803	$	(442	)	22	$	38,734	$	(16,197	)	19	$	64,537	$	(16,639	)	41
ABS	—		—			—	5,961		(1,115		)	9	5,961		(1,115		)	9
Corporate Bonds	19,445		(190		)	12	—		—			—	19,445		(190		)	12
Total temporarily impaired securities	$	45,248	$	(632	)	34	$	44,695	$	(17,312	)	28	$	89,943	$	(17,944	)	62

Investments in real estate

The table below summarizes RSO's investments in real estate (in thousands, except number of properties):

	As of December 31, 2013				As of December 31, 2012
	Book Value			Number of Properties	Book Value			Number of Properties
Multi-family property	$	22,107		1	$	42,179		2
Office property	10,273			1	10,149			1
Hotel property	—			—	25,608			1
Subtotal	32,380				77,936
Less:  Accumulated depreciation	(2,602		)		(2,550		)
Investments in real estate	$	29,778			$	75,386

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table is a summary of the aggregate estimated fair value of the assets and liabilities acquired on the respective date of acquisition during the year ended December 31, 2012 (in thousands):

	December 31,
Description	2012
Assets acquired:
Investments in real estate	$	25,500
Other assets	(89		)
Total assets acquired	25,411
Liabilities assumed:
Accounts payable and other liabilities	3,750
Total liabilities assumed	3,750
Estimated fair value of net assets acquired	$	21,661

Schedule of Receivables with Imputed Interest

The following is a summary of RSO’s loans (in thousands):

Loan Description	Principal			Unamortized (Discount) Premium (1)			Carrying Value (2)
December 31, 2013:
Commercial real estate loans:
Whole loans	$	749,083		$	(3,294	)	$	745,789
B notes	16,288			(83		)	16,205
Mezzanine loans	64,417			(100		)	64,317
Total commercial real estate loans	829,788			(3,477		)	826,311
Bank loans (3)	555,806			(4,033		)	551,773
Middle-market loans	10,250			—			10,250
Residential mortgage loans (4)	16,915			—			16,915
Subtotal loans before allowances	1,412,759			(7,510		)	1,405,249
Allowance for loan loss	(13,807		)	—			(13,807		)
Total	$	1,398,952		$	(7,510	)	$	1,391,442
December 31, 2012:
Commercial real estate loans:
Whole loans (5)	$	569,829		$	(1,891	)	$	567,938
B notes	16,441			(114		)	16,327
Mezzanine loans	82,992			(206		)	82,786
Total commercial real estate loans	669,262			(2,211		)	667,051
Bank loans (3)	1,218,563			(25,249		)	1,193,314
Subtotal loans before allowances	1,887,825			(27,460		)	1,860,365
Allowance for loan loss	(17,691		)	—			(17,691		)
Total	$	1,870,134		$	(27,460	)	$	1,842,674

(1) Amounts include deferred amendment fees of $216,000 and $450,000 and deferred upfront fees of $141,000 and $334,000 being amortized over the life of the bank loans as of December 31, 2013 and 2012, respectively.  Amounts include loan origination fees of $3.3 million and $1.9 million and loan extension fees of $73,000 and $214,000 being amortized over the life of the commercial real estate loans as of December 31, 2013 and 2012, respectively.

(2) Substantially all loans are pledged as collateral under various borrowings at December 31, 2013 and 2012, respectively.

(3) Amounts include $6.9 million and $14.9 million of bank loans held for sale at December 31, 2013 and 2012, respectively.

(4) Amount includes $15.0 million of residential mortgage loans held for sale at December 31, 2013.

(5) Amount includes $34.0 million from two whole loans which are classified as loans held for sale at December 31, 2012.

Summary of the weighted average life of bank loans at amortized cost

The following is a summary of the weighted average life of RSO’s bank loans, at amortized cost (in thousands):

	December 31,
	2013		2012
Less than one year	$	36,985	$	10,028
Greater than one year and less than five years	369,624		821,568
Five years or greater	145,164		361,718
	$	551,773	$	1,193,314

Summary of the commercial real estate loans

	December 31,
	2013		2012
Less than one year	$	36,985	$	10,028
Greater than one year and less than five years	369,624		821,568
Five years or greater	145,164		361,718
	$	551,773	$	1,193,314

The following is a summary of RSO’s commercial real estate loans held for investment (in thousands):

Description	Quantity	Amortized Cost		Contracted Interest Rates	Maturity Dates(3)
December 31, 2013:
Whole loans, floating rate (1) (4) (5)	52	$	745,789	LIBOR plus 2.68% to LIBOR plus 12.14%	March 2014 to February 2019
B notes, fixed rate	1	16,205		8.68%	April 2016
Mezzanine loans, floating rate	1	12,455		LIBOR plus 13.53%	April 2016
Mezzanine loans, fixed rate (7)	3	51,862		0.50% to 18.72%	September 2014 to September 2019
Total (2)	57	$	826,311
December 31, 2012:
Whole loans, floating rate (1) (4) (6)	37	$	567,938	LIBOR plus 2.50% to LIBOR plus 5.50%	June 2013 to February 2019
B notes, fixed rate	1	16,327		8.68%	April 2016
Mezzanine loans, floating rate	2	15,845		LIBOR plus 2.50% to LIBOR plus 7.45%	August 2013 to December 2013
Mezzanine loans, fixed rate (7)	3	66,941		0.50% to 20.00%	September 2014 to September 2019
Total (2)	43	$	667,051

(1) Whole loans had $13.7 million and $8.9 million in unfunded loan commitments as of December 31, 2013 and 2012, respectively.  These unfunded commitments are advanced as the borrowers formally request additional funding as permitted under the loan agreement and any necessary approvals have been obtained.

(2) The total does not include an allowance for loan loss of $10.4 million and $8.0 million as of December 31, 2013 and 2012, respectively.

(3) Maturity dates do not include possible extension options that may be available to the borrowers.

(4) Floating rate whole loans include a combined $11.4 million mezzanine component of two whole loans which have a fixed rate of 12.0% as of December 31, 2013, and includes a $2.0 million mezzanine component of a whole loan that has a fixed rate of 15.0% at December 31, 2012.

(5) Floating rate whole loans include a $799,000 junior mezzanine tranche of a whole loan that has a fixed rate of 10.0% as of December 31, 2013.

(6) Amount includes $34.0 million from two whole loans that are classified as loans held for sale at December 31, 2012.

(7) Fixed rate mezzanine loans include a mezzanine loan that was modified into two tranches, which both currently pay interest at 0.50%. In addition, the subordinate tranche accrues interest at LIBOR plus 18.50% which is deferred until maturity.

Summary of the weighted average life of the commercial real estate loans at amortized cost

The following is a summary of the weighted average life of RSO’s commercial real estate loans, at amortized cost (in thousands):

Description	2014		2015		2016 and Thereafter		Total
December 31, 2013:
B notes	$	—	$	—	$	16,205	$	16,205
Mezzanine loans	5,711		—		58,606		64,317
Whole loans	—		17,949		727,840		745,789
Total (1)	$	5,711	$	17,949	$	802,651	$	826,311

(1) Weighted average life of commercial real estate loans assumes full exercise of extension options available to borrowers.

Allocation of Allowance for Loan Loss

The following is a summary of the allocation of the allowance for loan loss with respect to RSO’s commercial real estate and bank loans (in thousands, except percentages) by asset class:

Description	Allowance for Loan Loss		Percentage of Total Allowance
December 31, 2013:
B notes	$	174	1.26%
Mezzanine loans	559		4.05%
Whole loans	9,683		70.13%
Bank loans	3,391		24.56%
Total	$	13,807
December 31, 2012:
B notes	$	206	1.16%
Mezzanine loans	860		4.86%
Whole loans	6,920		39.12%
Bank loans	9,705		54.86%
Total	$	17,691

Summarization of Activity in the Allowance for Credit Losses for the Company's Financing Receivables

The following tables show the allowance for loan losses and recorded investments in loans for the years indicated (in thousands):

	Commercial Real Estate Loans			Bank Loans			Residential Mortgage Loans		Loans Receivable-Related Party		Total
December 31, 2013:
Allowance for Loan Losses:
Allowance for losses at January 1, 2013	$	7,986		$	9,705		$	—	$	—	$	17,691
Provision for loan loss	2,686			334			—		—		3,020
Loans charged-off	(256		)	(6,648		)	—		—		(6,904		)
Allowance for losses at December 31, 2013	$	10,416		$	3,391		$	—	$	—	$	13,807
Ending balance:
Individually evaluated for impairment	$	4,572		$	2,621		$	—	$	—	$	7,193
Collectively evaluated for impairment	$	5,844		$	770		$	—	$	—	$	6,614
Loans acquired with deteriorated credit quality	$	—		$	—		$	—	$	—	$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	194,403		$	3,554		$	—	$	6,966	$	204,923
Collectively evaluated for impairment	$	631,908		$	548,219		$	16,915	$	—	$	1,197,042
Loans acquired with deteriorated credit quality	$	—		$	—		$	—	$	—	$	—
December 31, 2012:
Allowance for Loan Losses:
Allowance for losses at January 1, 2012	$	24,221		$	3,297		$	—	$	—	$	27,518
Provision for loan loss	5,225			11,593			—		—		16,818
Loans charged-off	(21,460		)	(5,185		)	—		—		(26,645		)
Allowance for losses at December 31, 2012	$	7,986		$	9,705		$	—	$	—	$	17,691
Ending balance:
Individually evaluated for impairment	$	2,142		$	3,236		$	—	$	—	$	5,378
Collectively evaluated for impairment	$	5,844		$	6,469		$	—	$	—	$	12,313
Loans acquired with deteriorated credit quality	$	—		$	—		$	—	$	—	$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	177,055		$	4,689		$	—	$	8,324	$	190,068
Collectively evaluated for impairment	$	489,996		$	1,187,874		$	—	$	—	$	1,677,870
Loans acquired with deteriorated credit quality	$	—		$	751		$	—	$	—	$	751

Financing Receivable Credit Quality Indicators

Credit risk profiles of bank loans were as follows (in thousands):

	Rating 1		Rating 2		Rating 3		Rating 4		Rating 5		Held for Sale		Total
As of December 31, 2013
Bank loans	$	477,754	$	42,476	$	18,806	$	2,333	$	3,554	$	6,850	$	551,773
As of December 31, 2012
Bank loans	$	1,095,148	$	33,677	$	27,837	$	16,318	$	5,440	$	14,894	$	1,193,314

Credit risk profiles of commercial real estate loans were as follows (in thousands):

	Rating 1		Rating 2		Rating 3		Rating 4		Held for Sale		Total
As of December 31, 2013
Whole loans	$	680,718	$	32,500	$	32,571	$	—	$	—	$	745,789
B notes	16,205		—		—		—		—		16,205
Mezzanine loans	51,862		12,455		—		—		—		64,317
	$	748,785	$	44,955	$	32,571	$	—	$	—	$	826,311
As of December 31, 2012
Whole loans	$	427,456	$	—	$	106,482	$	—	$	34,000	$	567,938
B notes	16,327		—		—		—		—		16,327
Mezzanine loans	38,296		—		44,490		—		—		82,786
	$	482,079	$	—	$	150,972	$	—	$	34,000	$	667,051

Aging of the Company's Past Due Financing Receivables, Gross of Allowances for Credit Losses

The following table shows the loan portfolio aging analysis as of the dates indicated at cost basis (in thousands):

	30-59 Days		60-89 Days		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
December 31, 2013:
Whole loans	$	—	$	—	$	—	$	—	$	745,789	$	745,789	$	—
B notes	—		—		—		—		16,205		16,205		—
Mezzanine loans	—		—		—		—		64,317		64,317		—
Bank loans	—		—		3,554		3,554		548,219		551,773		—
Residential mortgage loans	234		91		268		593		16,322		16,915		—
Loans receivable-related party	—		—		—		—		6,966		6,966		—
Total loans	$	234	$	91	$	3,822	$	4,147	$	1,397,818	$	1,401,965	$	—
December 31, 2012:
Whole loans	$	—	$	—	$	—	$	—	$	567,938	$	567,938	$	—
B notes	—		—		—		—		16,327		16,327		—
Mezzanine loans	—		—		—		—		82,786		82,786		—
Bank loans	1,549		—		3,891		5,440		1,187,874		1,193,314		—
Loans receivable-related party	—		—		—		—		8,324		8,324		—
Total loans	$	1,549	$	—	$	3,891	$	5,440	$	1,863,249	$	1,868,689	$	—

Information about Company's Impaired Financing Receivables

The following tables show impaired loans indicated (in thousands):

	Recorded Balance		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2013:
Loans without a specific valuation allowance:
Whole loans	$	130,759	$	137,959	$	—		$	123,495	$	8,439
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	38,072	$	38,072	$	—		$	38,072	$	1,615
Bank loans	$	—	$	—	$	—		$	—	$	—
Residential mortgage loans	$	315	$	268	$	—		$	—	$	—
Loans receivable - related party	$	5,733	$	5,733	$	—		$	—	$	—
Loans with a specific valuation allowance:
Whole loans	$	25,572	$	25,572	$	(4,572	)	$	24,748	$	1,622
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	—	$	—	$	—		$	—	$	—
Bank loans	$	3,554	$	3,554	$	(2,621	)	$	—	$	—
Residential mortgage loans	$	—	$	—	$	—		$	—	$	—
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—
Total:
Whole loans	$	156,331	$	163,531	$	(4,572	)	$	148,243	$	10,061
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		1,615
Bank loans	3,554		3,554		(2,621		)	—		—
Residential mortgage loans	315		268		—			—		—
Loans receivable - related party	5,733		5,733		—			—		—
	$	204,005	$	211,158	$	(7,193	)	$	186,315	$	11,676

	Recorded Balance		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2012:
Loans without a specific valuation allowance:
Whole loans	$	115,841	$	115,841	$	—		$	114,682	$	3,436
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	38,072	$	38,072	$	—		$	38,072	$	367
Bank loans	$	—	$	—	$	—		$	—	$	—
Loans receivable - related party	$	6,754	$	6,754	$	—		$	—	$	851
Loans with a specific valuation allowance:
Whole loans	$	23,142	$	23,142	$	(2,142	)	$	22,576	$	801
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	—	$	—	$	—		$	—	$	—
Bank loans	$	5,440	$	5,440	$	(3,236	)	$	—	$	—
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—
Total:
Whole loans	$	138,983	$	138,983	$	(2,142	)	$	137,258	$	4,237
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		367
Bank loans	5,440		5,440		(3,236		)	—		—
Loans receivable - related party	6,754		6,754		—			—		851
	$	189,249	$	189,249	$	(5,378	)	$	175,330	$	5,455

Troubled Debt Restructurings on Financing Receivables

The following tables show troubled-debt restructurings in RSO's loan portfolio (in thousands):

	Number of Loans	Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Year Ended December 31, 2013:
Whole loans	5	$	143,484	$	147,826
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Residential mortgage loans	—	—		—
Loans receivable - related party	1	6,592		6,592
Total loans	6	$	150,076	$	154,418
Year Ended December 31, 2012:
Whole loans	6	$	143,261	$	126,946
B notes	—	—		—
Mezzanine loans	1	38,072		38,072
Bank loans	—	—		—
Loans receivable	1	7,797		7,797
Total loans	8	$	189,130	$	172,815

Schedule of Intangible Assets and Goodwill

The following table summarizes intangible assets at December 31, 2013 and 2012 (in thousands).

	Beginning Balance		Accumulated Amortization			Net Asset
December 31, 2013:
Investment in RCAM	$	21,213	$	(9,980	)	$	11,233
Investments in real estate:
In-place leases	2,461		(2,430		)	31
Above (below) market leases	29		(29		)	—
Investment in PCA:
Wholesale or correspondent relationships	600		(42		)	558
Total intangible assets	$	24,303	$	(12,481	)	$	11,822
December 31, 2012:
Investment in RCAM	$	21,213	$	(8,108	)	$	13,105
Investments in real estate:
In-place leases	2,461		(2,379		)	82
Above (below) market leases	29		(24		)	5
Total intangible assets	$	23,703	$	(10,511	)	$	13,192

Credit Facilities and Other Debt of the Company and Related Borrowings Outstanding

RSO historically has financed the acquisition of its investments, including investment securities, loans and lease receivables, through the use of secured and unsecured borrowings in the form of CDOs, securitized notes, repurchase agreements, secured term facilities, warehouse facilities and trust preferred securities issuances.  Certain information with respect to RSO’s borrowings at December 31, 2013 and 2012 is summarized in the following table (in thousands, except percentages):

	Outstanding Borrowings		Unamortized Issuance Costs and Discounts		Principal Outstanding		Weighted Average Borrowing Rate	Weighted Average Remaining Maturity	Value of Collateral		Date Securitization Closed
December 31, 2013:
RREF CDO 2006-1 Senior Notes	$	94,004	$	205	$	94,209	1.87%	32.6 years	$	169,115	August 2006
RREF CDO 2007-1 Senior Notes	177,837		719		178,556		0.84%	32.8 years	318,933		June 2007
RCC CRE Notes 2013	256,571		4,269		260,840		2.03%	15.0 years	305,586		December 2013
Apidos CDO I Senior Notes	87,131		—		87,131		1.68%	3.6 years	103,736		August 2005
Apidos CDO III Senior Notes	133,209		117		133,326		0.88%	6.7 years	145,930		May 2006
Apidos Cinco CDO Senior Notes	321,147		853		322,000		0.74%	6.4 years	342,796		May 2007
Whitney CLO I Securitized Borrowings(1)	440		—		440		—%	N/A	885		N/A
Unsecured Junior Subordinated Debentures (2)	51,005		543		51,548		4.19%	22.8 years	—		May/Sept 2006
6.0% Convertible Senior Notes	106,535		8,465		115,000		6.00%	4.9 years	—		October 2013
CRE - Term Repurchase Facilities (3)	29,703		1,033		30,736		2.67%	21 days	48,186		N/A
CMBS - Term Repurchase Facility (4)	47,601		12		47,613		1.38%	21 days	56,949		N/A
Residential Mortgage Financing Agreements	14,627		—		14,627		4.24%	56 days	16,487		N/A
Total	$	1,319,810	16,216		1,336,026		1.87%	13.1 years	$	1,508,603

	Outstanding Borrowings		Unamortized Issuance Costs and Discounts		Principal Outstanding		Weighted Average Borrowing Rate		Weighted Average Remaining Maturity	Value of Collateral		Date Securitization Closed
December 31, 2012:
RREF CDO 2006-1 Senior Notes	$	145,664	$	755	$	146,419	1.42	%	33.6 years	$	295,759	August 2006
RREF CDO 2007-1 Senior Notes	225,983		1,485		227,468		0.81	%	33.8 years	292,980		June 2007
Apidos CDO I Senior Notes	202,969		273		203,242		1.07	%	4.6 years	217,745		August 2005
Apidos CDO III Senior Notes	221,304		659		221,963		0.80	%	7.5 years	232,655		May 2006
Apidos Cinco CDO Senior Notes	320,550		1,450		322,000		0.82	%	7.4 years	344,105		May 2007
Apidos CLO VIII Senior Notes	300,951		16,649		317,600		2.16	%	8.8 years	351,014		Paid in full October 2013
Apidos CLO VIII Securitized Borrowings (3)	20,047		—		20,047		15.27	%	8.8 years	—		Paid in full October 2013
Whitney CLO I Senior Notes	171,555		2,548		174,103		1.82	%	4.2 years	191,704		Paid in full September 2013
Whitney Securitized Borrowings (1)	5,860		—		5,860		9.50	%	4.2 years	—		Paid in full September 2013
Unsecured Junior Subordinated Debentures (2)	50,814		734		51,548		4.26	%	23.7 years	—		May/Sept 2006
CRE - Term Repurchase Facilities (3)	58,834		348		59,182		2.89	%	18 days	85,390		N/A
CMBS - Term Repurchase Facility (4)	47,469		23		47,492		1.52	%	18 days	59,845		N/A
Mortgage Payable	13,600		—		13,600		4.17	%	5.6 years	18,100		Paid in full September 2013
Total	$	1,785,600	$	24,924	$	1,810,524	1.62	%	12.5 years	$	2,089,297

(1) The securitized borrowings are collateralized by the same assets as the Apidos CLO VIII Senior Notes and the Whitney CLO I Senior Notes, respectively.

(2) Amount represents junior subordinated debentures issued to RCT I and RCT II in May 2006 and September 2006, respectively.

(3) Amount also includes accrued interest costs of $26,000 and $79,000 related to CRE repurchase facilities as of December 31, 2013 and 2012, respectively.

(4) Amount also includes accrued interest costs of $22,000 and $23,000 related to CMBS repurchase facilities as of December 31, 2013 and 2012, respectively.

Schedule of Amount at Risk under Credit Facility

The following table shows information about the amount at risk under the repurchase facilities (dollars in thousands):

	Amount at Risk (1)		Weighted Average Maturity in Days	Weighted Average Interest Rate
December 31, 2013:
CMBS Term Repurchase Facility
Wells Fargo Bank, National Association (2)	$	10,796	21	1.38%
CRE Term Repurchase Facilities
Wells Fargo Bank, National Association	$	20,718	21	2.67%
Short-Term Repurchase Agreements - CMBS
JP Morgan Securities, LLC (3)	$	7,882	11	0.99%
Wells Fargo Securities, LLC (4)	$	8,925	2	1.19%
Deutsche Bank Securities, LLC	$	11,418	22	1.43%
December 31, 2012:
CMBS Term Repurchase Facility
Wells Fargo Bank, National Association (2)	$	10,722	18	1.53%
CRE Term Repurchase Facilities
Wells Fargo Bank, National Association	$	26,332	18	2.88%
Short-Term Repurchase Agreements - CMBS
JP Morgan Securities, LLC (3)	$	2,544	11	1.01%
Wells Fargo Securities, LLC (4)	$	1,956	28	1.46%
Deutsche Bank Securities, LLC	$	2,069	7	1.46%

(1) Equal to the estimated fair value of securities or loans sold, plus accrued interest income, minus the sum of repurchase agreement liabilities plus accrued interest expense.

(2) $6.5 million and $12.2 million of linked repurchase agreement borrowings are being included as derivative instruments as of December 31, 2013 and 2012, respectively.

(3) $17.0 million of linked repurchase agreement borrowings are being included as derivative instruments as of December 31, 2013.

(4) As of December 31, 2012, $3.5 million of linked repurchase agreement borrowings are being included as derivative instruments.

Company's Asset Recorded at Fair Value on Recurring Basis

The following table presents information about RSO’s assets (including derivatives that are presented net) measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by RSO to determine such fair value as follows (in thousands):

	Level 1		Level 2		Level 3		Total
December 31, 2013:
Assets:
Investment securities, trading	$	—	$	—	$	11,558	$	11,558
Investment securities available-for-sale	2,370		92		207,375		209,837
CMBS - Linked Transactions	—		—		30,066		30,066
Total assets at fair value	$	2,370	$	92	$	248,999	$	251,461
Liabilities:
Derivatives (net)	—		395		10,191		10,586
Total liabilities at fair value	$	—	$	395	$	10,191	$	10,586
December 31, 2012:
Assets:
Investment securities, trading	$	—	$	—	$	24,843	$	24,843
Investment securities available-for-sale	9,757		132,561		89,272		231,590
CMBS - Linked Transactions	—		4,802		2,033		6,835
Total assets at fair value	$	9,757	$	137,363	$	116,148	$	263,268
Liabilities:
Derivatives (net)	—		610		14,077		14,687
Total liabilities at fair value	$	—	$	610	$	14,077	$	14,687

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 are measured at fair value on a recurring basis for which RSO has utilized Level 3 inputs (in thousands):

	Level 3
Beginning balance, January 1, 2012	$	58,508
Total gains or losses (realized or unrealized):
Included in earnings	14,105
Purchases	8,341
Sales	(37,632		)
Paydowns	(2,012		)
Transfers into Level 3	66,381
Unrealized (losses) – included in accumulated other comprehensive income	8,457
Beginning balance, January 1, 2013	116,148
Total gains or losses (realized or unrealized):
Included in earnings	10,094
Purchases	106,570
Sales	(37,499		)
Paydowns	(41,571		)
Unrealized gains (losses) – included in accumulated other comprehensive income	362
Transfers into level 3	94,895
Ending balance, December 31, 2013	$	248,999

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents additional information about liabilities which are measured at fair value on a recurring basis for which RSO has utilized Level 3 inputs (in thousands):

	Level 3
Beginning balance, January 1, 2012	$	12,000
Unrealized losses – included in accumulated other comprehensive income	2,077
Beginning balance, January 1, 2013	14,077
Unrealized losses – included in accumulated other comprehensive income	(3,886		)
Ending balance, December 31, 2013	$	10,191

Changes in Carrying Value of Assets and Liabilities Measured at Fair Value on Non-recurring Basis

The following table summarizes the financial assets and liabilities measured at fair value on a nonrecurring basis and indicates the fair value hierarchy of the valuation techniques utilized by RSO to determine such fair value as follows (in thousands):

	Level 1		Level 2		Level 3		Total
December 31, 2013:
Assets:
Loans held for sale	$	—	$	6,850	$	15,066	$	21,916
Impaired loans	—		225		—		225
Total assets at fair value	$	—	$	7,075	$	15,066	$	22,141
December 31, 2012:
Assets:
Loans held for sale	$	—	$	14,894	$	34,000	$	48,894
Impaired loans	—		4,366		21,000		25,366
Total assets at fair value	$	—	$	19,260	$	55,000	$	74,260

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of December 31, 2013, the significant unobservable inputs used in the fair value measurements were as follows (in thousands):

	Fair Value at December 31, 2013		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Interest rate swap agreements	$	10,191	Discounted cash flow	Weighted average credit spreads	5.03	%

Fair Value of Financial Instruments

The fair values of RSO’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below (in thousands):

			Fair Value Measurements
	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets of Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013:
Loans held-for-investment	$	1,369,526	$	1,358,434	$	—	$	545,352	$	813,082
Loans receivable-related party	$	6,966	$	6,966	$	—	$	—	$	6,966
CDO notes	$	1,070,339	$	653,617	$	—	$	653,617	$	—
Junior subordinated notes	$	51,005	$	17,499	$	—	$	—	$	17,499
Repurchase agreements	$	77,304	$	77,304	$	—	$	—	$	77,304
December 31, 2012:
Loans held-for-investment	$	1,793,780	$	1,848,617	$	—	$	1,186,642	$	661,975
Loans receivable-related party	$	8,324	$	8,324	$	—	$	—	$	8,324
CDO notes	$	1,614,883	$	1,405,124	$	—	$	1,405,124	$	—
Junior subordinated notes	$	50,814	$	17,308	$	—	$	—	$	17,308
Repurchase agreements	$	106,303	$	106,303	$	—	$	—	$	106,303

Components of Income Taxes

The following table details the components of income taxes (in thousands):

	Years Ended December 31,
	2013			2012		2011
Provision (benefit) for income taxes:
Current:
Federal	$	4,601		$	11,497	$	7,839
State	1,068			776		4,596
Total current	5,669			12,273		12,435
Deferred:
Federal	(5,116		)	1,769		(305		)
State	(1,594		)	560		(94		)
Total deferred	(6,710		)	2,329		(399		)
Income tax provision (benefit)	$	(1,041	)	$	14,602	$	12,036

Reconciliation Between Federal Statutory Income Tax Rate and Effective Income Tax Rate

A reconciliation of the income tax benefit (provision) based upon the statutory tax rate to the effective income tax rate is as follows (in thousands):

	Years Ended December 31,
	2013			2012		2011
Statutory tax rate	$	(588	)	$	9,518	$	6,324
State and local taxes, net of federal benefit	(728		)	225		2,641
Permanent Adjustments	2			32		—
Subpart F income	—			3,458		1,991
Basis difference in LEAF investment	—			—		1,080
Prior period tax expense	253			—		—
Other items	20			1,369		—
	$	(1,041	)	$	14,602	$	12,036

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities are as follows (in thousands):

	December 31,
	2013		2012
Deferred tax assets related to:
Investment in securities	$	118	$	118
Intangible assets basis difference	2,725		2,557
Federal, state and local loss carryforwards	941		45
Subpart F income	1,359		12
Partnership investment	2		34
Deferred revenue	23		—
Accrued expenses	44		—
Total deferred tax assets	5,212		2,766
Valuation allowance	—		—
Total deferred tax assets	$	5,212	$	2,766

Deferred tax liabilities related to:
Unrealized loss on investments	$	(3,764	)	$	(4,286	)
Equity investments	(153		)	(838		)
Basis difference in LEAF investment	(195		)	(185		)
Subpart F income	—			(3,067		)
Total deferred tax liabilities	$	(4,112	)	$	(8,376	)