Slide 1: Resource Capital Corp. October 2013
0 Resource Capital Corp. October 2013
Slide 2: Safe Harbor
1 Safe Harbor This presentation contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are not historical facts but rather are based on our current beliefs, assumptions and expectations. These beliefs, assumptions and expectations can change as a r
Slide 3: Business Overview
2 Business Overview (1) Reflects common and preferred equity as of September 27, 2013. (2) As of June 30, 2013 (3) Paid last quarter Exchange / Ticker NYSE: "RSO" Business Structure REIT Total Market Capitalization (1) $865 million Investment Portfolio (2) $2.4 billion Dividend paid (3) $0.20/share
Slide 4: Resource Capital Corp. Overview
RSO is a REIT primarily focused on originating, underwriting and investing in transitional commercial real estate mortgage loans Approximately $2.4 billion in assets as of June 30, 2013 Provides customized financing solutions throughout the US to commercial real estate borrowers in multi-famil
Slide 5: Powerful and Established CRE Platform
4 Powerful and Established CRE Platform Powerful core real estate platform and established management team in origination, acquisition, asset management and securitization of real estate debt and debt securities Dedicated team of 12 professionals bolstered by 35 additional professionals at Resou
Slide 6: Return on Equity in CRE Loans
Return on Equity in CRE Loans 5 Illustrative Example of a $10 Million Loan • Note: Fees are collected on the entire loan amount, in this case $10 mm. Typical loan size ranges from $7-$50 million. Terms of Loan Loan Amount 10,000,000$ Advance 70% Coupon 6.25% Cost of Financing 2.50% RSO Equity 3,000,
Slide 7: Real Estate Loan Originations By Year
Real Estate Loan Originations By Year 6 * Note: 2013 includes three quarters and a projected value for Q4’13 , 2014 values are projected 0 100 200 300 400 500 600 700 2010 2011 2012 2013* 2014* $ i n M il lio n s CAGR= 196.6 %
Slide 8: Origination and Underwriting Process
Origination and Underwriting Process 7 Rigorous Underwriting Process Originators in New York and Los Angeles generate new real estate investments S ourci n g a nd S c re e n in g D ue Di li gen c e F inal R e v ie w Originators and senior management meet weekly to discuss status of portfolio and dea
Slide 9: CRE Loan Portfolio Details
Multifamily 39% Hotel 20% Retail 19% Office 13% Mixed Use 4% Industrial 2% Self- Storage 1% Other 2% CRE Loan Portfolio Details 8 * As of 9/30/2013; note percentages may not sum to 100.0% due to rounding Substantial portfolio diversification supports our strong credit performance Total CRE Loan Port
Slide 10: CRE Loan Financing
9 The term financing facilities are being utilized as we aggregate collateral and make plans to access the securitized financing markets to optimally match fund our assets Loans are currently financed on a $250 million term financing facility with Wells Fargo Bank and a $200 million term financing
Slide 11: Evolution of CRE portfolio
Whole loans 53% B notes and mezzanine loans 47% Whole loans 90% B notes and mezzanine loans 10% Evolution of CRE portfolio 10 6/30/2007 9/30/2013 81% reduction in subordinated loans * Portfolio shown on a gross basis (before allowances) Since the crisis, RSO has proactively shifted its CRE loan port
Slide 12: CMBS Activities
CMBS Activities 11 RSO has a dedicated CMBS team that manages a portfolio of approximately $330 million • CMBS AAA bonds are financed on a $100 million term facility with Wells Fargo • CMBS bonds are used as cash substitute and opportunistic purchases • The duration of the majority of the CMBS por
Slide 13: Additional CRE Activities
Additional CRE Activities 12 RSO also has an equity portfolio which currently consists of two wholly-owned and one JV owned multifamily properties comprised of 1,154 units, a 179 room luxury hotel and spa, and one 30,000 square foot office building RSO, along with an institutional partner, also
Slide 14: Leveraged/Middle Market Loans & Commercial Finance
Leveraged/Middle Market Loans & Commercial Finance 13
Slide 15: Corporate/Middle Market Loan Portfolio
14 Corporate credit fundamental picture is healthy Default rates are low and are projected to stay low Leverage multiples are staying intact New Issue CLO activity Better performing managers have access to the market again Through RCAM, a subsidiary of RSO, the Company receives senior, s
Slide 16: Bank Loan Portfolio Details
14.3% 9.8% 6.6% 6.4% 6.0% 5.8% 4.0% 3.0% 3.6% 3.8% 3.1% 2.8% 2.6% 28.2% Chemicals, plastics and rubber Total = $1,179 mm Bank Loan Portfolio Details 15 * As of 6/30/2013; note percentages may not sum to 100.0% due to rounding Substantial portfolio diversification supports our strong credit performan
Slide 17: Company Summary
Company Summary 16
Slide 18: RSO Portfolio
RSO Portfolio Commercial Real Estate Leveraged Loans Other Credit Opportunities Types of Assets • Commercial Mortgages • Senior Whole Loans • Mezzanine Loans • CMBS • Structured Investments in Real Estate • Corporate Bank Loans covering a wide array of industries and ABS • Preferred equity stake in
Slide 19: Clean Balance Sheet
18 Clean Balance Sheet Leverage Since 12/31/08 During FY 2010, RSO repurchased $46.9 million of its CDO notes at a 37% discount to par During FY 2011, RSO repurchased $10.0 million of its CDO notes at a 39% discount to par During FY2012 RSO repurchased $87.1 million of its CDO notes at a 21% d
Slide 20: RSO Highlights
Maintained a cash dividend and paid $9.92 in dividends since inception in March 2005 Powerful core platforms and established management teams in real estate lending and broadly syndicated corporate loans Cleaned up balance sheet and brought leverage down from a high of 10.0x to 2.0x as of June