Resource Capital Corp. Reports Results for Three and Nine Months Ended September 30, 2011
(firmenpresse) - NEW YORK, NY -- (Marketwire) -- 11/02/11 -- (NYSE: RSO)
(NYSE: RSO) , a real estate investment trust, or REIT, whose investment strategy focuses on commercial real estate ("CRE") assets, commercial mortgage-backed securities ("CMBS"), commercial finance assets and other investments, reported results for the three and nine months ended September 30, 2011.
GAAP net income for the three and nine months ended September 30, 2011 was $14.9 million, or $0.20 per share-diluted, and $37.3 million, or $0.54 per share-diluted, respectively, as compared to GAAP net income for the three and nine months ended September 30, 2010 of $14.1 million, or $0.27 per share-diluted, and $28.8 million, or $0.64 per share-diluted, respectively, an increase of $891,000, or 6%, and an increase of $8.5 million, or 29%, respectively.
FFO for the three and nine months ended September 30, 2011 was $16.2 million, or $0.22 per share-diluted, and $40.2 million, or $0.59 per share-diluted, respectively.
Jonathan Cohen, CEO and President of Resource Capital Corp., commented, "I believe that this quarter again saw improvement in our credit, good cash flow and the ability to grow the balance sheet safely. We accomplished a tremendous amount including earning FFO of $0.22 cents per share, securitizing our leasing portfolio, as well as growing our bank loan portfolio through the completion of Apidos CLO VIII, our newest CLO. It is proof of the market's belief in our underwriting ability that we were able to access the term markets during September and October. We continue to carry very little short term debt and make significant progress in investing the cash on our balance sheet into new high yielding assets."
Commercial Real Estate
RSO received repayments and paydowns on CRE loans of $33.0 million and sold five CRE loans for proceeds of $56.7 million for the nine months ended September 30, 2011.
RSO's CRE loan portfolio is now comprised of approximately 83% senior whole loans as of September 30, 2011, as compared to 66% a year ago.
RSO originated $104.6 million of whole loans in the nine months ended September 30, 2011, with a weighted average yield of 7.5% as compared to $17.9 million with a weighted average yield of 8.4% originated during the year ended December 31, 2010.
RSO has committed over $19.2 million to new CRE whole loans slated to close in the fourth quarter of 2011 from an ongoing pipeline of new CRE loans of over $200.0 million.
RSO increased its opportunistic and distressed real estate investments with the acquisition of one real estate asset in the quarter ended June 30, 2011, and acquired a second multi-family investment for $18.0 million in the quarter ended September 30, 2011. These acquisitions, coupled with the conversion to equity of two commercial real estate loans during the quarter ended June 30, 2011, demonstrate RSO's commitment to opportunistic real estate acquisitions.
The following table summarizes RSO's CRE loan activities and fundings of previous commitments, at par, for the three, nine and 12 months ended September 30, 2011 (in millions, except percentages):
CMBS Securities
During the nine months ended September 30, 2011, RSO acquired $76.5 million, at par, of CMBS at a weighted average price of 99.3%. The majority of these purchases were financed by RSO's Wells Fargo repurchase facility which all are AAA rated by at least one rating agency. RSO has $43.6 million, at par, of CMBS purchased through the Wells Fargo facility as of September 30, 2011.
Commercial Finance - Syndicated Bank Loans
RSO's bank loan portfolio, including asset-backed securities ("ABS") held-to-maturity and certain loans held for sale, at the end of the third quarter was $1.1 billion, at amortized cost, with a weighted-average spread of one-month and three-month LIBOR plus 3.06% at September 30, 2011. RSO's bank loan portfolio is now match-funded through four collateralized loan obligation ("CLO") issuances.
Apidos CLO VIII ("CLO VIII")
RSO's fourth CLO, CLO VIII, closed on October 13, 2011 with $317.6 million of notes issued at a weighted average cost of three-month LIBOR plus 1.83% at the date of closing. RSO retained an investment of $15.0 million of an aggregate total of $34.7 million of subordinated notes in CLO VIII. Apidos Capital Management, a subsidiary of Resource America, Inc., will manage CLO VIII and RSO's investment in the structure.
During the three and nine months ended September 30, 2011, RSO bought bank loans through its four CLOs with a par value of $291.0 million and $591.5 million, respectively, at a significant net discount of $11.4 million and $14.1 million, respectively. These purchased loans had an aggregate weighted average annual yield of approximately 4.27%.
RSO, through its subsidiary Resource Capital Asset Management, earned $5.9 million of net fees from February 24, 2011, the date of acquisition, through September 30, 2011.
As of September 30, 2011, RSO's book value per common share was $5.66. Total stockholders' equity was $433.3 million as of September 30, 2011 as compared to $348.3 million as of December 31, 2010. Total common shares outstanding were 76,590,035 as of September 30, 2011 as compared to 58,183,425 as of December 31, 2010.
The table below summarizes the amortized cost and net carrying amount of RSO's investment portfolio as of September 30, 2011, classified by interest rate and by asset type. The following table includes both (i) the amortized cost of RSO's investment portfolio and the related dollar price, which is computed by dividing amortized cost by par amount, and (ii) the net carrying amount of RSO's investment portfolio and the related dollar price, which is computed by dividing the net carrying amount by par amount (in thousands, except percentages):
At September 30, 2011, RSO's liquidity of $177.4 million consisted of three primary sources:
unrestricted cash and cash equivalents of $28.9 million, restricted cash of $1.5 million in margin call accounts and $2.5 million in the form of real estate escrows, reserves and deposits;
capital available for reinvestment in its five CDO entities of $129.3 million, of which $1.6 million is designated to finance future funding commitments on CRE loans; and
restricted cash available for investment in its newly-formed CLO of $15.2 million.
As of September 30, 2011, RSO had allocated its invested equity capital among its targeted asset classes as follows: 65% in CRE investments, 30% in commercial finance and 5% in other investments.
The following schedules of reconciliations or supplemental information as of September 30, 2011 are included at the end of this release:
Schedule I - Reconciliation of GAAP Net Income to Funds from Operations.
Schedule II - Reconciliation of GAAP Net Income to Estimated REIT Taxable Income.
Schedule III - Summary of CDO and CLO Performance Statistics.
Supplemental Information regarding loan and leasing investment statistics, CRE loans and bank loans.
RSO is a diversified real estate finance company that is organized and conducts its operations to qualify as a REIT for federal income tax purposes. RSO's investment strategy focuses on CRE and CRE-related assets, and, to a lesser extent, commercial finance assets. RSO invests in the following asset classes: CRE-related assets such as commercial real estate property, whole loans, A-notes, B-notes, mezzanine loans, commercial mortgage-backed securities and investments in real estate joint ventures as well as commercial finance assets such as bank loans, lease receivables, other asset-backed securities, trust preferred securities, debt tranches of CDOs, structured note investments, and private equity investments principally issued by financial institutions.
RSO is externally managed by Resource Capital Manager, Inc., an indirect wholly-owned subsidiary of Resource America, Inc. (NASDAQ: REXI), a specialized asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outside investors in the real estate, commercial finance and financial fund management sectors.
For more information, please visit RSO's website at or contact investor relations at .
Statements made in this release may include forward-looking statements, which involve substantial risks and uncertainties. RSO's actual results, performance or achievements could differ materially from those expressed or implied in this release. The risks and uncertainties associated with forward-looking statements contained in this release include those related to:
fluctuations in interest rates and related hedging activities;
capital markets conditions and the availability of financing;
defaults or bankruptcies by borrowers on RSO's loans or on loans underlying its investments;
adverse market trends which have affected and may continue to affect the value of real estate and other assets underlying RSO's investments;
increases in financing or administrative costs; and
general business and economic conditions that have impaired and may continue to impair the credit quality of borrowers and RSO's ability to originate loans.
For further information concerning these and other risks pertaining to the forward-looking statements contained in this release, and to the general risks to which RSO is subject, see Item 1A, "Risk Factors" included in its Annual Report on Form 10-K and in other of its public filings with the Securities and Exchange Commission.
RSO cautions you not to place undue reliance on any forward-looking statements contained in this release, which speak only as of the date of this release. All subsequent written and oral forward-looking statements attributable to RSO or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this release. Except to the extent required by applicable law or regulation, RSO undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this filing or to reflect the occurrence of unanticipated events.
The remainder of this release contains RSO's unaudited consolidated balance sheets, unaudited consolidated statements of income, reconciliation of GAAP net income to funds from operations, a reconciliation of GAAP net income to estimated REIT taxable income and a summary of CDO and CLO performance statistics and supplemental information regarding RSO's CRE loan and bank loan portfolios.
RSO calculates estimated REIT taxable income, which is a non-GAAP financial measure, according to the requirements of the Internal Revenue Code. The following table reconciles GAAP net income to estimated REIT taxable income for the periods presented (in thousands, except per share data):
The following table sets forth distributions by RSO's CDOs and coverage test summaries for the periods presented:
In connection with RSO's ownership of certain notes held by RREF CDO 2006-1 and RREF CDO 2007-1, respectively, on June 21, 2011, the Company surrendered for cancellation $32.4 million and $30.9 million, respectively, of CDO notes which previously eliminated in consolidation. The surrendered notes were cancelled by the trustee under the applicable indentures, and the obligations due under the surrendered notes were deemed extinguished. The effect of these cancellations improves each CDO's ability to comply with its over-collateralization and interest coverage tests and strengthens RSO's long-term interest in these structured vehicles.
The following table presents information on RSO's impaired loans and lease receivables and related allowances for the periods indicated (based on amortized cost):
The following table presents commercial real estate loan portfolio statistics as of September 30, 2011 (based on par value):
The following table presents bank loan portfolio statistics by industry as of September 30, 2011 (based on par value):
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Datum: 02.11.2011 - 23:13 Uhr
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