Delaware | 0-4408 | 72-0654145 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) | ||
One Crescent Drive, Suite 203, Navy Yard Corporate Center Philadelphia, PA | 19112 | |||
(Address of principal executive offices) | (Zip Code) |
(d) | The exhibit furnished as part of this report is identified in the Exhibit Index immediately following the signature page of this report. Such Exhibit Index is incorporated herein by this reference. |
Resource America, Inc. | |||||
Date: | May 8, 2014 | By: | /s/ Thomas C. Elliott | ||
Thomas C. Elliott | |||||
Senior Vice President and Chief Financial Officer |
Exhibit No. | Description | |||
Ex 99.1 | Press Release |
CONTACT: | THOMAS C. ELLIOTT | |
CHIEF FINANCIAL OFFICER | ||
RESOURCE AMERICA, INC. | ||
ONE CRESCENT DRIVE, SUITE 203 | ||
PHILADELPHIA, PA 19112 | ||
(215) 546-5005; (215) 640-6357 (fax) |
March 31, | |||||||
2014 | 2013 | ||||||
Financial fund management | $ | 14.6 | $ | 13.0 | |||
Real estate | 2.6 | 1.8 | |||||
Commercial finance | 0.6 | 0.5 | |||||
$ | 17.8 | $ | 15.3 | ||||
Net assets under management (1) | $ | 8.3 | $ | 6.8 |
(1) | Net assets under management represents the proportionate share of assets managed by the Company after reflecting joint venture arrangements. |
• | Increased total assets to $824.1 million at March 31, 2014, an increase of $594.1 million, or 258%, from $230.0 million at March 31, 2013. |
• | In January 2014, acquired joint venture interests in 10 multifamily assets totaling 2,513 units and two office properties that contain 75,518 rentable square feet for $51.2 million. In March 2014, acquired the remaining ownership interest for one of the multifamily assets for $7.5 million. Including these acquisitions, Opportunity REIT I acquired $165.9 million of total assets during the quarter. |
• | During the quarter, raised $15.8 million in equity capital through its preferred equity programs. Since March 31, 2014, raised an additional $14.0 million in equity capital, including $3.3 million from its DRIP program. |
• | Originated $111.6 million of commercial real estate whole loans during the three months ended March 31, 2014. |
• | The Company's real estate operating segment increased its assets under management at March 31, 2014 to $2.6 billion, an increase of $796.5 million, or 44%, from March 31, 2013. |
• | Real estate revenues increased 17% to $13.3 million, for the three months ended March 31, 2014 as compared to $11.3 million for the three months ended March 31, 2013, respectively. |
• | In April 2014, the Company increased its revolving credit facility with TD Bank, N.A. to $11.5 million and extended the maturity from December 2014 to December 2017. |
• | The Company's Board of Directors authorized a cash dividend of $0.05 per share on the Company’s common stock and payment on April 30, 2014 to holders of record as of the close of business on April 16, 2014. |
• | RSO's Board of Directors declared a cash dividend of $0.20 per common share for its quarter ended March 31, 2014. |
March 31, 2014 | December 31, 2013 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash | $ | 17,210 | $ | 19,853 | |||
Restricted cash | 627 | 571 | |||||
Receivables | 572 | 541 | |||||
Loans and receivables from managed entities and related parties, net | 34,506 | 30,923 | |||||
Investments in real estate, net | 17,167 | 17,696 | |||||
Investment securities, at fair value | 9,100 | 7,839 | |||||
Investments in unconsolidated loan manager | 38,181 | 37,821 | |||||
Investments in unconsolidated entities | 13,609 | 14,342 | |||||
Assets of consolidated variable interest entity ("VIE") - RSO: | |||||||
Cash and cash equivalents (including restricted cash) | 282,638 | 325,579 | |||||
Investments, at fair value | 243,538 | 226,764 | |||||
Loans | 1,618,060 | 1,397,458 | |||||
Investments in real estate and unconsolidated entities | 117,280 | 124,193 | |||||
Other assets | 79,819 | 76,467 | |||||
Total assets of consolidated VIE - RSO | 2,341,335 | 2,150,461 | |||||
Property and equipment, net | 5,566 | 5,844 | |||||
Deferred tax assets, net | 26,587 | 27,769 | |||||
Other assets | 5,431 | 4,791 | |||||
Total assets | $ | 2,509,891 | $ | 2,318,451 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Accrued expenses and other liabilities | $ | 22,698 | $ | 22,134 | |||
Payables to managed entities and related parties | 3,112 | 3,110 | |||||
Borrowings | 20,501 | 20,619 | |||||
Liabilities of consolidated VIE - RSO: | |||||||
Borrowings | 1,502,266 | 1,320,015 | |||||
Other liabilities | 56,934 | 55,247 | |||||
Total liabilities of consolidated VIE - RSO | 1,559,200 | 1,375,262 | |||||
Total liabilities | 1,605,511 | 1,421,125 | |||||
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; 30,807,746 and 30,378,339 shares issued (including nonvested restricted stock of 689,904 and 400,194), respectively | 301 | 299 | |||||
Additional paid-in capital | 288,958 | 288,555 | |||||
Accumulated deficit | (26,023 | ) | (26,025 | ) | |||
Treasury stock, at cost; 10,440,319 and 10,434,436 shares, respectively | (107,905 | ) | (107,874 | ) | |||
Accumulated other comprehensive loss | (1,164 | ) | (1,231 | ) | |||
Total stockholders’ equity | 154,167 | 153,724 | |||||
Noncontrolling interests | 221 | 238 | |||||
Noncontrolling interests attributable to RSO | 749,992 | 743,364 | |||||
Total equity | 904,380 | 897,326 | |||||
$ | 2,509,891 | $ | 2,318,451 |
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
REVENUES: | |||||||
Real estate (includes revenues of $2,683 and $2,288 related to RSO) | $ | 13,275 | $ | 11,340 | |||
Financial fund management (includes revenues of $207 and $381 related to RSO) | 7,075 | 4,287 | |||||
Commercial finance (includes no revenue related to RSO) | (99 | ) | (178 | ) | |||
20,251 | 15,449 | ||||||
Revenues from consolidated VIE - RSO | 31,931 | 30,578 | |||||
Elimination of consolidated VIE revenues attributed to operating segments | (2,880 | ) | (2,700 | ) | |||
Total revenues | 49,302 | 43,327 | |||||
COSTS AND EXPENSES: | |||||||
Real estate | 8,875 | 9,440 | |||||
Financial fund management | 4,389 | 2,528 | |||||
Commercial finance | 103 | 45 | |||||
General and administrative | 3,154 | 2,153 | |||||
Provision for credit losses | 1,208 | 338 | |||||
Depreciation and amortization | 451 | 416 | |||||
18,180 | 14,920 | ||||||
Expenses from consolidated VIE - RSO | 13,124 | 16,188 | |||||
Elimination of consolidated VIE expenses attributed to operating segments | (2,819 | ) | (2,654 | ) | |||
Total expenses | 28,485 | 28,454 | |||||
OPERATING INCOME | 20,817 | 14,873 | |||||
OTHER INCOME (EXPENSE): | |||||||
Other-than-temporary impairment on investments | — | (214 | ) | ||||
Interest expense | (483 | ) | (494 | ) | |||
Other income (expense), net | 165 | 189 | |||||
(318 | ) | (519 | ) | ||||
Other expense, net, from consolidated VIE - RSO | (1,331 | ) | — | ||||
Elimination of consolidated VIE other income attributed to operating segments | 18 | 31 | |||||
(1,631 | ) | (488 | ) | ||||
Income from continuing operations before taxes | 19,186 | 14,385 | |||||
Income tax provision (benefit) | 1,069 | (146 | ) | ||||
Income tax provision - RSO | 16 | 1,762 | |||||
Income from continuing operations | 18,101 | 12,769 | |||||
Loss from discontinued operations, net of tax | — | (2 | ) | ||||
Net income | 18,101 | 12,767 | |||||
Net loss attributable to noncontrolling interests | 40 | 43 | |||||
Net income attributable to noncontrolling interests of consolidated VIE - RSO | (17,151 | ) | (12,314 | ) | |||
Net income attributable to common shareholders | $ | 990 | $ | 496 | |||
Amounts attributable to common shareholders: | |||||||
Income from continuing operations | $ | 990 | $ | 498 | |||
Discontinued operations | — | (2 | ) | ||||
Net income | $ | 990 | $ | 496 | |||
Basic earnings per share: | |||||||
Continuing operations | $ | 0.05 | $ | 0.02 | |||
Discontinued operations | — | — | |||||
Net income | $ | 0.05 | $ | 0.02 | |||
Weighted average shares outstanding | 20,252 | 20,124 | |||||
Diluted earnings per share: | |||||||
Continuing operations | $ | 0.04 | $ | 0.02 | |||
Discontinued operations | — | — | |||||
Net income | $ | 0.04 | $ | 0.02 | |||
Weighted average shares outstanding | 22,027 | 21,815 |
RAI | RSO | Eliminations | Consolidated | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 13,275 | $ | — | $ | — | $ | 13,275 | |||||||
Financial fund management | 7,075 | — | — | 7,075 | |||||||||||
Commercial finance | (99 | ) | — | — | (99 | ) | |||||||||
20,251 | — | — | 20,251 | ||||||||||||
Revenues from consolidated VIE - RSO | — | 31,931 | — | 31,931 | |||||||||||
Elimination of consolidated VIE revenues attributed to operating segments | — | — | (2,880 | ) | (2,880 | ) | |||||||||
Total revenues | 20,251 | 31,931 | (2,880 | ) | 49,302 | ||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 8,875 | — | — | 8,875 | |||||||||||
Financial fund management | 4,389 | — | — | 4,389 | |||||||||||
Commercial finance | 103 | — | — | 103 | |||||||||||
General and administrative | 3,154 | — | — | 3,154 | |||||||||||
Provision for credit losses | 1,208 | — | — | 1,208 | |||||||||||
Depreciation and amortization | 451 | — | — | 451 | |||||||||||
18,180 | — | — | 18,180 | ||||||||||||
Expenses from consolidated VIE - RSO | — | 13,140 | (16 | ) | 13,124 | ||||||||||
Elimination of consolidated VIE expenses attributed to operating segments | — | — | (2,819 | ) | (2,819 | ) | |||||||||
Total expenses | 18,180 | 13,140 | (2,835 | ) | 28,485 | ||||||||||
OPERATING INCOME | 2,071 | 18,791 | (45 | ) | 20,817 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense | (483 | ) | — | — | (483 | ) | |||||||||
Other income, net | 737 | — | (572 | ) | 165 | ||||||||||
Other expense, net, from consolidated VIE - RSO | — | (1,331 | ) | — | (1,331 | ) | |||||||||
Elimination of consolidated VIE other income, net | — | — | 18 | 18 | |||||||||||
254 | (1,331 | ) | (554 | ) | (1,631 | ) | |||||||||
Income from continuing operations before taxes | 2,325 | 17,460 | (599 | ) | 19,186 | ||||||||||
Income tax provision | 1,069 | — | 16 | 1,085 | |||||||||||
Net income | 1,256 | 17,460 | (615 | ) | 18,101 | ||||||||||
Net loss attributable to noncontrolling interests | 40 | — | — | 40 | |||||||||||
Net income attributable to noncontrolling interests - RSO | — | (2,344 | ) | (14,807 | ) | (17,151 | ) | ||||||||
Net income attributable to common shareholders | $ | 1,296 | $ | 15,116 | $ | (15,422 | ) | $ | 990 |
RAI | RSO | Eliminations | Consolidated | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 11,340 | $ | — | $ | — | $ | 11,340 | |||||||
Financial fund management | 4,287 | — | — | 4,287 | |||||||||||
Commercial finance | (178 | ) | — | — | (178 | ) | |||||||||
15,449 | — | — | 15,449 | ||||||||||||
Revenues from consolidated VIE - RSO | — | 30,578 | — | 30,578 | |||||||||||
Elimination of consolidated VIE revenues attributed to operating segments | — | — | (2,700 | ) | (2,700 | ) | |||||||||
Total revenues | 15,449 | 30,578 | (2,700 | ) | 43,327 | ||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 9,440 | — | — | 9,440 | |||||||||||
Financial fund management | 2,528 | — | — | 2,528 | |||||||||||
Commercial finance | 45 | — | — | 45 | |||||||||||
General and administrative | 2,153 | — | — | 2,153 | |||||||||||
Provision for credit losses | 338 | — | — | 338 | |||||||||||
Depreciation and amortization | 416 | — | — | 416 | |||||||||||
14,920 | — | — | 14,920 | ||||||||||||
Expenses from consolidated VIE - RSO | — | 17,950 | (1,762 | ) | 16,188 | ||||||||||
Elimination of consolidated VIE expenses attributed to operating segments | — | — | (2,654 | ) | (2,654 | ) | |||||||||
Total expenses | 14,920 | 17,950 | (4,416 | ) | 28,454 | ||||||||||
OPERATING INCOME | 529 | 12,628 | 1,716 | 14,873 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Other-than-temporary impairment on investments | (214 | ) | — | — | (214 | ) | |||||||||
Interest expense | (494 | ) | — | — | (494 | ) | |||||||||
Other income, net | 745 | — | (556 | ) | 189 | ||||||||||
Elimination of consolidated VIE other income, net | — | — | 31 | 31 | |||||||||||
37 | — | (525 | ) | (488 | ) | ||||||||||
Income from continuing operations before taxes | 566 | 12,628 | 1,191 | 14,385 | |||||||||||
Income tax (benefit) provision | (146 | ) | — | 1,762 | 1,616 | ||||||||||
Income from continuing operations | 712 | 12,628 | (571 | ) | 12,769 | ||||||||||
Loss from discontinued operations, net of tax | (2 | ) | — | — | (2 | ) | |||||||||
Net income | 710 | 12,628 | (571 | ) | 12,767 | ||||||||||
Net loss attributable to noncontrolling interests - RAI | 43 | — | — | 43 | |||||||||||
Net income attributable to noncontrolling interests - RSO | — | (1,102 | ) | (11,212 | ) | (12,314 | ) | ||||||||
Net income attributable to common shareholders | $ | 753 | $ | 11,526 | $ | (11,783 | ) | $ | 496 | ||||||
Amounts attributable to common shareholders: | |||||||||||||||
Income from continuing operations | $ | 755 | $ | 11,526 | $ | (11,783 | ) | $ | 498 | ||||||
Discontinued operations | (2 | ) | — | — | (2 | ) | |||||||||
Net income | $ | 753 | $ | 11,526 | $ | (11,783 | ) | $ | 496 |
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Net income attributable to common shareholders - GAAP | $ | 990 | $ | 496 | |||||
Adjustments, net of tax: | |||||||||
Income, net of eliminations, attributable to consolidation of RSO | 306 | 257 | |||||||
Loss attributable to commercial finance | 863 | 1,873 | (2) | ||||||
Deferred tax provision (benefit) | 161 | (225 | ) | ||||||
Adjusted net income attributable to common shareholders | $ | 2,320 | $ | 2,401 | |||||
Weighted average diluted shares outstanding | 22,027 | 21,815 | |||||||
Adjusted net income attributable to common shareholders per common per share-diluted | $ | 0.11 | $ | 0.11 |
(1) | Adjusted net income attributable to common shareholders presents the Company's operations prior to the consolidation of RSO and without the effect of its commercial finance operations and deferred tax provision (benefit). The Company believes that this provides useful information to investors since it allows investors to evaluate the Company's progress, excluding the impact of the RSO consolidation, in both its real estate and financial fund management segments for the three months ended March 31, 2014 and 2013 separately from its commercial finance operations and deferred tax provision (benefit). Adjusted net income attributable to common shareholders should not be considered as an alternative to net income attributable to common shareholders (computed in accordance with GAAP). Instead, adjusted net income attributable to common shareholders should be reviewed in connection with net income attributable to common shareholders in the Company's consolidated financial statements to help analyze how the Company's business is performing. |
(2) | Utilizes a full year continuing income tax rate of 39%. |