Slide 1: Resource Capital Corp. FBR Presentation
Resource Capital Corp. FBR Presentation November 27, 2007
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the statements in this presentation constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not his
Slide 3: Business Overview
Business Overview Exchange / Ticker NYSE : "RSO" 144A Offering March 2005 $214.8 million Initial Public Offering - February 2006 27.6 million Follow-on Offering - December 2006 103.0 million Market Capitalization (1) 238.8 million Trust preferred - May / September 2006 50.0 million Investment Portfo
Slide 4: Resource Capital Corporation
Resource Capital Corporation A commercial finance business structured as a REIT with substantial focus on commercial mortgage investments as well as commercial loans Provides high value, customized financing solutions Whole loans B notes Mezzanine loans Bank loans Small business loans and leases Sta
Slide 5: Strong Financial Performance
REIT Taxable Earnings ($ in millions) Dividends Declared Per Share Dividends Declared / Beginning Book Value (annualized) Regular Dividend Special Dividend 3Q06 0.37 4Q06 0.38 0.05 1Q07 0.39 2Q07 0.41 3Q07 0.41 3Q06 0.117 4Q06 0.1205 IQ07 0.1266 2Q07 0.1388 3Q07 0.1417 3Q06 6.6 4Q06 6.7 1Q07 9.7 2Q0
Slide 6: RCC - Investment Highlights
RCC - Investment Highlights Attractive Returns Declared Q3 2007 dividend of $0.41, an annualized $1.64 run rate High Yielding Portfolio $2.3 billion portfolio with an average yield of 7.7% Predominantly secured commercial mortgages and rated secured corporate loans (over 90%) Match Funding Principle
Slide 7: Commercial RE Mortgage Platform
Commercial RE Mortgage Platform Commercial real estate and net lease market $3+ trillion Portfolio of approximately $1 billion at 09/30/07 Approximately 71% of common equity and proceeds from TRUPS invested into Commercial RE Originated over $1 billion in loans since 7/1/06 Closed Two Commercial Rea
Slide 8: Originated Loans vs. Investments
Originated Loans vs. Investments
Slide 9: Power of the RRE Platform: Sourcing Capability
Power of the RRE Platform: Sourcing Capability Well over $4 billion in investments made RRE has deep knowledge of all major U.S. markets Strong relationships Deep relationships with borrowers, middle-market contacts and high-end brokers Established relationships bring repeat business Ability to cust
Slide 10: RCC Real Estate Team
RCC Real Estate Team As in its other businesses, Resource America has developed a strong team with extensive experience in the commercial real estate sector: Edward E. Cohen Chairman Jonathan Z. Cohen President & CEO Steven J. Kessler CFO of RAI Joan Sapinsley Managing Director Debt Origination 12 A
Slide 11: CRE Portfolio Diversity
CRE Portfolio Diversity * Adjusted to reflect noticed payoffs of $54 million across two loans
Slide 12: Sample Loan Transaction
Sample Loan Transaction RCC provided a $15.7 million loan for the repositioning of a 57,000 square foot office building located in Century City, CA The RCC loan was structured with an initial advance of approximately $12.7 million, which represented an LTV of 60%, with a $3 million future advance co
Slide 13: Recent Developments in the Commercial Mortgage World
RECENT DEVELOPMENTS IN THE COMMERCIAL MORTGAGE WORLD Since late July the commercial mortgage market has adjusted significantly Bond buyers for CMBS transactions have pulled-back significantly - Issuers are holding billions of dollars of CMBS There are signs that fixed rate buyers are returning, albe
Slide 14: RCC Well Positioned for Continued Growth
RCC's commercial mortgage platform is fully built-out and well established with a total of 15 dedicated origination, asset management and capital markets professionals operating on a national basis RCC owns flexible long-term financing facilities at very low rates Absence of securitized lenders in t
Slide 15: Examples of Market Changes
EXAMPLES OF MARKET CHANGES Spreads have increased by between 100 and 150 basis points Return of full origination and exit fees and components of recourse Full interest, capital expenditure and other reserves factored into total loan with rebalancing and additional equity requirements Newly originate
Slide 16: Liquidity at 11/26/07 (Unaudited)
Liquidity at 11/26/07 (Unaudited) Description Amount (in Millions) Unrestricted cash balances $5.4 Undrawn capacity under an unsecured revolving credit facility 10.9 Undrawn capacity under a non-recourse term facility 0.3 Undrawn capacity under a secured term facility 23.4 Proforma unrestricted cash
Slide 17: Economic Book Value at 9/30/07
Economic Book Value at 9/30/07 ($ in thousands) Description As of 9.30.07 Shareholders' equity - GAAP 174,298 Add: Unrealized losses recognized in excess of value at risk - ABS-RMBS Portfolio 128,034 Unrealized losses recognized in excess of value at risk - Derivatives 8,825 Economic Book Value 311,
Slide 18: Return on Equity
Return on Equity Actual results through Q3 2007 Actual results through Q3 2007 Actual results through Q3 2007 Portfolio Equity / Trups Invested Leverage ROE CMBS/RMBS/ABS 7%* 13.9x 20.3% CRE Loans 59% 3.2x 13.7% Cash 3% 0.0x 5. 0% CMBS 9% 7.0x 10.2% Bank Loans 21% 11.4x 22.8% Leasing Assets 1% 30.5x
Slide 19: Equity Composition Trends
Equity Composition Trends 38869 38961 39052 39142 39234 39326 Commercial RE Loans 0.343586482331251 0.599 0.769 0.751 0.704 0.717 CMBS 0 0 0.002 0.011 0.01 0.03 ABS - RMBS 0.44 0.13 0.075 0.074 0.071 0.002 Bank Loans 0.199 0.248 0.142 0.154 0.21 0.24 Leasing 0.018 0.023 0.012 0.009 0.006 0.01
Slide 20: Illustrative Portfolio Mix
Illustrative Portfolio Mix Asset Allocation Equity Allocation The flexibility of the Resource America platform provides access to attractive investments across a variety of economic environments 1st Qtr Commercial Real Estate-Related 0.449 ABS 0.095 Commercial Finance 0.416 Cash 0.04 1st Qtr Commerc
Slide 21: Resource America Relationship
Resource America Relationship Resource Capital is externally managed by a subsidiary of Resource America (Nasdaq:REXI) Resource America is a specialized asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outs