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VARIABLE INTEREST ENTITIES (Tables)

9 Months Ended

Sep. 30, 2015

Variable Interest Entity [Line Items]

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 September 30, 2015 (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
Pearlmark	—		3,647		3,647
	$	158	$	4,325	$	4,483


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

Supplemental Cash Flow Information

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



	Nine Months Ended
	September 30,
	2015			2014
Cash (paid) received:
Interest	$	(1,356	)	$	(1,249	)
Income tax payments	(1,270		)	(952		)
Refund of income taxes	69			167

Dividends declared per common share	$	0.18		$	0.16

Non-cash activities:
Repurchase of common stock from employees in exchange for the payment of income taxes	$	173		$	263
Repurchase common stock in exchange for the exercise of warrants	—			1,754
Issuance of treasury stock for the Company's investment savings 401(k) plan	371			368
Leasehold improvements paid by the landlord	60			—

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
September 30, 2015
CLO securities	$	1,095	$	(45	)	2	$	883	$	(32	)	2
Equity securities	106		(3		)	1	—		—			—
Total	$	1,201	$	(48	)	3	$	883	$	(32	)	2
December 31, 2014
CLO securities	$	2,643	$	(176	)	4	$	—	$	—		—
Equity securities	—		—			—	—		—			—
Total	$	2,643	$	(176	)	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	September 30, 2015		December 31, 2014
Real estate investment entities	1% – 12%	$	11,496	$	8,313
Financial fund management partnerships	0.01% − 50%	6,175		4,162
Trapeza entities	33% − 50%	678		614
Investments in unconsolidated entities		$	18,349	$	13,089

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):



	Receivables from Managed Entities			Leases and Loans			Rent Receivables		Total
Three Months Ended September 30, 2015:
Balance, beginning of period	$	17,665		$	—		$	2	$	17,667
Provision for (reversal) of credit losses	(402		)	—			2		(400		)
(Charge-offs) recoveries	(17,263		)	—			—		(17,263		)
Balance, end of period	$	—		$	—		$	4	$	4

Ending balance, individually evaluated for impairment	$	—		$	—		$	4	$	4
Ending balance, collectively evaluated for impairment	—			—			—		—
Balance, end of period	$	—		$	—		$	4	$	4

Nine Months Ended September 30, 2015:
Balance, beginning of period	$	16,990		$	—		$	—	$	16,990
Provision for (reversal) of credit losses	273			1			4		278
(Charge-offs) recoveries	(17,263		)	(1		)	—		(17,264		)
Balance, end of period	$	—		$	—		$	4	$	4

Ending balance, individually evaluated for impairment	$	—		$	—		$	4	$	4
Ending balance, collectively evaluated for impairment	—			—			—		—
Balance, end of period	$	—		$	—		$	4	$	4



	Loans and Receivables from Managed Entities			Leases and Loans			Rent Receivables			Total
Three Months Ended September 30, 2014:
Balance, beginning of period	$	39,028		$	—		$	2		$	39,030
Loan	520			30			9			559
(Charge-offs) recoveries	(7,028		)	(28		)	(6		)	(7,062		)
Balance, end of period	$	32,520		$	2		$	5		$	32,527

Nine Months Ended September 30, 2014:
Balance, beginning of period	$	36,229		$	—		$	14		$	36,243
Provision for credit losses	3,321			25			(4		)	3,342
(Charge-offs) recoveries	(7,030		)	(23		)	(5		)	(7,058		)
Balance, end of period	$	32,520		$	2		$	5		$	32,527

Ending balance, individually evaluated for impairment	$	32,520		$	2		$	—		$	32,522
Ending balance, collectively evaluated for impairment	—			—			5			5
Balance, end of period	$	32,520		$	2		$	5		$	32,527

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 September 30, 2015 (in thousands):



	Current		30-89 Days Past Due		90-180 Days Past Due		Greater than 181 Days		Total Past Due		Total
Loans and receivables from managed entities and related parties:
Commercial finance investment entities	$	—	$	28	$	100	$	1,630	$	1,758	$	1,758
Real estate investment entities	5,190		590		1,271		14,827		16,688		21,878
Financial fund management entities	1,122		—		21		26		47		1,169
Other	333		—		—		—		—		333
	6,645		618		1,392		16,483		18,493		25,138
Rent receivables - real estate	158		2		2		2		6		164
Total financing receivables	$	6,803	$	620	$	1,394	$	16,485	$	18,499	$	25,302

The following table is the aging of the Company’s financing receivables (presented gross of allowance for credit losses) as of December 31, 2014 (in thousands):



	Current		30-89 Days Past Due		90-180 Days Past Due		Greater than 181 Days		Total Past Due		Total
Loans and receivables from managed entities and related parties: ⁽¹⁾
Commercial finance investment entities	$	9	$	342	$	1,124	$	18,398	$	19,864	$	19,873
Real estate investment entities	6,613		772		1,214		15,134		17,120		23,733
Financial fund management entities	583		74		—		6		80		663
Other	3,024		—		—		—		—		3,024
	10,229		1,188		2,338		33,538		37,064		47,293
Rent receivables - real estate	76		11		1		—		12		88
Total financing receivables	$	10,305	$	1,199	$	2,339	$	33,538	$	37,076	$	47,381


(1)	Receivables are presented gross of an allowance for credit losses of $17.0 million related to one of 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):

Debt and Credit Facilities

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



	As of September 30, 2015				December 31, 2014
	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	1,866		—		—
			—		—
Other debt:
Senior Notes			10,000		10,000
Mortgage debt - hotel property			9,932		10,088
Other debt			964		324
Total borrowings outstanding			$	20,896	$	20,412


(1)	The amount of the facility as shown has been reduced $503,000 for an outstanding letter of credit.

Company's Asset Recorded at Fair Value on Recurring Basis

The fair value of the Company’s assets and liability recorded at fair value on a recurring basis were as follows (in thousands):



	Level 1		Level 2		Level 3		Total
Assets - Investment securities
September 30, 2015	$	466	$	—	$	9,752	$	10,218
December 31, 2014	310		741		8,489		9,540



Liability - Apidos contractual commitment	Level 1		Level 2		Level 3		Total
September 30, 2015	$	—	$	—	$	627	$	627
December 31, 2014	—		—		745		745

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 nine months ended September 30, 2015 (in thousands):



	Investment Securities
Balance, beginning of year	$	8,489
Purchases	2,054
Income accreted	906
Payments and distributions received, net	(1,468		)
Sales	(175		)
Impairment	(152		)
Losses on sales of trading securities	(15		)
Unrealized holding gains on trading securities	87
Change in unrealized gains included in accumulated other comprehensive loss	26
Balance, end of period	$	9,752



	Investment Securities
Balance, beginning of year	$	7,407
Purchases	15,063
Income accreted	995
Payments and distributions received, net	(3,752		)
Sales	(13,235		)
Gain on sale of investment securities, net	445
Unrealized losses on trading securities	(200		)
Gains on trading securities	1,834
Change in unrealized losses included in accumulated other comprehensive loss	(68		)
Balance, end of period	$	8,489

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):



	September 30, 2015				December 31, 2014
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Borrowings:
Real estate debt	$	9,932	$	10,932	$	10,088	$	11,197
Senior Notes	10,000		12,515		10,000		12,820
Other debt	964		964		324		324
	$	20,896	$	24,411	$	20,412	$	24,341

RSO [Member]

Variable Interest Entity [Line Items]

Condensed Financial Statements

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



RSO Balance Sheets Detail (in thousands):
	September 30, 2015			December 31, 2014
ASSETS ⁽¹⁾
Cash and cash equivalents	$	104,735		$	79,905
Restricted cash	24,110			122,138
Subtotal - Cash and cash equivalents	128,845			202,043
Investment securities, trading	25,715			20,786
Investment securities available-for-sale, pledged as collateral, at fair value	118,797			197,800
Investment securities available-for-sale, at fair value	115,803			77,920
Subtotal - Investments, at fair value	260,315			296,506
Loans, pledged as collateral and net of allowances of $47.3 million and $4.6 million	2,118,978			1,925,980
Loans receivable–related party	—			558
Loans held for sale ($113.0 million and $113.4 million at fair value)	116,001			113,675
Subtotal - Loans, before eliminations	2,234,979			2,040,213
Eliminations	—			(558		)
Subtotal - Loans	2,234,979			2,039,655
Property held for sale	180			180
Investments in unconsolidated entities	55,858			59,827
Subtotal, Investments in real estate and unconsolidated entities	56,038			60,007
Line items included in "other assets":
Linked transactions, net at fair value	—			15,367
Derivatives, at fair value	3,730			5,304
Interest receivable	13,923			16,260
Deferred tax asset	11,351			12,634
Principal paydown receivable	32,100			40,920
Direct financing leases	1,135			2,109
Intangible assets	25,806			18,610
Prepaid expenses	5,049			4,196
Other assets	12,771			14,510
Subtotal - Other assets, before eliminations	105,865			129,910
Eliminations	—			(109		)
Subtotal - Other assets	105,865			129,801
Total assets (excluding eliminations)	$	2,786,042		$	2,728,679
Total assets (including eliminations)	$	2,786,042		$	2,728,012
LIABILITIES⁽²⁾
Borrowings	$	1,880,891		$	1,716,871
Eliminations	349			261
Subtotal Borrowings	1,881,240			1,717,132
Distribution payable	24,744			30,592
Accrued interest expense	5,437			2,123
Derivatives, at fair value	7,466			8,476
Accrued tax liability	4,697			9,219
Accounts payable and other liabilities	9,531			9,287
Subtotal - Other liabilities, before eliminations	51,875			59,697
Eliminations	(2,424		)	(2,596		)
Subtotal - Other liabilities	49,451			57,101
Total liabilities (before eliminations)	$	1,932,766		$	1,776,568
Total liabilities (after eliminations)	$	1,930,691		$	1,774,233



RSO Balance Sheets Detail (in thousands):
	September 30, 2015		December 31, 2014
(1) Assets of consolidated Variable Interest Entities ("VIE") included in total assets above:
Cash and cash equivalents	$	188	$	25
Restricted cash	22,206		121,247
Investments securities available-for-sale, pledged as collateral, at fair value	76,517		119,203
Loans held for sale	2,994		282
Loans, pledged as collateral and net of allowances of $43.0 million and $3.3 million	1,566,454		1,261,137
Interest receivable	7,848		8,941
Prepaid expenses	194		221
Principal paydown receivable	32,100		25,767
Other assets	882		(12		)
Total assets of consolidated RSO VIEs	$	1,709,383	$	1,536,811

(2) Liabilities of consolidated VIEs included in total liabilities above:
Borrowings	$	1,189,092	$	1,046,494
Accrued interest expense	953		1,000
Derivatives, at fair value	4,774		8,439
Unsettled loan purchases	—		(529		)
Accounts payable and other liabilities	208		(386		)
Total liabilities of consolidated RSO VIEs	$	1,195,027	$	1,055,018



RSO Operations Statement Detail (in thousands):
	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
REVENUES
Interest income:
Loans	$	33,502		$	27,026		$	95,924		$	73,474
Securities	4,866			5,168			14,418			12,563
Leases	(8		)	—			250			—
Interest income − other	968			1,647			2,919			5,481
Total interest income	39,328			33,841			113,511			91,518
Interest expense	16,906			11,508			47,611			31,746
Net interest income	22,422			22,333			65,900			59,772
Rental income	—			1,118			—			7,777
Dividend income	17			16			50			169
Fee income	1,266			2,344			6,317			7,166
Revenues from consolidated VIE-RSO	23,705			25,811			72,267			74,884
OPERATING EXPENSES
Management fees − related party	3,252			3,606			10,312			10,000
Equity compensation − related party	(225		)	798			1,561			4,497
Rental operating expense	—			695			6			5,168
Lease operating	(33		)	—			14			—
General and administrative - Corporate	4,372			3,716			13,222			11,305
General and administrative - PCM	6,966			4,631			20,767			12,196
Depreciation and amortization	628			562			1,814			2,158
Impairment losses	—			—			59			—
Provision (recovery) for loan losses	1,034			1,439			43,834			(1,739		)
Expenses of consolidated VIE-RSO	15,994			15,447			91,589			43,585
Adjusted operating income	7,711			10,364			(19,322		)	31,299
OTHER INCOME (EXPENSE)
Equity in earnings of unconsolidated subsidiaries	334			887			1,702			4,663
Net realized and unrealized gain (loss) on sales of investment securities available-for-sale and loans and derivatives	5,812			4,226			29,980			7,962
Net realized and unrealized gains (loss) on investment securities, trading	(580		)	376			1,773			(1,834		)
Unrealized gain (loss) and net interest income on linked transactions, net	—			177			235			7,494
(Loss) on reissuance/gain on extinguishment of debt	(332		)	(1,867		)	(1,403		)	(2,469		)
(Loss) gain on sale of real estate	(19		)	(69		)	(19		)	2,973
Other income (expense)	—			—			—			(1,262		)
Other income, net, from consolidated VIE - RSO	5,215			3,730			32,268			17,527
Income from continuing operations	12,926			14,094			12,946			48,826
Income tax (expense) benefit - RSO	1,796			237			(2,969		)	667
NET INCOME (LOSS)	14,722			14,331			9,977			49,493
Net (loss) income allocated to preferred shares	(6,115		)	(5,545		)	(18,322		)	(11,303		)
Net (income) loss allocable to non-controlling interest, net of taxes	(1,829		)	(1,458		)	(6,486		)	(1,069		)
NET INCOME (LOSS) ALLOCABLE TO RSO COMMON SHAREHOLDERS	$	6,778		$	7,328		$	(14,831	)	$	37,121



RSO Cash Flow Detail (in thousands)	For the Nine Months Ended
	September 30,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	9,977		$	49,493
Items included in "Change in cash attributable to consolidated VIE-RSO":
Provision for (recovery of) loan losses	43,834			(1,739		)
Depreciation, amortization, and accretion	10,122			2,463
Amortization of stock-based compensation	1,561			4,497
Amortization of (accretion) of terminated derivative instruments	1,219			212
Amortization (accretion)of interest-only available-for-sales securities	2,768			(573		)
Sale (origination) of residential mortgage loans held for sale, net	(647		)	(42,178		)
Sale (purchase) of and principal payments of securities, trading, net	(3,120		)	(3,571		)
Net realized and unrealized loss (gain) on investment securities, trading	(1,773		)	1,834
Net realized and unrealized (gain) loss on sales of investment securities available-for-sale and loans	(29,980		)	(15,487		)
Loss (gain) on the reissuance (extinguishment) of debt	1,403			2,469
Loss (gain) on sales of real estate	19			(2,973		)
Settlement of derivative instruments	3,870			(23		)
Net impairment losses recognized in earnings	59			—
Unrealized gain (loss) of unconsolidated subsidiaries	(235		)	(5,713		)
Equity in net (earnings) losses of unconsolidated subsidiaries	(1,702		)	(4,663		)
Changes in operating assets and liabilities, net of acquisitions	(3,225		)	6,067
Net cash provided by (used in) operating activities	24,173			(59,378		)
Change in consolidated VIE-RSO cash for the period	(24,830		)	99,001
Subtotal - Change in cash attributable to consolidated VIE-RSO before eliminations	(657		)	39,623
Elimination of intercompany activity	(97		)	2,714
Subtotal - Adjustments to reconcile net income (loss) and operating cash flows to net income (loss) of consolidated VIE-RSO	(754		)	42,337
Net cash provided by (used in ) operating activities of consolidated VIE-RSO (excluding eliminations)	34,150			(9,885		)



	For the Nine Months Ended
	September 30,
	2015		2014
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase and originations of loans	(629,832	)	(667,774	)
Purchase of securities available-for-sale	(28,375	)	(145,138	)
Subtotal - Purchase of loans and securities by consolidated VIE-RSO	(658,207	)	(812,912	)
Principal payments received on loans	294,901		315,778
Proceeds from sale of loans	108,446		76,314
Principal payments on securities available-for-sale	59,819		40,748
Proceeds from sale of securities available-for-sale	60,752		117,367
Principal payments received on loans - related parties	558		2,706
Investment in loans - related parties	—		(849	)
Subtotal - principal payments and proceeds from sales received by consolidated VIE-RSO, before eliminations	524,476		552,064

(Increase) decrease in restricted cash	96,887		18,328

Items included in "Other investing activity of consolidated VIE-RSO":
Return of capital from (investment in) unconsolidated entity	5,625		8,911
Acquisition of controlling interest in Moselle CLO S.A.	—		(30,433	)
Settlement of derivative instruments	8,028		(19,245	)
Proceeds from sale of real estate held-for-sale	47		31,639
Improvements of investments in real estate	—		(225	)
Purchase of furniture and fixtures	(10	)	(69	)
Acquisition of property and equipment	—		(362	)
Subtotal - Other investing activity of consolidated VIE-RSO, before eliminations	13,690		(9,784	)
Eliminations	(990	)	(391	)
Subtotal - Other investing activity of consolidated VIE-RSO	12,700		(10,175	)
Net cash used in investing activities of consolidated VIE-RSO (excluding eliminations)	(23,154	)	(252,304	)



	Nine Months Ended
	September 30,
	2015			2014
CASH FLOWS FROM FINANCING ACTIVITIES:
Items included in "Net borrowings (repayments) of debt by consolidated VIE-RSO"
Proceeds from borrowings:
Repurchase agreements, net of repayments	4,621			92,234
Senior secured revolving credit facility	110,500			35,500
Securitizations	505,862			235,344
Convertible senior notes	99,000			—
Reissuance of debt	16,597			39,635
Payments on borrowings:
Securitization	(374,778		)	(301,040		)
Senior secured revolving credit facility	(62,000		)	—
Payment of debt issuance costs	(13,235		)	(7,284		)
Repurchase agreements, net of borrowings	(161,645		)	(33,719		)
Subtotal - net borrowings of debt by consolidated VIE-RSO	124,922			60,670
Distributions paid on common stock	(69,433		)	(77,636		)
Elimination of dividends paid to RAI	1,374			1,716
Distributions paid on common stock of consolidated VIE-RSO, after eliminations	(68,059		)	(75,920		)
Net proceeds from issuances of common stock and dividend reinvestment and stock purchase plan, net of offering costs	163			25,416
Proceeds from issuance of preferred shares, net of offering costs	3,033			152,152
Repurchase of common stock	(15,433		)	—
Subtotal - net proceeds from issuance of stock by consolidated VIE-RSO	(12,237		)	177,568
Distributions paid to non-controlling interests	(14,050		)	(1,384		)
Proceeds received from non-controlling interests	3,424			12,676
Distributions to subordinated note holders	(518		)	(799		)
Distributions paid on preferred stock	(18,274		)	(7,907		)
Subtotal - Other consolidated financing activity of consolidated VIE-RSO, before eliminations	(29,418		)	2,586
Eliminations	185			175
Subtotal - Other consolidated financing activity of consolidated VIE-RSO	(29,233		)	2,761
Net cash provided by financing activities of consolidated VIE-RSO, excluding eliminations	13,834			163,188
Net increase (decrease) in cash and cash equivalents	24,830			(99,001		)
Cash and cash equivalents, beginning of year of consolidated VIE-RSO	79,905			262,270
Cash and cash equivalents, end of period of consolidated VIE-RSO	$	104,735		$	163,269

Supplemental disclosures:
Interest expense paid in cash	$	33,971		$	26,782
Income taxes paid in cash	$	9,518		$	3,293

Schedule of Variable Interest Entities

The following table shows the classification and carrying value of assets and liabilities of RSO's consolidated VIEs as of September 30, 2015 (in thousands):



	Apidos I		Apidos III		Apidos Cinco		Whitney CLO I		RREF 2006-1		RREF 2007-1		RCC CRE Notes 2013			RCC 2014-CRE2		RCC 2015-CRE3		RCC 2015-CRE4		Moselle		RCM Global, LLC		Total
ASSETS ⁽¹⁾
Cash and cash equivalents	$	—	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—	$	—	$	—	$	188	$	188
Restricted cash (1)	71		192		14,503		116		24		255		1,686			—		—		5,005		354		—		22,206
Investment securities available-for-sale, pledged as collateral, at fair value	—		—		9,653		—		5,933		55,781		—			—		—		—		—		5,150		76,517
Loans, pledged as collateral	—		—		148,549		—		88,193		190,614		139,956			351,620		342,944		304,578		—		—		1,566,454
Loans held for sale	153		—		2,841		—		—		—		—			—		—		—		—		—		2,994
Interest receivable	—		—		805		—		350		1,329		740			1,324		1,241		1,109		—		950		7,848
Prepaid assets	—		5		29		—		69		74		12			5		—		—		—		—		194
Principal paydown receivable	—		—		—		—		—		—		32,100			—		—		—		—		—		32,100
Other assets	—		—		—		—		—		—		161			8		—		—		—		713		882
Total assets ⁽²⁾	$	224	$	197	$	176,380	$	116	$	94,569	$	248,053	$	174,655		$	352,957	$	344,185	$	310,692	$	354	$	7,001	$	1,709,383

LIABILITIES
Borrowings	$	—	$	—	$	152,310	$	—	$	52,820	$	127,195	$	125,833		$	232,030	$	278,444	$	220,403	$	57	$	—	$	1,189,092
Accrued interest expense	—		—		209		—		25		101		122			127		214		155		—		—		953
Derivatives, at fair value	—		—		—		—		197		4,577		—			—		—		—		—		—		4,774
Unsettled loan purchases	—		—		—		—		—		—		—			—		—		—		—		—		—
Accounts payable and other liabilities	—		—		13		—		17		5		(2		)	10		—		—		154		11		208
Total liabilities	$	—	$	—	$	152,532	$	—	$	53,059	$	131,878	$	125,953		$	232,167	$	278,658	$	220,558	$	211	$	11	$	1,195,027


(1)	Includes $6.9 million designated to fund future commitments on specific commercial real estate loans 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.


(3)	In October 2013, RSO liquidated Apidos CLO VIII and all of the assets were sold. However, RSO still owns its share of beneficial interests that caused it to consolidate it.

The following table shows the classification, carrying value and maximum exposure to loss with respect to RSO’s unconsolidated VIEs as of September 30, 2015 (in thousands):



	Unconsolidated Variable Interest Entities
	LCC		Unsecured Junior Subordinated Debentures			Resource Capital Asset Management CDOs		Investment in ZAIS and Harvest XV		Total		Maximum Exposure to Loss
Investment in unconsolidated entities	$	40,779	$	1,548		$	—	$	24,471	$	66,798	$	66,798
Intangible assets	—		—			8,088		—		8,088		8,088
Total assets	40,779		1,548			8,088		24,471		74,886

Borrowings	—		51,360			—		—		51,360		N/A
Total liabilities	—		51,360			—		—		51,360		N/A
Net asset (liability)	$	40,779	$	(49,812	)	$	8,088	$	24,471	$	23,526	N/A

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information is summarized for the periods indicated (in thousands):



	For the Nine Months Ended
	September 30,
	2015		2014
Non-cash operating activities include the following:
Reclassification of linked transactions, net at fair value to investment securities available-for-sale, pledged as collateral, at fair value and borrowings ⁽¹⁾	$	15,367	$	—

Non-cash investing activities include the following:
Reclassification of linked transactions, net at fair value to investment securities available-for-sale, pledged as collateral, at fair value ⁽¹⁾	$	48,764	$	—

Non-cash financing activities include the following:
Distributions on common stock declared but not paid	$	20,667	$	26,629
Distributions on preferred stock declared but not paid	$	4,077	$	5,555
Reclassification of linked transactions, net at fair value to borrowings ⁽¹⁾	$	33,397	$	—


(1)	As a result of an accounting standards update adopted on January 1, 2015, RSO unlinked their previously linked transactions, resulting in non-cash increases in both its investment securities available-for-sale, pledged as collateral, at fair value and related repurchase agreements borrowings balances.

Investment Trading Securities at Fair Value

The following table summarizes RSO's structured notes and RMBS that are classified as investment securities, trading and carried at fair value (in thousands). Structured notes are CLO debt securities collateralized by syndicated bank loans, and RMBS is a type of mortgage-backed debt obligation whose cash flows come from residential mortgage debt.



	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
As of September 30, 2015:
Structured notes	$	26,635	$	1,952	$	(2,872	)	$	25,715
RMBS	1,896		—		(1,896		)	—
Total	$	28,531	$	1,952	$	(4,768	)	$	25,715

As of December 31, 2014:
Structured notes	$	22,876	$	1,098	$	(3,188	)	$	20,786
RMBS	1,896		—		(1,896		)	—
Total	$	24,772	$	1,098	$	(5,084	)	$	20,786

Available-for-sale Securities

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



	For the Three Months Ended						For the Nine Months Ended
	Positions Sold	Positions Redeemed	Par Amount Sold/Redeemed		Realized Gain (Loss)		Positions Sold	Positions Redeemed	Par Amount Sold/Redeemed		Realized Gain (Loss)
September 30, 2015:
ABS	8	—	$	15,462	$	2,437	15	—	$	31,399	$	10,547
RMBS	—	—	$	—	$	—	0.006	—	$	28,305	$	984

September 30, 2014:
ABS	3	—	$	6,947	$	2,974	3	—	$	9,447	$	3,000
Corporate bonds	—	1	$	1,000	$	48	—	—	$	1,630	$	47
CMBS	—	—	$	—	$	—	6	—	$	28,470	$	182

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
As of September 30, 2015:
CMBS	$	175,167	$	3,902	$	(1,244	)	$	177,825
RMBS	2,286		111		(77		)	2,320
ABS	47,110		5,419		(381		)	52,148
Corporate bonds	2,420		—		(113		)	2,307
Total	$	226,983	$	9,432	$	(1,815	)	$	234,600

As of December 31, 2014:
CMBS	$	168,669	$	4,938	$	(3,202	)	$	170,405
RMBS	29,814		937		—			30,751
ABS	55,617		16,876		(336		)	72,157
Corporate bonds	2,415		10		(18		)	2,407
Total	$	256,515	$	22,761	$	(3,556	)	$	275,720


(1)	As of September 30, 2015 and December 31, 2014, $118.8 million and $197.8 million, respectively, of investment securities available-for-sale were pledged as collateral under related financings.

Estimated maturities of available for sale securities

The following table summarizes the estimated maturities of RSO’s CMBS, RMBS, 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
As of September 30, 2015:
Less than one year	$	125,357	⁽¹⁾	$	124,387	8.18	%
Greater than one year and less than five years	82,189			77,757		6.66	%
Greater than five years and less than ten years	13,643			11,779		10.19	%
Greater than ten years	13,411			13,060		9.02	%
Total	$	234,600		$	226,983	7.81	%

As of December 31, 2014:
Less than one year	$	78,095	⁽¹⁾	$	79,649	4.13	%
Greater than one year and less than five years	115,302			100,909		4.64	%
Greater than five years and less than ten years	20,177			17,516		16.45	%
Greater than ten years	62,146			58,441		7.86	%
Total	$	275,720		$	256,515	6.08	%


(1)	RSO expects that the maturity date of these CMBS and ABS will either be extended or the security 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		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses			Number of Securities
As of September 30, 2015:
CMBS	$	73,950	$	(340	)	38	$	16,649	$	(904	)	13	$	90,599	$	(1,244	)	51
ABS	7,082		(195		)	8	1,132		(186		)	8	8,214		(381		)	16
Corporate Bonds	945		(6		)	2	1,362		(107		)	1	2,307		(113		)	3
RMBS	1,241		(77		)	2	—		—			—	1,241		(77		)	2
Total temporarily impaired securities	$	83,218	$	(618	)	50	$	19,143	$	(1,197	)	22	$	102,361	$	(1,815	)	72

As of December 31, 2014:
CMBS	$	35,860	$	(555	)	22	$	25,583	$	(2,647	)	13	$	61,443	$	(3,202	)	35
ABS	1,000		(278		)	8	958		(58		)	3	1,958		(336		)	11
Corporate Bonds	1,447		(18		)	1	—		—			—	1,447		(18		)	1
Total temporarily impaired securities	$	38,307	$	(851	)	31	$	26,541	$	(2,705	)	16	$	64,848	$	(3,556	)	47

Schedule of Receivables with Imputed Interest

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



Loan Description	Principal			Unamortized (Discount) Premium, Net ⁽¹⁾			Carrying Value ⁽²⁾
As of September 30, 2015:
Commercial real estate loans:
Whole loans	$	1,612,442		$	(9,057	)	$	1,603,385
B notes	15,984			(20		)	15,964
Mezzanine loans	45,382			5			45,387
Total commercial real estate loans	1,673,808			(9,072		)	1,664,736
Bank loans	150,122			(489		)	149,633
Middle market loans	350,325			(854		)	349,471
Residential mortgage loans, held for investment	2,422			—			2,422
Subtotal loans before allowance	2,176,677			(10,415		)	2,166,262
Allowance for loan loss	(47,284		)	—			(47,284		)
Total loans held for investment, net of allowance	2,129,393			(10,415		)	2,118,978
Bank loans held for sale	2,994			—			2,994
Residential mortgage loans held for sale, at fair value⁽³⁾	113,007			—			113,007
Total loans held for sale	116,001			—			116,001
Total loans, net	$	2,245,394		$	(10,415	)	$	2,234,979

As of December 31, 2014:
Commercial real estate loans:
Whole loans	$	1,271,121		$	(7,529	)	$	1,263,592
B notes	16,120			(48		)	16,072
Mezzanine loans	67,446			(80		)	67,366
Total commercial real estate loans	1,354,687			(7,657		)	1,347,030
Bank loans	332,058			(1,410		)	330,648
Middle market loans	250,859			(746		)	250,113
Residential mortgage loans, held for investment	2,802			—			2,802
Subtotal loans before allowances	1,940,406			(9,813		)	1,930,593
Allowance for loan loss	(4,613		)	—			(4,613		)
Total loans held for investment, net of allowance	1,935,793			(9,813		)	1,925,980
Bank loans held for sale	282			—			282
Residential mortgage loans held for sale, at fair value ⁽³⁾	113,393			—			113,393
Total loans held for sale	113,675			—			113,675
Total loans, net	$	2,049,468		$	(9,813	)	$	2,039,655


(1)	Amounts include deferred amendment fees of $45,000 and $88,000 and deferred upfront fees of $19,000 and $82,000 being amortized over the life of the bank loans as of September 30, 2015 and December 31, 2014, respectively. Amounts include loan origination fees of $9.5 million and $8.1 million as of September 30, 2015 and December 31, 2014, respectively.


(2)	Substantially all loans are pledged as collateral under various borrowings at September 30, 2015 and December 31, 2014, respectively.


(3)	Residential mortgage loans held for sale, at fair value consisted of $60.5 million and $52.5 million of agency-conforming and jumbo mortgage loans, respectively, as of September 30, 2015. Residential mortgage loans held for sale, at fair value consisted of $28.9 million and $82.6 million of agency-conforming and jumbo mortgage loans, respectively, as of December 31, 2014.

Schedule of Equity Method Investments

The following table shows RSO's investments in unconsolidated entities as of September 30, 2015 and December 31, 2014 and equity in earnings of unconsolidated subsidiaries for the three and nine months ended September 30, 2015 and 2014 (in thousands):



						Equity in Earnings of Unconsolidated Subsidiaries
		Balance as of		Balance as of		For the three months ended			For the nine months ended			For the three months ended			For the nine months ended
	Ownership %	September 30, 2015		December 31, 2014		September 30, 2015			September 30, 2015			September 30, 2014			September 30, 2014
Värde Investment Partners, L.P.	7.5%	$	654	$	654	$	—		$	—		$	—		$	(19	)
RRE VIP Borrower, LLC ⁽¹⁾	3% to 5%	—		—		—			46			770			2,506
Investment in LCC Preferred Stock	28.4%	40,779		39,416		961			1,362			13			(859		)
Investment in CVC Global Credit Opportunities Fund ⁽²⁾	14.1%	12,877		18,209		(628		)	293			47			2,004
Investment in Life Care Funding⁽³⁾	60.7%	—		—		—			—			—			(75		)
Investment in School Lane House ⁽¹⁾		—		—		1			1			57			1,106
Subtotal		54,310		58,279		334			1,702			887			4,663
Investment in RCT I and II ⁽⁴⁾	3.0%	1,548		1,548		(610		)	(1,805		)	(601		)	(1,785		)
Investment in Preferred Equity⁽¹⁾⁽⁵⁾		—		—		—			—			—			410
Total		$	55,858	$	59,827	$	(276	)	$	(103	)	$	286		$	3,288


(1)	Investment in School Lane House, Investment in RRE VIP Borrower and the Investment in Preferred Equity were sold or repaid as of December 31, 2014.


(2)	In March 2015, RSO elected a partial redemption of $5.0 million from the fund.

(3)

In January 2013, Long Term Care Conversion ("LTCC") invested $2.0 million into Life Care Funding, LLC ("LCF") for the purpose of originating and acquiring life settlement contracts. In February 2014, RSO invested an additional $1.4 million which resulted in the consolidation of LCF during the first quarter of 2014. Ownership percentage represents ownership following the additional investment and consolidation.


(4)	For the three and nine months ended September 30, 2015 and 2014, these amounts are recorded in interest expense on RSO's consolidated statements of operations.

(5) For the nine months ended September 30, 2014, these amounts are recorded in interest income on loans on RSO's consolidated statements of operations.

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			Middle Market Loans			Residential Mortgage Loans			Loans Receivable-Related Party			Total
As of September 30, 2015:
Allowance for Loan Losses:
Allowance for losses at January 1, 2015	$	4,043		$	570		$	—		$	—		$	—		$	4,613
Provision (recovery) for loan losses	38,025			1,912			4,223			(110		)	(216		)	43,834
Loans charged-off	—			(1,398		)	(137		)	110			216			(1,209		)
Recoveries	46			—			—			—			—			46
Allowance for losses at September 30, 2015	$	42,114		$	1,084		$	4,086		$	—		$	—		$	47,284
Ending balance:
Individually evaluated for impairment	$	40,274		$	345		$	4,086		$	—		$	—		$	44,705
Collectively evaluated for impairment	$	1,840		$	739		$	—		$	—		$	—		$	2,579
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	129,078		$	474		$	349,471		$	—		$	—		$	479,023
Collectively evaluated for impairment	$	1,535,658		$	149,159		$	—		$	2,422		$	—		$	1,687,239
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—

As of December 31, 2014:
Allowance for Loan Losses:
Allowance for losses at January 1, 2014	$	10,416		$	3,391		$	—		$	—		$	—		$	13,807
Provision (recovery) for loan losses	(3,758		)	4,173			92			—			1,297			1,804
Loans charged-off	(2,615		)	(6,994		)	(92		)	—			(1,297		)	(10,998		)
Allowance for losses at December 31, 2014	$	4,043		$	570		$	—		$	—		$	—		$	4,613
Ending balance:
Individually evaluated for impairment	$	—		$	570		$	—		$	—		$	—		$	570
Collectively evaluated for impairment	$	4,043		$	—		$	—		$	—		$	—		$	4,043
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	166,180		$	1,350		$	250,113		$	—		$	1,277		$	418,920
Collectively evaluated for impairment	$	1,180,850		$	329,580		$	—		$	2,802		$	—		$	1,513,232
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 September 30, 2015:
Bank loans	$	133,727	$	10,836	$	2,148	$	2,448	$	474	$	2,994	$	152,627

As of December 31, 2014:
Bank loans	$	291,214	$	32,660	$	5,424	$	—	$	1,350	$	282	$	330,930

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



	Rating 1		Rating 2		Rating 3		Rating 4		Rating 5		Held for Sale		Total
As of September 30, 2015:
Middle market loans	$	52,206	$	255,237	$	37,072	$	—	$	4,956	$	—	$	349,471

As of December 31, 2014:
Middle market loans	$	—	$	240,245	$	9,868	$	—	$	—	$	—	$	250,113

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 September 30, 2015:
Whole loans	$	1,568,683	$	32,500	$	—	$	2,202	$	—	$	1,603,385
B notes	15,964		—		—		—		—		15,964
Mezzanine loans	7,315		—		—		38,072		—		45,387
	$	1,591,962	$	32,500	$	—	$	40,274	$	—	$	1,664,736

As of December 31, 2014:
Whole loans	$	1,231,092	$	32,500	$	—	$	—	$	—	$	1,263,592
B notes	16,072		—		—		—		—		16,072
Mezzanine loans	45,432		21,934		—		—		—		67,366
	$	1,292,596	$	54,434	$	—	$	—	$	—	$	1,347,030

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 amortized cost (in thousands):



	30-59 Days		60-89 Days		Greater than 90 Days		Total Past Due		Current ⁽³⁾		Total Loans Receivable		Total Loans > 90 Days and Accruing
As of September 30, 2015:
Whole loans	$	—	$	—	$	—	$	—	$	1,603,385	$	1,603,385	$	—
B notes	—		—		—		—		15,964		15,964		—
Mezzanine loans	—		—		—		—		45,387		45,387		—
Bank loans ⁽¹⁾	—		—		474		474		152,153		152,627		—
Middle market loans	—		—		4,956		4,956		344,515		349,471		—
Residential mortgage loans ⁽²⁾	—		—		190		190		115,239		115,429		—
Total loans	$	—	$	—	$	5,620	$	5,620	$	2,276,643	$	2,282,263	$	—

As of December 31, 2014:
Whole loans	$	—	$	—	$	—	$	—	$	1,263,592	$	1,263,592	$	—
B notes	—		—		—		—		16,072		16,072		—
Mezzanine loans	—		—		—		—		67,366		67,366		—
Bank loans ⁽¹⁾	—		—		1,350		1,350		329,580		330,930		—
Middle market loans	—		—		—		—		250,113		250,113		—
Residential mortgage loans ⁽²⁾	443		82		119		644		113,612		114,256		—
Loans receivable-related party	—		—		—		—		1,277		1,277		—
Total loans	$	443	$	82	$	1,469	$	1,994	$	2,041,612	$	2,043,606	$	—


(1)	Contains $3.0 million and $282,000 of bank loans held for sale at September 30, 2015 and December 31, 2014, respectively.


(2)	Contains $113.0 million and $113.4 million of residential mortgage loans held for sale at fair value September 30, 2015 and December 31, 2014, respectively.


(3)	Current loans include one impaired mezzanine loan and one impaired whole loan with amortized costs of $38.1 million and $2.2 million, respectively that were both fully reserved as of September 30, 2015.

Information about Company's Impaired Financing Receivables

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



	Recorded Investment		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
As of September 30, 2015:
Loans without a specific valuation allowance:
Whole loans	$	129,078	$	129,078	$	—		$	128,591	$	15,659
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	—	$	—	$	—		$	—	$	—
Bank loans	$	—	$	—	$	—		$	—	$	—
Middle market loans	$	—	$	—	$	—		$	—	$	—
Residential mortgage loans	$	2,422	$	2,422	$	—		$	2,785	$	116
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—
Loans with a specific valuation allowance:
Whole loans	$	2,202	$	2,202	$	(2,202	)	$	2,202	$	45
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	38,072	$	38,072	$	(38,072	)	$	38,072	$	—
Bank loans	$	474	$	474	$	(345	)	$	237	$	—
Middle market loans	$	4,956	$	4,900	$	(4,086	)	$	4,956	$	—
Residential mortgage loans	$	—	$	—	$	—		$	—	$	—
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—

Total:
Whole loans	$	131,280	$	131,280	$	(2,202	)	$	130,793	$	15,704
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		(38,072		)	38,072		—
Bank loans	474		474		(345		)	237		—
Middle market loans	4,956		4,900		(4,086		)	4,956		—
Residential mortgage loans	2,422		2,422		—			2,785		116
Loans receivable - related party	—		—		—			—		—
	$	177,204	$	177,148	$	(44,705	)	$	176,843	$	15,820



	Recorded Balance		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
As of December 31, 2014:
Loans without a specific valuation allowance:
Whole loans	$	128,108	$	128,108	$	—		$	130,445	$	12,679
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	38,072	$	38,072	$	—		$	38,072	$	2,859
Bank loans	$	—	$	—	$	—		$	—	$	—
Middle market loans	$	—	$	—	$	—		$	—	$	—
Residential mortgage loans	$	2,082	$	2,082	$	—		$	2,082	$	148
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—
Loans with a specific valuation allowance:
Whole loans	$	—	$	—	$	—		$	—	$	—
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	—	$	—	$	—		$	—	$	—
Bank loans	$	1,350	$	1,350	$	(570	)	$	—	$	—
Middle market loans	$	—	$	—	$	—		$	—	$	—
Residential mortgage loans	$	—	$	—	$	—		$	—	$	—
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—

Total:
Whole loans	$	128,108	$	128,108	$	—		$	130,445	$	12,679
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		2,859
Bank loans	1,350		1,350		(570		)	—		—
Middle market loans	—		—		—			—		—
Residential mortgage loans	2,082		2,082		—			2,082		148
Loans receivable - related party	—		—		—			—		—
	$	169,612	$	169,612	$	(570	)	$	170,599	$	15,686

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
Nine Months Ended September 30, 2015::
Whole loans	3	$	99,959	$	99,959
B notes	—	—		—
Mezzanine loans	1	38,072		—
Bank loans	—	—		—
Middle market loans	—	—		—
Residential mortgage loans	—	—		—
Loans receivable - related party	—	—		—
Total loans	4	$	138,031	$	99,959

Nine Months Ended September 30, 2014:
Whole loans	2	$	16,039	$	16,039
B notes	—	—		—
Mezzanine loans	1	38,072		38,072
Bank loans	—	—		—
Middle market loans	—	—		—
Residential mortgage loans	—	—		—
Loans receivable - related party	—	—		—
Total loans	3	$	54,111	$	54,111

Schedule of Intangible Assets and Goodwill

The following table summarizes the activity of intangible assets for the period indicated (in thousands):



	Management Contracts			Wholesale/Correspondent Relationships			Mortgage Servicing Rights			Total
Balance, January 1, 2015	$	9,434		$	302		$	8,874		$	18,610
Additions	—			—			12,521			12,521
Sales	—			—			—			—
Amortization	(1,346		)	(191		)	(3,138		)	(4,675		)
Total before impairment adjustment	8,088			111			18,257			26,456
Temporary impairment adjustment	—			—			(650		)	(650		)
Balance, September 30, 2015	$	8,088		$	111		$	17,607		$	25,806

Schedule Loan Servicing Portfolio

The activity in the loan servicing portfolio associated with capitalized servicing rights consisted of (in thousands):



	September 30, 2015			December 31, 2014
Balance, beginning of period	$	894,767		$	433,153
Additions	923,473			519,915
Payoffs, sales and curtailments	(65,013		)	(58,301		)
Balance, end of period	$	1,753,227		$	894,767

Schedule of Servicing Fees

These cash flows include contractually specified servicing fees, late fees and other ancillary servicing revenue and were recorded within fee income as follows (in thousands):



	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
Servicing fees from capitalized portfolio	$	1,071	$	413	$	2,533	$	1,057
Late fees	$	37	$	20	$	78	$	59
Other ancillary servicing revenue	$	2	$	1	$	9	$	4

Debt and Credit Facilities

Certain information with respect to RSO’s borrowings is summarized in the following table (in thousands, except percentages):



	Principal Outstanding		Unamortized Issuance Costs and Discounts		Outstanding Borrowings		Weighted Average Borrowing Rate	Weighted Average Remaining Maturity	Value of Collateral
As of September 30, 2015:
RREF CDO 2006-1 Senior Notes	$	52,820	$	—	$	52,820	2.37%	30.9 years	$	93,757
RREF CDO 2007-1 Senior Notes	127,195		—		127,195		1.20%	31.0 years	247,080
RCC CRE Notes 2013 Senior Notes	127,215		1,382		125,833		2.66%	13.2 years	141,114
RCC 2014-CRE2 Senior Notes	235,344		3,314		232,030		1.50%	16.6 years	349,681
RCC 2015-CRE3 Senior Notes	282,127		3,683		278,444		2.10%	16.5 years	340,885
RCC 2015-CRE4 Senior Notes	223,735		3,332		220,403		1.92%	16.9 years	307,697
Apidos Cinco CDO Senior Notes	152,310		—		152,310		1.05%	4.6 years	171,209
Moselle CLO S.A. Securitized Borrowings, at fair value ⁽¹⁾	57		—		57		N/A	N/A	354
Unsecured Junior Subordinated Debentures ⁽²⁾	51,548		188		51,360		4.24%	21.1 years	—
6.0% Convertible Senior Notes	115,000		5,339		109,661		6.00%	3.2 years	—
8% Convertible Senior Notes	100,000		4,885		95,115		8.00%	4.3 years	—
CRE - Term Repurchase Facilities ⁽³⁾	88,050		2,756		85,294		2.27%	19 days	140,107
CMBS - Term Repurchase Facility ⁽⁴⁾	26,328		2		26,326		1.41%	19 days	32,539
Residential Investments - Term Repurchase Facility ⁽⁵⁾	4,629		—		4,629		2.75%	356 days	5,134
Residential Mortgage Financing Agreements	97,124		—		97,124		2.78%	352 days	154,531
CMBS - Short Term Repurchase Agreements ⁽⁶⁾	63,548		—		63,548		1.72%	46 days	90,444
Senior Secured Revolving Credit Agreement	162,000		3,258		158,742		3.03%	3.5 years	344,084
Total	$	1,909,030	$	28,139	$	1,880,891	2.61%	12.0 years	$	2,418,616



	Principal Outstanding		Unamortized Issuance Costs and Discounts		Outstanding Borrowings		Weighted Average Borrowing Rate	Weighted Average Remaining Maturity	Value of Collateral
As of December 31, 2014:
RREF CDO 2006-1 Senior Notes	$	61,423	$	—	$	61,423	2.12%	31.6 years	$	139,242
RREF CDO 2007-1 Senior Notes	130,340		133		130,207		1.19%	31.8 years	271,423
RCC CRE Notes 2013 Senior Notes	226,840		2,683		224,157		2.11%	14.0 years	249,983
RCC 2014-CRE2 Senior Notes	235,344		3,687		231,657		1.45%	17.3 years	346,585
Apidos CDO III Senior Notes	74,646		—		74,646		1.18%	5.7 years	85,553
Apidos Cinco CDO Senior Notes	255,664		201		255,463		0.81%	5.4 years	272,512
Moselle CLO S.A. Senior Notes, at fair value ⁽⁷⁾	63,321		—		63,321		1.49%	5.0 years	93,576
Moselle CLO S.A. Securitized Borrowings, at fair value⁽¹⁾	5,619		—		5,619		1.49%	5.0 years	—
Unsecured Junior Subordinated Debentures ⁽²⁾	51,548		343		51,205		4.19%	21.8 years	—
6.0% Convertible Senior Notes	115,000		6,626		108,374		6.00%	3.9 years	—
CRE - Term Repurchase Facilities ⁽³⁾	207,640		1,958		205,682		2.43%	20 days	297,571
CMBS - Term Repurchase Facility ⁽⁴⁾	24,967		—		24,967		1.35%	20 days	30,180
Residential Investments - Term Repurchase Facility ⁽⁵⁾	22,248		36		22,212		1.16%	1 day	27,885
Residential Mortgage Financing Agreements	102,576		—		102,576		2.78%	207 days	147,472
CMBS - Short Term Repurchase Agreements ⁽⁶⁾	44,225		—		44,225		1.63%	17 days	62,446
Senior Secured Revolving Credit Agreement	113,500		2,363		111,137		2.66%	3.7 years	262,687
Total	$	1,734,901	$	18,030	$	1,716,871	2.09%	10.0 years	$	2,287,115


(1)	The securitized borrowings were collateralized by the same assets as the Moselle CLO Senior Notes.


(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 expense of $63,000 and $198,000 related to CRE repurchase facilities as of September 30, 2015 and December 31, 2014, respectively.


(4)	Amounts also include accrued interest expense of $14,000 and $12,000 related to CMBS repurchase facilities as of September 30, 2015 and December 31, 2014, respectively. Amounts do not reflect CMBS repurchase agreement borrowings that are components of linked transactions as of December 31, 2014.


(5)	Amounts also include accrued interest expense of $8,000 and $20,000 related to residential investment facilities as of September 30, 2015 and December 31, 2014, respectively.


(6)	Amounts also include accrued interest expense of $26,000 and $31,000 related to CMBS short term repurchase facilities as of September 30, 2015 and December 31, 2014.


(7)	The fair value option was elected for the borrowings associated with Moselle CLO. As such, the outstanding borrowings and principal outstanding amounts are stated at fair value. The unpaid principal amounts of these borrowings were $63.3 million at December 31, 2014.

Schedule of Securitizations

The following table sets forth certain information with respect to RSO's securitizations:



Securitization	Closing Date	Maturity Date	Reinvestment Period End	Total Note Paydowns as of September 30, 2015
				(in millions)
RREF CDO 2006-1 Senior Notes	August 2006	August 2046	September 2011	$	180.4
RREF CDO 2007-1 Senior Notes	June 2007	September 2046	June 2012	$	216.6
RCC CRE Notes 2013 Senior Notes	December 2013	December 2028	N/A	$	133.6
RCC 2014-CRE2 Senior Notes	July 2014	April 2032	N/A	$	—
RCC 2015-CRE3 Senior Notes	February 2015	March 2032	N/A	$	—
RCC 2015-CRE4 Senior Notes	August 2015	August 2032	N/A	$	—
Apidos CDO III Senior Notes	May 2006	September 2020	June 2012	$	262.5
Apidos Cinco CDO Senior Notes	May 2007	May 2020	May 2014	$	169.7
Moselle CLO S.A. Senior Notes	October 2005	January 2020	January 2012	$	167.2
Moselle CLO S.A. Securitized Borrowings	October 2005	January 2020	January 2012	$	5.0

Schedule of Short-term Debt

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



	As of September 30, 2015						As of December 31, 2014
	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⁾	$	26,326	$	32,539	27	1.41%	$	24,967	$	30,180	33	1.35%

CRE Term Repurchase Facilities
Wells Fargo Bank ⁽²⁾	78,230		128,354		6	2.21%	179,762		258,223		15	2.38%
Deutsche Bank AG ⁽³⁾	—		—		—	—%	25,920		39,348		2	2.78%
Morgan Stanley Bank ⁽⁴⁾	7,064		11,753		1	2.80%	—		—		—	—%

Short-Term Repurchase Agreements - CMBS
Deutsche Bank Securities, LLC	49,939		70,484		20	1.73%	33,783		44,751		8	1.62%
Wells Fargo Securities, LLC	13,609		19,960		4	1.85%	10,442		17,695		1	1.66%

Residential Investment Term Repurchase Facility
Wells Fargo Bank ⁽⁵⁾	4,629		5,134		6	2.75%	22,212		27,885		6	1.16%

Residential Mortgage Financing Agreements
New Century Bank	41,975		54,093		194	2.82%	41,387		51,961		158	2.82%
Wells Fargo Bank	55,149		100,438		163	2.75%	61,189		95,511		104	2.75%
Totals	$	276,921	$	422,755			$	399,662	$	565,554


(1)	The Wells Fargo CMBS term repurchase facility borrowing includes $2,000 and $0 of deferred debt issuance costs as of September 30, 2015 and December 31, 2014, respectively.


(2)	The Wells Fargo CRE term repurchase facility borrowing includes $927,000 and $1.7 million of deferred debt issuance costs as of September 30, 2015 and December 31, 2014, respectively.


(3)	The Deutsche Bank CRE term repurchase facility includes $0 and $268,000 of deferred debt issuance costs as of September 30, 2015 and December 31, 2014, respectively.


(4)	The Morgan Stanley CRE term repurchase facility includes $1.8 million and $0 of deferred debt issuance costs as of September 30, 2015 and December 31, 2014, respectively.


(5)	The Wells Fargo resident investments term repurchase facility includes $36,000 of deferred debt issuance costs as of

Schedule of Linked Transactions

The assets in the following table were accounted for as linked transactions as of December 31, 2014 (in thousands). These linked repurchase agreements are not included in borrowings on RSO consolidated balance sheets at that date.



	As of December 31, 2014
	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	$	4,941	$	6,371	7	1.67%

Short-Term Repurchase Agreements - CMBS
JP Morgan Securities, LLC	—		—		—	—%
Wells Fargo Securities, LLC	4,108		6,233		2	1.37%
Deutsche Bank Securities, LLC	24,348		36,001		10	1.57%
Totals	$	33,397	$	48,605

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
As of September 30, 2015:
CMBS Term Repurchase Facility
Wells Fargo Bank, National Association	$	5,894	19	1.41%

Residential Investments Term Repurchase Facility
Wells Fargo Bank, National Association	$	505	356	2.75%

CRE Term Repurchase Facilities
Wells Fargo Bank, National Association	$	49,604	19	2.21%
Morgan Stanley Bank, National Association	$	2,864	22	2.80%

Short-Term Repurchase Agreements - CMBS
Wells Fargo Securities, LLC	$	6,070	11	1.85%
Deutsche Bank Securities, LLC	$	20,853	56	1.73%

Residential Mortgage Financing Agreements
Wells Fargo Bank	$	45,289	365	2.75%
New Century Bank	$	12,119	334	2.82%

As of December 31, 2014:
CMBS Term Repurchase Facility
Wells Fargo Bank, National Association	$	6,486	20	1.35%

Residential Investment Term Repurchase Facility
Wells Fargo Bank, National Association	$	5,017	1	1.16%

CRE Term Repurchase Facilities
Wells Fargo Bank, National Association	$	76,148	20	2.38%
Deutsche Bank Securities, LLC	$	13,017	19	2.78%

Short-Term Repurchase Agreements - CMBS
Wells Fargo Securities, LLC	$	2,127	9	1.66%
Deutsche Bank Securities, LLC	$	11,810	20	1.62%

Residential Mortgage Financing Agreements
New Century Bank	$	853	242	2.82%
Wells Fargo Bank	$	6,902	183	2.75%


(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.

Company's Asset Recorded at Fair Value on Recurring Basis

The following table presents information about RSO’s assets and liabilities 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
As of September 30, 2015:
Assets:
Investment securities, trading	$	—	$	—	$	25,715	$	25,715
Investment securities available-for-sale	—		4,627		229,973		234,600
Loans held for sale	—		60,958		52,049		113,007
Derivatives	—		1		3,729		3,730
Total assets at fair value	$	—	$	65,586	$	311,466	$	377,052

Liabilities:
Derivatives	$	—	$	1,586	$	5,880	$	7,466
Total liabilities at fair value	$	—	$	1,586	$	5,880	$	7,466

As of December 31, 2014:
Assets:
Investment securities, trading	$	—	$	—	$	20,786	$	20,786
Investment securities available-for-sale	—		33,158		242,562		275,720
CMBS - linked transactions	—		—		15,367		15,367
Derivatives	3,429		7		1,868		5,304
Total assets at fair value	$	3,429	$	33,165	$	280,583	$	317,177

Liabilities:
Moselle CLO Notes	$	—	$	—	$	68,940	$	68,940
Derivatives	$	—	$	—	$	8,476	$	8,476
Total liabilities at fair value	$	—	$	—	$	77,416	$	77,416

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



	CMBS ⁽¹⁾			ABS			Structured Finance Securities			Warrant			Interest Rate Lock Commitments			Loans Held for Sale			Total
Beginning balance, January 1, 2015	$	185,772		$	72,157		$	20,786		$	898		$	970		$	83,380		$	363,963
Included in earnings	1,676			2,478			2,530			(71		)	25,713			(1,272		)	31,054
Unlined transactions	33,239			—			—			—			—			—			33,239
Purchases/Originations	10,373			24,812			22,126			—			—			246,927			304,238
Sales	—			(26,292		)	(17,283		)	—			—			(270,827		)	(314,402		)
Paydowns	(51,918		)	(5,094		)	(1,986		)	—			—			(6,159		)	(65,157		)
Issuances	—			—			—			—			—			—			—
Settlements	—			(11,216		)	—			—			(24,595		)	—			(35,811		)
Included in OCI	(1,317		)	(8,568		)	(458		)	—			—			—			(10,343		)
Transfers into Level 3	—			3,871			—			—			—			—			3,871
Ending balance, September 30, 2015	$	177,825		$	52,148		$	25,715		$	827		$	2,088		$	52,049		$	310,652

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

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



	Interest Rate Swaps
Beginning balance, January 1, 2015	$	8,680
Unrealized gains - included in accumulated other comprehensive income	(3,552		)
Included in earnings	127
Ending balance, September 30, 2015	$	5,255

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
As of September 30, 2015:
Assets:
Loans held for sale	$	—	$	2,999	$	—	$	2,999
Impaired loans	—		998		32,500		33,498
Total assets at fair value	$	—	$	3,997	$	32,500	$	36,497

As of December 31, 2014:
Assets:
Loans held for sale	$	—	$	36,956	$	—	$	36,956
Impaired loans	—		1,678		137,811		139,489
Total assets at fair value	$	—	$	38,634	$	137,811	$	176,445

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 September 30, 2015, for which quantitative information with respect to unobservable inputs was available, the significant unobservable inputs used in the fair value measurements were as follows (in thousands, except were otherwise indicated):



	Fair Value at September 30, 2015		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Interest rate swap agreements	$	5,255	Discounted cash flow	Weighted average credit spreads	4.83		%
Warrant	$	827	Option pricing model	Market capitalization (in millions)	$	146.0
				Volatility	50.00		%

Fair Value of Financial Instruments

The fair values of RSO’s remaining financial instruments that are not reported at fair value on their 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)
As of September 30, 2015:
Loans held-for-investment	$	2,118,978	$	2,107,162	$	—	$	491,206	$	1,615,956
CDO notes	$	1,189,092	$	1,076,523	$	—	$	—	$	1,076,523
Junior subordinated notes	$	51,360	$	17,854	$	—	$	—	$	17,854
Convertible notes	$	204,776	$	204,776	$	—	$	—	$	204,776
Repurchase agreements	$	276,921	$	276,921	$	—	$	—	$	276,921
Senior secured revolving credit agreement	$	158,742	$	158,742	$	—	$	—	$	158,742

As of December 31, 2014:
Loans held-for-investment	$	1,925,980	$	1,909,019	$	—	$	570,071	$	1,338,948
Loans receivable-related party	$	558	$	558	$	—	$	—	$	558
CDO notes	$	1,046,493	$	975,762	$	—	$	—	$	975,762
Junior subordinated notes	$	51,205	$	17,699	$	—	$	—	$	17,699
Convertible notes	$	108,374	$	108,374	$	—	$	—	$	108,374
Repurchase agreements	$	399,662	$	399,662	$	—	$	—	$	399,662
Senior secured revolving credit agreement	$	111,137	$	111,137	$	—	$	—	$	111,137

Contractual Obligation, Fiscal Year Maturity Schedule

Contractual maturity dates of RSO's borrowings by category and year are present in the table below:



	Total		2015		2016		2017		2018		2019 and Thereafter
CDOs	$	332,382	$	57	$	—	$	—	$	—	$	332,325
CRE Securitizations	856,710		—		—		—		—		856,710
Repurchase Agreements	276,921		175,168		101,753		—		—		—
Unsecured Junior Subordinated Debentures	51,360		—		—		—		—		51,360
6.0 % Convertible Notes	109,661		—		—		—		109,661		—
8.0 % Convertible Notes	95,115		—		—		—		—		95,115
Senior Secured Revolving Credit Facility	158,742		—		—		—		—		158,742
Total	$	1,880,891	$	175,225	$	101,753	$	—	$	109,661	$	1,494,252