VARIABLE INTEREST ENTITIES (Tables)

6 Months Ended

Jun. 30, 2014

Variable Interest Entity [Line Items]

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 June 30, 2014 (in thousands):

	Receivables from Managed Entities and Related Parties, Net (1)		Investments		Maximum Exposure to Loss in Non-consolidated VIEs
Ischus entities	$	158	$	—	$	158
Trapeza entities	—		678		678
RREGPS	—		716		716
	$	158	$	1,394	$	1,552

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

Supplemental Cash Flow Information

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

	Six Months Ended
	June 30,
	2014			2013
Cash (paid) received:
Interest	$	(828	)	$	(840	)
Income tax payments	(916		)	(916		)
Refund of income taxes	48			13
Dividends declared per common share	$	0.10		$	0.06
Non-cash activities:
Repurchases of common stock from employees in exchange for the payment of income taxes	$	255		$	49
Issuance of treasury stock for the Company's investment savings 401(k) plan	306			184

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 on available-for-sale securities, along with their 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
June 30, 2014
CLO securities	$	660	$	(58	)	1	$	1,058	$	(61	)	1
Equity securities	—		—			—	—		—			—
Total	$	660	$	(58	)	1	$	1,058	$	(61	)	1
December 31, 2013
CLO securities	$	2,312	$	(196	)	3	$	—	$	—		—
Equity securities	92		(8		)	1	—		—			—
Total	$	2,404	$	(204	)	4	$	—	$	—		—

Schedule of Equity Method Investments

 The following table details the Company’s investments in these vehicles, including the range of ownership interests owned (in thousands, except percentages):

	Range of Combined Ownership Interests	June 30,		December 31,
		2014		2013
Real estate investment entities	1% – 12%	$	8,555	$	8,271
Financial fund management partnerships	0.4% − 50%	4,215		5,294
Trapeza entities	33% − 50%	678		777
Investments in unconsolidated entities		$	13,448	$	14,342

Summary 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):

	Loans and receivables from Managed Entities			Leases and Loans			Rent Receivables			Total
Three Months Ended June 30, 2014:
Balance, beginning of period	$	37,441		$	—		$	10		$	37,451
Provision for credit losses	1,588			(5		)	(8		)	1,575
Charge-offs	(1		)	—			—			(1		)
Recoveries	—			5			—			5
Balance, end of period	$	39,028		$	—		$	2		$	39,030
Six Months Ended June 30, 2014:
Balance, beginning of year	$	36,229		$	—		$	14		$	36,243
Provision for credit losses	2,801			(6		)	(12		)	2,783
Charge-offs	(2		)	—			—			(2		)
Recoveries	—			6			—			6
Balance, end of period	$	39,028		$	—		$	2		$	39,030
Ending balance, individually evaluated for impairment	$	39,028		$	—		$	—		$	39,028
Ending balance, collectively evaluated for impairment	—			—			2			2
Balance, end of period	$	39,028		$	—		$	2		$	39,030

	Loans and 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 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
Six Months Ended June 30, 2013:
Balance, beginning of year	$	32,560	$	—		$	68		$	32,628
Provision for credit losses	2,007		(7		)	(15		)	1,985
Charge-offs	—		—			(24		)	(24		)
Recoveries	20		7			—			27
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

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 financing receivables (presented gross of allowance for credit losses) as of June 30, 2014 (in thousands):

	30-89 Days Past Due		90-180 Days Past Due		Greater than 181 Days		Total Past Due		Current		Total
Loans and receivables from managed    entities and related parties: (1)
Commercial finance     investment entities (2)	$	—	$	—	$	43,291	$	43,291	$	19	$	43,310
Real estate investment entities	580		1,149		17,839		19,568		5,809		25,377
Financial fund management entities	1		—		18		19		449		468
Other	22		—		—		22		2,437		2,459
	603		1,149		61,148		62,900		8,714		71,614
Rent receivables - real estate	4		1		1		6		94		100
Total financing receivables	$	607	$	1,150	$	61,149	$	62,906	$	8,808	$	71,714

(1) Receivables are presented gross of an allowance for credit losses of $39.0 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.

(2) Pursuant to a guarantee agreement, the Company made a payment to the lender of one of its commercial finance investment partnerships. In making the payment, the Company assumed the rights of the lender, with the resulting note being collateralized by the portfolio of leases and loans held by the partnership (see Note 17).

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

	30-89 Days Past Due		90-180 Days Past Due		Greater than 181 Days		Total Past Due		Current		Total
Loans and 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.

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 June 30, 2014
Financing receivables with a specific valuation allowance:
Loans and receivables from managed entities – commercial finance	$	1,401	$	40,429	$	39,028	$	39,621
Rent receivables – real estate	—		2		2		14
As of December 31, 2013
Financing receivables with a specific valuation allowance:
Loans and receivables from managed entities – commercial finance	$	2,690	$	38,919	$	36,229	$	38,649
Rent receivables – real estate	—		14		14		32

Debt and Credit Facilities

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

	As of June 30, 2014				December 31, 2013
	Maximum Amount of Facility		Borrowings Outstanding		Borrowings Outstanding
Credit facilities:
TD Bank – secured revolving credit facility (1)	$	10,997	$	—	$	—
Republic Bank – secured revolving credit facility	3,361		—		—
			—		—
Other debt:
Senior Notes			10,000		10,000
Mortgage debt - hotel property			10,188		10,287
Other debt			370		332
Total borrowings outstanding			$	20,558	$	20,619

(1) The amount of the facility as shown has been reduced for outstanding letters of credit of $503,000 at June 30, 2014.

Company's Asset Recorded at Fair Value on Recurring Basis

As of June 30, 2014, 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	$	1,043	$	—	$	11,547	$	12,590

As of December 31, 2013, 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

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 six months ended June 30, 2014 (in thousands):

	Investment Securities
Balance, beginning of year	$	7,407
Purchases	11,362
Income accreted	461
Payments and distributions received, net	(854		)
Sales	(8,037		)
Gains on sale of investment securities	370
Gains on sales of trading securities	828
Unrealized holding gains on trading securities	101
Change in unrealized losses included in accumulated other comprehensive loss	(91		)
Balance, end of period	$	11,547

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 year ended December 31, 2013 (in thousands):

	Investment Securities
Balance, beginning of year	$	10,367
Purchases	11,630
Income accreted	899
Payments and distributions received, net	(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

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

The Company's carrying value of the assets and liabilities measured at fair value on a non-recurring basis were as follows (in thousands):

	Level 1		Level 2		Level 3		Total
As of June 30, 2014
Assets:
Loans and receivables from managed entities – commercial finance and real estate	$	—	$	—	$	2,250	$	2,250
Liability:
Apidos contractual commitment	$	—	$	—	$	815	$	815
As of December 31, 2013
Assets:
Loans and receivables from managed entities – commercial finance and real estate	$	—	$	—	$	4,528	$	4,528
Liability:
Apidos contractual commitment	$	—	$	—	$	995	$	995

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):

	June 30, 2014				December 31, 2013
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Loans and receivables from managed entities	$	32,586	$	32,586	$	30,923	$	30,923
Borrowings:
Real estate debt	$	10,188	$	11,090	$	10,287	$	10,702
Senior Notes	10,000		13,322		10,000		12,619
Other debt	370		370		332		332
	$	20,558	$	24,782	$	20,619	$	23,653

RSO [Member]

Variable Interest Entity [Line Items]

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):
	June 30, 2014			December 31, 2013
ASSETS (1)
Cash and cash equivalents	$	222,313		$	262,270
Restricted cash	91,215			63,309
Subtotal- Cash and cash equivalents	313,528			325,579
Investment securities, trading	8,951			11,558
Investment securities available-for-sale, pledged as collateral, at fair value	196,009			162,608
Investment securities available-for-sale, at fair value	68,494			52,598
Subtotal - Investments, at fair value	273,454			226,764
Loans, pledged as collateral and net of allowances of $6.5 million and $13.8 million ($120.8 million and $0 at fair value)	1,740,656			1,369,526
Loans receivable–related party net of allowance of $700,000 and $0	4,751			6,966
Loans held for sale	40,286			21,916
Subtotal - Loans, before eliminations	1,785,693			1,398,408
Eliminations	(558		)	(950		)
Subtotal - Loans	1,785,135			1,397,458
Property available-for-sale	29,509			25,346
Investment in real estate	—			29,778
Investments in unconsolidated entities	60,480			69,069
Subtotal, Investments in real estate and unconsolidated entities	89,989			124,193
Line items included in "other assets":
Linked transactions, net at fair value	13,676			30,066
Derivatives, at fair value	755			—
Interest receivable	12,028			8,965
Deferred tax asset	7,480			5,212
Principal paydown receivable	31,950			6,821
Intangible assets	10,771			11,822
Prepaid expenses	4,153			2,871
Other assets	15,272			10,726
Subtotal - Other assets, before eliminations	96,085			76,483
Eliminations	(23		)	(16		)
Subtotal - Other assets	96,062			76,467
Total assets (excluding eliminations)	$	2,558,749		$	2,151,427
Total assets (including eliminations)	$	2,558,168		$	2,150,461
LIABILITIES (2)
Borrowings ($140.2 million and $0 at fair value)	$	1,579,834		$	1,319,810
Eliminations	151			205
Subtotal Borrowings	1,579,985			1,320,015
Distribution payable	28,697			27,023
Accrued interest expense	2,063			1,693
Derivatives, at fair value	9,855			10,586
Accrued tax liability	2,389			1,629
Deferred tax liability	4,036			4,112
Accounts payable and other liabilities	9,948			12,650
Subtotal - Other liabilities, before eliminations	56,988			57,693
Eliminations	(2,646		)	(2,446		)
Subtotal - Other liabilities	54,342			55,247
Total liabilities (before eliminations)	$	1,636,822		$	1,377,503
Total liabilities (after eliminations)	$	1,634,327		$	1,375,262

RSO Balance Sheets Detail (in thousands):
	June 30, 2014		December 31, 2013
(1) Assets of consolidated RSO's VIEs included in total assets above:
Restricted cash	$	88,762	$	61,372
Investments securities available-for-sale, pledged as collateral, at fair value	114,641		105,846
Loans held for sale	1,808		2,376
Loans, pledged as collateral and net of allowances of $4.9 million and $8.8 million ($120.8 million and $0 at fair value)	1,234,382		1,219,569
Interest receivable	6,955		5,627
Prepaid expenses	154		247
Principal receivable	31,950		6,821
Total assets of consolidated VIEs	$	1,478,652	$	1,401,858
(2) Liabilities of consolidated RSO's VIEs included in total liabilities above:
Borrowings ($140.2 million and $0 at fair value)	$	1,111,314	$	1,070,339
Accrued interest expense	1,295		918
Derivatives, at fair value	9,071		10,191
Accounts payable and other liabilities	1,958		1,604
Total liabilities of consolidated VIEs	$	1,123,638	$	1,083,052

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

	June 30, 2014			December 31, 2013
Total stockholders' equity per RSO balance sheet	$	921,927		$	773,924
Eliminations	(29,924		)	(30,560		)
Noncontrolling interests attributable to RSO	$	892,003		$	743,364

RSO Income Statement Detail (in thousands):
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
REVENUES
Interest income:
Loans	$	26,219		$	26,184		$	46,448		$	53,996
Securities	3,391			3,896			7,395			7,538
Interest income − other	982			635			3,834			2,501
Total interest income	30,592			30,715			57,677			64,035
Interest expense	10,610			11,134			20,247			22,299
Net interest income	19,982			19,581			37,430			41,736
Rental income	1,507			5,052			6,659			11,226
Dividend income	17			17			153			33
Equity in net earnings (losses) of unconsolidated subsidiaries	1,762			72			3,776			(353		)
Fee income	2,717			1,527			5,473			2,937
Net realized and unrealized gains on sales of investment securities available-for-sale and loans	4,261			2,394			7,941			2,785
Net realized and unrealized (loss) gain on investment securities, trading	(650		)	(1,751		)	(2,210		)	(635		)
Unrealized gain (loss) and net interest income on linked transactions, net	5,012			(5,245		)	7,317			(5,504		)
Revenues from consolidated VIE - RSO	34,608			21,647			66,539			52,225
OPERATING EXPENSES
Management fees − related party	3,314			2,915			6,394			5,893
Equity compensation − related party	2,032			2,155			3,699			5,746
Rental operating expense	1,077			3,624			4,473			7,561
General and administrative	11,896			2,382			20,001			5,863
Depreciation and amortization	760			999			1,596			2,137
Income tax expense	(446		)	1,737			(430		)	3,499
Net impairment losses recognized in earnings	—			535			—			556
(Benefit) provision for loan losses	782			(1,242		)	(3,178		)	(200		)
Total operating expenses	19,415			13,105			32,555			31,055
Reclassification of income tax expense	446			(1,737		)	430			(3,499		)
Expenses of consolidated VIE - RSO	19,861			11,368			32,985			27,556
Adjusted operating income	14,747			10,279			33,554			24,669
OTHER REVENUE (EXPENSE)
Gain on sale of real estate	3,042			—			3,042			—
Other expense	—			—			(1,262		)	—
Loss on the reissuance of debt	(533		)	—			(602		)	—
Other expense, net, from consolidated VIE - RSO	2,509			—			1,178			—
Income from continuing operations	17,256			10,279			34,732			24,669
Income tax provision - RSO	(446		)	1,737			(430		)	3,499
NET INCOME	17,702			8,542			35,162			21,170
Net income allocated to preferred shares	(3,358		)	(1,800		)	(5,758		)	(3,111		)
Net income allocated to noncontrolling interests	333			(209		)	389			—
NET INCOME ALLOCABLE TO RSO COMMON SHAREHOLDERS	$	14,677		$	6,533		$	29,793		$	18,059

RSO Cash Flow Detail (in thousands)	Six Months Ended
	June 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	35,162		$	21,170
Items included in "Change in cash attributable to consolidated VIE - RSO":
Provision for loan losses	(3,178		)	(200		)
Depreciation of investments in real estate and other	1,635			1,202
Amortization of intangible assets	1,024			996
Amortization of term facilities	—			495
Accretion of net discounts on loans held for investment	(1,310		)	(6,930		)
Accretion of net discounts on securities available-for-sale	(1,637		)	(1,430		)
Amortization of discounts on convertible notes	659			—
Amortization of discount on notes securitization	41			1,772
Amortization of debt issuance costs on notes securitization	1,510			1,965
Amortization of stock-based compensation	3,698			5,746
Amortization of terminated derivative instruments	142			193
Accretion of interest-only available-for-sales securities	(339		)	(485		)
Deferred income tax benefits	(689		)	(115		)
Change in mortgage loans held for sale, net	(12,162		)	—
Purchase of securities, trading	—			(10,044		)
Principal payments on securities, trading	50			3,272
Proceeds from sales of securities, trading	379			18,713
Net realized and unrealized loss on investment securities, trading	2,210			635
Net realized gains on sales of investment securities available-for-sale and loans	(2,148		)	(2,785		)
Loss on reissuance of debt	602			—
Gain on sale of real estate	(3,042		)	—
Net impairment losses recognized in earnings	—			548
Linked transactions fair value adjustments	(5,923		)	6,385
Equity in net (earnings) losses of unconsolidated subsidiaries	(3,776		)	353
Change in operating assets and liabilities, net of acquisitions	980			5,283
Subtotal - consolidated VIE - RSO operating activity	(21,274		)	25,569
Change in consolidated VIE - RSO cash for the period	39,957			(83,124		)
Subtotal - Change in cash attributable to consolidated VIE - RSO before eliminations	18,683			(57,555		)
Elimination of intercompany activity	(54		)	(654		)
Subtotal - Adjustments to reconcile net income and operating cash flows to net income of consolidated VIE - RSO	18,629			(58,209		)
Net cash provided by operating activities (excluding eliminations)	13,888			46,739

	Six Months Ended
	June 30,
	2014		2013
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of loans	(489,800	)	(377,679	)
Purchase of securities available-for-sale	(107,339	)	(96,031	)
Subtotal - Purchase of loans and securities by consolidated VIE - RSO, before eliminations	(597,139	)	(473,710	)
Principal payments received on loans	196,973		386,686
Proceeds from sale of loans	44,024		170,450
Principal payments on securities available-for-sale	25,774		20,040
Proceeds from sale of securities available-for-sale	99,151		7,025
Subtotal - principal payments and proceeds from sales received by consolidated VIE - RSO, before eliminations	365,922		584,201
Decrease (increase) in restricted cash	10,543		(5,926	)
Items included in "Other -VIE, investing activity":
Proceeds from (investment in) unconsolidated entity	8,911		(15,534	)
Acquisition of Moselle CLO S.A.	(30,433	)	—
Proceeds from sale of real estate held-for-sale	31,202		—
Improvement of real estate held-for-sale	—		(404	)
Distributions from investments in real estate	—		522
Improvements in investments in real estate	252		(365	)
Investment in loans - related parties	(244	)	—
Principal payments received on loans – related parties	1,759		362
Purchase of furniture and fixtures	(69	)	—
Acquisition of property and equipment	(332	)	—
Subtotal - Other consolidated VIE - investing activity, before eliminations	11,046		(15,419	)
Eliminations	(391	)	—
Subtotal - Other consolidated VIE - investing activity	10,655		(15,419	)
Net cash (used in) provided by investing activities (excluding eliminations)	(209,628	)	89,146

	Six Months Ended
	June 30,
	2014			2013
CASH FLOWS FROM FINANCING ACTIVITIES:
Items included in "Net borrowings (repayments) of debt by consolidated VIE - RSO"
Proceeds from borrowings:
Repurchase agreements	175,738			104,325
Warehouse agreement	43,000			—
Reissuance of debt	16,502			—
Payments on borrowings:
Collateralized debt obligations	(152,556		)	(286,962		)
Warehouse agreement	(33,719		)	—
Subtotal - net (repayments) borrowings of debt by consolidated VIE - RSO	48,965			(182,637		)
Distributions paid on common stock	(51,457		)	(43,665		)
Elimination of dividends paid to RAI	1,144			1,123
Distribution paid on common stock, after elimination	(50,313		)	(42,542		)
Net proceeds from issuances of common stock (net of offering costs of $0 and $4,265)	—			114,018
Net proceeds from dividend reinvestment and stock purchase plan (net of offering costs of $0 and $19)	14,554			18,164
Proceeds from issuance of 8.5% Series A redeemable preferred shares (net of offering costs of $167 and $0)	7,697			—
Proceeds from issuance of 8.25% Series B redeemable preferred shares (net of offering costs of $525 and $707)	25,253			47,644
Proceeds from issuance of 8.625% Series C redeemable preferred shares (net of offering costs of $4,186 and $0)	115,815			—
Subtotal - net proceeds from issuance of stock by consolidated VIE	163,319			179,826
Payment of debt issuance costs	(8		)	(1,178		)
Settlement of derivative instruments	442			—
Payment of equity to third party sub-note holders	(799		)	(2,661		)
Distributions paid on preferred stock	(4,679		)	(2,446		)
Subtotal - Other consolidated VIE - RSO financing activity, before elimination	(5,044		)	(6,285		)
Eliminations	—			—
Subtotal - Other consolidated VIE - RSO financing activity after elimination	(5,044		)	$	(6,285	)
Net cash provided by (used in) financing activities (excluding eliminations)	$	155,783		$	(52,761	)
Net (decrease) increase in cash and cash equivalents	(39,957		)	83,124
Cash and cash equivalents, beginning of year	262,270			85,278
Cash and cash equivalents, end of period	$	222,313		$	168,402
Supplemental disclosure:
Interest expense paid in cash	$	17,438		$	20,214
Income taxes paid in cash	$	3,249		$	9,113

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 and carrying value of assets and liabilities of consolidated VIEs as of June 30, 2014 (in thousands):

	Apidos I			Apidos III		Apidos Cinco		Apidos VIII		Whitney CLO I		RREF 2006		RREF 2007		RCC CRE Notes 2013		Moselle		Total
ASSETS
Restricted cash (1)	$	7,323		$	2,374	$	30,731	$	7	$	80	$	20	$	250	$	4,097	$	43,880	$	88,762
Investment securities available-for-sale, pledged    as collateral, at fair value	7,227			3,933		13,045		—		—		10,112		67,702		—		12,622		114,641
Loans, pledged as collateral	59,177			102,046		302,247		—		—		154,012		218,384		277,750		120,766		1,234,382
Loans held for sale	—			932		876		—		—		—		—		—		—		1,808
Interest receivable	(235		)	495		932		—		—		1,995		2,322		1,446		—		6,955
Prepaid assets	8			10		23		—		—		18		95		—		—		154
Principal paydown receivable	—			—		—		—		—		—		9,300		22,650		—		31,950
Total assets (2)	$	73,500		$	109,790	$	347,854	$	7	$	80	$	166,157	$	298,053	$	305,943	$	177,268	$	1,478,652
LIABILITIES
Borrowings	$	56,922		$	97,458	$	319,639	$	—	$	—	$	106,029	$	126,004	$	256,807	$	148,455	$	1,111,314
Accrued interest expense	234			49		307		—		—		44		94		190		377		1,295
Derivatives, at fair value	—			—		—		—		—		1,290		7,781		—		—		9,071
Accounts payable and    other liabilities	12			19		29		198		—		9		1		—		1,690		1,958
Total liabilities	$	57,168		$	97,526	$	319,975	$	198	$	—	$	107,372	$	133,880	$	256,997	$	150,522	$	1,123,638

(1) Includes $4.3 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.

The following table shows the classification, carrying value and maximum exposure to loss with respect to RSO’s unconsolidated VIEs as of June 30, 2014 (in thousands):

	Unconsolidated Variable Interest Entities
	LEAF		Unsecured Junior Subordinated Debentures			Resource Capital Asset Management CDOs		Total		Maximum Exposure to Loss
Investment in unconsolidated entities	$	40,144	$	1,548		$	—	$	41,692	41,692
Intangible assets	—		—			10,341		10,341		10,341
Total assets	40,144		1,548			10,341		52,033
Borrowings	—		51,104			—		51,104		N/A
Total liabilities	—		51,104			—		51,104		N/A
Net asset (liability)	$	40,144	$	(49,556	)	10,341		$	929	N/A

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information (in thousands):

	Six Months Ended
	June 30,
	2014		2013
Non-cash financing activities include the following:
Distributions on common stock declared but not paid	$	26,179	$	25,399
Distribution on preferred stock declared but not paid	$	4,353	$	1,944
Issuance of restricted stock	$	646	$	151

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
June 30, 2014
Structured notes, trading	$	8,056	$	2,130	$	(1,567	)	$	8,619
RMBS, trading	1,901		—		(1,569		)	332
Total	$	9,957	$	2,130	$	(3,136	)	$	8,951
December 31, 2013
Structured notes, trading	$	8,057	$	4,050	$	(1,000	)	$	11,107
RMBS, trading	1,919		—		(1,468		)	451
Total	$	9,976	$	4,050	$	(2,468	)	$	11,558

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		Unrealized Gains		Unrealized Losses			Fair Value
June 30, 2014
CMBS	$	175,983	$	7,074	$	(10,683	)	172,374
RMBS	30,647		—		—			30,647
Asset-backed securities ("ABS")	32,145		1,429		(214		)	33,360
Structured notes	23,203		1,452		—			24,655
Corporate bonds	3,360		107		—			3,467
Total	$	265,338	$	10,062	$	(10,897	)	$	264,503
December 31, 2013:
CMBS	$	185,178	$	7,570	$	(12,030	)	$	180,718
ABS	25,406		1,644		(394		)	26,656
Structured notes	5,369		—		—			5,369
Corporate bonds	2,517		16		(70		)	2,463
Total	$	218,470	$	9,230	$	(12,494	)	$	215,206

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

	Positions Sold	Par Amount Sold		Realized Gain (Loss)
June 30, 2014
CMBS position	3	$	15,970	$	480
December 31, 2013
CMBS position	4	$	14,500	$	466
Corporate bond position	35	$	34,253	$	(474	)

The aggregate discount (premium) recognized as of the periods indicated (in thousands) are:

	June 30, 2014		December 31, 2013
CMBS	$	4,049	$	6,583
ABS	$	1,988	$	2,394
Corporate bond	$	96	$	(68	)

Estimated maturities of available for sale securities

The following table summarizes the estimated maturities of RSO’s investment securities according to their estimated weighted average life classifications (in thousands, except percentages):

Weighted Average Life	Fair Value			Amortized Cost		Weighted Average Coupon
June 30, 2014
Less than one year	$	41,371	(1)	$	50,628	3.79	%
Greater than one year and less than five years	139,526			133,098		5.01	%
Greater than five years and less than ten years	28,304			27,762		1.73	%
Greater than ten years	55,302			53,850		6.49	%
Total	$	264,503		$	265,338	4.78	%
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	9,724			10,072		7.90	%
Total	$	215,206		$	218,470	4.49	%

(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
June 30, 2014
CMBS	$	40,021	$	(649	)	28	$	22,249	$	(10,034	)	12	$	62,270	$	(10,683	)	40
ABS	827		(10		)	1	4,412		(204		)	8	5,239		(214		)	9
Corporate Bonds	—		—			—	—		—			—	—		—			—
Total temporarily impaired securities	$	40,848	$	(659	)	29	$	26,661	$	(10,238	)	20	$	67,509	$	(10,897	)	49
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

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
	Book Value			Number of Properties
Multi-family property	$	22,107		1
Office property	10,273			1
Subtotal	32,380
Less:  Accumulated depreciation	(2,602		)
Investments in real estate	$	29,778

Schedule of Receivables with Imputed Interest

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

Loan Description	Principal			Unamortized (Discount) Premium (1)			Carrying Value (2)
June 30, 2014
Commercial real estate loans:
Whole loans	$	959,569		$	(4,823	)	$	954,746
B notes	16,204			(66		)	16,138
Mezzanine loans	67,370			(110		)	67,260
Total commercial real estate loans	1,043,143			(4,999		)	1,038,144
Bank loans	709,102			(2,521		)	706,581
Residential mortgage loans, held for investment	2,470			—			2,470
Subtotal loans before allowances	1,754,715			(7,520		)	1,747,195
Allowance for loan loss	(6,539		)	—			(6,539		)
Total loans held for investment	1,748,176			(7,520		)	1,740,656
Bank loans held for sale	15,427						15,427
Residential mortgage loans held for sale	24,859						24,859
Total loans held for sale	40,286			—			40,286
Total loans	$	1,788,462		$	(7,520	)	$	1,780,942
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	559,206			(4,033		)	555,173
Residential mortgage loans, held for investment	1,849			—			1,849
Subtotal loans before allowances	1,390,843			(7,510		)	1,383,333
Allowance for loan loss	(13,807		)	—			(13,807		)
Total loans held for investment	1,377,036			(7,510		)	1,369,526
Bank loans held for sale	6,850						6,850
Residential mortgage loans held for sale	15,066						15,066
Total loans held for sale	21,916			$	—		21,916
Total loans	$	1,398,952		$	(7,510	)	$	1,391,442

(1) Amounts include deferred amendment fees of $169,000 and $216,000 and deferred upfront fees of $112,000 and $141,000 being amortized over the life of the bank loans as of June 30, 2014 and December 31, 2013, respectively.  Amounts include loan origination fees of $4.9 million and $3.3 million and loan extension fees of $177,000 and $73,000 being amortized over the life of the commercial real estate loans as of June 30, 2014 and December 31, 2013, respectively.

(2) Substantially all loans are pledged as collateral under various borrowings at June 30, 2014 and December 31, 2013, respectively.

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

The following is a summary of the weighted average remaining lives of RSO’s bank loans held for investment, at amortized cost (in thousands):

	June 30, 2014		December 31, 2013
Less than one year	$	36,155	$	36,985
Greater than one year and less than five years	528,687		379,874
Five years or greater	157,166		145,164
	$	722,008	$	562,023

Summary of the commercial real estate loans

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)
June 30, 2014
Whole loans, floating rate (1) (4) (5)	59	$	954,746	LIBOR plus 2.13% to LIBOR plus 12.14%	October 2014 to February 2019
B notes, fixed rate	1	16,138		8.68%	April 2016
Mezzanine loans, floating rate	1	15,452		LIBOR plus 15.32%	April 2016
Mezzanine loans, fixed rate (6)	3	51,808		0.50% to 18.71%	September 2014 to September 2021
Total (2)	64	$	1,038,144
December 31, 2013
Whole loans, floating rate (1) (4)	51	$	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 15.32%	April 2016
Mezzanine loans, fixed rate (6)	3	51,862		0.50% to 18.72%	September 2014 to September 2019
Total (2)	56	$	826,311

(1) Whole loans had $52.5 million and $13.7 million in unfunded loan commitments as of June 30, 2014 and December 31, 2013, 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 $5.8 million and $10.4 million as of June 30, 2014 and December 31, 2013, respectively.

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

(4) As of June 30, 2014, floating rate whole loans includes $3.1 million and $12.0 million mezzanine components of two whole loans, which have a fixed rate of 15.0% and 12.0%, respectively.

(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 June 30, 2014.

(6) 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 maturity of RSO’s commercial real estate loans, at amortized cost (in thousands):

Description	2014		2015		2016 and Thereafter		Total
June 30, 2014
B notes	$	—	$	—	$	16,138	$	16,138
Mezzanine loans	5,711		—		61,549		67,260
Whole loans	—		—		954,746		954,746
Total (1)	$	5,711	$	—	$	1,032,433	$	1,038,144
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
June 30, 2014
B notes	$	76	1.16%
Mezzanine loans	314		4.80%
Whole loans	5,454		83.41%
Bank loans	669		10.23%
Residential mortgage loans, held for investment	$	26	0.40%
Total	$	6,539
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

Schedule of Equity Method Investments

The following table shows RSO's investments in unconsolidated entities as of June 30, 2014 and December 31, 2013 and equity in net earnings (losses) of unconsolidated subsidiaries for the three months ended June 30, 2014 and 2013 (in thousands):

		Balance as of		Balance as of		For the three months ended			For the six months ended			For the three months ended			For the six months ended
	Ownership %	June 30, 2014		December 31, 2013		June 30, 2014			June 30, 2014			June 30, 2013			June 30, 2013
Värde Investment Partners, L.P.	7.5%	$	654	$	674	$	(19	)	$	(20	)	$	19		$	43
RRE VIP Borrower, LLC	3% to 5%	—		—		869			1,736			(101		)	(214		)
Investment in LEAF Preferred Stock	28.2%	40,144		41,016		(278		)	(872		)	304			(32		)
Investment in RCT I and II (1)	3%	1,548		1,548		(594		)	(1,184		)	(602		)	(1,195		)
Investment in Preferred Equity (2)	various	—		8,124		232			1,300			86			170
Investment in CVC Global Opps Fund	34.4%	18,134		16,177		1,124			1,958			93			93
Investment in Life Care Funding (3)	30%	—		1,530		—			(75		)	(242		)	(242		)
Total		$	60,480	$	69,069	$	1,334		$	2,843		$	(443	)	$	(1,377	)

(1) For the three months ended June 30, 2014 and 2013, these amounts are recorded in interest expense on RSO's consolidated statements of income.

(2) For the three months ended June 30, 2014 and 2013, these amounts are recorded in interest income on loans on RSO's consolidated statements of income.

(3)

Summary 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
June 30, 2014
Allowance for Loan Losses:
Allowance for losses at January 1, 2014	$	10,416		$	3,391		$	—	$	—	$	13,807
Provision for loan loss	(4,511		)	607			26		700		(3,178		)
Loans charged-off	(61		)	(3,329		)	—		—		(3,390		)
Allowance for losses at June 30, 2014	$	5,844		$	669		$	26	$	700	$	7,239
Ending balance:
Individually evaluated for impairment	$	1,800		$	441		$	—	$	700	$	2,941
Collectively evaluated for impairment	$	4,044		$	228		$	26	$	—	$	4,298
Loans acquired with deteriorated credit quality	$	—		$	—		$	—	$	—	$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	172,583		$	1,566		$	—	$	5,451	$	179,600
Collectively evaluated for impairment (1)	$	865,561		$	704,806		$	2,470			$	1,572,837
Loans acquired with deteriorated credit quality	$	—		$	119		$	—	$	—	$	119
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: (2)
Individually evaluated for impairment	$	194,403		$	3,554		$	—	$	6,966	$	204,923
Collectively evaluated for impairment	$	631,908		$	558,469		$	16,915	$	—	$	1,207,292
Loans acquired with deteriorated credit quality	$	—		$	—		$	—	$	—	$	—

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 June 30, 2014
Bank loans	$	666,578	$	33,999	$	3,551	$	768	$	1,685	$	15,427	$	722,008
As of December 31, 2013
Bank loans	$	488,004	$	42,476	$	18,806	$	2,333	$	3,554	$	6,850	$	562,023

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 June 30, 2014
Whole loans	$	900,246	$	32,500	$	22,000	$	—	$	—	$	954,746
B notes	16,138		—		—		—		—		16,138
Mezzanine loans	45,460		21,800		—		—		—		67,260
	$	961,844	$	54,300	$	22,000	$	—	$	—	$	1,038,144
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

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
June 30, 2014
Whole loans	$	—	$	—	$	—	$	—	$	954,746	$	954,746	$	—
B notes	—		—		—		—		16,138		16,138		—
Mezzanine loans	—		—		—		—		67,260		67,260		—
Bank loans (1) (2)	—		—		1,685		1,685		720,323		722,008		—
Residential mortgage loans (3)	—		—		266		266		27,063		27,329		—
Loans receivable-related party	—		—		—		—		5,451		5,451		—
Total loans	$	—	$	—	$	1,951	$	1,951	$	1,790,981	$	1,792,932	$	—
December 31, 2013
Whole loans	$	—	$	—	$	—	$	—	$	745,789	$	745,789	$	—
B notes	—		—		—		—		16,205		16,205		—
Mezzanine loans	—		—		—		—		64,317		64,317		—
Bank loans (2)	—		—		3,554		3,554		558,469		562,023		—
Residential mortgage loans (3)	234		91		268		593		16,322		16,915		—
Loans receivable-related party	—		—		—		—		6,966		6,966		—
Total loans	$	234	$	91	$	3,822	$	4,147	$	1,408,068	$	1,412,215	$	—

Information about Company's Impaired Financing Receivables

The following tables show impaired loans as of the dates indicated (in thousands):

	Recorded Balance		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
June 30, 2014
Loans without a specific valuation allowance:
Whole loans	$	127,511	$	127,511	$	—		$	126,070	$	10,682
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	38,072	$	38,072	$	—		$	38,072	$	2,229
Bank loans	$	119	$	119	$	—		$	119	$	—
Residential mortgage loans	$	2,470	$	2,470	$	—		$	2,470	$	65
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—
Loans with a specific valuation allowance:
Whole loans	$	7,000	$	7,000	$	(1,800	)	$	7,000	$	591
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	—	$	—	$	—		$	—	$	—
Bank loans	$	1,566	$	1,566	$	(441	)	$	1,566	$	—
Residential mortgage loans	$	—	$	—	$	—		$	—	$	—
Loans receivable - related party	$	4,657	$	4,657	$	(700	)	$	5,195	$	85
Total:
Whole loans	$	134,511	$	134,511	$	(1,800	)	$	133,070	$	11,273
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		2,229
Bank loans	1,685		1,685		(441		)	1,685		—
Residential mortgage loans	2,470		2,470		—			2,470		65
Loans receivable - related party	4,657		4,657		(700		)	5,195		85
	$	181,395	$	181,395	$	(2,941	)	$	180,492	$	13,652

	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	$	130,759	$	—		$	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	$	156,331	$	(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	$	203,958	$	(7,193	)	$	186,315	$	11,676

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

The following tables show troubled-debt restructurings in RSO's loan portfolio during the six months ended June 30, 2013 (in thousands):

	Number of Loans	Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Six Months Ended June 30, 2013
Whole loans	2	$	56,328	$	56,328
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Residential mortgage loans	—	—		—
Loans receivable	1	6,592		6,592
Total loans	3	$	62,920	$	62,920

Schedule of Intangible Assets and Goodwill

The following table summarizes intangible assets (in thousands).

	Asset Balance		Accumulated Amortization			Net Asset
June 30, 2014
Investment in RCAM	$	21,213	$	(10,872	)	$	10,341
Investment in PCM:
Wholesale or correspondent relationships	600		(170		)	430
Total intangible assets	$	21,813	$	(11,042	)	$	10,771
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 PCM:
Wholesale or correspondent relationships	600		(42		)	558
Total intangible assets	$	24,303	$	(12,481	)	$	11,822

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table sets forth the allocation of the purchase price as of December 31, 2013 (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

Debt and Credit Facilities

Certain information with respect to RSO’s borrowings 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
June 30, 2014
RREF CDO 2006-1 Senior Notes	$	106,029	$	51	$	106,080	1.92%	32.1 years	$	174,237	August 2006
RREF CDO 2007-1 Senior Notes	126,004		355		126,359		0.99%	32.3 years	361,432		June 2007
RCC CRE Notes 2013	256,807		3,683		260,490		2.02%	14.5 years	281,846		December 2013
Apidos CDO I Senior Notes	56,922		—		56,922		2.24%	3.1 years	73,276		August 2005
Apidos CDO III Senior Notes	97,458		—		97,458		1.01%	6.2 years	109,325		May 2006
Apidos Cinco CDO Senior Notes	319,639		553		320,192		0.73%	5.9 years	341,777		May 2007
Whitney CLO I Senior Notes (1)	—		—		—		—%	N/A	79		N/A
Moselle CLO S.A. Senior Notes, at fair value (6)	140,220		—		140,220		1.04%	5.5 years	175,641		October 2005
Moselle CLO S.A. Securitized Borrowings, at fair value	5,208		—		5,208		1.04%	N/A	—		N/A
Unsecured Junior Subordinated Debentures (2)	51,104		444		51,548		4.18%	22.3 years	—		May/Sept 2006
6.0% Convertible Senior Notes	107,550		7,450		115,000		6.00%	4.4 years	—		October 2013
CRE - Term Repurchase Facilities (3)	217,679		448		218,127		2.58%	17 days	315,579		N/A
CMBS - Term Repurchase Facility (4)	30,833		—		30,833		1.37%	18 days	37,784		N/A
RMBS- Term Repurchase Facility (5)	22,997		28		23,025		1.15%	1 day	27,669		N/A
Residential Mortgage Financing Agreements	23,679		—		23,679		3.99%	130 days	32,399		N/A
CMBS - Short Term Repurchase Agreements	17,705		—		17,705		1.40%	2 days	20,813		N/A
Total	$	1,579,834	13,012		1,592,846		1.96%	9.8 years	$	1,951,857

	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

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

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

(3) Amounts also include accrued interest costs of $207,000 and $26,000 related to CRE repurchase facilities as of June 30, 2014 and December 31, 2013, respectively.

(4) Amounts also include accrued interest costs of $14,000 and $22,000 related to CMBS repurchase facilities as of June 30, 2014 and December 31, 2013, respectively. Amounts do note reflect CMBS repurchase agreement borrowings that are components of linked transactions.

(5) Amount also includes accrued interest costs of $1,000 related to RMBS repurchase facilities as of June 30, 2014.

(6) The fair value option has been elected for the borrowings associated with Moselle CLO S.A., as such, the outstanding borrowings and principal outstanding amounts are state at fair value. The unpaid principal amounts of these borrowings were $143 million at June 30, 2014.

Schedule of Short-term Debt

The following table sets forth certain information with respect to RSO's borrowings is summarized in the following table (dollars in thousands):

	June 30, 2014						December 31, 2013
	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)	$	30,833	$	37,784	47	1.37%	$	47,601		$	56,949	44	1.38%
CRE Term Repurchase Facilities
Wells Fargo Bank (2)	202,821		293,496		12	2.55%	30,003			48,186		8	2.67%
Deutsche Bank AG (3)	14,858		22,083		3	3.03%	(300		)	—		—	—%
Short-Term Repurchase Agreements - CMBS
Deutsche Bank Securities, LLC	17,705		20,813		6	1.40%	—			—		—	—%
RMBS Term Repurchase Facility
Wells Fargo Bank (4)	22,997		27,669		6	1.15%	—			—		—	—%
Residential Mortgage Financing Agreements
New Century Bank	14,772		17,519		78	3.91%	11,916			13,089		74	4.17%
ViewPoint Bank, NA	8,907		14,880		48	4.12%	2,711			3,398		17	4.58%
Totals	$	312,893	$	434,244			$	91,931		$	121,622

(1) The Wells Fargo CMBS term facility borrowing includes zero and $12,000 of deferred debt issuance costs as of June 30, 2014 and December 31, 2013, respectively.

(2) The Wells Fargo CRE term repurchase facility borrowing includes $419,000 and $732,000 of deferred debt issuance costs as of June 30, 2014 and December 31, 2013, respectively.

(3) The Deutsche Bank term repurchase facility includes $29,000 and $300,000 of deferred debt issuance costs as of June 30, 2014 and December 31, 2013, respectively.

(4) The Wells Fargo RMBS term repurchase facility includes $28,000 of deferred debt issuance costs as of June 30, 2014.

Schedule of Linked Transactions

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.

	June 30, 2014						December 31, 2013
	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	$	5,959	$	7,750	7	1.63%	$	6,506	$	8,345	7	1.65%
CRE Term    Repurchase    Facility
Wells Fargo Bank	—		—		—	—%	—		—		—	—%
Short-Term    Repurchase    Agreements -    CMBS
JP Morgan Securities, LLC	—		—		—	—%	17,020		24,814		4	0.99%
Wells Fargo Securities, LLC	4,183		6,309		7	1.37%	21,969		30,803		9	1.19%
Deutsche Bank Securities, LLC	18,584		28,211		15	1.41%	18,599		29,861		9	1.43%
Totals	$	28,726	$	42,270			$	64,094	$	93,823

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
June 30, 2014
CMBS Term Repurchase Facility
Wells Fargo Bank, National Association (2)	$	7,549	18	1.37%
RMBS Term Repurchase Facility
Wells Fargo Bank, National Association	$	5,725	1	1.15%
CRE Term Repurchase Facilities
Wells Fargo Bank, National Association	$	128,915	18	2.55%
Deutsche Bank Securities, LLC	$	15,435	18	3.03%
Short-Term Repurchase Agreements - CMBS
JP Morgan Securities, LLC (3)	$	—	0	—%
Wells Fargo Securities, LLC	$	2,115	30	1.37%
Deutsche Bank Securities, LLC	$	9,778	26	1.40%
Residential Mortgage Financing Agreements
New Century Bank	$	15.227	62	3.91%
View Point Bank, NA	$	9,089	183	4.12%
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	$	8,925	2	1.19%
Deutsche Bank Securities, LLC	$	11,418	22	1.43%

(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) $6.0 million and $6.5 million of linked repurchase agreement borrowings are being included as derivative instruments as of June 30, 2014 and December 31, 2013, respectively.

(3) There are no linked repurchase agreement borrowings being included as derivative instruments as of June 30, 2014. As of December 31, 2013 $17.0 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
June 30, 2014
Assets:
Investment securities, trading	$	—	$	—	$	8,951	$	8,951
Investment securities available-for-sale	1,886		1,581		261,036		264,503
CMBS - linked transactions	—		—		13,676		13,676
Derivatives (net)	—		755		—		755
Total assets at fair value	$	1,886	$	2,336	$	283,663	$	287,885
Liabilities:
Derivatives (net)	—		785		9,070		9,855
Total liabilities at fair value	$	—	$	785	$	9,070	$	9,855
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

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):

	CMBS Including Linked Transactions			ABS			RMBS			Structured Finance			Total
Beginning balance, January 1, 2014	$	210,785		$	26,656		$	451		$	11,107		$	248,999
Total gains or losses (realized or unrealized):
Included in earnings	(720		)	470						379			129
Purchases	93,291			37,397			31,058			—			161,746
Sales	(99,151		)	(2,494		)				(758		)	(102,403		)
Paydowns	(25,435		)	(5,403		)	(18		)	—			(30,856		)
Included in OCI	7,280			1,388			(511		)	(2,109		)	6,048
Transfers out of Level 2	—			—			—			—			—
Transfers into level 3	—			—			—			—			—
Ending balance, June 30, 2014	$	186,050		$	58,014		$	30,980		$	8,619		$	283,663

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, 2014	$	10,191
Unrealized losses – included in accumulated other comprehensive income	(1,121		)
Ending balance, June 30, 2014	$	9,070

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
June 30, 2014
Assets:
Loans held for sale	$	—	$	15,427	$	24,859	$	40,286
Impaired loans	—		1,125		5,200		6,325
Total assets at fair value	$	—	$	16,552	$	30,059	$	46,611
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

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 June 30, 2014		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Interest rate swap agreements	$	9,070	Discounted cash flow	Weighted average credit spreads	5.12	%

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 in the following table (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)
June 30, 2014
Loans held-for-investment (1)	$	1,740,656	$	1,732,134	$	—	$	704,319	$	1,027,815
Loans receivable-related party	$	4,751	$	4,751	$	—	$	—	$	4,751
CDO notes (2)	$	1,108,287	$	1,020,334	$	—	$	1,020,334	$	—
Junior subordinated notes	$	51,104	$	17,598	$	—	$	—	$	17,598
Repurchase agreements	$	312,893	$	312,893	$	—	$	—	$	312,893
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

(1) Contains loans for which the fair value method was elected with an unpaid principal balance of $124.9 million and a fair value of $120.8 million at June 30, 2014.

(2) Contains notes for which the fair value method was elected with an unpaid principal balance of $143.0 million and a fair value of $140.2 million at June 30, 2014.