þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated filer
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¨
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Accelerated filer
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R
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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PAGE
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PART I
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Item 1:
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Item 1A:
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Item 1B:
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Item 2:
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Item 3:
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Item 4:
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PART II
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Item 5:
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Item 6:
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Item 7:
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Item 7A:
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Item 8:
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Item 9:
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Item 9A:
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Item 9B:
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PART III
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Item 10:
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Item 11:
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Item 12:
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Item 13:
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Item 14:
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PART IV
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ITEM 15:
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•
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the factors described in this report, including those set forth under the sections captioned “Risk Factors,” “Business,” and “Management's Discussion and Analysis of Financial Conditions and Results of Operations;”
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•
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changes in our industry, interest rates, the debt securities markets, real estate markets or the general economy;
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•
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increased rates of default and/or decreased recovery rates on our investments;
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•
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availability, terms and deployment of capital;
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•
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availability of qualified personnel;
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•
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changes in governmental regulations, tax rates and similar matters;
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•
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changes in our business strategy;
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•
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availability of investment opportunities in commercial real estate-related and commercial finance assets;
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•
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the degree and nature of our competition;
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•
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the adequacy of our cash reserves and working capital; and
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•
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the timing of cash flows, if any, from our investments.
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ITEM I .
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BUSINESS
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Amortized
cost |
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Estimated
fair value (1) |
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Percent of
portfolio |
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Weighted
average coupon |
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Loans Held for Investment:
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Commercial real estate loans:
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Whole loans
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$
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533,938
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$
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528,778
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23.70
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%
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4.98%
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Mezzanine loans
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82,786
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83,010
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3.72
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%
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4.92%
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B notes
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16,327
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16,187
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0.73
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%
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8.68%
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Bank loans
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1,178,420
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1,168,715
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52.38
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%
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4.35%
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Loans receivable-related party
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8,324
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8,324
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0.37
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%
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8.35%
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1,819,795
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1,805,014
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80.90
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%
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Loans held for sale:
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Bank loans
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14,894
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14,894
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0.67
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%
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3.74%
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Commercial loans
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34,000
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34,000
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1.52
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%
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2.77%
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48,894
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48,894
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2.19
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%
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Investments in Available-for-Sale Securities:
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CMBS
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182,828
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170,815
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7.66
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%
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4.56%
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Corporate bonds
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33,767
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33,700
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1.51
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%
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3.33%
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ABS
(2)
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26,479
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27,075
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1.21
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%
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2.05%
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243,074
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231,590
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10.38
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%
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Investment Securities-Trading:
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Structured notes
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9,413
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19,279
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0.86
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%
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N/A
(3)
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RMBS
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6,047
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5,564
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0.25
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%
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N/A
(3)
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15,460
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24,843
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1.11
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%
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Other (non-interest bearing):
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Investment in real estate
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75,386
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75,386
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3.38
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%
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N/A
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Investment in unconsolidated entities
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45,413
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45,413
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2.04
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%
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N/A
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120,799
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120,799
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5.42
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%
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Total portfolio/weighted average
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$
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2,248,022
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$
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2,231,140
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100.00
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%
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(1)
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The fair value of our investments represents our management's estimate of the price that a market participant would pay for such assets. Management bases this estimate on the underlying interest rates and credit spreads for fixed-rate securities and, to the extent available, quoted market prices.
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(2)
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ABS includes both ABS and Other ABS investments. The fair value of the ABS includes $23,000 fair value for Other ABS at
December 31, 2012
.
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(3)
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There is no stated rate associated with these securities.
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Personal and Non Durable Consumer Products (Mfg. Only)
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2.8
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%
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Aerospace and Defense
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2.6
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%
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Finance
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2.4
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%
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CDO
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2.2
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%
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Mining, Steel, Iron and Non-Precious Metals
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2.1
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%
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Diversified/Conglomerate Manufacturing
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1.9
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%
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Buildings and Real Estate
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1.9
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%
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Containers, Packaging and Glass
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1.9
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%
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Utilities
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1.4
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%
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Beverage, Food and Tobacco
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1.2
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%
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Cargo Transport
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1.2
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%
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Diversified Natural Resources, Precious Metals and Minerals
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0.8
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%
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Insurance
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0.7
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%
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Oil and Gas
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0.7
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%
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Ecological
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0.4
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%
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Machinery (Non-Agriculture, Non-Construction, Non-Electronic)
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0.4
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%
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Grocery
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0.3
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%
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Farming and Agriculture
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0.3
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%
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Packaging and Forest Products
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0.2
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%
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Banking, Finance, Insurance & Real Estate
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0.2
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%
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Structured Finance Obligations
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0.1
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%
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Textiles and Leather
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0.1
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%
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Consumer Non-Durables
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0.1
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%
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Home and Office Furnishings, Housewares, and Durable Consumer Products
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0.1
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%
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•
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A monthly base management fee equal to 1/12th of the amount of our equity multiplied by 1.50%. Under the management agreement, ''equity'' is equal to the net proceeds from any issuance of shares of common stock less offering-related costs, plus or minus our retained earnings (excluding non-cash equity compensation incurred in current or prior periods) less any amounts we have paid for common stock repurchases. The calculation is adjusted for one-time events due to changes in accounting principles generally accepted in the United States, which we refer to as GAAP, as well as other non-cash charges, upon approval of our independent directors.
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•
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Incentive compensation, calculated as follows: (i) 25% of the dollar amount by which (A) our adjusted operating earnings (before incentive compensation but after the base management fee) for such quarter per common share (based on the weighted average number of common shares outstanding for such quarter) exceeds (B) an amount equal to (1) the weighted average of the price per share of the common shares in the initial offering by us and the prices per share of the common shares in any subsequent offerings by us, in each case at the time of issuance thereof, multiplied by (2) the greater of (a) 2.00% and (b) 0.50% plus one-fourth of the Ten Year Treasury Rate for such quarter, multiplied by (ii) the weighted average number of common shares outstanding during such quarter subject to adjustment to exclude events pursuant to changes in GAAP or the application of GAAP, as well as non-recurring or unusual transactions or events, after discussion between the Manager and the Independent Directors and approval by a majority of the Independent Directors in the case of non-recurring or unusual transactions or events.
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•
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Reimbursement of out-of-pocket expenses and certain other costs incurred by the Manager that relate directly to us and our operations.
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•
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Reimbursement of the Manager for the expense of the wages, salaries and benefits of our Chairman, our Chief Financial Officer and several accounting professionals and 50% of the salary and benefits of the director of investor relations.
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•
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if such shares are traded on a securities exchange, at the average of the closing prices of the shares on such exchange over the thirty day period ending three days prior to the issuance of such shares;
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•
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if such shares are actively traded over-the-counter, at the average of the closing bid or sales price as applicable over the thirty day period ending three days prior to the issuance of such shares; and
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•
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if there is no active market for such shares, at the fair market value as reasonably determined in good faith by our board of directors.
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•
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the Manager's continued material breach of any provision of the management agreement following a period of 30 days after written notice thereof;
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•
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the Manager's fraud, misappropriation of funds, or embezzlement against us;
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•
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the Manager's gross negligence in the performance of its duties under the management agreement;
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•
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the bankruptcy or insolvency of the Manager, or the filing of a voluntary bankruptcy petition by the Manager;
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•
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the dissolution of the Manager; and
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•
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a change of control (as defined in the management agreement) of the Manager if a majority of our independent directors determines, at any point during the 18 months following the change of control, that the change of control was detrimental to the ability of the Manager to perform its duties in substantially the same manner conducted before the change of control.
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ITEM IA.
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RISK FACTORS
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•
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the cash provided by our operating activities will not be sufficient to meet required payments of principal and interest,
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•
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the cost of financing may increase relative to the income from the assets financed, reducing the income we have available to pay distributions, and
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•
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our investments may have maturities that differ from the maturities of the related financing and, consequently, the risk that the terms of any refinancing we obtain will not be as favorable as the terms of existing financing.
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•
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If we accumulate assets for a CDO or CLO on a short-term credit facility and do not complete the CDO financing, or if a default occurs under the facility, the short-term lender will sell the assets and we would be responsible for the amount by which the original purchase price of the assets exceeds their sale price, up to the amount of our investment or guaranty.
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•
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An event of default under one short-term facility may constitute a default under other credit facilities we may have, potentially resulting in asset sales and losses to us, as well as increasing our financing costs or reducing the amount of investable funds available to us.
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•
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We may be unable to acquire a sufficient amount of eligible assets to maximize the efficiency of a CDO or CLO issuance, which would require us to seek other forms of term financing or liquidate the assets. We may not be able to obtain term financing on acceptable terms, or at all, and liquidation of the assets may be at prices less than those we paid, resulting in losses to us.
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•
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Using short-term financing to accumulate assets for a CDO or CLO issuance may require us to obtain new financing as the short-term financing matures. Residual financing may not be available on acceptable terms, or at all. Moreover, an increase in short-term interest rates at the time that we seek to enter into new borrowings would reduce the spread between the income on our assets and the cost of our borrowings. This would reduce returns on our assets, which would reduce earnings and, in turn, cash available for distribution to our stockholders.
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•
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We will lose money on our repurchase transactions if the counterparty to the transaction defaults on its obligation to resell the underlying security back to us at the end of the transaction term, or if the value of the underlying security has declined as of the end of the term or if we default on our obligations under the repurchase agreements.
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•
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Available interest rate hedges may not correspond directly with the interest rate risk against which we seek protection.
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•
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The duration of the hedge may not match the duration of the related liability.
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•
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Interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates. Hedging costs may include structuring and legal fees and fees payable to hedge counterparties to execute the hedge transaction.
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•
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Losses on a hedge position may reduce the cash available to make distributions to stockholders, and may exceed the amounts invested in the hedge position.
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•
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The amount of income that a REIT may earn from hedging transactions, other than through a TRS, is limited by federal tax provisions governing REITs.
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•
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The credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction.
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•
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The party owing money in the hedging transaction may default on its obligation to pay.
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•
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acquire investments subject to rights of senior classes and servicers under inter-creditor or servicing agreements;
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•
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acquire only a minority and/or non-controlling participation in an underlying investment
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•
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co-invest with third parties through partnerships, joint ventures or other entities, thereby acquiring non-controlling interests; or
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•
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rely on independent third-party management or strategic partners with respect to the management of an asset.
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•
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tenant mix, success of tenant businesses, tenant bankruptcies and property management decisions;
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•
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property location and condition;
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•
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competition from comparable types of properties;
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•
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changes in laws that increase operating expenses or limit rents that may be charged;
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•
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any need to address environmental contamination at the property;
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•
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the occurrence of any uninsured casualty at the property;
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•
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changes in national, regional or local economic conditions and/or the conditions of specific industry segments in which our lessees may operate;
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•
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declines in regional or local real estate values;
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•
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declines in regional or local rental or occupancy rates;
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•
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increases in interest rates, real estate tax rates and other operating expenses;
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•
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the availability of debt or equity financing;
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•
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increases in costs of construction material;
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•
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changes in governmental rules, regulations and fiscal policies, including environmental legislation and zoning laws; and
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•
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acts of God, terrorism, social unrest and civil disturbances.
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•
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There are ownership limits and restrictions on transferability and ownership in our charter.
For purposes of assisting us in maintaining our REIT qualification under the Internal Revenue Code, our charter generally prohibits any person from beneficially or constructively owning more than 9.8% in value or number of shares, whichever is more restrictive, of any class or series of our outstanding capital stock. This restriction may:
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•
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discourage a tender offer or other transactions or a change in the composition of our board of directors or control that might involve a premium price for our shares or otherwise be in the best interests of our stockholders; or
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•
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result in shares issued or transferred in violation of such restrictions being automatically transferred to a trust for a charitable beneficiary, resulting in the forfeiture of those shares.
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•
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Our charter permits our board of directors to issue stock with terms that may discourage a third-party from acquiring us.
Our board of directors may amend our charter without stockholder approval to increase the total number of authorized shares of stock or the number of shares of any class or series and issue common or preferred stock having preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, or terms or conditions of redemption as determined by our board. Thus, our board could authorize the issuance of stock with terms and conditions that could have the effect of discouraging a takeover or other transaction in which holders of some or a majority of our shares might receive a premium for their shares over the then-prevailing market price.
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•
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Our charter and bylaws contain other possible anti-takeover provisions.
Our charter and bylaws contain other provisions, including advance notice procedures for the introduction of business and the nomination of directors, that may have the effect of delaying or preventing a change in control of us or the removal of existing directors and, as a result, could prevent our stockholders from being paid a premium for their common stock over the then-prevailing market price.
|
•
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any person who beneficially owns ten percent or more of the voting power of the corporation's shares; or
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•
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an affiliate or associate of the corporation who, at any time within the two-year period before the date in question, was the beneficial owner of ten percent or more of the voting power of the then outstanding voting stock of the corporation.
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•
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80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and
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•
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two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.
|
•
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actual receipt of an improper benefit or profit in money, property or services; or
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•
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a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated.
|
•
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85% of our ordinary income for that year;
|
•
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95% of our capital gain net income for that year; and
|
•
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100% our undistributed taxable income from prior years.
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5 .
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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
High
|
|
Low
|
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Dividends
Declared |
December 31, 2012
|
|
|
|
|
|
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Fourth Quarter
|
|
$6.13
|
|
$5.36
|
|
$0.20 (1)
|
Third Quarter
|
|
$6.28
|
|
$5.27
|
|
$0.20
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Second Quarter
|
|
$5.55
|
|
$5.09
|
|
$0.20
|
First Quarter
|
|
$5.99
|
|
$5.39
|
|
$0.20
|
|
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
|
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Fourth Quarter
|
|
$6.08
|
|
$4.55
|
|
$0.25
|
Third Quarter
|
|
$6.46
|
|
$4.54
|
|
$0.25
|
Second Quarter
|
|
$6.78
|
|
$6.17
|
|
$0.25
|
First Quarter
|
|
$7.60
|
|
$6.59
|
|
$0.25
|
(1)
|
We distributed a regular dividend of $0.20 on January 28, 2013, to stockholders of record as of
December 31, 2012
.
|
ITEM 6 .
|
SELECTED FINANCIAL DATA
|
|
|
As of and for the Years Ended December 31,
|
||||||||||||||||||
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
|
$
|
133,330
|
|
|
$
|
109,874
|
|
|
$
|
103,911
|
|
|
$
|
97,593
|
|
|
$
|
134,341
|
|
Interest expense
|
|
42,792
|
|
|
32,186
|
|
|
36,466
|
|
|
45,427
|
|
|
79,619
|
|
|||||
Net interest income
|
|
90,538
|
|
|
77,688
|
|
|
67,445
|
|
|
52,166
|
|
|
54,722
|
|
|||||
Other revenues
|
|
5,156
|
|
|
11,162
|
|
|
330
|
|
|
85
|
|
|
115
|
|
|||||
Rental Income
|
|
11,463
|
|
|
3,656
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|||||
Net realized gain on sales of investment securities available-for-sale and loans
|
|
4,106
|
|
|
2,643
|
|
|
4,821
|
|
|
1,890
|
|
|
(1,637
|
)
|
|||||
Net realized and unrealized gain on investment securities, trading
|
|
12,435
|
|
|
837
|
|
|
14,791
|
|
|
—
|
|
|
—
|
|
|||||
Total revenues
|
|
123,698
|
|
|
95,986
|
|
|
87,422
|
|
|
54,141
|
|
|
53,200
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES
|
|
78,452
|
|
|
62,139
|
|
|
102,733
|
|
|
90,913
|
|
|
58,598
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
45,246
|
|
|
33,847
|
|
|
(15,311
|
)
|
|
(36,772
|
)
|
|
(5,398
|
)
|
|||||
OTHER REVENUE (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on consolidation
|
|
2,498
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gain on the extinguishment of debt
|
|
16,699
|
|
|
3,875
|
|
|
34,610
|
|
|
44,546
|
|
|
1,750
|
|
|||||
Gain on the settlement of loan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
574
|
|
|||||
Other expenses
|
|
—
|
|
|
(6
|
)
|
|
148
|
|
|
(1,435
|
)
|
|
—
|
|
|||||
Total other revenue (expense)
|
|
19,197
|
|
|
3,869
|
|
|
34,758
|
|
|
43,111
|
|
|
2,324
|
|
|||||
NET INCOME (LOSS)
|
|
$
|
64,443
|
|
|
$
|
37,716
|
|
|
$
|
19,447
|
|
|
$
|
6,339
|
|
|
$
|
(3,074
|
)
|
NET INCOME (LOSS) ALLOCABLE TO COMMON SHARES
|
|
$
|
63,199
|
|
|
$
|
37,716
|
|
|
$
|
19,447
|
|
|
$
|
6,339
|
|
|
$
|
(3,074
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
85,278
|
|
|
$
|
43,116
|
|
|
$
|
29,488
|
|
|
$
|
51,991
|
|
|
$
|
14,583
|
|
Restricted cash
|
|
94,112
|
|
|
142,806
|
|
|
168,192
|
|
|
85,125
|
|
|
60,394
|
|
|||||
Investment securities trading
|
|
24,843
|
|
|
38,673
|
|
|
17,723
|
|
|
—
|
|
|
—
|
|
|||||
Investment securities available-for-sale, pledged as
collateral, at fair value |
|
195,200
|
|
|
136,188
|
|
|
57,998
|
|
|
39,304
|
|
|
22,466
|
|
|||||
Investment securities available-for-sale, at fair value
|
|
36,390
|
|
|
4,678
|
|
|
5,962
|
|
|
5,238
|
|
|
6,794
|
|
|||||
Investment securities held-to-maturity, pledged as
collateral |
|
—
|
|
|
—
|
|
|
29,036
|
|
|
31,401
|
|
|
28,157
|
|
|||||
Investment in real estate
|
|
75,386
|
|
|
48,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loans, pledged as collateral and net of allowances of $17.7 million, $27.5 million, $34.2 million, $47.1 million and $43.9 million
|
|
1,793,780
|
|
|
1,772,063
|
|
|
1,443,271
|
|
|
1,557,757
|
|
|
1,684,622
|
|
|||||
Loans held for sale
|
|
48,894
|
|
|
3,154
|
|
|
28,593
|
|
|
8,050
|
|
|
−
|
|
|||||
Investments in unconsolidated entities
|
|
45,413
|
|
|
47,899
|
|
|
6,791
|
|
|
3,605
|
|
|
1,548
|
|
|||||
Intangible assets
|
|
13,192
|
|
|
19,813
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total assets
|
|
2,478,251
|
|
|
2,284,724
|
|
|
1,934,200
|
|
|
1,791,404
|
|
|
1,936,031
|
|
|||||
Borrowings
|
|
1,785,600
|
|
|
1,794,083
|
|
|
1,543,251
|
|
|
1,534,874
|
|
|
1,699,763
|
|
|||||
Total liabilities
|
|
1,864,906
|
|
|
1,855,034
|
|
|
1,585,874
|
|
|
1,562,574
|
|
|
1,749,726
|
|
|||||
Total stockholders' equity
|
|
613,345
|
|
|
429,690
|
|
|
348,326
|
|
|
228,830
|
|
|
186,305
|
|
|
|
As of and for the Years Ended December 31,
|
||||||||||||||||||
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
||||||||||
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends declared per common share
|
|
$
|
0.80
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.15
|
|
|
$
|
1.60
|
|
Net income (loss) per share - basic
|
|
$
|
0.71
|
|
|
$
|
0.54
|
|
|
$
|
0.41
|
|
|
$
|
0.25
|
|
|
$
|
(0.12
|
)
|
Net income (loss) per share − diluted
|
|
$
|
0.71
|
|
|
$
|
0.53
|
|
|
$
|
0.41
|
|
|
$
|
0.25
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average number of shares
outstanding - basic |
|
88,410,272
|
|
|
70,410,131
|
|
|
47,715,082
|
|
|
25,205,403
|
|
|
24,757,386
|
|
|||||
Weighted average number of shares
outstanding - diluted |
|
89,284,488
|
|
|
70,809,088
|
|
|
47,907,281
|
|
|
25,355,821
|
|
|
24,757,386
|
|
ITEM 7 .
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Years Ended
|
||||||||||
|
|
December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest income:
|
|
|
|
|
|
|
||||||
Interest income from loans:
|
|
|
|
|
|
|
||||||
Bank loans
|
|
$
|
71,511
|
|
|
$
|
54,833
|
|
|
$
|
44,828
|
|
Commercial real estate loans
|
|
37,519
|
|
|
31,906
|
|
|
32,866
|
|
|||
Total interest income from loans
|
|
109,030
|
|
|
86,739
|
|
|
77,694
|
|
|||
|
|
|
|
|
|
|
||||||
Interest income from securities:
|
|
|
|
|
|
|
||||||
CMBS-private placement
|
|
11,358
|
|
|
9,290
|
|
|
9,768
|
|
|||
ABS
|
|
1,631
|
|
|
1,613
|
|
|
1,466
|
|
|||
Corporate bonds
|
|
240
|
|
|
—
|
|
|
—
|
|
|||
Residential mortgage-backed securities, or RMBS
|
|
1,067
|
|
|
1,521
|
|
|
—
|
|
|||
Other ABS
|
|
—
|
|
|
—
|
|
|
200
|
|
|||
Total interest income from securities
|
|
14,296
|
|
|
12,424
|
|
|
11,434
|
|
|||
|
|
|
|
|
|
|
||||||
Leasing
|
|
—
|
|
|
—
|
|
|
11,306
|
|
|||
|
|
|
|
|
|
|
||||||
Interest income - other:
|
|
|
|
|
|
|
||||||
Preference payments on structured notes
(1)
|
|
9,773
|
|
|
10,432
|
|
|
3,112
|
|
|||
Temporary investment in over-night repurchase agreements
|
|
231
|
|
|
279
|
|
|
365
|
|
|||
Total interest income - other
|
|
10,004
|
|
|
10,711
|
|
|
3,477
|
|
|||
Total interest income
|
|
$
|
133,330
|
|
|
$
|
109,874
|
|
|
$
|
103,911
|
|
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||||||
|
|
December 31, 2012
|
|
December 31, 2011
|
|
December 31, 2010
|
||||||||||||
|
|
Weighted Average
|
|
Weighted Average
|
|
Weighted Average
|
||||||||||||
|
|
Yield
|
|
Balance
|
|
Yield
|
|
Balance
|
|
Yield
|
|
Balance
|
||||||
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest income from loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bank loans
|
|
5.94%
|
|
$
|
1,189,898
|
|
|
5.63%
|
|
$
|
963,427
|
|
|
4.91%
|
|
$
|
907,582
|
|
Commercial real estate loans
|
|
5.25%
|
|
$
|
701,836
|
|
|
4.95%
|
|
$
|
646,121
|
|
|
4.68%
|
|
$
|
694,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest income from securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CMBS-private placement
|
|
5.22%
|
|
$
|
216,460
|
|
|
5.65%
|
|
$
|
160,593
|
|
|
6.97%
|
|
$
|
140,377
|
|
ABS
|
|
5.02%
|
|
$
|
32,087
|
|
|
4.85%
|
|
$
|
32,879
|
|
|
4.12%
|
|
$
|
35,295
|
|
Corporate bonds
|
|
3.33%
|
|
$
|
7,229
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
||||
RMBS
|
|
3.10%
|
|
$
|
34,396
|
|
|
2.93%
|
|
$
|
51,844
|
|
|
N/A
|
|
N/A
|
||
Other ABS
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
8.71%
|
|
$
|
2,300
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Leasing
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
15.61%
|
|
$
|
75,008
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Preference payments on structured notes
|
|
19.07%
|
|
$
|
51,239
|
|
|
32.95%
|
|
$
|
31,663
|
|
|
37.69%
|
|
$
|
8,257
|
|
Type of Security
|
|
Coupon
Interest
|
|
Unamortized
(Discount)
Premium
|
|
Net
Amortization/
Accretion
|
|
Interest
Income
|
|
Fee
Income
|
|
Total
|
|||||||||||
Year Ended December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Bank loans
|
|
4.25
|
%
|
|
$
|
(24,465
|
)
|
|
$
|
17,784
|
|
|
$
|
51,580
|
|
|
$
|
2,147
|
|
|
$
|
71,511
|
|
Commercial real estate loans
|
|
5.05
|
%
|
|
$
|
(127
|
)
|
|
33
|
|
|
35,759
|
|
|
1,727
|
|
|
37,519
|
|
||||
Total interest income from loans
|
|
|
|
|
|
17,817
|
|
|
87,339
|
|
|
3,874
|
|
|
109,030
|
|
|||||||
CMBS-private placement
|
|
3.60
|
%
|
|
$
|
(8,011
|
)
|
|
2,635
|
|
|
8,723
|
|
|
—
|
|
|
11,358
|
|
||||
RMBS
|
|
|
|
|
|
—
|
|
|
1,067
|
|
|
—
|
|
|
1,067
|
|
|||||||
ABS
|
|
2.41
|
%
|
|
$
|
(3,145
|
)
|
|
718
|
|
|
913
|
|
|
—
|
|
|
1,631
|
|
||||
Corporate bonds
|
|
3.69
|
%
|
|
$
|
479
|
|
|
(26
|
)
|
|
266
|
|
|
—
|
|
|
240
|
|
||||
Other ABS
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total interest income from securities
|
|
|
|
|
|
3,327
|
|
|
10,969
|
|
|
—
|
|
|
14,296
|
|
|||||||
Leasing
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Preference payments on structured notes
|
|
|
|
|
|
—
|
|
|
9,773
|
|
|
—
|
|
|
9,773
|
|
|||||||
Other
|
|
|
|
|
|
—
|
|
|
231
|
|
|
—
|
|
|
231
|
|
|||||||
Total interest income - other
|
|
|
|
|
|
—
|
|
|
10,004
|
|
|
—
|
|
|
10,004
|
|
|||||||
Total interest income
|
|
|
|
|
|
$
|
21,144
|
|
|
$
|
108,312
|
|
|
$
|
3,874
|
|
|
$
|
133,330
|
|
|||
Year Ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Bank loans
|
|
3.76
|
%
|
|
$
|
(31,787
|
)
|
|
$
|
15,539
|
|
|
$
|
36,932
|
|
|
$
|
2,362
|
|
|
$
|
54,833
|
|
Commercial real estate loans
|
|
4.64
|
%
|
|
$
|
(160
|
)
|
|
12
|
|
|
30,249
|
|
|
1,645
|
|
|
31,906
|
|
||||
Total interest income from loans
|
|
|
|
|
|
15,551
|
|
|
67,181
|
|
|
4,007
|
|
|
86,739
|
|
|||||||
CMBS-private placement
|
|
3.60
|
%
|
|
$
|
(13,391
|
)
|
|
3,270
|
|
|
6,020
|
|
|
—
|
|
|
9,290
|
|
||||
RMBS
|
|
|
|
|
|
—
|
|
|
1,521
|
|
|
—
|
|
|
1,521
|
|
|||||||
ABS
|
|
2.60
|
%
|
|
$
|
(3,812
|
)
|
|
524
|
|
|
1,089
|
|
|
—
|
|
|
1,613
|
|
||||
Other ABS
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total interest income from securities
|
|
|
|
|
|
3,794
|
|
|
8,630
|
|
|
—
|
|
|
12,424
|
|
|||||||
Leasing
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Preference payments on structured notes
|
|
|
|
|
|
—
|
|
|
10,432
|
|
|
—
|
|
|
10,432
|
|
|||||||
Other
|
|
|
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
279
|
|
|||||||
Total interest income - other
|
|
|
|
|
|
—
|
|
|
10,711
|
|
|
—
|
|
|
10,711
|
|
|||||||
Total interest income
|
|
|
|
|
|
$
|
19,345
|
|
|
$
|
86,522
|
|
|
$
|
4,007
|
|
|
$
|
109,874
|
|
|||
Year Ended December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Bank loans
|
|
3.24
|
%
|
|
$
|
(26,568
|
)
|
|
$
|
13,919
|
|
|
$
|
30,051
|
|
|
$
|
858
|
|
|
$
|
44,828
|
|
Commercial real estate loans
|
|
4.50
|
%
|
|
$
|
(171
|
)
|
|
(15
|
)
|
|
32,163
|
|
|
718
|
|
|
32,866
|
|
||||
Total interest income from loans
|
|
|
|
|
|
13,904
|
|
|
62,214
|
|
|
1,576
|
|
|
77,694
|
|
|||||||
CMBS-private placement
|
|
3.79
|
%
|
|
$
|
(20,932
|
)
|
|
4,359
|
|
|
5,409
|
|
|
—
|
|
|
9,768
|
|
||||
Securities held-to-maturity
|
|
2.45
|
%
|
|
$
|
(2,844
|
)
|
|
409
|
|
|
1,057
|
|
|
—
|
|
|
1,466
|
|
||||
Other ABS
|
|
|
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
200
|
|
|||||||
Total interest income from securities
|
|
|
|
|
|
4,768
|
|
|
6,666
|
|
|
—
|
|
|
11,434
|
|
|||||||
Leasing
|
|
|
|
|
|
—
|
|
|
11,306
|
|
|
—
|
|
|
11,306
|
|
|||||||
Preference payments on structured notes
|
|
|
|
|
|
—
|
|
|
3,112
|
|
|
—
|
|
|
3,112
|
|
|||||||
Other
|
|
|
|
|
|
—
|
|
|
365
|
|
|
—
|
|
|
365
|
|
|||||||
Total interest income - other
|
|
|
|
|
|
—
|
|
|
3,477
|
|
|
—
|
|
|
3,477
|
|
|||||||
Total interest income
|
|
|
|
|
|
$
|
18,672
|
|
|
$
|
83,663
|
|
|
$
|
1,576
|
|
|
$
|
103,911
|
|
•
|
an increase in the weighted average loan balance of
$226.5 million
to
$1.2 billion
for the
year ended
December 31, 2012
from
$963.4 million
for the
year ended
December 31, 2011
, principally as a result of our new CLO, Apidos CLO VIII , for which we began acquiring assets in July 2011, and Whitney CLO I ,which we began consolidating in October 2012 when we acquired a controlling interest. The increase in the weighted average balance was partially offset by a decrease in the loan asset balances at Apidos I and III as both have reached the end of their reinvestment period and are now required to use principal proceeds from bank loan payoffs and paydowns to repay outstanding debt. For the
year ended
December 31, 2012
, Apidos I and III paid down a total of $151.2 million par value of CLOs; and
|
•
|
an increase in the weighted average yield to
5.94%
for the
year ended
December 31, 2012
as compared to
5.63%
for the
year ended
December 31, 2011
, primarily as a result of the increase in accretion income from Apidos CLO VIII for which we began acquiring assets in July 2011. The increase in accretion income from Apidos VIII was partially offset by a decrease in accretion income from Apidos I and Apidos III as those CLOs have decreasing asset and discount balances as both have reached the end of their reinvestment periods.
|
•
|
an increase of
$55.7 million
in the weighted average loan balance to
$701.8 million
for the
year ended
December 31, 2012
from
$646.1 million
for the
year ended
December 31, 2011
as we reinvested proceeds from payoffs and paydowns, classified as restricted CDO cash on our balance sheet, beginning in the fourth quarter of 2011, with the majority of these proceeds being reinvested during the second and third quarters of 2012. In addition, we began to originate new loans financed by our Wells Fargo CRE credit facility coupled with new equity raised in 2012; and
|
•
|
an increase in the weighted average yield to
5.25%
during the
year ended
December 31, 2012
from
4.95%
during the
year ended
December 31, 2011
as a result of newly originated real estate loans with higher stated interest rates than our legacy portfolio and as a result of an acceleration of fees on one loan that paid off in August 2012.
|
•
|
an increase in the weighted average balance of
$55.8 million
to
$963.4 million
for the
year ended
December 31, 2011
from
$907.6 million
for the
year ended
December 31, 2010
, principally as a result of our new CLO, for which we began acquiring assets in July 2011;
|
•
|
an increase in the weighted average rate to 3.76% on bank loans for the
year ended
December 31, 2011
from 3.24% for the
year ended
December 31, 2010
primarily because of the increase in spread on these assets; and
|
•
|
timing of paydowns and payoffs which caused us to accelerate discounts into income in prior years. The bank loan market experienced increased prepayment speeds beginning in the third quarter of 2010 which have slowed considerably since the second quarter of 2011.
|
|
|
Years Ended
|
||||||||||
|
|
December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest expense:
|
|
|
|
|
|
|
||||||
Bank loans
|
|
$
|
21,781
|
|
|
$
|
11,348
|
|
|
$
|
9,573
|
|
Commercial real estate loans
|
|
7,566
|
|
|
6,397
|
|
|
8,068
|
|
|||
CMBS-private placement
|
|
1,024
|
|
|
547
|
|
|
—
|
|
|||
Leasing
|
|
—
|
|
|
—
|
|
|
5,737
|
|
|||
Hedging instruments
|
|
7,266
|
|
|
8,415
|
|
|
9,438
|
|
|||
Securitized borrowings
|
|
1,993
|
|
|
1,859
|
|
|
—
|
|
|||
General
|
|
3,162
|
|
|
3,620
|
|
|
3,650
|
|
|||
Total interest expense
|
|
$
|
42,792
|
|
|
$
|
32,186
|
|
|
$
|
36,466
|
|
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|||||||||||||||
|
|
December 31, 2012
|
|
December 31, 2011
|
|
December 31, 2010
|
|||||||||||||||
|
|
Weighted Average
|
|
Weighted Average
|
|
Weighted Average
|
|||||||||||||||
|
|
Yield
|
|
Balance
|
|
Yield
|
|
Balance
|
|
Yield
|
|
Balance
|
|||||||||
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Bank loans
|
|
1.83
|
%
|
|
$
|
1,174,495
|
|
|
1.16
|
%
|
|
$
|
981,000
|
|
|
1.04
|
%
|
|
$
|
906,000
|
|
Commercial real estate loans
|
|
1.62
|
%
|
|
$
|
458,032
|
|
|
1.28
|
%
|
|
$
|
499,416
|
|
|
1.46
|
%
|
|
$
|
543,345
|
|
CMBS-private placement
|
|
2.09
|
%
|
|
$
|
47,533
|
|
|
2.75
|
%
|
|
$
|
19,462
|
|
|
N/A
|
|
N/A
|
|||
Leasing
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
8.81
|
%
|
|
$
|
65,176
|
|
||||||
Hedging instruments
|
|
5.13
|
%
|
|
$
|
138,581
|
|
|
5.27
|
%
|
|
$
|
160,132
|
|
|
4.90
|
%
|
|
$
|
181,821
|
|
Securitized borrowings
(1)
|
|
8.79
|
%
|
|
$
|
21,399
|
|
|
42.90
|
%
|
|
$
|
4,347
|
|
|
N/A
|
|
N/A
|
|||
General
|
|
4.75
|
%
|
|
$
|
65,148
|
|
|
6.39
|
%
|
|
$
|
57,249
|
|
|
7.47
|
%
|
|
$
|
50,000
|
|
(1)
|
Third party equity holders interest is accounted for as interest expense in our statement of operations using an imputed interest rate on the underlying subordinated debt. Prior year amounts do not include a change in an accounting estimate made in the current year.
|
Type of Security
|
|
Coupon
Interest
|
|
Unamortized
Deferred Debt
and LOC
|
|
Net
Amortization
|
|
Interest
Expense
|
|
Other
|
|
Total
|
|||||||||||
Year Ended December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Bank loans
|
|
1.36
|
%
|
|
$
|
7,102
|
|
|
$
|
2,846
|
|
(1)
|
$
|
18,935
|
|
(1)
|
$
|
—
|
|
|
$
|
21,781
|
|
Commercial real estate loans
|
|
1.08
|
%
|
|
$
|
610
|
|
|
2,292
|
|
|
5,274
|
|
|
—
|
|
|
7,566
|
|
||||
CMBS-private placement
|
|
1.52
|
%
|
|
$
|
23
|
|
|
271
|
|
|
753
|
|
|
—
|
|
|
1,024
|
|
||||
Hedging
|
|
4.97
|
%
|
|
$
|
932
|
|
|
—
|
|
|
7,266
|
|
|
—
|
|
|
7,266
|
|
||||
Securitized borrowings
|
|
14.40
|
%
|
|
$
|
—
|
|
|
—
|
|
|
3,195
|
|
|
(1,202
|
)
|
|
1,993
|
|
||||
General
|
|
4.43
|
%
|
|
$
|
734
|
|
|
65
|
|
|
3,097
|
|
|
—
|
|
|
3,162
|
|
||||
Total interest expense
|
|
|
|
|
|
$
|
5,474
|
|
|
$
|
38,520
|
|
|
$
|
(1,202
|
)
|
|
$
|
42,792
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year Ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Bank loans
|
|
0.94
|
%
|
|
$
|
9,948
|
|
|
$
|
1,894
|
|
|
$
|
9,454
|
|
|
$
|
—
|
|
|
$
|
11,348
|
|
Commercial real estate loans
|
|
0.97
|
%
|
|
$
|
2,918
|
|
|
1,447
|
|
|
4,950
|
|
|
—
|
|
|
6,397
|
|
||||
CMBS-private placement
|
|
1.48
|
%
|
|
$
|
494
|
|
|
247
|
|
|
300
|
|
|
—
|
|
|
547
|
|
||||
Hedging
|
|
4.95
|
%
|
|
$
|
1,160
|
|
|
—
|
|
|
8,415
|
|
|
—
|
|
|
8,415
|
|
||||
Securitized borrowings
|
|
15.27
|
%
|
|
$
|
—
|
|
|
—
|
|
|
1,859
|
|
|
—
|
|
|
1,859
|
|
||||
General
|
|
5.75
|
%
|
|
$
|
917
|
|
|
46
|
|
|
3,574
|
|
|
—
|
|
|
3,620
|
|
||||
Total interest expense
|
|
|
|
|
|
$
|
3,634
|
|
|
$
|
28,552
|
|
|
$
|
—
|
|
|
$
|
32,186
|
|
Year Ended December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Bank loans
|
|
0.85
|
%
|
|
$
|
6,197
|
|
|
$
|
1,751
|
|
|
$
|
7,822
|
|
|
$
|
—
|
|
|
$
|
9,573
|
|
Commercial real estate loans
|
|
0.99
|
%
|
|
$
|
5,377
|
|
|
2,475
|
|
|
5,593
|
|
|
—
|
|
|
8,068
|
|
||||
Leasing
|
|
5.12
|
%
|
|
$
|
—
|
|
|
364
|
|
|
5,373
|
|
|
—
|
|
|
5,737
|
|
||||
Hedging
|
|
4.90
|
%
|
|
$
|
1,387
|
|
|
—
|
|
|
9,438
|
|
|
—
|
|
|
9,438
|
|
||||
General
|
|
6.30
|
%
|
|
$
|
1,194
|
|
|
46
|
|
|
3,604
|
|
|
—
|
|
|
3,650
|
|
||||
Total interest expense
|
|
|
|
|
|
$
|
4,636
|
|
|
$
|
31,830
|
|
|
$
|
—
|
|
|
$
|
36,466
|
|
•
|
an increase in the weighted average balance of the related financings of
$193.5 million
(
20%
) to
$1.2 billion
for the
year ended
December 31, 2012
as compared to
$981.0 million
for the year ended
December 31, 2011
due to the closing of our new CLO, Apidos CLO VIII, which occurred in October 2011 and from the consolidation of Whitney CLO I which we acquired in October 2012. The increase in weighted average balance of financings from the two new CLOs was partially offset by the debt amortization of Apidos CDO I and Apidos CDO III as they reached the end of their reinvestment periods in 2011 and 2012, respectively. During the period July, 31, 2011 through December 31, 2012, Apidos CDO I paid down $116.3 million in principal amount of its CDO notes. During the period from July 1, 2012 through December 31, 2012, Apidos CDO III paid down $40.5 million in principal amount of its CDO notes; and
|
•
|
an increase in the weighted average rate to
1.83%
for the
year ended
December 31, 2012
from
1.16%
for the
year ended
December 31, 2011
primarily as a result of the increase in LIBOR, a reference index for the rates payable on most of these financings as well as a full year of interest expense on Apidos CLO VIII which has a higher weighted average rate than our legacy Apidos CLOs as a result of market conditions at the time that Apidos CLO VIII was closed.
|
•
|
an increase in the weighted average balance of the related financings of
$75.0 million
to
$981.0 million
for the
year ended
December 31, 2011
as compared to
$906.0 million
for the
year ended
December 31, 2010
due to the financing of new asset purchases primarily financed by our warehouse line for a new CLO which closed in October 2011.
|
•
|
an increase in the weighted average rate to
1.16%
for the
year ended
December 31, 2011
from
1.04%
for the
year ended
December 31, 2010
primarily as a result of the increase in LIBOR, a reference index for the rates payable on most of these financings.
|
•
|
a decrease in the weighted average yield due to decreased amortization of financing costs as a result of fewer CDO note repurchases during the
year ended
December 31, 2011
as compared to the
year ended
December 31, 2010
.
|
•
|
a decrease in the weighted average balance of the related financings of
$43.9 million
to
$499.4 million
for the
year ended
December 31, 2011
as compared to
$543.3 million
for the
year ended
December 31, 2010
, primarily due to the repurchase of $10.0 million and $91.4 million of CDO notes in 2011 and 2010, respectively. In addition, the reinvestment period of one of our CDOs ended in September 2011 and, consequently, the subsequent paydowns received on loans held by that CDO were used to pay down $23.0 million of notes issued by the CDO.
|
|
Years Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Other revenue:
|
|
|
|
|
|
||||||
Rental income
|
$
|
11,463
|
|
|
$
|
3,656
|
|
|
$
|
35
|
|
Dividend income
|
69
|
|
|
3,045
|
|
|
99
|
|
|||
Equity in earnings (loss) of unconsolidated subsidiaries
|
(2,709
|
)
|
|
112
|
|
|
231
|
|
|||
Fee income
|
7,068
|
|
|
7,789
|
|
|
—
|
|
|||
Net realized gain on investment securities available-for-sale and loans
|
4,106
|
|
|
2,643
|
|
|
4,821
|
|
|||
Net realized and unrealized gain on investment securities, trading
|
12,435
|
|
|
837
|
|
|
14,791
|
|
|||
Unrealized gain and net interest income on linked transactions, net
|
728
|
|
|
216
|
|
|
—
|
|
|||
Total other revenue
|
$
|
33,160
|
|
|
$
|
18,298
|
|
|
$
|
19,977
|
|
|
Years Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Management fees − related party
|
$
|
18,512
|
|
|
$
|
11,022
|
|
|
$
|
13,216
|
|
Equity compensation − related party
|
4,636
|
|
|
2,526
|
|
|
2,221
|
|
|||
Professional services
|
4,700
|
|
|
3,791
|
|
|
3,627
|
|
|||
Insurance
|
639
|
|
|
658
|
|
|
759
|
|
|||
Rental operating expense
|
8,046
|
|
|
2,743
|
|
|
46
|
|
|||
General and administrative
|
4,434
|
|
|
3,950
|
|
|
3,015
|
|
|||
Depreciation on operating leases
|
—
|
|
|
—
|
|
|
4,003
|
|
|||
Depreciation and amortization
|
5,885
|
|
|
4,619
|
|
|
—
|
|
|||
Income tax expense
|
14,602
|
|
|
12,036
|
|
|
5,721
|
|
|||
Net impairment losses recognized in earnings
|
180
|
|
|
6,898
|
|
|
26,804
|
|
|||
Provision for loan losses
|
16,818
|
|
|
13,896
|
|
|
43,321
|
|
|||
Total operating expenses
|
$
|
78,452
|
|
|
$
|
62,139
|
|
|
$
|
102,733
|
|
•
|
Incentive management fees to our Manager, which are based upon the excess of adjusted operating earnings, as defined in the management agreement, over a variable base rate, increased
$4.3 million
(
247%
) to
$6.0 million
for the
year ended
December 31, 2012
from
$1.7 million
for the
year ended
December 31, 2011
. The increase in these fees was primarily the result of gains on the extinguishment of debt for the
year ended
December 31, 2012
as well as fewer realized losses on the charge-off of assets in our CRE and Apidos portfolios. The incentive fee is calculated for each quarter and the calculation in any quarter is not affected by the results of any other quarter.
|
•
|
Base management fees increased by
$1.3 million
(
19%
) to
$8.3 million
for the
year ended
December 31, 2012
as compared to
$7.0 million
for the
year ended
December 31, 2011
. This increase was due to increased stockholders' equity, a component in the formula by which base management fees are calculated, primarily as a result of the receipt of $156.6 million of proceeds from the sales of common stock through our Dividend Reinvestment and Stock Purchase Plan or DRIP, from January 1, 2011 through
December 31, 2012
as well as the receipt of $46.6 million and $55.6 million from the proceeds of our March 2011 and September 2012 secondary common stock offerings and proceeds from our preferred stock offerings of $42.2 million, received in October 2012.
|
•
|
Incentive management fees related to our structured finance manager increased by
$1.9 million
(
83%
) to
$4.2 million
for the
year ended
December 31, 2012
as compared to
$2.3 million
for the
year ended
December 31, 2011
. The increase in fees is primarily related to the improved economic performance of this portfolio during the
year ended
December 31, 2012
, which is reflected in gain on investment securities, trading and preference payments on structured notes.
|
•
|
an increase of $152,000 related to the payment to our board investment committee for their services. We resumed paying these fees in April 2012;
|
•
|
an increase of $327,000 related to franchise taxes because of increased profitability and equity in our taxable REIT subsidiaries.
|
|
Years Ended
|
||||||
|
December 31
|
||||||
|
2012
|
|
2011
|
||||
CRE loan portfolio
|
$
|
5,225
|
|
|
$
|
6,478
|
|
Bank loan portfolio
|
11,593
|
|
|
7,418
|
|
||
|
$
|
16,818
|
|
|
$
|
13,896
|
|
•
|
Base management fees increased by
$1.6 million
(
29%
) to
$7.0 million
for the
year ended
December 31, 2011
as compared to
$5.4 million
for the
year ended
December 31, 2010
. This increase was due to increased stockholders' equity, a component in the formula by which base management fees are calculated, primarily as a result of the receipt of $83.6 million of net proceeds from the sales of common stock through our Dividend Reinvestment and Stock Purchase Plan or DRIP, during the years ended
December 31, 2011
as well as the receipt of $46.6 million from the proceeds of our March 2011 common stock offering.
|
•
|
Incentive management fees to our Manager, which are based upon the excess of adjusted operating earnings over a variable base rate, decreased
$2.7 million
(
61%
) to
$1.7 million
for the
year ended
December 31, 2011
from
$4.4 million
for the
year ended
December 31, 2010
. The fees for the
year ended
December 31, 2010
were driven by $34.6 million of gains on the extinguishment of debt as compared to $3.9 million of gains on the extinguishment of debt for the
year ended
December 31, 2011
. The incentive fee is calculated for each quarter and the calculation in any quarter is not affected by the results of any other quarter.
|
•
|
Incentive management fees related to our structured finance manager decreased by
$1.1 million
(
32%
) to
$2.3 million
for the
year ended
December 31, 2011
from
$3.4 million
for the
year ended
December 31, 2010. The decrease in fees is primarily related to the decline in the performance of this portfolio at December 31, 2011.
|
•
|
an increase of $257,000 related to transaction costs in connection with our acquisition of an investment in real estate in September 2011;
|
•
|
increase of $194,000 related to franchise taxes because of increased profitability and equity in our taxable REIT subsidiaries;
|
•
|
an increase of $168,000 related to our agreement to reimburse Resource America for the wages, salary and benefits of our Chairman, our Chief Financial Officer, several accounting professionals, and 50% of the salary and benefits of a director of investor relations.
|
|
Years Ended
|
||||||
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
CRE loan portfolio
|
$
|
6,478
|
|
|
$
|
44,357
|
|
Bank loan portfolio
|
7,418
|
|
|
(1,348
|
)
|
||
Lease receivables
|
—
|
|
|
312
|
|
||
|
$
|
13,896
|
|
|
$
|
43,321
|
|
|
Years Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Other Revenue (Expense)
|
|
|
|
|
|
||||||
Gain on consolidation
|
2,498
|
|
|
—
|
|
|
—
|
|
|||
Gain on the extinguishment of debt
|
16,699
|
|
|
3,875
|
|
|
34,610
|
|
|||
Other income (expense)
|
—
|
|
|
(6
|
)
|
|
148
|
|
|||
Total other revenue
|
$
|
19,197
|
|
|
$
|
3,869
|
|
|
$
|
34,758
|
|
|
Amortized
cost |
|
Dollar price
|
|
Net carrying
amount |
|
Dollar price
|
|
Net carrying
amount less amortized cost |
|
Dollar price
|
|||||||||
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Floating rate
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
RMBS
|
$
|
6,047
|
|
|
36.14
|
%
|
|
$
|
5,564
|
|
|
33.25
|
%
|
|
$
|
(483
|
)
|
|
(2.89
|
)%
|
CMBS-private placement
|
28,147
|
|
|
100.00
|
%
|
|
12,814
|
|
|
45.52
|
%
|
|
(15,333
|
)
|
|
(54.48
|
)%
|
|||
Structured notes
|
9,413
|
|
|
26.67
|
%
|
|
19,279
|
|
|
54.62
|
%
|
|
9,866
|
|
|
27.95
|
%
|
|||
Other ABS
|
—
|
|
|
—
|
%
|
|
23
|
|
|
0.27
|
%
|
|
23
|
|
|
0.27
|
%
|
|||
Mezzanine loans
(1)
|
15,845
|
|
|
99.95
|
%
|
|
15,644
|
|
|
98.68
|
%
|
|
(201
|
)
|
|
(1.27
|
)%
|
|||
Whole loans
(1)
|
533,938
|
|
|
99.64
|
%
|
|
527,018
|
|
|
98.35
|
%
|
|
(6,920
|
)
|
|
(1.29
|
)%
|
|||
Bank loans
(2)
|
1,178,420
|
|
|
97.09
|
%
|
|
1,168,715
|
|
|
97.08
|
%
|
|
(9,705
|
)
|
|
(0.01
|
)%
|
|||
Loans held for sale
(3)
|
48,894
|
|
|
92.42
|
%
|
|
48,894
|
|
|
92.38
|
%
|
|
—
|
|
|
(0.04
|
)%
|
|||
ABS Securities
|
26,479
|
|
|
89.42
|
%
|
|
27,052
|
|
|
91.36
|
%
|
|
573
|
|
|
1.94
|
%
|
|||
Corporate bonds
|
33,767
|
|
|
101.82
|
%
|
|
33,700
|
|
|
101.61
|
%
|
|
(67
|
)
|
|
(0.21
|
)%
|
|||
Total floating rate
|
1,880,950
|
|
|
95.98
|
%
|
|
1,858,703
|
|
|
94.85
|
%
|
|
(22,247
|
)
|
|
(1.13
|
)%
|
|||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
CMBS-private placement
|
154,681
|
|
|
68.14
|
%
|
|
158,001
|
|
|
69.61
|
%
|
|
3,320
|
|
|
1.47
|
%
|
|||
B notes
(1)
|
16,327
|
|
|
99.30
|
%
|
|
16,121
|
|
|
98.05
|
%
|
|
(206
|
)
|
|
(1.25
|
)%
|
|||
Mezzanine loans
(1)
|
66,941
|
|
|
99.70
|
%
|
|
66,282
|
|
|
98.73
|
%
|
|
(659
|
)
|
|
(0.97
|
)%
|
|||
Loans receivable-related party
|
8,324
|
|
|
100.00
|
%
|
|
8,324
|
|
|
100.00
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total fixed rate
|
246,273
|
|
|
77.23
|
%
|
|
248,728
|
|
|
78.00
|
%
|
|
2,455
|
|
|
0.77
|
%
|
|||
Other (non-interest bearing)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Investment in real estate
|
75,386
|
|
|
100.00
|
%
|
|
75,386
|
|
|
100.00
|
%
|
|
—
|
|
|
—
|
%
|
|||
Investment in unconsolidated entities
|
45,413
|
|
|
100.00
|
%
|
|
45,413
|
|
|
100.00
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total other
|
120,799
|
|
|
100.00
|
%
|
|
120,799
|
|
|
100.00
|
%
|
|
—
|
|
|
—
|
%
|
|||
Grand total
|
$
|
2,248,022
|
|
|
93.70
|
%
|
|
$
|
2,228,230
|
|
|
92.87
|
%
|
|
$
|
(19,792
|
)
|
|
(0.83
|
)%
|
|
Amortized
cost |
|
Dollar price
|
|
Net carrying
amount |
|
Dollar price
|
|
Net carrying
amount less amortized cost |
|
Dollar price
|
|||||||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Floating rate
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
RMBS
|
$
|
8,729
|
|
|
18.60
|
%
|
|
$
|
7,120
|
|
|
15.17
|
%
|
|
$
|
(1,609
|
)
|
|
(3.43
|
)%
|
CMBS-private placement
|
28,691
|
|
|
100.00
|
%
|
|
8,311
|
|
|
28.97
|
%
|
|
(20,380
|
)
|
|
(71.03
|
)%
|
|||
Structured notes
|
27,345
|
|
|
41.53
|
%
|
|
31,553
|
|
|
47.93
|
%
|
|
4,208
|
|
|
6.40
|
%
|
|||
ABS
|
28,513
|
|
|
88.21
|
%
|
|
25,201
|
|
|
77.96
|
%
|
|
(3,312
|
)
|
|
(10.25
|
)%
|
|||
Other ABS
|
—
|
|
|
—
|
%
|
|
23
|
|
|
0.28
|
%
|
|
23
|
|
|
0.28
|
%
|
|||
Corporate bonds
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Mezzanine loans
(1)
|
53,908
|
|
|
99.97
|
%
|
|
53,077
|
|
|
98.43
|
%
|
|
(831
|
)
|
|
(1.54
|
)%
|
|||
Whole loans
(1)
|
537,708
|
|
|
99.79
|
%
|
|
515,176
|
|
|
95.61
|
%
|
|
(22,532
|
)
|
|
(4.18
|
)%
|
|||
Bank loans
(2)
|
1,170,599
|
|
|
97.33
|
%
|
|
1,167,302
|
|
|
97.06
|
%
|
|
(3,297
|
)
|
|
(0.27
|
)%
|
|||
Loans held for sale
(3)
|
3,154
|
|
|
54.59
|
%
|
|
3,154
|
|
|
54.59
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total floating rate
|
1,858,647
|
|
|
93.71
|
%
|
|
1,810,917
|
|
|
91.31
|
%
|
|
(47,730
|
)
|
|
(2.40
|
)%
|
|||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
CMBS-private placement
|
115,643
|
|
|
62.64
|
%
|
|
107,331
|
|
|
58.13
|
%
|
|
(8,312
|
)
|
|
(4.51
|
)%
|
|||
B notes
(1)
|
16,435
|
|
|
99.13
|
%
|
|
16,182
|
|
|
97.61
|
%
|
|
(253
|
)
|
|
(1.52
|
)%
|
|||
Mezzanine loans
(1)
|
13,966
|
|
|
100.35
|
%
|
|
13,361
|
|
|
96.00
|
%
|
|
(605
|
)
|
|
(4.35
|
)%
|
|||
Whole loans
(1)
|
6,965
|
|
|
99.47
|
%
|
|
6,965
|
|
|
99.47
|
%
|
|
—
|
|
|
—
|
%
|
|||
Loans receivable-related party
|
9,497
|
|
|
100.00
|
%
|
|
9,497
|
|
|
100.00
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total fixed rate
|
162,506
|
|
|
70.16
|
%
|
|
153,336
|
|
|
66.20
|
%
|
|
(9,170
|
)
|
|
(3.96
|
)%
|
|||
Other (non-interest bearing)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Investment in real estate
|
48,027
|
|
|
100.00
|
%
|
|
48,027
|
|
|
100.00
|
%
|
|
—
|
|
|
—
|
%
|
|||
Investment in unconsolidated entities
|
47,899
|
|
|
100.00
|
%
|
|
47,899
|
|
|
100.00
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total other
|
95,926
|
|
|
100.00
|
%
|
|
95,926
|
|
|
100.00
|
%
|
|
—
|
|
|
—
|
%
|
|||
Grand total
|
$
|
2,117,079
|
|
|
91.61
|
%
|
|
$
|
2,060,179
|
|
|
89.15
|
%
|
|
$
|
(56,900
|
)
|
|
(2.46
|
)%
|
|
(1)
|
Net carrying amount includes an allowance for loan losses of
$8.0 million
at
December 31, 2012
, allocated as follows: B notes
($206,000)
, mezzanine loans
($860,000)
and whole loans
($6.9) million
. Net carrying amount includes an allowance for loan losses of
$24.2 million
at
December 31, 2011
, allocated as follows: B notes
($253,000)
, mezzanine loans
($1.4) million
and whole loans
($22.5) million
.
|
(2)
|
Net carrying amount includes allowance for loan losses of
$9.7 million
and
$3.3 million
as of December 31, 2012 and
December 31, 2011
, respectively.
|
(3)
|
Loans held for sale are carried at the lower of cost or market. Amortized cost is equal to fair value.
|
|
Fair Value at
|
|
|
|
|
|
|
|
Fair Value at
|
||||||||||
|
December 31, 2011
|
|
Net Purchases
|
|
Upgrades/Downgrades
|
|
MTM Change Same Ratings
|
|
December 31, 2012
|
||||||||||
Moody's Ratings Category:
|
|
|
|
|
|
|
|
|
|
||||||||||
Aaa
|
$
|
42,548
|
|
|
$
|
46,562
|
|
|
$
|
—
|
|
|
$
|
(22,280
|
)
|
|
$
|
66,830
|
|
Aa1 through Aa3
|
4,115
|
|
|
—
|
|
|
—
|
|
|
811
|
|
|
4,926
|
|
|||||
A1 through A3
|
10,678
|
|
|
—
|
|
|
—
|
|
|
(1,734
|
)
|
|
8,944
|
|
|||||
Baa1 through Baa3
|
27,839
|
|
|
13,503
|
|
|
(4,975
|
)
|
|
8,257
|
|
|
44,624
|
|
|||||
Ba1 through Ba3
|
3,502
|
|
|
—
|
|
|
(1,306
|
)
|
|
1,541
|
|
|
3,737
|
|
|||||
B1 through B3
|
960
|
|
|
4,350
|
|
|
(2,965
|
)
|
|
4,970
|
|
|
7,315
|
|
|||||
Caa1 through Caa3
|
7,151
|
|
|
—
|
|
|
—
|
|
|
901
|
|
|
8,052
|
|
|||||
Ca through C
|
2,094
|
|
|
2,496
|
|
|
(2,111
|
)
|
|
5,689
|
|
|
8,168
|
|
|||||
Non-Rated
|
16,755
|
|
|
5,111
|
|
|
—
|
|
|
(3,647
|
)
|
|
18,219
|
|
|||||
Total
|
$
|
115,642
|
|
|
$
|
72,022
|
|
|
$
|
(11,357
|
)
|
|
$
|
(5,492
|
)
|
|
$
|
170,815
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
S&P Ratings Category:
|
|
|
|
|
|
|
|
|
|
||||||||||
AAA
|
$
|
42,548
|
|
|
$
|
36,082
|
|
|
$
|
—
|
|
|
$
|
(25,990
|
)
|
|
$
|
52,640
|
|
A+ through A-
|
5,923
|
|
|
—
|
|
|
2,376
|
|
|
(866
|
)
|
|
7,433
|
|
|||||
BBB+ through BBB-
|
19,179
|
|
|
4,536
|
|
|
(1,382
|
)
|
|
(9,085
|
)
|
|
13,248
|
|
|||||
BB+ through BB-
|
21,130
|
|
|
6,966
|
|
|
(10,345
|
)
|
|
13,940
|
|
|
31,691
|
|
|||||
B+ through B-
|
2,310
|
|
|
4,350
|
|
|
(9,930
|
)
|
|
19,233
|
|
|
15,963
|
|
|||||
CCC+ through CCC-
|
6,643
|
|
|
—
|
|
|
—
|
|
|
2,316
|
|
|
8,959
|
|
|||||
D
|
615
|
|
|
—
|
|
|
(627
|
)
|
|
1,162
|
|
|
1,150
|
|
|||||
Non-Rated
|
17,294
|
|
|
20,088
|
|
|
—
|
|
|
2,349
|
|
|
39,731
|
|
|||||
Total
|
$
|
115,642
|
|
|
$
|
72,022
|
|
|
$
|
(19,908
|
)
|
|
$
|
3,059
|
|
|
$
|
170,815
|
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair
Value |
||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Structured notes
|
$
|
9,413
|
|
|
$
|
10,894
|
|
|
$
|
(1,028
|
)
|
|
$
|
19,279
|
|
RMBS
|
6,047
|
|
|
858
|
|
|
(1,341
|
)
|
|
5,564
|
|
||||
Total
|
$
|
15,460
|
|
|
$
|
11,752
|
|
|
$
|
(2,369
|
)
|
|
$
|
24,843
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Structured notes
|
$
|
27,345
|
|
|
$
|
6,098
|
|
|
$
|
(1,890
|
)
|
|
$
|
31,553
|
|
RMBS
|
8,729
|
|
|
100
|
|
|
(1,709
|
)
|
|
7,120
|
|
||||
Total
|
$
|
36,074
|
|
|
$
|
6,198
|
|
|
$
|
(3,599
|
)
|
|
$
|
38,673
|
|
Description
|
|
Quantity
|
|
Amortized Cost
|
|
Contracted Interest Rates
|
|
Maturity Dates
(3)
|
||
December 31, 2012
|
|
|
|
|
|
|
|
|
||
Whole loans, floating rate
(1) (4) (5) (6)
|
|
37
|
|
$
|
567,938
|
|
|
LIBOR plus 2.50% to
LIBOR plus 5.50% |
|
June 2013 to
February 2019 |
B notes, fixed rate
|
|
1
|
|
16,327
|
|
|
8.68%
|
|
April 2016
|
|
Mezzanine loans, floating rate
|
|
2
|
|
15,845
|
|
|
LIBOR plus 2.50% to
LIBOR plus 7.45% |
|
August 2013 to
December 2013 |
|
Mezzanine loans, fixed rate
(7)
|
|
3
|
|
66,941
|
|
|
0.50% to 20.00%
|
|
September 2014 to
September 2019 |
|
Total
(2)
|
|
43
|
|
$
|
667,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
Whole loans, floating rate
(1) (4) (5)
|
|
32
|
|
$
|
537,708
|
|
|
LIBOR plus 2.50% to
LIBOR plus 5.75% |
|
April 2012 to
February 2019 |
Whole loans, fixed rate
|
|
1
|
|
6,965
|
|
|
10.00%
|
|
June 2012
|
|
B notes, fixed rate
|
|
1
|
|
16,435
|
|
|
8.68%
|
|
April 2016
|
|
Mezzanine loans, floating rate
|
|
3
|
|
53,908
|
|
|
LIBOR plus 2.50% to
LIBOR plus 7.45% |
|
May 2012 to
December 2012 |
|
Mezzanine loans, fixed rate
|
|
2
|
|
13,966
|
|
|
8.99% to 11.00%
|
|
January 2016 to
September 2016 |
|
Total
(2)
|
|
39
|
|
$
|
628,982
|
|
|
|
|
|
|
(1)
|
Whole loans had
$8.9 million
and
$5.2 million
in unfunded loan commitments as of
December 31, 2012
and
2011
, respectively. These commitments are funded as the borrowers require additional funding and have satisfied the requirements to obtain this additional funding.
|
(2)
|
The total does not include an allowance for loan losses of
$8.0 million
and
$24.2 million
recorded as of
December 31, 2012
and
2011
, respectively.
|
(3)
|
Maturity dates do not include possible extension options that may be available to the borrowers.
|
(4)
|
Floating rate whole loans includes a
$2.0 million
portion of a whole loan that has a fixed rate of
15.0%
as of
December 31, 2012
and
2011
, respectively.
|
(5)
|
Floating rate whole loans includes a
$1.0 million
and
$302,000
preferred equity tranche of a whole loan that has a fixed rate of 10.0% as of
December 31, 2012
and
2011
, respectively.
|
(6)
|
Amount includes
$34.0 million
of
two
whole loans that are classified as a loan held for sale at
December 31, 2012
.
|
(7)
|
Fixed rate mezzanine loans include a mezzanine loan that was modified into
2
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.
|
|
December 31, 2012
|
|
December 31, 2011
|
||||||||||||
|
Amortized cost
|
|
Fair Value
(1)
|
|
Amortized cost
|
|
Fair Value
(1)
|
||||||||
Moody’s ratings category:
|
|
|
|
|
|
|
|
||||||||
Baa1 through Baa3
|
$
|
41,831
|
|
|
$
|
42,337
|
|
|
$
|
44,952
|
|
|
$
|
44,956
|
|
Ba1 through Ba3
|
645,502
|
|
|
655,039
|
|
|
648,543
|
|
|
644,497
|
|
||||
B1 through B3
|
443,775
|
|
|
449,232
|
|
|
439,871
|
|
|
427,282
|
|
||||
Caa1 through Caa3
|
27,523
|
|
|
23,869
|
|
|
19,710
|
|
|
12,774
|
|
||||
Ca
|
6,819
|
|
|
3,582
|
|
|
5,765
|
|
|
2,397
|
|
||||
No rating provided
|
27,864
|
|
|
28,154
|
|
|
14,912
|
|
|
14,155
|
|
||||
Total
|
$
|
1,193,314
|
|
|
$
|
1,202,213
|
|
|
$
|
1,173,753
|
|
|
$
|
1,146,061
|
|
|
|
|
|
|
|
|
|
||||||||
S&P ratings category:
|
|
|
|
|
|
|
|
|
|
|
|
||||
BBB+ through BBB-
|
$
|
128,072
|
|
|
$
|
129,648
|
|
|
$
|
84,623
|
|
|
$
|
84,615
|
|
BB+ through BB-
|
483,091
|
|
|
490,823
|
|
|
561,375
|
|
|
559,211
|
|
||||
B+ through B-
|
529,331
|
|
|
535,632
|
|
|
478,684
|
|
|
465,564
|
|
||||
CCC+ through CCC-
|
28,567
|
|
|
25,522
|
|
|
27,097
|
|
|
19,401
|
|
||||
CC+ through CC-
|
2,831
|
|
|
1,451
|
|
|
4,490
|
|
|
1,512
|
|
||||
C+ through C-
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
D
|
2,021
|
|
|
1,237
|
|
|
352
|
|
|
343
|
|
||||
No rating provided
|
19,401
|
|
|
17,900
|
|
|
17,132
|
|
|
15,415
|
|
||||
Total
|
$
|
1,193,314
|
|
|
$
|
1,202,213
|
|
|
$
|
1,173,753
|
|
|
$
|
1,146,061
|
|
Weighted average rating factor
|
1,974
|
|
|
|
|
|
1,969
|
|
|
|
|
|
Amortized Cost
|
||||||||||||||||||||||
|
Apidos I
|
|
Apidos III
|
|
Apidos Cinco
|
|
Apidos VIII
|
|
Whitney CLO I
|
|
Total
|
||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
First lien loans
|
$
|
174,208
|
|
|
$
|
206,960
|
|
|
$
|
298,885
|
|
|
$
|
321,022
|
|
|
$
|
147,791
|
|
|
$
|
1,148,866
|
|
Second lien loans
|
3,559
|
|
|
3,237
|
|
|
8,306
|
|
|
9,035
|
|
|
729
|
|
|
24,866
|
|
||||||
Defaulted first lien loans
|
2,207
|
|
|
1,200
|
|
|
615
|
|
|
—
|
|
|
—
|
|
|
4,022
|
|
||||||
Defaulted second lien loans
|
333
|
|
|
333
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
666
|
|
||||||
Total
|
180,307
|
|
|
211,730
|
|
|
307,806
|
|
|
330,057
|
|
|
148,520
|
|
|
1,178,420
|
|
||||||
First lien loans held for sale at fair value
|
2,671
|
|
|
2,770
|
|
|
3,657
|
|
|
5,796
|
|
|
—
|
|
|
14,894
|
|
||||||
Total
|
$
|
182,978
|
|
|
$
|
214,500
|
|
|
$
|
311,463
|
|
|
$
|
335,853
|
|
|
$
|
148,520
|
|
|
$
|
1,193,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
First lien loans
|
$
|
295,318
|
|
|
$
|
242,628
|
|
|
$
|
293,442
|
|
|
$
|
311,923
|
|
|
$
|
—
|
|
|
$
|
1,143,311
|
|
Second lien loans
|
5,281
|
|
|
5,746
|
|
|
6,438
|
|
|
6,845
|
|
|
—
|
|
|
24,310
|
|
||||||
Subordinated second lien loans
|
163
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
285
|
|
||||||
Defaulted first lien loans
|
1,397
|
|
|
599
|
|
|
697
|
|
|
—
|
|
|
—
|
|
|
2,693
|
|
||||||
Total
|
302,159
|
|
|
249,095
|
|
|
300,577
|
|
|
318,768
|
|
|
—
|
|
|
1,170,599
|
|
||||||
First lien loans held for sale at fair value
|
—
|
|
|
198
|
|
|
2,018
|
|
|
938
|
|
|
—
|
|
|
3,154
|
|
||||||
Total
|
$
|
302,159
|
|
|
$
|
249,293
|
|
|
$
|
302,595
|
|
|
$
|
319,706
|
|
|
$
|
—
|
|
|
$
|
1,173,753
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Moody’s ratings category:
|
|
|
|
|
|
|
|
||||||||
Aaa
|
$
|
5,856
|
|
|
$
|
6,414
|
|
|
$
|
8,252
|
|
|
$
|
8,051
|
|
Aa1 through Aa3
|
1,086
|
|
|
1,192
|
|
|
1,723
|
|
|
1,593
|
|
||||
A1 through A3
|
6,590
|
|
|
7,116
|
|
|
6,446
|
|
|
6,366
|
|
||||
Baa1 through Baa3
|
2,790
|
|
|
3,108
|
|
|
2,647
|
|
|
2,543
|
|
||||
Ba1 through Ba3
|
5,115
|
|
|
4,614
|
|
|
5,043
|
|
|
3,592
|
|
||||
B1 through B3
|
4,131
|
|
|
3,641
|
|
|
3,613
|
|
|
2,346
|
|
||||
Caa1 through Caa3
|
80
|
|
|
81
|
|
|
—
|
|
|
—
|
|
||||
No rating provided
|
831
|
|
|
886
|
|
|
789
|
|
|
710
|
|
||||
Total
|
$
|
26,479
|
|
|
$
|
27,052
|
|
|
$
|
28,513
|
|
|
$
|
25,201
|
|
|
|
|
|
|
|
|
|
||||||||
S&P ratings category:
|
|
|
|
|
|
|
|
|
|
|
|
||||
AAA
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
AA+ through AA-
|
6,943
|
|
|
7,608
|
|
|
8,138
|
|
|
7,928
|
|
||||
A+ through A-
|
6,539
|
|
|
7,319
|
|
|
7,467
|
|
|
7,347
|
|
||||
BBB+ through BBB-
|
300
|
|
|
327
|
|
|
950
|
|
|
866
|
|
||||
BB+ through BB-
|
7,518
|
|
|
7,054
|
|
|
1,592
|
|
|
1,335
|
|
||||
B+ through B-
|
2,059
|
|
|
2,011
|
|
|
3,639
|
|
|
3,200
|
|
||||
CCC+ through CCC-
|
80
|
|
|
81
|
|
|
—
|
|
|
—
|
|
||||
No rating provided
|
3,040
|
|
|
2,652
|
|
|
6,727
|
|
|
4,525
|
|
||||
Total
|
$
|
26,479
|
|
|
$
|
27,052
|
|
|
$
|
28,513
|
|
|
$
|
25,201
|
|
Weighted average rating factor
|
690
|
|
|
|
|
|
582
|
|
|
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Moody’s ratings category:
|
|
|
|
|
|
|
|
||||||||
Aaa
|
$
|
4,345
|
|
|
$
|
4,359
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Aa1 through Aa3
|
2,068
|
|
|
2,063
|
|
|
—
|
|
|
—
|
|
||||
A1 through A3
|
5,606
|
|
|
5,582
|
|
|
—
|
|
|
—
|
|
||||
Baa1 through Baa3
|
721
|
|
|
707
|
|
|
—
|
|
|
—
|
|
||||
Ba1 through Ba3
|
4,491
|
|
|
4,445
|
|
|
—
|
|
|
—
|
|
||||
B1 through B3
|
8,757
|
|
|
8,795
|
|
|
—
|
|
|
—
|
|
||||
Caa1 through Caa3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
No rating provided
|
7,779
|
|
|
7,749
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
33,767
|
|
|
$
|
33,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
S&P ratings category:
|
|
|
|
|
|
|
|
|
|
|
|
||||
AAA
|
$
|
4,345
|
|
|
$
|
4,359
|
|
|
$
|
—
|
|
|
$
|
—
|
|
AA+ through AA-
|
2,068
|
|
|
2,063
|
|
|
—
|
|
|
—
|
|
||||
A+ through A-
|
3,144
|
|
|
3,110
|
|
|
—
|
|
|
—
|
|
||||
BBB+ through BBB-
|
1,239
|
|
|
1,227
|
|
|
—
|
|
|
—
|
|
||||
BB+ through BB-
|
1,414
|
|
|
1,407
|
|
|
—
|
|
|
—
|
|
||||
B+ through B-
|
14,330
|
|
|
14,322
|
|
|
—
|
|
|
—
|
|
||||
CCC+ through CCC-
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
No rating provided
|
7,227
|
|
|
7,212
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
33,767
|
|
|
$
|
33,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Weighted average rating factor
|
1,045
|
|
|
|
|
|
—
|
|
|
|
|
|
Commercial Real Estate Loans
|
|
Bank Loans
|
|
Lease Receivables
|
|
Loans Receivable-Related Party
|
|
Total
|
||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for losses at January 1, 2012
|
$
|
24,221
|
|
|
$
|
3,297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,518
|
|
Provision for loan loss
|
5,225
|
|
|
11,593
|
|
|
—
|
|
|
—
|
|
|
16,818
|
|
|||||
Loans charged-off
|
(21,460
|
)
|
|
(5,185
|
)
|
|
—
|
|
|
—
|
|
|
(26,645
|
)
|
|||||
Recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Noncontrolling interest eliminated in consolidation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Allowance for losses at December 31, 2012
|
$
|
7,986
|
|
|
$
|
9,705
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,691
|
|
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
$
|
2,142
|
|
|
$
|
3,236
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,378
|
|
Collectively evaluated for impairment
|
$
|
5,844
|
|
|
$
|
6,469
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,313
|
|
Loans acquired with deteriorated credit quality
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
$
|
177,055
|
|
|
$
|
4,688
|
|
|
$
|
—
|
|
|
$
|
8,324
|
|
|
$
|
190,067
|
|
Collectively evaluated for impairment
|
$
|
489,996
|
|
|
$
|
1,187,875
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,677,871
|
|
Loans acquired with deteriorated credit quality
|
$
|
—
|
|
|
$
|
751
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
751
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for losses at January 1, 2011
|
$
|
31,617
|
|
|
$
|
2,616
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
34,303
|
|
Provision for loan loss
|
6,478
|
|
|
7,418
|
|
|
—
|
|
|
—
|
|
|
13,896
|
|
|||||
Loans charged-off
|
(13,874
|
)
|
|
(6,737
|
)
|
|
(70
|
)
|
|
—
|
|
|
(20,681
|
)
|
|||||
Recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Allowance for losses at December 31, 2011
|
$
|
24,221
|
|
|
$
|
3,297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,518
|
|
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
$
|
17,065
|
|
|
$
|
1,593
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,658
|
|
Collectively evaluated for impairment
|
$
|
7,156
|
|
|
$
|
1,704
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,860
|
|
Loans acquired with deteriorated credit quality
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
$
|
113,038
|
|
|
$
|
2,693
|
|
|
$
|
—
|
|
|
$
|
9,497
|
|
|
$
|
125,228
|
|
Collectively evaluated for impairment
|
$
|
515,944
|
|
|
$
|
1,171,060
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,687,004
|
|
Loans acquired with deteriorated credit quality
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Rating 1
|
|
Rating 2
|
|
Rating 3
|
|
Rating 4
|
|
Rating 5
|
|
Held for Sale
|
|
Total
|
||||||||||||||
As of December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank loans
|
$
|
1,095,148
|
|
|
$
|
33,677
|
|
|
$
|
27,837
|
|
|
$
|
16,318
|
|
|
$
|
5,440
|
|
|
$
|
14,894
|
|
|
$
|
1,193,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As of December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Bank loans
|
$
|
1,076,298
|
|
|
$
|
19,739
|
|
|
$
|
60,329
|
|
|
$
|
11,540
|
|
|
$
|
2,693
|
|
|
$
|
3,154
|
|
|
$
|
1,173,753
|
|
|
Rating 1
|
|
Rating 2
|
|
Rating 3
|
|
Rating 4
|
|
Held for Sale
|
|
Total
|
||||||||||||
As of December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Whole loans
|
$
|
427,456
|
|
|
$
|
—
|
|
|
$
|
106,482
|
|
|
$
|
—
|
|
|
$
|
34,000
|
|
|
$
|
567,938
|
|
B notes
|
16,327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,327
|
|
||||||
Mezzanine loans
|
38,296
|
|
|
—
|
|
|
44,490
|
|
|
—
|
|
|
—
|
|
|
82,786
|
|
||||||
|
$
|
482,079
|
|
|
$
|
—
|
|
|
$
|
150,972
|
|
|
$
|
—
|
|
|
$
|
34,000
|
|
|
$
|
667,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Whole loans
|
$
|
329,085
|
|
|
$
|
87,598
|
|
|
$
|
90,225
|
|
|
$
|
37,765
|
|
|
$
|
—
|
|
|
$
|
544,673
|
|
B notes
|
16,435
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,435
|
|
||||||
Mezzanine loans
|
23,347
|
|
|
—
|
|
|
44,527
|
|
|
—
|
|
|
—
|
|
|
67,874
|
|
||||||
|
$
|
368,867
|
|
|
$
|
87,598
|
|
|
$
|
134,752
|
|
|
$
|
37,765
|
|
|
$
|
—
|
|
|
$
|
628,982
|
|
|
30-59 Days
|
|
60-89 Days
|
|
Greater than 90 Days
|
|
Total Past Due
|
|
Current
|
|
Total Loans Receivable
|
|
Total Loans > 90 Days and Accruing
|
||||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
567,938
|
|
|
$
|
567,938
|
|
|
$
|
—
|
|
B notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,327
|
|
|
16,327
|
|
|
—
|
|
|||||||
Mezzanine loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,786
|
|
|
82,786
|
|
|
—
|
|
|||||||
Bank loans
|
1,549
|
|
|
—
|
|
|
3,891
|
|
|
5,440
|
|
|
1,187,874
|
|
|
1,193,314
|
|
|
—
|
|
|||||||
Loans receivable- related party
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,324
|
|
|
8,324
|
|
|
—
|
|
|||||||
Total loans
|
$
|
1,549
|
|
|
$
|
—
|
|
|
$
|
3,891
|
|
|
$
|
5,440
|
|
|
$
|
1,863,249
|
|
|
$
|
1,868,689
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
544,673
|
|
|
$
|
544,673
|
|
|
$
|
—
|
|
B notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,435
|
|
|
16,435
|
|
|
—
|
|
|||||||
Mezzanine loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,874
|
|
|
67,874
|
|
|
—
|
|
|||||||
Bank loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,173,753
|
|
|
1,173,753
|
|
|
—
|
|
|||||||
Loans receivable- related party
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,497
|
|
|
9,497
|
|
|
—
|
|
|||||||
Total loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,812,232
|
|
|
$
|
1,812,232
|
|
|
$
|
—
|
|
|
Recorded Balance
|
|
Unpaid Principal Balance
|
|
Specific Allowance
|
|
Average Investment in Impaired Loans
|
|
Interest Income Recognized
|
||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans without a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Whole loans
|
$
|
115,841
|
|
|
$
|
115,841
|
|
|
$
|
—
|
|
|
$
|
114,682
|
|
|
$
|
3,436
|
|
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mezzanine loans
|
$
|
38,072
|
|
|
$
|
38,072
|
|
|
$
|
—
|
|
|
$
|
38,072
|
|
|
$
|
367
|
|
Bank loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans receivable - related party
|
$
|
6,754
|
|
|
$
|
6,754
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
851
|
|
Loans with a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
23,142
|
|
|
$
|
23,142
|
|
|
$
|
(2,142
|
)
|
|
$
|
22,576
|
|
|
$
|
801
|
|
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mezzanine loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank loans
|
$
|
5,440
|
|
|
$
|
5,440
|
|
|
$
|
(3,236
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans receivable - related party
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
138,983
|
|
|
$
|
138,983
|
|
|
$
|
(2,142
|
)
|
|
$
|
137,258
|
|
|
$
|
4,237
|
|
B notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Mezzanine loans
|
38,072
|
|
|
38,072
|
|
|
—
|
|
|
38,072
|
|
|
367
|
|
|||||
Bank loans
|
5,440
|
|
|
5,440
|
|
|
(3,236
|
)
|
|
—
|
|
|
—
|
|
|||||
Loans receivable - related party
|
6,754
|
|
|
6,754
|
|
|
—
|
|
|
—
|
|
|
851
|
|
|||||
|
$
|
189,249
|
|
|
$
|
189,249
|
|
|
$
|
(5,378
|
)
|
|
$
|
175,330
|
|
|
$
|
5,455
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans without a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
75,273
|
|
|
$
|
75,273
|
|
|
$
|
—
|
|
|
$
|
75,263
|
|
|
$
|
2,682
|
|
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mezzanine loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans receivable - related party
|
$
|
7,820
|
|
|
$
|
7,820
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,112
|
|
Loans with a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
37,765
|
|
|
$
|
37,765
|
|
|
$
|
(17,065
|
)
|
|
$
|
36,608
|
|
|
$
|
920
|
|
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mezzanine loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank loans
|
$
|
2,693
|
|
|
$
|
2,693
|
|
|
$
|
(1,593
|
)
|
|
$
|
2,693
|
|
|
$
|
—
|
|
Loans receivable - related party
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
113,038
|
|
|
$
|
113,038
|
|
|
$
|
(17,065
|
)
|
|
$
|
111,871
|
|
|
$
|
3,602
|
|
B notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Mezzanine loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Bank loans
|
2,693
|
|
|
2,693
|
|
|
(1,593
|
)
|
|
2,693
|
|
|
—
|
|
|||||
Loans receivable - related party
|
7,820
|
|
|
7,820
|
|
|
—
|
|
|
—
|
|
|
1,112
|
|
|||||
|
$
|
123,551
|
|
|
$
|
123,551
|
|
|
$
|
(18,658
|
)
|
|
$
|
114,564
|
|
|
$
|
4,714
|
|
|
Number of Loans
|
|
Pre-Modification Outstanding Recorded Balance
|
|
Post-Modification Outstanding Recorded Balance
|
||||
Year Ended December 31, 2012:
|
|
|
|
|
|
||||
Whole loans
(1)
|
7
|
|
$
|
175,708
|
|
|
$
|
158,422
|
|
B notes
|
—
|
|
—
|
|
|
—
|
|
||
Mezzanine loans
|
1
|
|
38,072
|
|
|
38,072
|
|
||
Bank loans
|
—
|
|
—
|
|
|
—
|
|
||
Loans receivable - related party
(2)
|
1
|
|
7,797
|
|
|
7,797
|
|
||
Total loans
|
9
|
|
$
|
221,577
|
|
|
$
|
204,291
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2011:
|
|
|
|
|
|
|
|
||
Whole loans
|
2
|
|
$
|
34,739
|
|
|
$
|
33,073
|
|
B notes
|
—
|
|
—
|
|
|
—
|
|
||
Mezzanine loans
|
—
|
|
—
|
|
|
—
|
|
||
Bank loans
|
—
|
|
—
|
|
|
—
|
|
||
Loans receivable
|
—
|
|
—
|
|
|
—
|
|
||
Loans receivable - related party
|
1
|
|
7,981
|
|
|
7,981
|
|
||
Total loans
|
3
|
|
$
|
42,720
|
|
|
$
|
41,054
|
|
(1)
|
Whole loans include a whole loan with a pre-modification and post-modification outstanding recorded balance of
$21.8 million
that have been converted to real-estate owned and will no longer be a TDR after
December 31, 2012
.
|
(2)
|
Loans receivable - related party has received paydowns for the year ended
December 31, 2012
and currently has an outstanding balance of
$6.8 million
as of
December 31, 2012
.
|
|
As of December 31, 2012
|
|
As of December 31, 2011
|
||||||||
|
Book Value
|
|
Number of Properties
|
|
Book Value
|
|
Number of Properties
|
||||
Multi-family property
|
$
|
42,179
|
|
|
2
|
|
$
|
38,577
|
|
|
2
|
Office property
|
10,149
|
|
|
1
|
|
10,149
|
|
|
1
|
||
Hotel property
|
25,608
|
|
|
1
|
|
—
|
|
|
—
|
||
Subtotal
|
77,936
|
|
|
|
|
48,726
|
|
|
|
||
Less: Accumulated depreciation
|
(2,550
|
)
|
|
|
|
(699
|
)
|
|
|
||
Investments in real estate
|
$
|
75,386
|
|
|
|
|
$
|
48,027
|
|
|
|
•
|
On September 6, 2012, we foreclosed on a self-originated loan and converted the loan to equity with a fair value of $25.5 million at acquisition. The loan was collateralized by a 179 unit hotel property in Coconut Grove, Florida. The property was 75% occupied at acquisition.
|
•
|
On June 14, 2011, we converted a self-originated loan to equity with a fair value of
$22.4 million
at acquisition. The loan was collateralized by a
400
unit multi-family property in Memphis, Tennessee. The property was
93.8%
occupied at acquisition.
|
•
|
On June 24, 2011, we converted a self-originated loan to equity with a fair value of
$10.7 million
at acquisition. The loan was collateralized by an office building in Pacific Palisades, California. The property was
60%
occupied at acquisition.
|
•
|
On August 1, 2011, we, through our subsidiary RCC Real Estate, purchased Whispertree Apartments, a
504
multi-family property located in Houston, Texas, for
$18.1 million
, the fair value. The property was
95%
occupied at acquisition. In conjunction with the purchase of this property, we entered into a mortgage in the amount of
$13.6 million
.
|
Description
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Assets acquired:
|
|
|
|
|
||||
Investments in real estate
|
|
$
|
25,500
|
|
|
$
|
48,683
|
|
Cash and cash equivalents
|
|
—
|
|
|
177
|
|
||
Restricted cash
|
|
—
|
|
|
2,360
|
|
||
Intangible assets
|
|
—
|
|
|
2,490
|
|
||
Other assets
|
|
(89
|
)
|
|
391
|
|
||
Total assets acquired
|
|
25,411
|
|
|
54,101
|
|
||
Liabilities assumed:
|
|
|
|
|
|
|||
Accounts payable and other liabilities
|
|
3,750
|
|
|
673
|
|
||
Total liabilities assumed
|
|
3,750
|
|
|
673
|
|
||
Estimated fair value of net assets acquired
|
|
$
|
21,661
|
|
|
$
|
53,428
|
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Prepaid taxes
|
$
|
9,546
|
|
|
$
|
125
|
|
Prepaid insurance
|
425
|
|
|
276
|
|
||
Other prepaid expenses
|
425
|
|
|
247
|
|
||
Total
|
$
|
10,396
|
|
|
$
|
648
|
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Management fees receivable
|
$
|
1,253
|
|
|
$
|
1,170
|
|
Other receivables
|
1,542
|
|
|
1,296
|
|
||
Preferred stock proceeds receivable
|
1,248
|
|
|
—
|
|
||
Fixed assets
|
66
|
|
|
979
|
|
||
Total
|
$
|
4,109
|
|
|
$
|
3,445
|
|
|
|
Benchmark rate
|
|
Notional
value |
|
Strike
rate |
|
Effective
date |
|
Maturity
date |
|
Fair
value |
||||
CRE Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap
|
|
1 month LIBOR
|
|
$
|
31,598
|
|
|
4.13%
|
|
01/10/08
|
|
05/25/16
|
|
$
|
(1,939
|
)
|
Interest rate swap
|
|
1 month LIBOR
|
|
1,681
|
|
|
5.72%
|
|
07/12/07
|
|
10/01/16
|
|
(231
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
1,880
|
|
|
5.68%
|
|
07/13/07
|
|
03/12/17
|
|
(398
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
80,256
|
|
|
5.58%
|
|
06/26/07
|
|
04/25/17
|
|
(10,503
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
1,726
|
|
|
5.65%
|
|
07/05/07
|
|
07/15/17
|
|
(258
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
3,850
|
|
|
5.65%
|
|
07/26/07
|
|
07/15/17
|
|
(575
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
4,023
|
|
|
5.41%
|
|
08/10/07
|
|
07/25/17
|
|
(572
|
)
|
||
Total CRE Swaps
|
|
|
|
125,014
|
|
|
|
|
|
|
|
|
(14,476
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
CMBS Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
85
|
|
|
0.64%
|
|
02/23/2011
|
|
11/01/2013
|
|
—
|
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
27
|
|
|
0.51%
|
|
03/18/2011
|
|
11/01/2013
|
|
—
|
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
101
|
|
|
0.55%
|
|
03/28/2011
|
|
11/01/2013
|
|
—
|
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
150
|
|
|
0.55%
|
|
04/15/2011
|
|
11/18/2013
|
|
—
|
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
2,360
|
|
|
1.11%
|
|
04/26/2011
|
|
01/15/2014
|
|
(20
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
726
|
|
|
0.84%
|
|
03/31/2011
|
|
01/18/2014
|
|
(2
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
3,043
|
|
|
1.93%
|
|
02/14/2011
|
|
05/01/2015
|
|
(90
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
746
|
|
|
1.30%
|
|
07/19/2011
|
|
03/18/2016
|
|
(12
|
)
|
||
Interest rate swap
|
|
1 month LIBOR
|
|
2,989
|
|
|
1.95%
|
|
04/11/2011
|
|
03/18/2016
|
|
(87
|
)
|
||
Total CMBS Swaps
|
|
|
|
10,227
|
|
|
|
|
|
|
|
|
(211
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Interest Rate Swaps
|
|
|
|
$
|
135,241
|
|
|
4.94%
|
|
|
|
|
|
$
|
(14,687
|
)
|
•
|
In February 2011, we acquired the rights to manage the assets held by Whitney CLO I. In October 2012, we purchased 66.6% of the oustanding preferred equity. Based upon that purchase, we determined that we had a controlling interest and consolidated Whitney CLO I. The balance of senior notes outstanding as of October 2012, the date of acquisition, was
$209.5 million
at a discount of
1.47%
. All of the notes issued mature on March 1, 2017. We have the right to call the notes anytime after March 1, 2009 until maturity in March 2017. The weighted average interest rate on all notes was
1.82%
at December 31, 2012. The reinvestment period for Whitney CLO I ended in March 2011 which will result in the sequential pay down of notes as underlying collateral matures and pays down. Since we consolidated Whitney CLO I, $
15.5 million
of Class A-1L and $
19.9 million
of Class A-1LA notes have been paid down.
|
•
|
In October 2011, we closed Apidos CLO VIII, a
$350.0 million
CLO transaction that provided financing for bank loans. The investments held by Apidos CLO VIII collateralized
$317.6 million
of senior notes issued by the CDO vehicle. Resource TRS III originally purchased a
$15.0 million
equity interest representing approximately
43%
of the outstanding preference shares and subsequently sold $3.5 million to our subsidiary RSO Equity Co, LLC in connection with the sale of Apidos Capital Management by the Manager. At
December 31, 2012
, the notes issued to outside investors had a weighted average borrowing rate of 2.16%.
|
•
|
In June 2007, we closed RREF CDO 2007-1, a $500.0 million CDO transaction that provided financing for commercial real estate loans. The investments held by RREF CDO 2007-1 collateralized $458.8 million of senior notes issued by the CDO vehicle, of which RCC Real Estate, a subsidiary of ours, purchased 100% of the class H senior notes, class K senior notes, class L senior notes and class M senior notes for $68.0 million at closing, $5.0 million of the Class J senior notes in February 2008, an additional $2.5 million of the Class J senior notes in November 2009, and $11.9 million of the Class E senior notes, $11.9 million of the Class F senior notes and $7.3 million of the Class G senior notes in December 2009, $250,000 of the Class J senior notes in January 2010, $5.0 million of the Class A-2 senior notes in August 2011, $5.0 million of the Class A-2 senior notes in September 2011 and $50.0 million of the A1-R notes were repurchased in June 2012 by a clearing broker for us and subsequently paid off. In addition, RREF 2007-1 CDO Investor, LLC, a subsidiary of RCC Real Estate, purchased a $41.3 million equity interest representing 100% of the outstanding preference shares. At
December 31, 2012
, the notes issued to outside investors, net of repurchased notes, had a weighted average borrowing rate of 0.81%. The reinvestment period expired in June 2012 and the CDO has begun paying down the senior notes as principal is collected. Through
December 31, 2012
, $14.5 million of the Class A-1 and $50.0 million of the Class A-1R senior notes had been paid down.
|
•
|
In May 2007, we closed Apidos Cinco CDO, a $350.0 million CDO transaction that provided financing for bank loans. The investments held by Apidos Cinco CDO collateralized $322.0 million of senior notes issued by the CDO vehicle. RCC Commercial II holds a $28.0 million equity interest representing 100% of the outstanding preference shares. At
December 31, 2012
, the notes issued to outside investors had a weighted average borrowing rate of 0.82%.
|
•
|
In August 2006, we closed RREF CDO 2006-1, a $345.0 million CDO transaction that provided financing for commercial real estate loans. The investments held by RREF CDO 2006-1 collateralized $308.7 million of senior notes issued by the CDO vehicle. RCC Real Estate purchased 100% of the class J senior notes and class K senior notes for $43.1 million at closing and $7.5 million of the Class F senior notes in September 2009, $3.5 million of the Class E senior note and $4.0 million of the Class F senior notes in September 2009, $20.0 million of the Class A-1 senior notes in February 2010, $4.3 million of the Class A-1 senior notes in May 2012 and $4.0 million of the Class C senior notes in May 2012. In addition, RREF 2006-1 CDO Investor, LLC, a subsidiary of RCC Real Estate, purchased a $36.3 million equity interest representing 100% of the outstanding preference shares. At
December 31, 2012
, the notes issued to outside investors, net of repurchased notes, had a weighted average borrowing rate of 1.42%. The reinvestment period expired in September 2011 and the CDO has begun paying down the senior notes as principal is collected. Through
December 31, 2012
, $29.7 million of the Class A-1 senior notes had been paid down.
|
•
|
In May 2006, we closed Apidos CDO III, a
$285.5 million
CDO transaction that provided financing for bank loans. The investments held by Apidos CDO III collateralized
$262.5 million
of senior notes issued by the CDO vehicle. RCC Commercial purchased a
$23.0 million
equity interest representing
100%
of the outstanding preference shares. At
December 31, 2012
, the notes issued to outside investors had a weighted average borrowing rate of 0.80%. The reinvestment period expired in June 2012 and the CDO has begun paying down the senior notes as principal is collected. Through
December 31, 2012
, $40.5 million of the Class A-1 senior notes had been paid down.
|
•
|
In August 2005, we closed Apidos CDO I, a $350.0 million CDO transaction that provided financing for bank loans. The investments held by Apidos CDO I collateralize $321.5 million of senior notes issued by the CDO vehicle. RCC Commercial originally purchased a $28.5 million equity interest representing 100% of the outstanding preference shares and during the three months ended June 30, 2012 sold 10% or $2.85 million to our subsidiary RSO Equity Co, LLC in connection with the sale of CVC Credit Partners, formerly Apidos Capital Management, by the Manager. Our subsidiary, RCC Commercial II, repurchased $2.0 million of the Class B notes in May 2012. At
December 31, 2012
, the notes issued to outside investors had a weighted average borrowing rate of 1.07%. The reinvestment period expired in July 2011 and the CDO has begun paying down the senior notes as principal is collected. Through
December 31, 2012
, $116.3 million of the Class A-1 senior notes had been paid down.
|
|
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income allocable to common shares - GAAP
|
|
$
|
14,141
|
|
|
$
|
413
|
|
|
$
|
63,199
|
|
|
$
|
37,716
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Real estate depreciation and amortization
|
|
661
|
|
|
1,112
|
|
|
2,686
|
|
|
2,606
|
|
||||
Gains on sales of properties
(1)
|
|
(224
|
)
|
|
—
|
|
|
(1,664
|
)
|
|
—
|
|
||||
Impairment charges on repossessed real estate assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,449
|
|
||||
FFO
|
|
14,578
|
|
|
1,525
|
|
|
64,221
|
|
|
41,771
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Non-cash items:
|
|
|
|
|
|
|
|
|
||||||||
Adjust for impact of imputed interest on VIE accounting
|
|
(3,049
|
)
|
|
—
|
|
|
(3,049
|
)
|
|
—
|
|
||||
Provisions for loan losses
|
|
7,900
|
|
|
2,249
|
|
|
12,408
|
|
|
6,898
|
|
||||
Amortization of deferred costs (non real estate)
and intangible assets |
|
3,140
|
|
|
193
|
|
|
8,896
|
|
|
317
|
|
||||
Equity investment losses
|
|
956
|
|
|
(7
|
)
|
|
3,256
|
|
|
(17
|
)
|
||||
Share-based compensation
|
|
1,224
|
|
|
1,127
|
|
|
4,636
|
|
|
2,526
|
|
||||
Impairment losses on real property held for sale
|
|
—
|
|
|
1,771
|
|
|
180
|
|
|
5,870
|
|
||||
Straight line rental adjustments
|
|
1
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Gain on the extinguishment of debt
|
|
(11,235
|
)
|
|
—
|
|
|
(13,070
|
)
|
|
(3,875
|
)
|
||||
IMF adjustment related to extinguishment of debt
|
|
2,614
|
|
|
—
|
|
|
2,614
|
|
|
—
|
|
||||
REIT tax planning adjustments
|
|
6,810
|
|
|
11,008
|
|
|
6,810
|
|
|
11,751
|
|
||||
Cash items:
|
|
|
|
|
|
|
|
|
||||||||
Gains on sales of joint venture real estate interest
(1)
|
|
224
|
|
|
—
|
|
|
1,664
|
|
|
—
|
|
||||
Gain on the extinguishment of debt
|
|
7
|
|
|
—
|
|
|
670
|
|
|
—
|
|
||||
Capital expenditures
|
|
(826
|
)
|
|
(864
|
)
|
|
(3,081
|
)
|
|
(1,296
|
)
|
||||
AFFO
|
|
$
|
22,344
|
|
|
$
|
17,002
|
|
|
$
|
86,170
|
|
|
$
|
63,945
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares – diluted
|
|
100,959
|
|
|
77,326
|
|
|
89,284
|
|
|
70,809
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AFFO per share – diluted
|
|
$
|
0.22
|
|
|
$
|
0.22
|
|
|
$
|
0.97
|
|
|
$
|
0.90
|
|
|
Years Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Net income - GAAP
|
$
|
64,443
|
|
|
$
|
37,716
|
|
|
$
|
19,447
|
|
Taxable REIT subsidiary's income (loss)
|
120
|
|
|
(6,033
|
)
|
|
(9,833
|
)
|
|||
Adjusted net income
|
64,563
|
|
|
31,683
|
|
|
9,614
|
|
|||
|
|
|
|
|
|
||||||
Adjustments:
|
|
|
|
|
|
||||||
Share-based compensation to related parties
|
2,748
|
|
|
274
|
|
|
805
|
|
|||
Capital carryover (utilization)/losses from the sale of securities
|
(16,000
|
)
|
|
(23,274
|
)
|
|
(5,013
|
)
|
|||
Provision for loan and lease losses unrealized
|
5,225
|
|
|
6,478
|
|
|
44,357
|
|
|||
Asset impairments
|
180
|
|
|
4,649
|
|
|
26,638
|
|
|||
Equity in income (loss) of real estate joint venture
|
(21,408
|
)
|
|
2,540
|
|
|
(14,493
|
)
|
|||
Tax gain on sale of real estate joint venture
|
19,690
|
|
|
—
|
|
|
1,443
|
|
|||
Investments in real estate
|
622
|
|
|
1,788
|
|
|
—
|
|
|||
Foreclosure Tax
|
1,679
|
|
|
—
|
|
|
—
|
|
|||
Deferral of extinguishment of debt income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net book to tax adjustment for the inclusion of our taxable
REIT subsidiaries |
(14,475
|
)
|
|
(10,211
|
)
|
|
(22,204
|
)
|
|||
Subpart F income limitation
|
—
|
|
|
—
|
|
|
—
|
|
|||
Distributable earnings from nonconsolidating taxable
REIT subsidiary |
—
|
|
|
—
|
|
|
1,000
|
|
|||
Other net book to tax adjustments
|
1,312
|
|
|
(90
|
)
|
|
(1,423
|
)
|
|||
Estimated REIT taxable income, before deduction for dividends paid
|
$
|
44,136
|
|
|
$
|
13,837
|
|
|
$
|
40,724
|
|
Name
|
|
CDO Type
|
|
Cash Distributions
|
|
Annualized Interest Coverage Cushion
|
|
Overcollateralization Cushion
|
||||||||||||||
|
|
Year Ended
December 31,
|
|
Year Ended
December 31,
|
|
As of
December 31,
|
|
As of
December 31,
|
|
As of Initial
Measurement Date
|
||||||||||||
|
|
2012
(1)
|
|
2011
(1)
|
|
2012
(2) (3)
|
|
2012
(4)
|
|
|||||||||||||
|
|
|
|
(actual)
|
|
(actual)
|
|
|
|
|
|
|
||||||||||
Apidos CDO I
(5)
|
|
CLO
|
|
$
|
7,971
|
|
|
$
|
9,305
|
|
|
$
|
5,521
|
|
|
$
|
13,386
|
|
|
$
|
17,136
|
|
Apidos CDO III
(6)
|
|
CLO
|
|
$
|
8,742
|
|
|
$
|
8,351
|
|
|
$
|
3,997
|
|
|
$
|
9,900
|
|
|
$
|
11,269
|
|
Apidos Cinco CDO
|
|
CLO
|
|
$
|
11,109
|
|
|
$
|
9,941
|
|
|
$
|
6,420
|
|
|
$
|
19,294
|
|
|
$
|
17,774
|
|
Apidos CLO VIII
(7)
|
|
CLO
|
|
$
|
5,186
|
|
|
$
|
—
|
|
|
$
|
4,681
|
|
|
$
|
14,610
|
|
|
$
|
13,657
|
|
Whitney CLO I
(8)
|
|
CKI
|
|
$
|
567
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
15,171
|
|
|
$
|
—
|
|
RREF 2006-1
(9)
|
|
CRE CDO
|
|
$
|
15,032
|
|
|
$
|
11,637
|
|
|
$
|
10,167
|
|
|
$
|
45,837
|
|
|
$
|
24,941
|
|
RREF 2007-1
(10)
|
|
CRE CDO
|
|
$
|
13,226
|
|
|
$
|
10,743
|
|
|
$
|
11,621
|
|
|
$
|
32,641
|
|
|
$
|
26,032
|
|
(1)
|
Distributions on retained equity interests in CDOs (comprised of note investments and preference share ownership).
|
(2)
|
Interest coverage includes annualized amounts based on the most recent trustee statements.
|
(3)
|
Interest coverage cushion represents the amount by which annualized interest income expected exceeds the annualized amount payable on all classes of CDO notes senior to RSO's preference shares.
|
(4)
|
Overcollateralization cushion represents the amount by which the collateral held by the CDO issuer exceeds the maximum amount required.
|
(5)
|
Apidos CDO I reinvestment period expired in July 2011.
|
(6)
|
Apidos CDO III reinvestment period expired in June 2012.
|
(7)
|
Distributions from Apidos CLO VIII, which closed in October 2011, include $757,000 in subordinated management fees; RSO's contribution of $15.0 million represents 43% of the subordinated debt.
|
(8)
|
Whitney CLO I was acquired in October 2012, when RSO purchased 66% of the outstanding preference shares.
|
(9)
|
RREF CDO 2006-1 reinvestment period expired in September 2011.
|
(10)
|
RREF CDO 2007-1 reinvestment period expired in June 2012.
|
•
|
unrestricted cash and cash equivalents of $99.3 million, restricted cash of $500,000 in margin call accounts and $4.1 million in the form of real estate escrows, reserves and deposits; and
|
•
|
capital available for reinvestment in seven CDO entities of $30.0 million, of which $775,000 is designated to finance future funding commitments on CRE loans, loan principal repayments that will pay down outstanding CLO notes of $79.1 million and $11.2 million in interest collections.
|
|
Contractual Commitments
(dollars in thousands)
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1 – 3 years
|
|
3 – 5 years
|
|
More than
5 years
|
||||||||||
CDOs
(1)
|
$
|
1,614,883
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,614,883
|
|
Repurchase Agreements
(2)
|
126,718
|
|
|
126,718
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unsecured junior subordinated debentures
(3)
|
50,814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,814
|
|
|||||
Mortgage payable
|
13,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,600
|
|
|||||
Joint ventures
(4)
|
1,030
|
|
|
1,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unfunded commitments on CRE loans
(5)
|
8,933
|
|
|
—
|
|
|
8,933
|
|
|
—
|
|
|
—
|
|
|||||
Base management fees
(6)
|
9,998
|
|
|
9,998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,825,976
|
|
|
$
|
137,746
|
|
|
$
|
8,933
|
|
|
$
|
—
|
|
|
$
|
1,679,297
|
|
(1)
|
Contractual commitments do not include $5.0 million, $7.5 million, $5.8 million, $18.0 million, $9.7 million, $14.6 million and $43.2 million of interest expense payable through the stated maturity dates of July 2014, May 2015, May 2015, March 2017, June 2017 and October 2017, respectively, on Apidos CDO I, Apidos Cinco CDO, Apidos CDO III, RREF 2006-1, Whitney CLO I, RREF 2007-1 and Apidos CLO VIII. The maturity date represents the period under which the CDO assets can be sold, resulting in repayment of the CDO notes.
|
(2)
|
Contractual commitments include $116,000 of interest expense payable through the maturity date of January 18, 2013 on our repurchase agreements.
|
(3)
|
Contractual commitments do not include $46.5 million and $47.5 million of estimated interest expense payable through the maturity dates of June 2036 and October 2036, respectively, on our trust preferred securities.
|
(4)
|
The joint venture agreement requires us to contribute 3% to 5% (depending on the terms of the agreement pursuant to which the particular asset is being acquired) of the total funding required for each asset acquisition as needed, up to a specified amount. We expect that all remaining assets will be sold within two years.
|
(5)
|
Unfunded commitments on CRE loans generally fall into two categories: (1) pre-approved capital improvement projects; and (2) new or additional construction costs subject, in each case, to the borrower meeting specified criteria. Upon completion of the improvements or construction, we would receive additional loan interest income on the advanced amount.
|
(6)
|
Calculated only for the next 12 months based on our current equity, as defined in our management agreement. Our management agreement also provides for an incentive fee arrangement that is based on operating performance. Because the incentive fee is not a fixed and determinable amount, it is not included in this table.
|
ITEM 7A .
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
December 31, 2012
|
||||||||||
|
Interest rates fall 100
basis points |
|
Unchanged
|
|
Interest rates rise 100
basis points |
||||||
CMBS – private placement
(1)
:
|
|
|
|
|
|
||||||
Fair value
|
$
|
163,093
|
|
|
$
|
157,423
|
|
|
$
|
152,124
|
|
Change in fair value
|
$
|
5,670
|
|
|
|
|
|
$
|
(5,299
|
)
|
|
Change as a percent of fair value
|
3.60
|
%
|
|
|
|
|
3.37
|
%
|
|||
|
|
|
|
|
|
||||||
Hedging instruments:
|
|
|
|
|
|
|
|
|
|||
Fair value
|
$
|
(16,956
|
)
|
|
$
|
(14,687
|
)
|
|
$
|
(10,090
|
)
|
Change in fair value
|
$
|
(2,269
|
)
|
|
|
|
|
$
|
4,597
|
|
|
Change as a percent of fair value
|
15.45
|
%
|
|
|
|
|
31.30
|
%
|
•
|
monitoring and adjusting, if necessary, the reset index and interest rate related to our mortgage-backed securities and our borrowings;
|
•
|
attempting to structure our borrowing agreements for our CMBS to have a range of different maturities, terms, amortizations and interest rate adjustment periods; and
|
•
|
using derivatives, financial futures, swaps, options, caps, floors and forward sales, to adjust the interest rate sensitivity of our fixed-rate commercial real estate mortgages and CMBS and our borrowing which we discuss in “Financial Condition-Hedging Instruments.”
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTATRY DATA
|
|
December 31,
2012 |
|
December 31,
2011 |
||||
ASSETS
(1)
|
|
|
|
||||
Cash and cash equivalents
|
$
|
85,278
|
|
|
$
|
43,116
|
|
Restricted cash
|
94,112
|
|
|
142,806
|
|
||
Investment securities, trading
|
24,843
|
|
|
38,673
|
|
||
Investment securities available-for-sale, pledged as collateral, at fair value
|
195,200
|
|
|
136,188
|
|
||
Investment securities available-for-sale, at fair value
|
36,390
|
|
|
4,678
|
|
||
Linked transactions, net at fair value
|
6,835
|
|
|
2,275
|
|
||
Loans held for sale
|
48,894
|
|
|
3,154
|
|
||
Property available-for-sale
|
—
|
|
|
2,980
|
|
||
Investment in real estate
|
75,386
|
|
|
48,027
|
|
||
Loans, pledged as collateral and net of allowances of $17.7 million and $27.5 million
|
1,793,780
|
|
|
1,772,063
|
|
||
Loans receivable–related party
|
8,324
|
|
|
9,497
|
|
||
Investments in unconsolidated entities
|
45,413
|
|
|
47,899
|
|
||
Interest receivable
|
7,763
|
|
|
8,836
|
|
||
Deferred tax asset
|
2,766
|
|
|
626
|
|
||
Principal paydown receivable
|
25,570
|
|
|
—
|
|
||
Intangible assets
|
13,192
|
|
|
19,813
|
|
||
Prepaid expenses
|
10,396
|
|
|
648
|
|
||
Other assets
|
4,109
|
|
|
3,445
|
|
||
Total assets
|
$
|
2,478,251
|
|
|
$
|
2,284,724
|
|
LIABILITIES
(2)
|
|
|
|
|
|
||
Borrowings
|
$
|
1,785,600
|
|
|
$
|
1,794,083
|
|
Distribution payable
|
21,655
|
|
|
19,979
|
|
||
Accrued interest expense
|
2,918
|
|
|
3,260
|
|
||
Derivatives, at fair value
|
14,687
|
|
|
13,210
|
|
||
Accrued tax liability
|
13,641
|
|
|
12,567
|
|
||
Deferred tax liability
|
8,376
|
|
|
5,624
|
|
||
Accounts payable and other liabilities
|
18,029
|
|
|
6,311
|
|
||
Total liabilities
|
1,864,906
|
|
|
1,855,034
|
|
||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Preferred stock, par value $0.001: 8.50% Series A 100,000,000 shares authorized, 676,373 shares issued and outstanding
|
1
|
|
|
—
|
|
||
Preferred stock, par value $0.001: 8.25% Series B 100,000,000 shares authorized, 1,126,898 shares issued and outstanding
|
1
|
|
|
—
|
|
||
Common stock, par value $0.001: 500,000,000 shares authorized; 105,118,093 and 79,877,516 shares issued and outstanding (including 3,308,343 and 1,428,931 unvested restricted shares)
|
105
|
|
|
80
|
|
||
Additional paid-in capital
|
836,053
|
|
|
659,700
|
|
||
Accumulated other comprehensive loss
|
(27,078
|
)
|
|
(46,327
|
)
|
||
Distributions in excess of earnings
|
(195,737
|
)
|
|
(183,763
|
)
|
||
Total stockholders’ equity
|
613,345
|
|
|
429,690
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
2,478,251
|
|
|
$
|
2,284,724
|
|
|
December 31,
2012 |
|
December 31,
2011 |
||||
(1) Assets of consolidated Variable Interest Entities ("VIEs") included in the
total assets above:
|
|
|
|
||||
Restricted cash
|
$
|
90,108
|
|
|
$
|
138,120
|
|
Investments securities available-for-sale, pledged as collateral, at fair value
|
135,566
|
|
|
89,045
|
|
||
Loans held for sale
|
14,894
|
|
|
3,154
|
|
||
Property available-for-sale
|
—
|
|
|
2,980
|
|
||
Loans, pledged as collateral and net of allowances of $15.2 million and $17.2 million
|
1,678,719
|
|
|
1,730,950
|
|
||
Interest receivable
|
5,986
|
|
|
6,003
|
|
||
Prepaid expenses
|
328
|
|
|
212
|
|
||
Principal paydown receivable
|
25,570
|
|
|
—
|
|
||
Other assets
|
333
|
|
|
24
|
|
||
Total assets of consolidated VIEs
|
$
|
1,951,504
|
|
|
$
|
1,970,488
|
|
|
|
|
|
||||
(2) Liabilities of consolidated VIEs included in the total liabilities above:
|
|
|
|
||||
Borrowings
|
$
|
1,614,882
|
|
|
$
|
1,689,638
|
|
Accrued interest expense
|
2,666
|
|
|
2,943
|
|
||
Derivatives, at fair value
|
14,078
|
|
|
12,000
|
|
||
Accounts payable and other liabilities
|
698
|
|
|
442
|
|
||
Total liabilities of consolidated VIEs
|
$
|
1,632,324
|
|
|
$
|
1,705,023
|
|
|
Years Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
REVENUES
|
|
|
|
|
|
||||||
Interest income:
|
|
|
|
|
|
||||||
Loans
|
$
|
109,030
|
|
|
$
|
86,739
|
|
|
$
|
77,694
|
|
Securities
|
14,296
|
|
|
12,424
|
|
|
11,434
|
|
|||
Leases
|
—
|
|
|
—
|
|
|
11,306
|
|
|||
Interest income − other
|
10,004
|
|
|
10,711
|
|
|
3,477
|
|
|||
Total interest income
|
133,330
|
|
|
109,874
|
|
|
103,911
|
|
|||
Interest expense
|
42,792
|
|
|
32,186
|
|
|
36,466
|
|
|||
Net interest income
|
90,538
|
|
|
77,688
|
|
|
67,445
|
|
|||
Rental income
|
11,463
|
|
|
3,656
|
|
|
35
|
|
|||
Dividend income
|
69
|
|
|
3,045
|
|
|
99
|
|
|||
Equity in (losses) earnings of unconsolidated subsidiaries
|
(2,709
|
)
|
|
112
|
|
|
231
|
|
|||
Fee income
|
7,068
|
|
|
7,789
|
|
|
—
|
|
|||
Net realized gain on sales of investment securities available-for-sale and loans
|
4,106
|
|
|
2,643
|
|
|
4,821
|
|
|||
Net realized and unrealized gain on investment securities, trading
|
12,435
|
|
|
837
|
|
|
14,791
|
|
|||
Unrealized gain and net interest income on linked transactions, net
|
728
|
|
|
216
|
|
|
—
|
|
|||
Total revenues
|
123,698
|
|
|
95,986
|
|
|
87,422
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||
Management fees − related party
|
18,512
|
|
|
11,022
|
|
|
13,216
|
|
|||
Equity compensation − related party
|
4,636
|
|
|
2,526
|
|
|
2,221
|
|
|||
Professional services
|
4,700
|
|
|
3,791
|
|
|
3,627
|
|
|||
Insurance
|
639
|
|
|
658
|
|
|
759
|
|
|||
Rental operating expense
|
8,046
|
|
|
2,743
|
|
|
46
|
|
|||
General and administrative
|
4,434
|
|
|
3,950
|
|
|
3,015
|
|
|||
Depreciation on operating leases
|
—
|
|
|
—
|
|
|
4,003
|
|
|||
Depreciation and amortization
|
5,885
|
|
|
4,619
|
|
|
—
|
|
|||
Income tax expense
|
14,602
|
|
|
12,036
|
|
|
5,721
|
|
|||
Net impairment losses recognized in earnings
|
180
|
|
|
6,898
|
|
|
26,804
|
|
|||
Provision for loan losses
|
16,818
|
|
|
13,896
|
|
|
43,321
|
|
|||
Total operating expenses
|
78,452
|
|
|
62,139
|
|
|
102,733
|
|
|||
|
45,246
|
|
|
33,847
|
|
|
(15,311
|
)
|
|||
OTHER REVENUE (EXPENSE)
|
|
|
|
|
|
|
|
||||
Gain on consolidation
|
2,498
|
|
|
—
|
|
|
—
|
|
|||
Gain on the extinguishment of debt
|
16,699
|
|
|
3,875
|
|
|
34,610
|
|
|||
Other expenses
|
—
|
|
|
(6
|
)
|
|
148
|
|
|||
Total other revenue (expense)
|
19,197
|
|
|
3,869
|
|
|
34,758
|
|
|||
NET INCOME
|
64,443
|
|
|
37,716
|
|
|
19,447
|
|
|||
Net income allocated to preferred shares
|
(1,244
|
)
|
|
—
|
|
|
—
|
|
|||
NET INCOME ALLOCABLE TO COMMON SHARES
|
$
|
63,199
|
|
|
$
|
37,716
|
|
|
$
|
19,447
|
|
NET INCOME PER COMMON SHARE – BASIC
|
$
|
0.71
|
|
|
$
|
0.54
|
|
|
$
|
0.41
|
|
NET INCOME PER COMMON SHARE – DILUTED
|
$
|
0.71
|
|
|
$
|
0.53
|
|
|
$
|
0.41
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING − BASIC
|
88,410,272
|
|
|
70,410,131
|
|
|
47,715,082
|
|
|||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING − DILUTED
|
89,284,488
|
|
|
70,809,088
|
|
|
47,907,281
|
|
|
Years Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Net income
|
$
|
63,199
|
|
|
$
|
37,716
|
|
|
$
|
19,447
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|||
Reclassification adjustment for gains included in net income
|
1,728
|
|
|
1,080
|
|
|
4,016
|
|
|||
Unrealized (losses) gains on available-for-sale securities, net
|
18,770
|
|
|
(13,798
|
)
|
|
24,313
|
|
|||
Reclassification adjustments associated with unrealized losses from interest rate hedges included in net income
|
227
|
|
|
227
|
|
|
387
|
|
|||
Unrealized (losses) gains on derivatives, net
|
(1,476
|
)
|
|
82
|
|
|
(480
|
)
|
|||
Total other comprehensive (loss) income
|
19,249
|
|
|
(12,409
|
)
|
|
28,236
|
|
|||
Comprehensive income
|
$
|
82,448
|
|
|
$
|
25,307
|
|
|
$
|
47,683
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Preferred Shares - Series A
|
|
Preferred Shares - Series B
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Distributions in Excess of Earnings
|
|
Total Stockholders' Equity
|
|||||||||||||||||
Balance, January 1, 2010
|
36,545,737
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
405,517
|
|
|
$
|
(62,154
|
)
|
|
$
|
—
|
|
|
$
|
(114,569
|
)
|
|
$
|
228,830
|
|
Proceeds from dividend reinvestment and
stock purchase plan |
12,422,956
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
76,797
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,809
|
|
||||||||
Gross proceeds from common stock offering
|
8,625,000
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
45,273
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,282
|
|
||||||||
Offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,875
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,875
|
)
|
||||||||
Stock based compensation
|
589,732
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1,440
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,441
|
|
||||||||
Amortization of stock based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,221
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,221
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,447
|
|
|
—
|
|
|
19,447
|
|
||||||||
Securities available-for-sale, fair value
adjustment, net |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,329
|
|
|
—
|
|
|
—
|
|
|
28,329
|
|
||||||||
Designated derivatives, fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
||||||||
Distributions on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,447
|
)
|
|
(31,618
|
)
|
|
(51,065
|
)
|
||||||||
Balance, December 31, 2010
|
58,183,425
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
528,373
|
|
|
(33,918
|
)
|
|
—
|
|
|
(146,187
|
)
|
|
348,326
|
|
||||||||
Proceeds from dividend reinvestment and
stock purchase plan |
13,511,300
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
83,561
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,575
|
|
||||||||
Gross proceeds from common stock offering
|
6,900,000
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
47,603
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,610
|
|
||||||||
Offering costs
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
(1,274
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,274
|
)
|
|||||||||
Related party debt forgiveness
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,552
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(1,552
|
)
|
|||||||||
Stock based compensation
|
1,286,593
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
463
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
464
|
|
||||||||
Amortization of stock based compensation
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
2,526
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,526
|
|
|||||||||
Forfeitures
|
(3,802
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,716
|
|
|
—
|
|
|
37,716
|
|
||||||||
Securities available-for-sale, fair value
adjustment, net |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,718
|
)
|
|
—
|
|
|
—
|
|
|
(12,718
|
)
|
||||||||
Designated derivatives, fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309
|
|
|
—
|
|
|
—
|
|
|
309
|
|
||||||||
Distributions on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,716
|
)
|
|
(37,576
|
)
|
|
(75,292
|
)
|
||||||||
Balance, December 31, 2011
|
79,877,516
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
659,700
|
|
|
(46,327
|
)
|
|
—
|
|
|
(183,763
|
)
|
|
429,690
|
|
||||||||
Proceeds from dividend reinvestment and
stock purchase plan |
13,130,333
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
73,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73,044
|
|
||||||||
Proceeds from issuance of common stock
|
9,775,000
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
57,663
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,673
|
|
||||||||
Proceeds from issuance of preferred stock
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
44,356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,358
|
|
||||||||
Offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,147
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,147
|
)
|
||||||||
Stock based compensation
|
2,352,253
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
816
|
|
||||||||
Amortization of stock based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,636
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,636
|
|
||||||||
Forfeitures
|
(17,009
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
64,443
|
|
|
—
|
|
|
64,443
|
|
|||||||||
Preferred dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,244
|
)
|
|
—
|
|
|
(1,244
|
)
|
||||||||
Securities available-for-sale, fair value
adjustment, net |
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
20,498
|
|
|
—
|
|
|
—
|
|
|
20,498
|
|
|||||||||
Designated derivatives, fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,249
|
)
|
|
—
|
|
|
—
|
|
|
(1,249
|
)
|
||||||||
Distributions on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,199
|
)
|
|
(11,974
|
)
|
|
(75,173
|
)
|
||||||||
Balance, December 31, 2012
|
105,118,093
|
|
|
$
|
105
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
836,053
|
|
|
$
|
(27,078
|
)
|
|
$
|
—
|
|
|
$
|
(195,737
|
)
|
|
$
|
613,345
|
|
|
Years Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
64,443
|
|
|
$
|
37,716
|
|
|
$
|
19,447
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Provision for loan losses
|
16,818
|
|
|
13,896
|
|
|
43,321
|
|
|||
Depreciation of investments in real estate and other
|
1,838
|
|
|
729
|
|
|
—
|
|
|||
Amortization of intangible assets
|
4,047
|
|
|
3,890
|
|
|
—
|
|
|||
Amortization of term facilities
|
957
|
|
|
570
|
|
|
875
|
|
|||
Depreciation on operating leases
|
—
|
|
|
—
|
|
|
4,003
|
|
|||
Accretion of net discounts on loans held for investment
|
(17,817
|
)
|
|
(15,588
|
)
|
|
(18,672
|
)
|
|||
Accretion of net discounts on securities available-for-sale
|
(3,177
|
)
|
|
(3,698
|
)
|
|
—
|
|
|||
Amortization of discount on notes of CDOs
|
2,470
|
|
|
274
|
|
|
1,963
|
|
|||
Amortization of debt issuance costs on notes of CDOs
|
4,700
|
|
|
3,341
|
|
|
4,226
|
|
|||
Amortization of stock-based compensation
|
4,636
|
|
|
2,526
|
|
|
2,221
|
|
|||
Amortization of terminated derivative instruments
|
227
|
|
|
227
|
|
|
387
|
|
|||
Accretion of interest-only available-for-sales securities
|
(719
|
)
|
|
—
|
|
|
—
|
|
|||
Non-cash incentive compensation to the Manager
|
1,468
|
|
|
430
|
|
|
1,098
|
|
|||
Deferred income tax benefits
|
2,329
|
|
|
(399
|
)
|
|
5,397
|
|
|||
Purchase of securities, trading
|
(8,348
|
)
|
|
(38,904
|
)
|
|
(16,317
|
)
|
|||
Principal payments on securities, trading
|
1,027
|
|
|
643
|
|
|
37
|
|
|||
Proceeds from sales of securities, trading
|
33,579
|
|
|
18,131
|
|
|
13,357
|
|
|||
Net realized and unrealized gain on investment securities, trading
|
(12,435
|
)
|
|
(837
|
)
|
|
(14,791
|
)
|
|||
Net realized gain on sales of investment securities available-for-sale and loans
|
(4,106
|
)
|
|
(2,643
|
)
|
|
(4,821
|
)
|
|||
Gain on early extinguishment of debt
|
(16,699
|
)
|
|
(3,875
|
)
|
|
(34,610
|
)
|
|||
Net impairment losses recognized in earnings
|
180
|
|
|
6,898
|
|
|
26,804
|
|
|||
Gain on consolidation
|
(2,498
|
)
|
|
—
|
|
|
—
|
|
|||
Linked Transactions fair value adjustments
|
(168
|
)
|
|
—
|
|
|
—
|
|
|||
Equity in losses/(earnings) of unconsolidated subsidiaries
|
2,709
|
|
|
(112
|
)
|
|
(231
|
)
|
|||
Minority Interest Equity
|
114
|
|
|
—
|
|
|
—
|
|
|||
Adjust for impact of imputed interest on VIE accounting
|
1,879
|
|
|
—
|
|
|
—
|
|
|||
Unrealized losses on non-designated derivative instruments
|
—
|
|
|
—
|
|
|
46
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
||||
Decrease in restricted cash
|
(2,062
|
)
|
|
(5,628
|
)
|
|
(6,543
|
)
|
|||
Decrease (increase) in interest receivable, net of purchased interest
|
987
|
|
|
(2,513
|
)
|
|
(701
|
)
|
|||
(Increase) in subscriptions receivable
|
(1,248
|
)
|
|
—
|
|
|
—
|
|
|||
(Increase) decrease in principal paydowns receivable
|
(25,465
|
)
|
|
363
|
|
|
616
|
|
|||
Increase in management fee payable
|
3,929
|
|
|
974
|
|
|
25
|
|
|||
Increase (decrease) in security deposits
|
25
|
|
|
80
|
|
|
(264
|
)
|
|||
Increase in accounts payable and accrued liabilities
|
7,573
|
|
|
15,370
|
|
|
104
|
|
|||
(Decrease) increase in accrued interest expense
|
(193
|
)
|
|
1,696
|
|
|
181
|
|
|||
Increase in other assets
|
(20,003
|
)
|
|
(520
|
)
|
|
(6,624
|
)
|
|||
Net cash provided by operating activities
|
40,997
|
|
|
33,037
|
|
|
20,534
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
||||
Decrease (increase) in restricted cash
|
50,756
|
|
|
31,014
|
|
|
(76,524
|
)
|
|||
Purchase of securities available-for-sale
|
(119,779
|
)
|
|
(117,044
|
)
|
|
(28,697
|
)
|
|||
Principal payments on securities available-for-sale
|
47,284
|
|
|
11,810
|
|
|
1,240
|
|
|||
Proceeds from sale of securities available-for-sale
|
28,652
|
|
|
13,747
|
|
|
19,144
|
|
|||
Investment in unconsolidated entity
|
474
|
|
|
(4,762
|
)
|
|
(3,186
|
)
|
|||
Equity contribution to VIE
|
(710
|
)
|
|
—
|
|
|
(7,333
|
)
|
|
Years Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Improvement of real estate held-for-sale
|
(138
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of real estate held-for-sale
|
2,886
|
|
|
1,464
|
|
|
—
|
|
|||
Purchase of loans
|
(649,983
|
)
|
|
(970,309
|
)
|
|
(340,355
|
)
|
|||
Principal payments received on loans
|
570,276
|
|
|
424,600
|
|
|
316,400
|
|
|||
Proceeds from sale of loans
|
173,378
|
|
|
212,042
|
|
|
94,419
|
|
|||
Purchase of investments in real estate
|
—
|
|
|
(19,299
|
)
|
|
—
|
|
|||
Distributions from investments in real estate
|
1,152
|
|
|
—
|
|
|
—
|
|
|||
Improvements in investments in real estate
|
(3,878
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of intangible asset
|
—
|
|
|
(21,213
|
)
|
|
—
|
|
|||
Investments in real estate assets
|
—
|
|
|
(689
|
)
|
|
—
|
|
|||
Purchase of lease receivables
|
—
|
|
|
—
|
|
|
(28,161
|
)
|
|||
Payments received on lease receivables
|
—
|
|
|
—
|
|
|
13,985
|
|
|||
Proceeds from sale of lease receivables
|
—
|
|
|
—
|
|
|
1,579
|
|
|||
Investment in loans - related parties
|
—
|
|
|
(10,000
|
)
|
|
(10,000
|
)
|
|||
Principal payments received on loans – related parties
|
1,251
|
|
|
10,430
|
|
|
73
|
|
|||
Net cash provided by (used in) investing activities
|
101,621
|
|
|
(438,209
|
)
|
|
(47,416
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net proceeds from issuances of common stock (net of offering costs of $2,165, $1,263 and $2,772)
|
55,502
|
|
|
46,347
|
|
|
42,510
|
|
|||
Net proceeds from dividend reinvestment and stock purchase plan (net of offering costs of $19, $11 and $103)
|
73,044
|
|
|
83,564
|
|
|
76,706
|
|
|||
Proceeds from issuance of 8.5% Series A redeemable
preferred shares (net of offering costs of $781, $0 and $0) |
16,411
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of 8.25% Series B redeemable
preferred shares (net of offering costs of $1,201, $0 and $0) |
26,099
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from borrowings:
|
|
|
|
|
|
|
|||||
Repurchase agreements
|
71,121
|
|
|
55,852
|
|
|
—
|
|
|||
Collateralized debt obligations
|
—
|
|
|
323,244
|
|
|
—
|
|
|||
Mortgage payable
|
—
|
|
|
13,600
|
|
|
—
|
|
|||
Secured term facility
|
—
|
|
|
—
|
|
|
6,500
|
|
|||
Payments on borrowings:
|
|
|
|
|
|
|
|||||
Secured term facility
|
—
|
|
|
—
|
|
|
(369
|
)
|
|||
Equipment-backed securitized notes
|
—
|
|
|
—
|
|
|
(18,046
|
)
|
|||
Collateralized debt obligations
|
(257,905
|
)
|
|
(28,542
|
)
|
|
—
|
|
|||
Repurchase of issued bonds
|
—
|
|
|
(6,125
|
)
|
|
(56,740
|
)
|
|||
Retirement of debt
|
(20,365
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of debt issuance costs
|
(586
|
)
|
|
(6,385
|
)
|
|
(502
|
)
|
|||
Payment of equity to third party sub-note holders
|
(3,480
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions paid on preferred stock
|
(613
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions paid on common stock
|
(74,050
|
)
|
|
(69,869
|
)
|
|
(45,680
|
)
|
|||
Proceeds from CDO retained notes
|
14,366
|
|
|
7,114
|
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
$
|
(100,456
|
)
|
|
$
|
418,800
|
|
|
4,379
|
|
|
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
|
42,162
|
|
|
13,628
|
|
|
(22,503
|
)
|
|||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
43,116
|
|
|
29,488
|
|
|
51,991
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
85,278
|
|
|
$
|
43,116
|
|
|
29,488
|
|
|
SUPPLEMENTAL DISCLOSURE:
|
|
|
|
|
|
|
|
||||
Interest expense paid in cash
|
$
|
41,369
|
|
|
$
|
32,596
|
|
|
37,911
|
|
•
|
RCC Real Estate, Inc. (“RCC Real Estate”) holds real estate investments, including commercial real estate loans, commercial real estate-related securities and investments in real estate. RCC Real Estate owns
100%
of the equity of the following variable interest entities (“VIEs”):
|
◦
|
Resource Real Estate Funding CDO 2006-1 (“RREF CDO 2006-1”), a Cayman Islands limited liability company and qualified real estate investment trust (“REIT”) subsidiary (“QRS”). RREF CDO 2006-1 was established to complete a collateralized debt obligation (“CDO”) issuance secured by a portfolio of commercial real estate loans and commercial mortgage-backed securities (“CMBS”).
|
◦
|
Resource Real Estate Funding CDO 2007-1 (“RREF CDO 2007-1”), a Cayman Islands limited liability company and QRS. RREF CDO 2007-1 was established to complete a CDO issuance secured by a portfolio of commercial real estate loans, CMBS and property available-for-sale
.
|
•
|
RCC Commercial, Inc. (“RCC Commercial”) holds bank loan investments. RCC Commercial owns
100%
of the equity of the following VIE:
|
◦
|
Apidos CDO III, Ltd. (“Apidos CDO III”), a Cayman Islands limited liability company and taxable REIT subsidiary (“TRS”). Apidos CDO III was established to complete a CDO issuance secured by a portfolio of bank loans and asset-backed securities (“ABS”).
|
•
|
RCC Commercial II, Inc. (“Commercial II”) holds bank loan investments. Commercial II owns
100%
and
66.6%
, respectively, of the equity of the following VIEs:
|
◦
|
Apidos Cinco CDO, Ltd. (“Apidos Cinco CDO”), a Cayman Islands limited liability company and TRS. Apidos Cinco CDO was established to complete a CDO issuance secured by a portfolio of bank loans and ABS.
|
◦
|
Whitney CLO I, Ltd. ("Whitney CLO I"), a Cayman Islands limited liability company and TRS. Whitney CLO I is a collateralized loan obligation ("CLO") issuance secured by a portfolio of bank loans and corporate bonds. The Company is the primary beneficiary of Whitney CLO I and therefore consolidates 100% of this VIE in its financial statements.
|
•
|
RCC Commercial III, Inc. (“Commercial III”) holds bank loan investments and commercial real estate-related securities. Commercial III owns
90%
of the equity of the following VIE:
|
◦
|
Apidos CDO I, Ltd. (“Apidos CDO I”), a Cayman Islands limited liability company and TRS. Apidos CDO I was established to complete a CDO issuance secured by a portfolio of bank loans and ABS.
|
•
|
Resource TRS, Inc. (“Resource TRS”), a TRS directly owned by the Company, holds the Company’s equity investment in a leasing company and holds all of its investment securities, trading.
|
•
|
Resource TRS II, Inc. (“Resource TRS II”), a TRS directly owned by the Company, holds the Company’s management rights in bank loan CLOs not originated by the Company. Resource TRS II owns
100%
of the equity of the following VIE:
|
◦
|
Resource Capital Asset Management (“RCAM”), a domestic limited liability company, is entitled to collect senior, subordinated, and incentive fees related to
five
CDO issuers to which it provides management services through CVC Credit Partners, LLC, formerly Apidos Capital Management, a subsidiary of CVC Capital Partners SICAV-FIS, S.A., a private equity firm (“CVC”). Resource America, Inc. owns a
33%
interest in CVC Credit Partners, LLC. Whitney CLO I, one of the RCAM CLOs, is consolidated in the Company's financial statements as a result of a purchase of its preferred equity which gave the Company a controlling interest.
|
•
|
Resource TRS III, Inc. (“Resource TRS III”), a TRS directly owned by the Company, holds the Company’s interests in a bank loan CDO originated by the Company. Resource TRS III owns
33%
of the equity of the following VIE:
|
◦
|
Apidos CLO VIII, Ltd (“Apidos CLO VIII”), a Cayman Islands limited liability company and TRS. Apidos CLO VIII was established to complete a CLO issuance secured by a portfolio of bank loans. The Company is the primary beneficiary of Apidos CLO VIII and therefore consolidates 100% of this VIE in its financial statements.
|
•
|
Resource TRS IV, Inc. (“Resource TRS IV”), a TRS directly owned by the Company, holds the Company's equity investment in hotel condominium units acquired in conjunction with a loan foreclosure.
|
•
|
Resource TRS V, Inc. (“Resource TRS V”), a TRS directly owned by the Company, holds the Company's equity investment in a held for sale condominium complex.
|
•
|
RSO EquityCo, LLC owns
10%
of the equity of Apidos CDO I and
10%
of the equity of Apidos CLO VIII.
|
Category
|
Term
|
Building
|
25 – 40 years
|
Site improvements
|
Lesser of the remaining life of building or useful life
|
|
Apidos I
|
|
Apidos
III |
|
Apidos
Cinco |
|
Apidos
VIII |
|
Whitney CLO I
|
|
RREF
2006 |
|
RREF
2007 |
|
Total
|
||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restricted cash
(1)
|
$
|
30,799
|
|
|
$
|
12,956
|
|
|
$
|
22,669
|
|
|
$
|
11,027
|
|
|
$
|
11,800
|
|
|
$
|
20
|
|
|
$
|
837
|
|
|
$
|
90,108
|
|
Investment securities
available-for-sale, pledged as collateral, at fair value |
8,333
|
|
|
6,902
|
|
|
11,316
|
|
|
501
|
|
|
33,700
|
|
|
10,796
|
|
|
64,018
|
|
|
135,566
|
|
||||||||
Loans, pledged as collateral
|
177,385
|
|
|
209,561
|
|
|
306,196
|
|
|
329,467
|
|
|
146,106
|
|
|
226,716
|
|
|
283,288
|
|
|
1,678,719
|
|
||||||||
Loans held for sale
|
2,671
|
|
|
2,770
|
|
|
3,657
|
|
|
5,796
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,894
|
|
||||||||
Interest receivable
|
(12
|
)
|
|
720
|
|
|
1,050
|
|
|
737
|
|
|
404
|
|
|
1,153
|
|
|
1,934
|
|
|
5,986
|
|
||||||||
Prepaid assets
|
50
|
|
|
25
|
|
|
30
|
|
|
69
|
|
|
18
|
|
|
78
|
|
|
58
|
|
|
328
|
|
||||||||
Principal receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,320
|
|
|
19,250
|
|
|
25,570
|
|
||||||||
Other assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
270
|
|
|
333
|
|
||||||||
Total assets
(2)
|
$
|
219,226
|
|
|
$
|
232,934
|
|
|
$
|
344,918
|
|
|
$
|
347,597
|
|
|
$
|
192,028
|
|
|
$
|
245,146
|
|
|
$
|
369,655
|
|
|
$
|
1,951,504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Borrowings
|
$
|
202,968
|
|
|
$
|
221,304
|
|
|
$
|
320,550
|
|
|
$
|
320,998
|
|
|
$
|
177,415
|
|
|
$
|
145,664
|
|
|
$
|
225,983
|
|
|
$
|
1,614,882
|
|
Accrued interest expense
|
380
|
|
|
94
|
|
|
343
|
|
|
1,427
|
|
|
266
|
|
|
50
|
|
|
106
|
|
|
2,666
|
|
||||||||
Derivatives, at fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,939
|
|
|
12,139
|
|
|
14,078
|
|
||||||||
Accounts payable and
other liabilities |
142
|
|
|
16
|
|
|
30
|
|
|
395
|
|
|
92
|
|
|
22
|
|
|
1
|
|
|
698
|
|
||||||||
Total liabilities
|
$
|
203,490
|
|
|
$
|
221,414
|
|
|
$
|
320,923
|
|
|
$
|
322,820
|
|
|
$
|
177,773
|
|
|
$
|
147,675
|
|
|
$
|
238,229
|
|
|
$
|
1,632,324
|
|
|
Unconsolidated Variable Interest Entities
|
|
|
|
|
||||||||||||||||||||||
|
LEAF Commercial Capital, Inc.
|
|
Unsecured Junior Subordinated Debentures
|
|
Resource Capital Asset Management CDOs
|
|
RRE VIP Borrower, LLC
|
|
Värde Investment Partners, LP
|
|
Total
|
|
Maximum Exposure to Loss
(1)
|
||||||||||||||
Investment in
unconsolidated entities |
$
|
33,071
|
|
|
$
|
1,548
|
|
|
$
|
—
|
|
|
$
|
2,264
|
|
|
$
|
526
|
|
|
$
|
37,409
|
|
|
$
|
37,409
|
|
Intangible assets
|
—
|
|
|
—
|
|
|
13,105
|
|
|
—
|
|
|
—
|
|
|
13,105
|
|
|
$
|
13,105
|
|
||||||
Total assets
|
33,071
|
|
|
1,548
|
|
|
13,105
|
|
|
2,264
|
|
|
526
|
|
|
50,514
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Borrowings
|
—
|
|
|
50,814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,814
|
|
|
N/A
|
||||||||
Total liabilities
|
—
|
|
|
50,814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,814
|
|
|
N/A
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net asset (liability)
|
$
|
33,071
|
|
|
$
|
(49,266
|
)
|
|
$
|
13,105
|
|
|
$
|
2,264
|
|
|
$
|
526
|
|
|
$
|
(300
|
)
|
|
N/A
|
|
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Non-cash investing activities include the following:
|
|
|
|
|
|
||||||
Contribution of lease receivables and other assets
|
$
|
—
|
|
|
$
|
117,840
|
|
|
$
|
—
|
|
Conversion of equity in LEAF Receivables Funding 3 to preferred stock and warrants
|
$
|
—
|
|
|
$
|
(21,000
|
)
|
|
$
|
—
|
|
Acquisition of real estate investments
|
$
|
(21,661
|
)
|
|
$
|
(33,073
|
)
|
|
$
|
—
|
|
Conversion of loans to investment in real estate
|
$
|
21,661
|
|
|
$
|
34,550
|
|
|
$
|
—
|
|
Conversion of PIK interest in securities available-for-sale
|
$
|
—
|
|
|
$
|
2,364
|
|
|
$
|
—
|
|
Acquisition of lease receivables
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(100,305
|
)
|
Net purchase of loans on warehouse line
|
$
|
—
|
|
|
$
|
(52,735
|
)
|
|
$
|
—
|
|
Acquisition of loans, pledged as collateral
|
$
|
(230,152
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans, pledged as collateral
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4,444
|
)
|
Property available-for-sale
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,444
|
|
|
|
|
|
|
|
||||||
Non-cash financing activities include the following:
|
|
|
|
|
|
|
|
||||
Distributions on common stock declared but not paid
|
$
|
21,024
|
|
|
$
|
19,979
|
|
|
$
|
14,555
|
|
Distribution on preferred stock declared but not paid
|
$
|
1,244
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of restricted stock
|
$
|
2,189
|
|
|
$
|
1,203
|
|
|
$
|
338
|
|
Contribution of equipment-backed securitized notes and other liability
|
$
|
—
|
|
|
$
|
(96,840
|
)
|
|
$
|
—
|
|
Subscription receivable
|
$
|
1,248
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Assumption of collateralized debt obligations
|
$
|
206,408
|
|
|
$
|
—
|
|
|
|
||
Acquisition of loans on warehouse line
|
$
|
—
|
|
|
$
|
52,735
|
|
|
$
|
—
|
|
Assumption of equipment-backed securitized notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112,223
|
|
Settlement of a secured term facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,131
|
)
|
Settlement of debt issuance costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,012
|
)
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
Structured notes
|
$
|
9,413
|
|
|
$
|
10,894
|
|
|
$
|
(1,028
|
)
|
|
$
|
19,279
|
|
RMBS
|
6,047
|
|
|
858
|
|
|
(1,341
|
)
|
|
5,564
|
|
||||
Total
|
$
|
15,460
|
|
|
$
|
11,752
|
|
|
$
|
(2,369
|
)
|
|
$
|
24,843
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Structured notes
|
$
|
27,345
|
|
|
$
|
6,098
|
|
|
$
|
(1,890
|
)
|
|
$
|
31,553
|
|
RMBS
|
8,729
|
|
|
100
|
|
|
(1,709
|
)
|
|
7,120
|
|
||||
Total
|
$
|
36,074
|
|
|
$
|
6,198
|
|
|
$
|
(3,599
|
)
|
|
$
|
38,673
|
|
|
Amortized Cost
(1)
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
CMBS
|
$
|
182,828
|
|
|
$
|
4,626
|
|
|
$
|
(16,639
|
)
|
|
$
|
170,815
|
|
ABS
|
26,479
|
|
|
1,700
|
|
|
(1,127
|
)
|
|
27,052
|
|
||||
Corporate bonds
|
33,767
|
|
|
111
|
|
|
(178
|
)
|
|
33,700
|
|
||||
Other asset-backed
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||
Total
|
$
|
243,074
|
|
|
$
|
6,460
|
|
|
$
|
(17,944
|
)
|
|
$
|
231,590
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
||||
CMBS
|
$
|
144,334
|
|
|
$
|
1,129
|
|
|
$
|
(29,821
|
)
|
|
$
|
115,642
|
|
ABS
|
28,513
|
|
|
215
|
|
|
(3,527
|
)
|
|
25,201
|
|
||||
Other asset-backed
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||
Total
|
$
|
172,847
|
|
|
$
|
1,367
|
|
|
$
|
(33,348
|
)
|
|
$
|
140,866
|
|
|
(1)
|
As of
December 31, 2012
and
2011
,
$195.2 million
and $
136.2 million
, respectively, of securities were pledged as collateral security under related financings.
|
Weighted Average Life
|
Fair Value
|
|
Amortized
Cost
|
|
Weighted Average Coupon
|
||||
December 31, 2012:
|
|
|
|
|
|
||||
Less than one year
|
$
|
42,618
|
|
(1)
|
$
|
46,522
|
|
|
4.09%
|
Greater than one year and less than five years
|
122,509
|
|
|
131,076
|
|
|
4.55%
|
||
Greater than five years and less than ten years
|
61,780
|
|
|
60,801
|
|
|
3.31%
|
||
Greater than ten years
|
4,683
|
|
|
4,675
|
|
|
4.03%
|
||
Total
|
$
|
231,590
|
|
|
$
|
243,074
|
|
|
4.12%
|
|
|
|
|
|
|
||||
December 31, 2011:
|
|
|
|
|
|
|
|
||
Less than one year
|
$
|
44,583
|
|
(2)
|
$
|
48,934
|
|
|
4.45%
|
Greater than one year and less than five years
|
68,751
|
|
|
91,199
|
|
|
4.62%
|
||
Greater than five years and less than ten years
|
25,596
|
|
|
29,527
|
|
|
3.52%
|
||
Greater than ten years
|
1,936
|
|
|
3,187
|
|
|
3.84%
|
||
Total
|
$
|
140,866
|
|
|
$
|
172,847
|
|
|
4.36%
|
|
(2)
|
CMBS of
$6.7 million
maturing in this category are collateralized by floating-rate loans and, as permitted under the CMBS terms, are expected to extend their maturities, because, beyond their contractual extensions which expired or will expire this year, the servicer may allow further extensions of the underlying floating rate loans. The Company expects that the remaining $
37.9 million
of CMBS will either have their maturity date extended or be paid in full. ABS of
$950,000
maturing in this category were subsequently extended until
March 2018
.
|
|
Less than 12 Months
|
|
More than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
CMBS
|
$
|
25,803
|
|
|
$
|
(442
|
)
|
|
$
|
38,734
|
|
|
$
|
(16,197
|
)
|
|
$
|
64,537
|
|
|
$
|
(16,639
|
)
|
ABS
|
501
|
|
|
(12
|
)
|
|
5,961
|
|
|
(1,115
|
)
|
|
6,462
|
|
|
(1,127
|
)
|
||||||
Corporate bonds
|
18,944
|
|
|
(178
|
)
|
|
—
|
|
|
—
|
|
|
18,944
|
|
|
(178
|
)
|
||||||
Total temporarily impaired securities
|
$
|
45,248
|
|
|
$
|
(632
|
)
|
|
$
|
44,695
|
|
|
$
|
(17,312
|
)
|
|
$
|
89,943
|
|
|
$
|
(17,944
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CMBS
|
$
|
88,726
|
|
|
$
|
(17,033
|
)
|
|
$
|
8,281
|
|
|
$
|
(12,788
|
)
|
|
$
|
97,007
|
|
|
$
|
(29,821
|
)
|
ABS
|
13,583
|
|
|
(935
|
)
|
|
4,473
|
|
|
(2,592
|
)
|
|
18,056
|
|
|
(3,527
|
)
|
||||||
Total temporarily impaired securities
|
$
|
102,309
|
|
|
$
|
(17,968
|
)
|
|
$
|
12,754
|
|
|
$
|
(15,380
|
)
|
|
$
|
115,063
|
|
|
$
|
(33,348
|
)
|
•
|
the length of time the market value has been less than amortized cost;
|
•
|
the severity of the impairment;
|
•
|
the expected loss of the security as generated by a third-party valuation model;
|
•
|
original and current credit ratings from the rating agencies;
|
•
|
underlying credit fundamentals of the collateral backing the securities;
|
•
|
whether, based upon the Company’s intent, it is more likely than not that the Company will sell the security before the recovery of the amortized cost basis; and
|
•
|
third-party support for default, for recovery, prepayment speed and reinvestment price assumptions.
|
|
As of December 31, 2012:
|
|
As of December 31, 2011:
|
||||||||
|
Book Value
|
|
Number of Properties
|
|
Book Value
|
|
Number of Properties
|
||||
Multi-family property
|
$
|
42,179
|
|
|
2
|
|
$
|
38,577
|
|
|
2
|
Office property
|
10,149
|
|
|
1
|
|
10,149
|
|
|
1
|
||
Hotel property
|
25,608
|
|
|
1
|
|
—
|
|
|
—
|
||
Subtotal
|
77,936
|
|
|
|
|
48,726
|
|
|
|
||
Less: Accumulated depreciation
|
(2,550
|
)
|
|
|
|
(699
|
)
|
|
|
||
Investments in real estate
|
$
|
75,386
|
|
|
|
|
$
|
48,027
|
|
|
|
•
|
On September 6, 2012, the Company foreclosed on a self-originated loan and converted the loan to equity with a fair value of
$25.5 million
at acquisition. The loan was collateralized by a
179
unit hotel property in Coconut Grove, Florida. The property had a hotel occupancy rate of
75%
at acquisition.
|
•
|
On August 1, 2011, the Company, through its subsidiary RCC Real Estate, purchased Whispertree Apartments, a
504
multi-family property located in Houston, Texas, for
$18.1 million
, the fair value. The property was
95%
occupied at acquisition. In conjunction with the purchase of this property, the Company entered into a mortgage in the amount of
$13.6 million
.
|
•
|
On June 24, 2011, the Company converted a self-originated loan to equity with a fair value of
$10.7 million
at acquisition. The loan was collateralized by an office building in Pacific Palisades, California. The property was
60%
occupied at acquisition.
|
•
|
On June 14, 2011, the Company converted a self-originated loan to equity with a fair value of
$22.4 million
at acquisition. The loan was collateralized by a
400
unit multi-family property in Memphis, Tennessee. The property was
93.8%
occupied at acquisition.
|
Description
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Assets acquired:
|
|
|
|
|
||||
Investments in real estate
|
|
$
|
25,500
|
|
|
$
|
48,683
|
|
Cash and cash equivalents
|
|
—
|
|
|
177
|
|
||
Restricted cash
|
|
—
|
|
|
2,360
|
|
||
Intangible assets
|
|
—
|
|
|
2,490
|
|
||
Other assets
|
|
(89
|
)
|
|
391
|
|
||
Total assets acquired
|
|
25,411
|
|
|
54,101
|
|
||
Liabilities assumed:
|
|
|
|
|
|
|||
Accounts payable and other liabilities
|
|
3,750
|
|
|
673
|
|
||
Total liabilities assumed
|
|
3,750
|
|
|
673
|
|
||
Estimated fair value of net assets acquired
|
|
$
|
21,661
|
|
|
$
|
53,428
|
|
|
|
Year Ended
December 31,
|
||||||
Description
|
|
2012
|
|
2011
|
||||
|
|
(Unaudited)
|
||||||
Total revenue, as reported
|
|
$
|
123,698
|
|
|
$
|
95,986
|
|
Pro forma revenue
|
|
$
|
131,028
|
|
|
$
|
111,263
|
|
Net income, reported
|
|
$
|
63,199
|
|
|
$
|
37,716
|
|
Pro forma net income
|
|
$
|
63,503
|
|
|
$
|
37,535
|
|
Earnings per share - basic, reported
|
|
$
|
0.71
|
|
|
$
|
0.54
|
|
Earnings per share per - diluted, reported
|
|
$
|
0.71
|
|
|
$
|
0.53
|
|
Pro forma earnings per share - basic
|
|
$
|
0.72
|
|
|
$
|
0.53
|
|
Pro forma earnings per share - diluted
|
|
$
|
0.71
|
|
|
$
|
0.53
|
|
Loan Description
|
|
Principal
|
|
Unamortized (Discount)
Premium
(1)
|
|
Carrying
Value
(2)
|
||||||
December 31, 2012:
|
|
|
|
|
|
|
||||||
Bank loans
(3)
|
|
$
|
1,218,563
|
|
|
$
|
(25,249
|
)
|
|
$
|
1,193,314
|
|
Commercial real estate loans:
|
|
|
|
|
|
|
|
|
|
|||
Whole loans
(4)
|
|
569,829
|
|
|
(1,891
|
)
|
|
567,938
|
|
|||
B notes
|
|
16,441
|
|
|
(114
|
)
|
|
16,327
|
|
|||
Mezzanine loans
|
|
82,992
|
|
|
(206
|
)
|
|
82,786
|
|
|||
Total commercial real estate loans
|
|
669,262
|
|
|
(2,211
|
)
|
|
667,051
|
|
|||
Subtotal loans before allowances
|
|
1,887,825
|
|
|
(27,460
|
)
|
|
1,860,365
|
|
|||
Allowance for loan loss
|
|
(17,691
|
)
|
|
—
|
|
|
(17,691
|
)
|
|||
Total
|
|
$
|
1,870,134
|
|
|
$
|
(27,460
|
)
|
|
$
|
1,842,674
|
|
|
|
|
|
|
|
|
||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|||
Bank loans
(3)
|
|
$
|
1,205,826
|
|
|
$
|
(32,073
|
)
|
|
$
|
1,173,753
|
|
Commercial real estate loans:
|
|
|
|
|
|
|
|
|
|
|||
Whole loans
|
|
545,828
|
|
|
(1,155
|
)
|
|
544,673
|
|
|||
B notes
|
|
16,579
|
|
|
(144
|
)
|
|
16,435
|
|
|||
Mezzanine loans
|
|
67,842
|
|
|
32
|
|
|
67,874
|
|
|||
Total commercial real estate loans
|
|
630,249
|
|
|
(1,267
|
)
|
|
628,982
|
|
|||
Subtotal loans before allowances
|
|
1,836,075
|
|
|
(33,340
|
)
|
|
1,802,735
|
|
|||
Allowance for loan loss
|
|
(27,518
|
)
|
|
—
|
|
|
(27,518
|
)
|
|||
Total
|
|
$
|
1,808,557
|
|
|
$
|
(33,340
|
)
|
|
$
|
1,775,217
|
|
|
(1)
|
Amounts include deferred amendment fees of
$450,000
and
$286,000
and deferred upfront fees of
$334,000
and
$0
being amortized over the life of the bank loans as of
December 31, 2012
and
2011
, respectively. Amounts include loan origination fees of
$1.9
million and
$984,000
and loan extension fees of
$214,000
and
$123,000
being amortized over the life of the commercial real estate loans as of
December 31, 2012
and
2011
, respectively.
|
(2)
|
Substantially all loans are pledged as collateral under various borrowings at
December 31, 2012
and
2011
, respectively.
|
(3)
|
Amounts include
$14.9 million
and
$3.2 million
of bank loans held for sale at
December 31, 2012
and
2011
, respectively.
|
(4)
|
Amount includes
$34.0 million
from
two
whole loans which are classified as loans held for sale at
December 31, 2012
.
|
|
December 31,
2012 |
|
December 31,
2011 |
||||
Less than one year
|
$
|
10,028
|
|
|
$
|
1,968
|
|
Greater than one year and less than five years
|
821,568
|
|
|
684,376
|
|
||
Five years or greater
|
361,718
|
|
|
487,409
|
|
||
|
$
|
1,193,314
|
|
|
$
|
1,173,753
|
|
Description
|
Quantity
|
|
Amortized Cost
|
|
Contracted
Interest Rates
|
|
Maturity Dates
(3)
|
||
December 31, 2012:
|
|
|
|
|
|
|
|
||
Whole loans, floating rate
(1) (4) (5) (6)
|
37
|
|
$
|
567,938
|
|
|
LIBOR plus 2.50% to
LIBOR plus 5.50% |
|
June 2013 to
February 2019 |
B notes, fixed rate
|
1
|
|
16,327
|
|
|
8.68%
|
|
April 2016
|
|
Mezzanine loans, floating rate
|
2
|
|
15,845
|
|
|
LIBOR plus 2.50% to
LIBOR plus 7.45% |
|
August 2013 to
December 2013 |
|
Mezzanine loans, fixed rate
(7)
|
3
|
|
66,941
|
|
|
0.50% to 20.00%
|
|
September 2014 to
September 2019 |
|
Total
(2)
|
43
|
|
$
|
667,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
Whole loans, floating rate
(1) (4) (5)
|
32
|
|
$
|
537,708
|
|
|
LIBOR plus 2.50% to
LIBOR plus 5.75% |
|
April 2012 to
February 2019 |
Whole loans, fixed rate
|
1
|
|
6,965
|
|
|
10.00%
|
|
June 2012
|
|
B notes, fixed rate
|
1
|
|
16,435
|
|
|
8.68%
|
|
April 2016
|
|
Mezzanine loans, floating rate
|
3
|
|
53,908
|
|
|
LIBOR plus 2.50% to
LIBOR plus 7.45% |
|
May 2012 to
December 2012 |
|
Mezzanine loans, fixed rate
|
2
|
|
13,966
|
|
|
8.99% to 11.00%
|
|
January 2016 to
September 2016 |
|
Total
(2)
|
39
|
|
$
|
628,982
|
|
|
|
|
|
|
(1)
|
Whole loans had
$8.9 million
and
$5.2 million
in unfunded loan commitments as of
December 31, 2012
and
2011
, respectively. These commitments are funded as the borrowers require additional funding and have satisfied the requirements to obtain this additional funding.
|
(2)
|
The total does not include an allowance for loan loss of
$8.0 million
and
$24.2 million
as of
December 31, 2012
and
2011
, respectively.
|
(3)
|
Maturity dates do not include possible extension options that may be available to the borrowers.
|
(4)
|
Floating rate whole loans include a
$2.0 million
portion of a whole loan that has a fixed rate of
15.0%
as of
December 31, 2012
and
2011
, respectively.
|
(5)
|
Floating rate whole loans include a
$1.0 million
and
$302,000
preferred equity tranche of a whole loan that has a fixed rate of
10.0%
as of
December 31, 2012
and
2011
, respectively.
|
(6)
|
Amount includes
$34.0 million
from
two
whole loans that are classified as loans held for sale at
December 31, 2012
.
|
(7)
|
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.
|
Description
|
2013
|
|
2014
|
|
2015 and Thereafter
|
|
Total
|
||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,327
|
|
|
$
|
16,327
|
|
Mezzanine loans
|
5,328
|
|
|
20,694
|
|
|
56,764
|
|
|
82,786
|
|
||||
Whole loans
|
71,799
|
|
|
—
|
|
|
496,139
|
|
|
567,938
|
|
||||
Total
(1)
|
$
|
77,127
|
|
|
$
|
20,694
|
|
|
$
|
569,230
|
|
|
$
|
667,051
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Weighted aver
age life of commercial real estate loans assumes full exercise of extension options available to borrowers.
|
Description
|
|
Allowance for
Loan Loss
|
|
Percentage of Total Allowance
|
||
December 31, 2012:
|
|
|
|
|
||
B notes
|
|
$
|
206
|
|
|
1.17%
|
Mezzanine loans
|
|
860
|
|
|
4.85%
|
|
Whole loans
|
|
6,920
|
|
|
39.12%
|
|
Bank loans
|
|
9,705
|
|
|
54.86%
|
|
Total
|
|
$
|
17,691
|
|
|
|
|
|
|
|
|
||
December 31, 2011:
|
|
|
|
|
|
|
B notes
|
|
$
|
253
|
|
|
0.92%
|
Mezzanine loans
|
|
1,437
|
|
|
5.23%
|
|
Whole loans
|
|
22,531
|
|
|
81.87%
|
|
Bank loans
|
|
3,297
|
|
|
11.98%
|
|
Total
|
|
$
|
27,518
|
|
|
|
|
Commercial Real Estate Loans
|
|
Bank Loans
|
|
Lease Receivables
|
|
Loans Receivable-Related Party
|
|
Total
|
||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for Loan Losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for losses at January 1, 2012
|
$
|
24,221
|
|
|
$
|
3,297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,518
|
|
Provision for loan loss
|
5,225
|
|
|
11,593
|
|
|
—
|
|
|
—
|
|
|
16,818
|
|
|||||
Loans charged-off
|
(21,460
|
)
|
|
(5,185
|
)
|
|
—
|
|
|
—
|
|
|
(26,645
|
)
|
|||||
Allowance for losses at December 31, 2012
|
$
|
7,986
|
|
|
$
|
9,705
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,691
|
|
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
$
|
2,142
|
|
|
$
|
3,236
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,378
|
|
Collectively evaluated for impairment
|
$
|
5,844
|
|
|
$
|
6,469
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,313
|
|
Loans acquired with deteriorated credit quality
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
$
|
177,055
|
|
|
$
|
4,688
|
|
|
$
|
—
|
|
|
$
|
8,324
|
|
|
$
|
190,067
|
|
Collectively evaluated for impairment
|
$
|
489,996
|
|
|
$
|
1,187,875
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,677,871
|
|
Loans acquired with deteriorated credit quality
|
$
|
—
|
|
|
$
|
751
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
751
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for Loan Losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for losses at January 1, 2011
|
$
|
31,617
|
|
|
$
|
2,616
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
34,303
|
|
Provision for loan loss
|
6,478
|
|
|
7,418
|
|
|
—
|
|
|
—
|
|
|
13,896
|
|
|||||
Loans charged-off
|
(13,874
|
)
|
|
(6,737
|
)
|
|
(70
|
)
|
|
—
|
|
|
(20,681
|
)
|
|||||
Allowance for losses at December 31, 2011
|
$
|
24,221
|
|
|
$
|
3,297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,518
|
|
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
$
|
17,065
|
|
|
$
|
1,593
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,658
|
|
Collectively evaluated for impairment
|
$
|
7,156
|
|
|
$
|
1,704
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,860
|
|
Loans acquired with deteriorated credit quality
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
$
|
113,038
|
|
|
$
|
2,693
|
|
|
$
|
—
|
|
|
$
|
9,497
|
|
|
$
|
125,228
|
|
Collectively evaluated for impairment
|
$
|
515,944
|
|
|
$
|
1,171,060
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,687,004
|
|
Loans acquired with deteriorated credit quality
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Rating 1
|
|
Rating 2
|
|
Rating 3
|
|
Rating 4
|
|
Rating 5
|
|
Held for Sale
|
|
Total
|
||||||||||||||
As of December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank loans
|
$
|
1,095,148
|
|
|
$
|
33,677
|
|
|
$
|
27,837
|
|
|
$
|
16,318
|
|
|
$
|
5,440
|
|
|
$
|
14,894
|
|
|
$
|
1,193,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As of December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Bank loans
|
$
|
1,076,298
|
|
|
$
|
19,739
|
|
|
$
|
60,329
|
|
|
$
|
11,540
|
|
|
$
|
2,693
|
|
|
$
|
3,154
|
|
|
$
|
1,173,753
|
|
|
Rating 1
|
|
Rating 2
|
|
Rating 3
|
|
Rating 4
|
|
Held for Sale
|
|
Total
|
||||||||||||
As of December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Whole loans
|
$
|
427,456
|
|
|
$
|
—
|
|
|
$
|
106,482
|
|
|
$
|
—
|
|
|
$
|
34,000
|
|
|
$
|
567,938
|
|
B notes
|
16,327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,327
|
|
||||||
Mezzanine loans
|
38,296
|
|
|
—
|
|
|
44,490
|
|
|
—
|
|
|
—
|
|
|
82,786
|
|
||||||
|
$
|
482,079
|
|
|
$
|
—
|
|
|
$
|
150,972
|
|
|
$
|
—
|
|
|
$
|
34,000
|
|
|
$
|
667,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Whole loans
|
$
|
329,085
|
|
|
$
|
87,598
|
|
|
$
|
90,225
|
|
|
$
|
37,765
|
|
|
$
|
—
|
|
|
$
|
544,673
|
|
B notes
|
16,435
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,435
|
|
||||||
Mezzanine loans
|
23,347
|
|
|
—
|
|
|
44,527
|
|
|
—
|
|
|
—
|
|
|
67,874
|
|
||||||
|
$
|
368,867
|
|
|
$
|
87,598
|
|
|
$
|
134,752
|
|
|
$
|
37,765
|
|
|
$
|
—
|
|
|
$
|
628,982
|
|
|
30-59 Days
|
|
60-89 Days
|
|
Greater than 90 Days
|
|
Total Past Due
|
|
Current
|
|
Total Loans Receivable
|
|
Total Loans > 90 Days and Accruing
|
||||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
567,938
|
|
|
$
|
567,938
|
|
|
$
|
—
|
|
B notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,327
|
|
|
16,327
|
|
|
—
|
|
|||||||
Mezzanine loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,786
|
|
|
82,786
|
|
|
—
|
|
|||||||
Bank loans
|
1,549
|
|
|
—
|
|
|
3,891
|
|
|
5,440
|
|
|
1,187,874
|
|
|
1,193,314
|
|
|
—
|
|
|||||||
Loans receivable- related party
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,324
|
|
|
8,324
|
|
|
—
|
|
|||||||
Total loans
|
$
|
1,549
|
|
|
$
|
—
|
|
|
$
|
3,891
|
|
|
$
|
5,440
|
|
|
$
|
1,863,249
|
|
|
$
|
1,868,689
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
544,673
|
|
|
$
|
544,673
|
|
|
$
|
—
|
|
B notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,435
|
|
|
16,435
|
|
|
—
|
|
|||||||
Mezzanine loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,874
|
|
|
67,874
|
|
|
—
|
|
|||||||
Bank loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,173,753
|
|
|
1,173,753
|
|
|
—
|
|
|||||||
Loans receivable- related party
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,497
|
|
|
9,497
|
|
|
—
|
|
|||||||
Total loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,812,232
|
|
|
$
|
1,812,232
|
|
|
$
|
—
|
|
|
Recorded Balance
|
|
Unpaid Principal Balance
|
|
Specific Allowance
|
|
Average Investment in Impaired Loans
|
|
Interest Income Recognized
|
||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans without a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Whole loans
|
$
|
115,841
|
|
|
$
|
115,841
|
|
|
$
|
—
|
|
|
$
|
114,682
|
|
|
$
|
3,436
|
|
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mezzanine loans
|
$
|
38,072
|
|
|
$
|
38,072
|
|
|
$
|
—
|
|
|
$
|
38,072
|
|
|
$
|
367
|
|
Bank loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans receivable - related party
|
$
|
6,754
|
|
|
$
|
6,754
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
851
|
|
Loans with a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
23,142
|
|
|
$
|
23,142
|
|
|
$
|
(2,142
|
)
|
|
$
|
22,576
|
|
|
$
|
801
|
|
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mezzanine loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank loans
|
$
|
5,440
|
|
|
$
|
5,440
|
|
|
$
|
(3,236
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans receivable - related party
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
138,983
|
|
|
$
|
138,983
|
|
|
$
|
(2,142
|
)
|
|
$
|
137,258
|
|
|
$
|
4,237
|
|
B notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Mezzanine loans
|
38,072
|
|
|
38,072
|
|
|
—
|
|
|
38,072
|
|
|
367
|
|
|||||
Bank loans
|
5,440
|
|
|
5,440
|
|
|
(3,236
|
)
|
|
—
|
|
|
—
|
|
|||||
Loans receivable - related party
|
6,754
|
|
|
6,754
|
|
|
—
|
|
|
—
|
|
|
851
|
|
|||||
|
$
|
189,249
|
|
|
$
|
189,249
|
|
|
$
|
(5,378
|
)
|
|
$
|
175,330
|
|
|
$
|
5,455
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans without a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
75,273
|
|
|
$
|
75,273
|
|
|
$
|
—
|
|
|
$
|
75,263
|
|
|
$
|
2,682
|
|
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mezzanine loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans receivable - related party
|
$
|
7,820
|
|
|
$
|
7,820
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,112
|
|
Loans with a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
37,765
|
|
|
$
|
37,765
|
|
|
$
|
(17,065
|
)
|
|
$
|
36,608
|
|
|
$
|
920
|
|
B notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mezzanine loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank loans
|
$
|
2,693
|
|
|
$
|
2,693
|
|
|
$
|
(1,593
|
)
|
|
$
|
2,693
|
|
|
$
|
—
|
|
Loans receivable - related party
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
113,038
|
|
|
$
|
113,038
|
|
|
$
|
(17,065
|
)
|
|
$
|
111,871
|
|
|
$
|
3,602
|
|
B notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Mezzanine loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Bank loans
|
2,693
|
|
|
2,693
|
|
|
(1,593
|
)
|
|
2,693
|
|
|
—
|
|
|||||
Loans receivable - related party
|
7,820
|
|
|
7,820
|
|
|
—
|
|
|
—
|
|
|
1,112
|
|
|||||
|
$
|
123,551
|
|
|
$
|
123,551
|
|
|
$
|
(18,658
|
)
|
|
$
|
114,564
|
|
|
$
|
4,714
|
|
|
Number of Loans
|
|
Pre-Modification Outstanding Recorded Balance
|
|
Post-Modification Outstanding Recorded Balance
|
||||
Year Ended December 31, 2012:
|
|
|
|
|
|
||||
Whole loans
(1)
|
7
|
|
$
|
175,708
|
|
|
$
|
158,422
|
|
B notes
|
—
|
|
—
|
|
|
—
|
|
||
Mezzanine loans
|
1
|
|
38,072
|
|
|
38,072
|
|
||
Bank loans
|
—
|
|
—
|
|
|
—
|
|
||
Loans receivable - related party
(2)
|
1
|
|
7,797
|
|
|
7,797
|
|
||
Total loans
|
9
|
|
$
|
221,577
|
|
|
$
|
204,291
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2011:
|
|
|
|
|
|
|
|
||
Whole loans
|
2
|
|
$
|
34,739
|
|
|
$
|
33,073
|
|
B notes
|
—
|
|
—
|
|
|
—
|
|
||
Mezzanine loans
|
—
|
|
—
|
|
|
—
|
|
||
Bank loans
|
—
|
|
—
|
|
|
—
|
|
||
Loans receivable
|
—
|
|
—
|
|
|
—
|
|
||
Loans receivable - related party
|
1
|
|
7,981
|
|
|
7,981
|
|
||
Total loans
|
3
|
|
$
|
42,720
|
|
|
$
|
41,054
|
|
|
(1)
|
Whole loans include a whole loan with a pre-modification and post-modification outstanding recorded balance of
$21.8 million
that have been converted to real-estate owned and will no longer be a TDR after
December 31, 2012
.
|
(2)
|
Loans receivable - related party has received paydowns for the year ended
December 31, 2012
and currently has an outstanding balance of
$6.8 million
as of
December 31, 2012
.
|
|
Beginning Balance
|
|
Accumulated Amortization
|
|
Net Asset
|
||||||
December 31, 2012:
|
|
|
|
|
|
||||||
Investment in RCAM
|
$
|
21,213
|
|
|
$
|
(8,108
|
)
|
|
$
|
13,105
|
|
Investments in real estate:
|
|
|
|
|
|
|
|
|
|||
In-place leases
|
2,461
|
|
|
(2,379
|
)
|
|
82
|
|
|||
Above (below) market leases
|
29
|
|
|
(24
|
)
|
|
5
|
|
|||
|
2,490
|
|
|
(2,403
|
)
|
|
87
|
|
|||
Total intangible assets
|
$
|
23,703
|
|
|
$
|
(10,511
|
)
|
|
$
|
13,192
|
|
|
|
|
|
|
|
||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|||
Investment in RCAM
|
$
|
21,213
|
|
|
$
|
(2,237
|
)
|
|
$
|
18,976
|
|
Investments in real estate:
|
|
|
|
|
|
|
|
|
|||
In-place leases
|
2,461
|
|
|
(1,634
|
)
|
|
827
|
|
|||
Above (below) market leases
|
29
|
|
|
(19
|
)
|
|
10
|
|
|||
|
2,490
|
|
|
(1,653
|
)
|
|
837
|
|
|||
Total intangible assets
|
$
|
23,703
|
|
|
$
|
(3,890
|
)
|
|
$
|
19,813
|
|
|
Outstanding Borrowings
|
|
Weighted Average Borrowing Rate
|
|
Weighted Average Remaining Maturity
|
|
Value of Collateral
|
||||
December 31, 2012:
|
|
|
|
|
|
|
|
||||
RREF CDO 2006-1 Senior Notes
(1)
|
$
|
145,664
|
|
|
1.42%
|
|
33.6 years
|
|
$
|
295,759
|
|
RREF CDO 2007-1 Senior Notes
(2)
|
225,983
|
|
|
0.81%
|
|
33.8 years
|
|
292,980
|
|
||
Apidos CDO I Senior Notes
(3)
|
202,969
|
|
|
1.07%
|
|
4.6 years
|
|
217,745
|
|
||
Apidos CDO III Senior Notes
(4)
|
221,304
|
|
|
0.80%
|
|
7.5 years
|
|
232,655
|
|
||
Apidos Cinco CDO Senior Notes
(5)
|
320,550
|
|
|
0.82%
|
|
7.4 years
|
|
344,105
|
|
||
Apidos CLO VIII Senior Notes
(6)
|
300,951
|
|
|
2.16%
|
|
8.8 years
|
|
351,014
|
|
||
Apidos CLO VIII Securitized Borrowings
(11)
|
20,047
|
|
|
15.27%
|
|
8.8 years
|
|
—
|
|
||
Whitney CLO I Senior Notes
(10)
|
171,555
|
|
|
1.82%
|
|
4.2 years
|
|
191,704
|
|
||
Whitney CLO I Securitized Borrowings
(11)
|
5,860
|
|
|
9.50%
|
|
4.2 years
|
|
—
|
|
||
Unsecured Junior Subordinated Debentures
(7)
|
50,814
|
|
|
4.26%
|
|
23.7 years
|
|
—
|
|
||
Repurchase Agreements
(8)
|
106,303
|
|
|
2.28%
|
|
18 days
|
|
145,234
|
|
||
Mortgage Payable
(9)
|
13,600
|
|
|
4.17%
|
|
5.6 years
|
|
18,100
|
|
||
Total
|
$
|
1,785,600
|
|
|
1.62%
|
|
12.5 years
|
|
$
|
2,089,296
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
||
RREF CDO 2006-1 Senior Notes
(1)
|
$
|
157,803
|
|
|
1.44%
|
|
34.6 years
|
|
$
|
264,796
|
|
RREF CDO 2007-1 Senior Notes
(2)
|
315,882
|
|
|
0.85%
|
|
34.8 years
|
|
422,641
|
|
||
Apidos CDO I Senior Notes
(3)
|
314,884
|
|
|
1.04%
|
|
5.6 years
|
|
315,088
|
|
||
Apidos CDO III Senior Notes
(4)
|
261,209
|
|
|
0.99%
|
|
8.5 years
|
|
260,167
|
|
||
Apidos Cinco CDO Senior Notes
(5)
|
319,959
|
|
|
0.95%
|
|
8.4 years
|
|
326,164
|
|
||
Apidos CLO VIII Senior Notes
(6)
|
298,312
|
|
|
2.42%
|
|
9.8 years
|
|
334,122
|
|
||
Apidos CLO VIII Securitized Borrowings
(11)
|
21,364
|
|
|
15.27%
|
|
9.8 years
|
|
—
|
|
||
Unsecured Junior Subordinated Debentures
(7)
|
50,631
|
|
|
4.35%
|
|
24.7 years
|
|
—
|
|
||
Repurchase Agreements
(8)
|
40,503
|
|
|
1.54%
|
|
18 days
|
|
47,143
|
|
||
Mortgage Payable
(9)
|
13,536
|
|
|
4.23%
|
|
6.6 years
|
|
18,100
|
|
||
Total
|
$
|
1,794,083
|
|
|
1.38%
|
|
15.2 years
|
|
$
|
1,988,221
|
|
|
(1)
|
Amount represents principal outstanding of
$146.4 million
and
$159.1 million
less unamortized issuance costs of
$728,000
and
$1.2 million
as of
December 31, 2012
and
2011
, respectively. This CDO transaction closed in August 2006.
|
(2)
|
Amount represents principal outstanding of
$227.4 million
and
$318.6 million
less unamortized issuance costs of
$1.4 million
and
$2.7 million
as of
December 31, 2012
and
2011
, respectively. This CDO transaction closed in June 2007.
|
(3)
|
Amount represents principal outstanding of
$203.2 million
and
$315.9 million
less unamortized issuance costs of
$274,000
and
$1.1 million
as of
December 31, 2012
and
2011
, respectively. This CDO transaction closed in August 2005.
|
(4)
|
Amount represents principal outstanding of
$222.0 million
and
$262.5 million
less unamortized issuance costs of
$659,000
and
$1.3 million
as of
December 31, 2012
and
2011
, respectively. This CDO transaction closed in May 2006.
|
(5)
|
Amount represents principal outstanding of
$322.0 million
and
$322.0 million
less unamortized issuance costs of
$1.5 million
and
$2.0 million
as of
December 31, 2012
and
2011
, respectively. This CDO transaction closed in May 2007.
|
(6)
|
Amount represents principal outstanding of
$317.6 million
and
$317.6 million
, less unamortized issuance costs of
$4.7 million
and
$5.5 million
, and less unamortized discounts of
$11.9 million
and
$13.8 million
as of
December 31, 2012
and
2011
, respectively. This CDO transaction closed in October 2011.
|
(7)
|
Amount represents junior subordinated debentures issued to RCT I and RCT II in May 2006 and September 2006, respectively.
|
(8)
|
Amount represents principal outstanding of
$47.5 million
and
$40.9 million
less unamortized deferred debt costs of
$23,000
and
$494,000
and accrued interest costs of
$37,000
and
$39,000
related to CMBS repurchase facilities as of
December 31, 2012
and
2011
, respectively, and principal outstanding of
$59.1 million
less unamortized deferred debt costs of
$348,000
and accrued interest costs of
$79,000
related to CRE repurchase facilities as of
December 31, 2012
. Does not reflect CMBS repurchase agreement borrowings that are components of Linked Transactions. At December 31, 2012 and 2011, the Company had repurchase agreements of
$20.4 million
and
$14.9 million
, respectively, that were linked to CMBS purchases and accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 21).
|
(9)
|
Amount represents principal outstanding of
$13.6 million
and
$13.6 million
less unamortized real estate financing costs of
$0
and
$65,000
as of
December 31, 2012
and
2011
, respectively. This real estate transaction closed in August 2011.
|
(10)
|
Amount represents principal outstanding of $
174.1 million
less unamortized discounts of $
2.5 million
as of
December 31, 2012
. In October 2012 the Company purchased a
$20.9 million
equity interest in Whitney CLO I which represents
67%
of the outstanding preference shares. The transaction gave the Company a controlling interest in the CLO.
|
(11)
|
The securitized borrowings are collateralized by the same assets as the Apidos CLO VIII Senior Notes and the Whitney CLO I Senior Notes, respectively.
|
|
Amount at Risk
(1)
|
|
Weighted Average Maturity in Days
|
|
Weighted Average Interest Rate
|
|||
December 31, 2012:
|
|
|
|
|
|
|||
Wells Fargo Bank, National Association.
(2)
|
$
|
10,722
|
|
|
18
|
|
1.53
|
%
|
|
|
|
|
|
|
|||
December 31, 2011:
|
|
|
|
|
|
|
|
|
Wells Fargo Bank, National Association.
(2)
|
$
|
8,461
|
|
|
18
|
|
1.54
|
%
|
|
(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)
|
$12.2 million
and
$14.9 million
of linked repurchase agreement borrowings are being included as derivative instruments as of December 31, 2012 and 2011, respectively.(See Note 21)
|
|
Amount at
Risk
(1)
|
|
Weighted Average Maturity in Days
|
|
Weighted Average Interest Rate
|
|||
December 31, 2012:
|
|
|
|
|
|
|||
Wells Fargo Bank, National Association.
|
$
|
26,332
|
|
|
18
|
|
2.88
|
%
|
|
(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.
|
|
Amount at Risk
(1)
|
|
Weighted Average Maturity in Days
|
|
Weighted Average Interest Rate
|
|||
December 31, 2012:
|
|
|
|
|
|
|||
Deutsche Bank Securities, Inc.
|
$
|
2,069
|
|
|
7
|
|
1.46
|
%
|
|
(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.
|
|
Amount at Risk
(1)
|
|
Weighted Average Maturity in Days
|
|
Weighted Average Interest Rate
|
|||
December 31, 2012:
|
|
|
|
|
|
|||
Wells Fargo Securities, LLC
(2)
|
$
|
1,956
|
|
|
28
|
|
1.46
|
%
|
|
(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)
|
$3.5 million
of linked repurchase agreement borrowings are being included as derivative instruments as of
December 31, 2012
. (See Note 21).
|
|
Amount at Risk
(1)
|
|
Weighted Average Maturity in Days
|
|
Weighted Average Interest Rate
|
|||
December 31, 2012:
|
|
|
|
|
|
|||
JP Morgan Securities, LLC
(2)
|
$
|
2,544
|
|
|
11
|
|
1.01
|
%
|
|
(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)
|
$4.7 million
of linked repurchase agreement borrowings are being included as derivative instruments as of
December 31, 2012
. (See Note 21).
|
|
Non-Employee Directors
|
|
Non-Employees
|
|
Total
|
|||
Unvested shares as of January 1, 2012
|
15,200
|
|
|
1,413,731
|
|
|
1,428,931
|
|
Issued
|
19,509
|
|
|
2,187,909
|
|
|
2,207,418
|
|
Vested
|
(15,200
|
)
|
|
(294,098
|
)
|
|
(309,298
|
)
|
Forfeited
|
—
|
|
|
(18,708
|
)
|
|
(18,708
|
)
|
Unvested shares as of December 31, 2012
|
19,509
|
|
|
3,288,834
|
|
|
3,308,343
|
|
Unvested Options
|
Options
|
|
Weighted Average Grant
Date Fair Value
|
|||
Unvested at January 1, 2012
|
40,000
|
|
|
$
|
6.40
|
|
Granted
|
—
|
|
|
|
|
|
Vested
|
(13,333
|
)
|
|
6.40
|
|
|
Forfeited
|
—
|
|
|
|
|
|
Unvested at December 31, 2012
|
26,667
|
|
|
$
|
6.40
|
|
Vested Options
|
Number of Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Vested as of January 1, 2012
|
601,666
|
|
|
$
|
14.99
|
|
|
|
|
|
||
Vested
|
13,333
|
|
|
$
|
6.40
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
|
|
|
|
|
|
|||
Forfeited
|
—
|
|
|
|
|
|
|
|
|
|||
Vested as of December 31, 2012
|
614,999
|
|
|
$
|
14.80
|
|
|
3
|
|
$
|
21
|
|
|
December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
Options granted to Manager and non-employees
|
2
|
|
|
15
|
|
|
11
|
|
Restricted shares granted to Manager and non-employees
|
4,522
|
|
|
2,399
|
|
|
2,098
|
|
Restricted shares granted to non-employee directors
|
112
|
|
|
112
|
|
|
112
|
|
Total equity compensation expense
|
4,636
|
|
|
2,526
|
|
|
2,221
|
|
|
Years Ended December 31
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Basic:
|
|
|
|
|
|
||||||
Net income allocable to common shares
|
$
|
63,199
|
|
|
$
|
37,716
|
|
|
$
|
19,447
|
|
Weighted average number of shares outstanding
|
88,410,272
|
|
|
70,410,131
|
|
|
47,715,082
|
|
|||
Basic net income per share
|
$
|
0.71
|
|
|
$
|
0.54
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
||||||
Diluted:
|
|
|
|
|
|
|
|
|
|||
Net income allocable to common shares
|
$
|
63,199
|
|
|
$
|
37,716
|
|
|
$
|
19,447
|
|
Weighted average number of shares outstanding
|
88,410,272
|
|
|
70,410,131
|
|
|
47,715,082
|
|
|||
Additional shares due to assumed conversion of dilutive instruments
|
874,216
|
|
|
398,957,000
|
|
|
192,199
|
|
|||
Adjusted weighted-average number of common shares outstanding
|
89,284,488
|
|
|
70,809,088
|
|
|
47,907,281
|
|
|||
Diluted net income per share
|
$
|
0.71
|
|
|
$
|
0.53
|
|
|
$
|
0.41
|
|
•
|
A monthly base management fee equal to
1/12
th of the amount of the Company's equity multiplied by
1.50%
. Under the management agreement, ''equity'' is equal to the net proceeds from any issuance of shares of capital stock less offering related costs, plus or minus the Company's retained earnings (excluding non-cash equity compensation incurred in current or prior periods) less any amounts the Company has paid for common stock repurchases. The calculation is adjusted for one-time events due to changes in GAAP, as well as other non-cash charges, upon approval of the independent directors of the Company.
|
•
|
Incentive compensation is calculated as follows: (i) twenty-five percent (
25%
) of the dollar amount by which (A) the Company's adjusted operating earnings (before incentive compensation but after the base management fee) for such quarter per common share (based on the weighted average number of common shares outstanding for such quarter) exceeds (B) an amount equal to (1) the weighted average of the price per share of the common shares in the initial offering by the Company and the prices per share of the Common Shares in any subsequent offerings by the Company, in each case at the time of issuance thereof, multiplied by (2) the greater of (a)
2.0%
and (b)
0.50%
plus
one-fourth
of the Ten Year Treasury Rate for such quarter, multiplied by (ii) the weighted average number of common shares outstanding during such quarter, subject to adjustment, to exclude events pursuant to changes in GAAP or the application of GAAP, as well as non-recurring or unusual transactions or events, after discussion between the Manager and the Independent Directors and approval by a majority of the independent directors in the case of non-recurring or unusual transactions or events. On August 17, 2010, the Company entered into an amendment to the Management Agreement pursuant to which the fees paid by a taxable REIT subsidiary of the Company to employees, agents or affiliates of the Manager with respect to profits of such taxable REIT subsidiary (or any subsidiary thereof) will be deducted from the Company's quarterly calculation of incentive compensation payable to the Manager. Additionally, any income taxes payable by a taxable REIT subsidiary of the Company will be excluded from the Company's calculation of operating earnings.
|
•
|
Reimbursement of out-of-pocket expenses and certain other costs incurred by the Manager that relate directly to the Company and its operations.
|
•
|
if such shares are traded on a securities exchange, at the average of the closing prices of the shares on such exchange over the
thirty
day period ending
three
days prior to the issuance of such shares;
|
•
|
if such shares are actively traded over-the-counter, at the average of the closing bid or sales price as applicable over the
thirty
day period ending
three
days prior to the issuance of such shares; and
|
•
|
if there is no active market for such shares, the value is the fair market value thereof, as reasonably determined in good faith by the board of directors of the Company.
|
•
|
unsatisfactory performance; and/or
|
•
|
unfair compensation payable to the Manager where fair compensation cannot be agreed upon by the Company (pursuant to a vote of
two-thirds
of the independent directors) and the Manager.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investment securities, trading
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,843
|
|
|
$
|
24,843
|
|
Investment securities available-for-sale
|
9,757
|
|
|
132,561
|
|
|
89,272
|
|
|
231,590
|
|
||||
CMBS - linked transactions
|
—
|
|
|
4,802
|
|
|
2,033
|
|
|
6,835
|
|
||||
Total assets at fair value
|
$
|
9,757
|
|
|
$
|
137,363
|
|
|
$
|
116,148
|
|
|
$
|
263,268
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives (net)
|
—
|
|
|
610
|
|
|
14,077
|
|
|
14,687
|
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
610
|
|
|
$
|
14,077
|
|
|
$
|
14,687
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities, trading
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38,673
|
|
|
$
|
38,673
|
|
Investment securities available-for-sale
|
—
|
|
|
121,031
|
|
|
19,835
|
|
|
140,866
|
|
||||
CMBS - linked transactions
|
—
|
|
|
2,275
|
|
|
—
|
|
|
2,275
|
|
||||
Total assets at fair value
|
$
|
—
|
|
|
$
|
123,306
|
|
|
$
|
58,508
|
|
|
$
|
181,814
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives (net)
|
—
|
|
|
1,210
|
|
|
12,000
|
|
|
13,210
|
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
1,210
|
|
|
$
|
12,000
|
|
|
$
|
13,210
|
|
|
Level 3
|
||
Beginning balance, January 1, 2011
|
$
|
43,380
|
|
Total gains or losses (realized/unrealized):
|
|
|
|
Included in earnings
|
2,948
|
|
|
Purchases
|
38,887
|
|
|
Sales
|
(18,181
|
)
|
|
Paydowns
|
(3,212
|
)
|
|
Transfers out of Level 3
|
(4,437
|
)
|
|
Unrealized losses – included in accumulated other comprehensive income
|
(877
|
)
|
|
Beginning balance, January 1, 2012
|
58,508
|
|
|
Total gains or losses (realized/unrealized):
|
|
|
|
Included in earnings
|
14,105
|
|
|
Purchases
|
8,341
|
|
|
Sales
|
(37,632
|
)
|
|
Paydowns
|
(2,012
|
)
|
|
Unrealized gains (losses) – included in accumulated other comprehensive income
|
8,457
|
|
|
Transfers from level 2
|
66,381
|
|
|
Ending balance, December 31, 2012
|
$
|
116,148
|
|
|
Level 3
|
||
Beginning balance, January 1, 2011
|
$
|
10,929
|
|
Unrealized losses – included in accumulated other comprehensive income
|
1,071
|
|
|
Beginning balance, January 1, 2012
|
12,000
|
|
|
Unrealized losses – included in accumulated other comprehensive income
|
2,077
|
|
|
Ending balance, December 31, 2012
|
$
|
14,077
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
Assets
:
|
|
|
|
|
|
|
|
||||||||
Loans held for sale
|
$
|
—
|
|
|
$
|
14,894
|
|
|
$
|
34,000
|
|
|
$
|
48,894
|
|
Impaired loans
|
—
|
|
|
4,366
|
|
|
21,000
|
|
|
25,366
|
|
||||
Total assets at fair value
|
$
|
—
|
|
|
$
|
19,260
|
|
|
$
|
55,000
|
|
|
$
|
74,260
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans held for sale
|
$
|
—
|
|
|
$
|
3,154
|
|
|
$
|
—
|
|
|
$
|
3,154
|
|
Impaired loans
|
—
|
|
|
1,099
|
|
|
—
|
|
|
1,099
|
|
||||
Total assets at fair value
|
$
|
—
|
|
|
$
|
4,253
|
|
|
$
|
—
|
|
|
$
|
4,253
|
|
|
Fair Value at December 31, 2012
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Significant Unobservable Input Value
|
||
Impaired loans
|
$
|
21,000
|
|
|
Discounted cash flow
|
|
Cap rate
|
|
10.00%
|
Interest rate swap agreements
|
$
|
(14,687
|
)
|
|
Discounted cash flow
|
|
Weighted average credit spreads
|
|
4.98%
|
|
|
|
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)
|
||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held-for-investment
|
$
|
1,793,780
|
|
|
$
|
1,848,617
|
|
|
$
|
—
|
|
|
$
|
1,186,642
|
|
|
$
|
661,975
|
|
Loans receivable-related party
|
$
|
8,324
|
|
|
$
|
8,324
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,324
|
|
CDO notes
|
$
|
1,614,883
|
|
|
$
|
1,405,124
|
|
|
$
|
—
|
|
|
$
|
1,405,124
|
|
|
$
|
—
|
|
Junior subordinated notes
|
$
|
50,814
|
|
|
$
|
17,308
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,308
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans held-for-investment
|
$
|
1,772,063
|
|
|
$
|
1,755,541
|
|
|
$
|
—
|
|
|
$
|
1,142,638
|
|
|
$
|
612,903
|
|
Loans receivable-related party
|
$
|
9,497
|
|
|
$
|
9,497
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,497
|
|
CDO notes
|
$
|
1,689,413
|
|
|
$
|
1,034,060
|
|
|
$
|
—
|
|
|
$
|
1,034,060
|
|
|
$
|
—
|
|
Junior subordinated notes
|
$
|
50,631
|
|
|
$
|
17,125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,125
|
|
•
|
The Company manages credit risk for its derivative positions on a counterparty-by-counterparty basis (that is, on the basis of its net portfolio exposure with each counterparty), consistent with its risk management strategy for such transactions. The Company manages credit risk by considering indicators of risk such as credit ratings, and by negotiating terms in its ISDA master netting arrangements (or similar agreements) and, if applicable, any associated Credit Support Annex (“CSA”) documentation, with each individual counterparty. Credit risk plays a central role in the decision of which counterparties to consider for such relationships and when deciding with whom it will enter into derivative transactions.
|
•
|
Since the effective date of ASC 820, management has monitored and measured credit risk and calculated credit valuation adjustments (“CVAs”) for its derivative transactions on the basis of its relationships at the counterparty portfolio/ISDA master netting arrangement level. Management receives reports from an independent third-party valuation specialist on a monthly basis providing the CVAs at the counterparty portfolio level for purposes of reviewing and managing its credit risk exposures. Since the portfolio exception applies only to the fair value measurement and not to financial statement presentation, the portfolio-level adjustments are then allocated in a reasonable and consistent manner each period to the individual assets or liabilities that make up the group, in accordance with other applicable accounting guidance and the Company’s accounting policy elections.
|
•
|
Derivative transactions are required under ASC 815 to be measured at fair value in the statement of financial position each reporting period.
|
|
Liability Derivatives
|
||||||||
|
Notional Amount
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
Interest rate swap contracts 2012
|
$
|
135,241
|
|
|
Derivatives, at fair value
|
|
$
|
(14,687
|
)
|
Interest rate swap contracts 2011
|
$
|
167,905
|
|
|
Derivatives, at fair value
|
|
$
|
(13,210
|
)
|
|
|
|
|
|
|
||||
Interest rate swap contracts 2012
|
$
|
135,241
|
|
|
Accumulated other comprehensive loss
|
|
$
|
14,687
|
|
Interest rate swap contracts 2011
|
$
|
167,905
|
|
|
Accumulated other comprehensive loss
|
|
$
|
13,210
|
|
|
Liability Derivatives
|
||||||||
|
Notional Amount
|
|
Statement of Operations Location
|
|
Unrealized Loss (1)
|
||||
Interest rate swap contracts 2012
|
$
|
135,241
|
|
|
Interest expense
|
|
$
|
7,266
|
|
Interest rate swap contracts 2011
|
$
|
167,905
|
|
|
Interest expense
|
|
$
|
8,415
|
|
Interest rate swap contracts 2010
|
$
|
166,836
|
|
|
Interest expense
|
|
$
|
9,438
|
|
|
|
Asset Derivatives
|
||||||
|
Designation
|
|
Balance Sheet Location
|
|
Fair Value
|
||
Linked transactions at fair value, 2012
|
Non-Hedging
|
|
Linked transactions, net at fair value
|
|
$
|
6,835
|
|
Linked transactions at fair value, 2011
|
Non-Hedging
|
|
Linked transactions, net at fair value
|
|
$
|
2,275
|
|
|
Asset Derivatives
|
||||||
|
Designation
|
|
Statement of Operations Location
|
|
Revenues
(1)
|
||
Linked transactions at fair value, 2012
|
Non-Hedging
|
|
Unrealized gain/(loss) and net interest income on linked transactions, net
|
|
$
|
728
|
|
Linked transactions at fair value, 2011
|
Non-Hedging
|
|
Unrealized gain/(loss) and net interest income on linked transactions, net
|
|
$
|
216
|
|
|
Components of Unrealized Net Gains and Net Interest
|
|
December 31,
|
||||||||||
Income from Linked Transactions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest income attributable to CMBS underlying linked transactions
|
|
$
|
802
|
|
|
$
|
320
|
|
|
$
|
—
|
|
Interest expense attributable to linked repurchase
agreement borrowings underlying linked transactions
|
|
(242
|
)
|
|
(104
|
)
|
|
—
|
|
|||
Change in fair value of linked transactions included in earnings
|
|
168
|
|
|
—
|
|
|
—
|
|
|||
Unrealized net gains and net interest income from linked transactions
|
|
$
|
728
|
|
|
$
|
216
|
|
|
$
|
—
|
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
CMBS linked transactions
|
$
|
27,082
|
|
|
$
|
190
|
|
|
$
|
(22
|
)
|
|
$
|
27,250
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
||||
CMBS linked transactions
|
$
|
17,178
|
|
|
$
|
63
|
|
|
$
|
(63
|
)
|
|
$
|
17,178
|
|
Weighted Average Life
|
Fair Value
|
|
Amortized
Cost
|
|
Weighted Average Coupon
|
||||
December 31, 2012:
|
|
|
|
|
|
||||
Less than one year
|
$
|
9,827
|
|
|
$
|
9,822
|
|
|
5.09%
|
Greater than one year and less than five years
|
5,444
|
|
|
5,446
|
|
|
6.11%
|
||
Greater than five years and less than ten years
|
11,979
|
|
|
11,814
|
|
|
2.69%
|
||
Total
|
$
|
27,250
|
|
|
$
|
27,082
|
|
|
4.23%
|
|
|
|
|
|
|
||||
December 31, 2011:
|
|
|
|
|
|
|
|
||
Less than one year
|
$
|
16,553
|
|
|
$
|
16,552
|
|
|
5.13%
|
Greater than one year and less than five years
|
625
|
|
|
626
|
|
|
5.92%
|
||
Total
|
$
|
17,178
|
|
|
$
|
17,178
|
|
|
5.16%
|
|
Less than 12 Months
|
|
More than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
CMBS linked transactions
|
$
|
20,894
|
|
|
$
|
(22
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,894
|
|
|
$
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CMBS linked transactions
|
$
|
11,248
|
|
|
$
|
(63
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,248
|
|
|
$
|
(63
|
)
|
|
Fair Value at
|
|
|
|
|
|
MTM
|
|
Fair Value at
|
||||||||||
|
December 31, 2011
|
|
Net Purchases
|
|
Upgrades/Downgrades
|
|
Change Same Ratings
|
|
December 31, 2012
|
||||||||||
Moody's Ratings Category:
|
|
|
|
|
|
|
|
|
|
||||||||||
Aaa
|
$
|
17,178
|
|
|
$
|
5,287
|
|
|
$
|
—
|
|
|
$
|
(7,880
|
)
|
|
$
|
14,585
|
|
A1 through A3
|
—
|
|
|
5,444
|
|
|
—
|
|
|
—
|
|
|
5,444
|
|
|||||
Non-Rated
|
—
|
|
|
7,221
|
|
|
—
|
|
|
—
|
|
|
7,221
|
|
|||||
Total
|
$
|
17,178
|
|
|
$
|
17,952
|
|
|
$
|
—
|
|
|
$
|
(7,880
|
)
|
|
$
|
27,250
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
S&P Ratings Category:
|
|
|
|
|
|
|
|
|
|
||||||||||
AAA
|
$
|
17,178
|
|
|
$
|
12,508
|
|
|
$
|
—
|
|
|
$
|
(7,880
|
)
|
|
$
|
21,806
|
|
CCC+ through CCC-
|
—
|
|
|
5,444
|
|
|
—
|
|
|
—
|
|
|
5,444
|
|
|||||
Total
|
$
|
17,178
|
|
|
$
|
17,952
|
|
|
$
|
—
|
|
|
$
|
(7,880
|
)
|
|
$
|
27,250
|
|
|
|
As of
|
|
As of
|
||||||||||
|
|
December 31, 2012
|
|
December 31, 2011
|
||||||||||
Maturity or Repricing
|
|
Balance
|
|
Weighted Average Interest Rate
|
|
Balance
|
|
Weighted Average Interest Rate
|
||||||
Within 30 days
|
|
$
|
20,415
|
|
|
1.40
|
%
|
|
$
|
14,903
|
|
|
1.54
|
%
|
>30 days to 90 days
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
|
$
|
20,415
|
|
|
1.40
|
%
|
|
$
|
14,903
|
|
|
1.54
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Provision (benefit) for income taxes:
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
11,497
|
|
|
$
|
7,839
|
|
|
$
|
324
|
|
State
|
776
|
|
|
4,596
|
|
|
—
|
|
|||
Total current
|
12,273
|
|
|
12,435
|
|
|
324
|
|
|||
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
1,769
|
|
|
(305
|
)
|
|
4,134
|
|
|||
State
|
560
|
|
|
(94
|
)
|
|
1,263
|
|
|||
Total deferred
|
2,329
|
|
|
(399
|
)
|
|
5,397
|
|
|||
Income tax provision (benefit)
|
$
|
14,602
|
|
|
$
|
12,036
|
|
|
$
|
5,721
|
|
|
Years Ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
Statutory tax rate
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
State and local taxes, net of federal benefit
|
1
|
%
|
|
15
|
%
|
|
10
|
%
|
Valuation allowance for deferred tax assets
|
—
|
%
|
|
—
|
%
|
|
(8
|
)%
|
Subpart F income
|
13
|
%
|
|
11
|
%
|
|
—
|
%
|
Basis difference in LEAF Commercial Capital investment
|
—
|
%
|
|
6
|
%
|
|
—
|
%
|
Other items
|
5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
54
|
%
|
|
67
|
%
|
|
37
|
%
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Deferred tax assets related to:
|
|
|
|
||||
Lease accounting
|
$
|
—
|
|
|
$
|
—
|
|
Investment in securities
|
118
|
|
|
119
|
|
||
Intangible assets basis difference
|
2,557
|
|
|
490
|
|
||
Federal, state and local loss carryforwards
|
45
|
|
|
17
|
|
||
Capital loss carryforward
|
12
|
|
|
—
|
|
||
Partnership investment
|
34
|
|
|
—
|
|
||
Provision for loan and lease losses
|
—
|
|
|
—
|
|
||
Accrued expenses
|
—
|
|
|
—
|
|
||
Total deferred tax assets
|
2,766
|
|
|
626
|
|
||
Valuation allowance
|
—
|
|
|
—
|
|
||
Total deferred tax assets
|
$
|
2,766
|
|
|
$
|
626
|
|
|
|
|
|
||||
Deferred tax liabilities related to:
|
|
|
|
||||
Unrealized income/loss on investments
|
$
|
(4,286
|
)
|
|
$
|
(1,188
|
)
|
Equity investments
|
(838
|
)
|
|
(394
|
)
|
||
Basis difference in LEAF Commercial Capital investment
|
(185
|
)
|
|
(3,390
|
)
|
||
Subpart F income
|
(3,067
|
)
|
|
(652
|
)
|
||
Property and equipment basis differences
|
—
|
|
|
—
|
|
||
Total deferred tax liabilities
|
$
|
(8,376
|
)
|
|
$
|
(5,624
|
)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
29,849
|
|
|
$
|
29,720
|
|
|
$
|
29,912
|
|
|
$
|
43,849
|
|
Interest expense
|
8,383
|
|
|
8,869
|
|
|
8,208
|
|
|
17,332
|
|
||||
Net interest income
|
$
|
21,466
|
|
|
$
|
20,851
|
|
|
$
|
21,704
|
|
|
$
|
26,517
|
|
|
|
|
|
|
|
|
|
||||||||
Net income allocable to common shares
|
$
|
14,481
|
|
|
$
|
16,425
|
|
|
$
|
18,152
|
|
|
$
|
14,141
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share − basic
|
0.18
|
|
|
0.20
|
|
|
0.20
|
|
|
0.14
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per share − diluted
|
0.18
|
|
|
0.20
|
|
|
0.20
|
|
|
0.14
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2011:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
25,229
|
|
|
$
|
25,189
|
|
|
$
|
26,037
|
|
|
$
|
33,419
|
|
Interest expense
|
6,932
|
|
|
7,042
|
|
|
7,141
|
|
|
11,071
|
|
||||
Net interest income
|
$
|
18,297
|
|
|
$
|
18,147
|
|
|
$
|
18,896
|
|
|
$
|
22,348
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
13,142
|
|
|
$
|
9,219
|
|
|
$
|
14,942
|
|
|
$
|
413
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share − basic
|
$
|
0.22
|
|
|
$
|
0.13
|
|
|
$
|
0.20
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share − diluted
|
$
|
0.22
|
|
|
$
|
0.13
|
|
|
$
|
0.20
|
|
|
$
|
0.01
|
|
ITEM 9.
|
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
•
|
Mr. J. Cohen was awarded 466,893 shares of restricted stock for fiscal
2012
, as compared to
62,056
shares of restricted stock for fiscal
2011
.
|
•
|
Mr. Blomstrom was awarded
135,823
shares of restricted stock for fiscal
2012
, as compared to
17,452
shares of restricted stock for fiscal 2011.
|
•
|
Mr. Bloom was awarded
135,823
shares of restricted stock for fiscal
2012
, as compared to
21,815
shares of restricted stock for fiscal
2011
. See “- Elements of Our Compensation Program-Supplemental Incentive Arrangements with David Bloom.”
|
•
|
Mr. Brotman was awarded
135,823
shares of restricted stock for fiscal
2012
, as compared to
35,460
shares of restricted stock for fiscal
2011
.
|
•
|
Mr. Bryant was awarded
67,911
shares of restricted stock for fiscal
2012
, as compared to 0 shares of restricted stock for fiscal
2011
. Mr. Bryant was also awarded
7,256
shares of restricted Resource America stock for fiscal
2012
, as compared to 0 shares of restricted Resource America stock for fiscal
2011
.
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus ($)
|
|
Stock Awards ($)
(2)
|
|
All Other Compensation ($)
(3)
|
|
Total ($)
|
|||||
Jonathan Z. Cohen
|
|
2012
|
|
—
|
|
|
—
|
|
|
2,750,000
|
|
|
—
|
|
|
2,750,000
|
|
Chief Executive Officer,
|
|
2011
|
|
—
|
|
|
—
|
|
|
349,996
|
|
|
—
|
|
|
349,996
|
|
President and Director
|
|
2010
|
|
—
|
|
|
—
|
|
|
999,999
|
|
|
—
|
|
|
999,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||
David J. Bryant
|
|
2012
|
|
275,000
|
|
(1)
|
200,000
|
|
(1)
|
399,996
|
|
|
49,994
|
|
|
924,990
|
|
Senior Vice President,
|
|
2011
|
|
275,000
|
|
(1)
|
200,000
|
|
(1)
|
—
|
|
|
—
|
|
|
475,000
|
|
Chief Financial Officer,
Chief Accounting Officer and Treasurer |
|
2010
|
|
240,000
|
|
(1)
|
200,000
|
|
(1)
|
199,996
|
|
|
24,993
|
|
|
664,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Jeffrey D. Blomstrom
|
|
2012
|
|
—
|
|
|
—
|
|
|
799,997
|
|
|
—
|
|
|
799,997
|
|
Senior Vice President
|
|
2011
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
100,000
|
|
|
|
2010
|
|
—
|
|
|
—
|
|
|
599,996
|
|
|
—
|
|
|
599,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
David E. Bloom
|
|
2012
|
|
—
|
|
|
—
|
|
|
799,997
|
|
|
—
|
|
|
799,997
|
|
Senior Vice President−
|
|
2011
|
|
—
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
|
125,000
|
|
Real Estate Investments
|
|
2010
|
|
—
|
|
|
—
|
|
|
199,996
|
|
|
10,000
|
|
|
209,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Jeffrey F. Brotman
|
|
2012
|
|
—
|
|
|
—
|
|
|
799,997
|
|
|
—
|
|
|
799,997
|
|
Executive Vice President
|
|
2011
|
|
—
|
|
|
—
|
|
|
199,994
|
|
|
—
|
|
|
199,994
|
|
|
|
2010
|
|
—
|
|
|
—
|
|
|
599,996
|
|
|
—
|
|
|
599,996
|
|
|
(1)
|
Mr. Bryant's salary and bonus were paid by Resource America. We began to reimburse Resource America for Mr. Bryant's salary and bonus in October 2009. Amounts represent salary and bonus earned for the years indicated, but may not have been paid in full in the respective years.
|
(2)
|
Grant date fair value, valued in accordance with FASB Accounting Standards Codification Topic 718 as the closing price of our common stock on the grant date.
|
(3)
|
2010 and 2012 amounts for Mr. Bryant represent awards of Resource America restricted stock earned during 2010 and 2012, respectively, valued at the closing price of Resource America common stock on the date of each grant. Amount for Mr. Bloom represents dividend equivalent rights on restricted common stock granted, but not yet earned. See “- Elements of Our Compensation Program-Supplemental Incentive Arrangements with David Bloom.”
|
Name
|
|
Grant date
|
|
All other stock awards: number of shares of stock (#)
|
|
Grant date fair
value of stock
awards ($)
(2)
|
||
Jonathan Cohen
(1)
|
|
|
|
|
|
|
||
Our restricted stock
|
|
1/6/2012
|
|
62,056
|
|
|
349,996
|
|
Our restricted stock
|
|
12/20/2012
|
|
237,893
|
|
|
1,401,190
|
|
|
|
|
|
|
|
|
||
David J. Bryant
|
|
|
|
|
|
|
||
Our restricted stock
|
|
12/20/2012
|
|
67,911
|
|
|
399,996
|
|
Resource America restricted stock
|
|
12/17/2012
|
|
7,256
|
|
|
49,994
|
|
|
|
|
|
|
|
|
||
Jeffrey D. Blomstrom
|
|
|
|
|
|
|
||
Our restricted stock
|
|
2/10/2012
|
|
17,452
|
|
|
100,000
|
|
Our restricted stock
|
|
12/20/2012
|
|
135,823
|
|
|
799,997
|
|
|
|
|
|
|
|
|
||
David E. Bloom
|
|
|
|
|
|
|
||
Our restricted stock
|
|
2/10/2012
|
|
21,815
|
|
|
125,000
|
|
Our restricted stock
|
|
12/20/2012
|
|
135,823
|
|
|
799,997
|
|
|
|
|
|
|
|
|
||
Jeffrey F. Brotman
|
|
|
|
|
|
|
||
Our restricted stock
|
|
1/6/2012
|
|
35,460
|
|
|
199,994
|
|
Our restricted stock
|
|
12/20/2012
|
|
135,823
|
|
|
799,997
|
|
|
(1)
|
Does not include 229,000 shares of restricted stock granted in 2013 as compensation earned for fiscal 2012.
|
(2)
|
Based on the closing price of our stock on the respective grant dates with the exception of Mr. Bryant's Resource America stock grant, which was valued based on the closing price of Resource America's stock on the respective grant date.
|
•
|
Restricted stock awards;
|
•
|
Stock options; and
|
•
|
Resource America restricted stock awards.
|
|
Option Awards
|
|
Stock Awards
|
|
|||||||||||||
Name
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Option
Exercise
Price ($)
|
|
Option Expiration Date
|
|
Number of
Shares or
Units of Stock
That Have Not
Vested (#)
(4)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
(1)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Jonathan Z. Cohen
|
|
100,000
|
|
|
—
|
|
15.00
|
|
|
3/7/2015
|
|
457,722
|
|
|
2,563,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
David J. Bryant
|
|
10,000
|
|
|
—
|
|
15.00
|
|
|
3/7/2015
|
|
101,996
|
|
|
571,178
|
|
|
|
|
5,000
|
|
|
—
|
|
8.14
|
|
|
5/21/2018
|
|
12,987
|
|
(2)
|
86,623
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Jeffrey D. Blomstrom
|
|
10,000
|
|
|
—
|
|
15.00
|
|
|
3/7/2015
|
|
241,080
|
|
|
1,350,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
David E. Bloom
|
|
100,000
|
|
|
—
|
|
15.00
|
|
|
3/7/2015
|
|
191,723
|
|
|
1,073,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Jeffrey F. Brotman
|
|
—
|
|
|
—
|
|
N/A
|
|
N/A
|
|
260,808
|
|
|
1,460,525
|
|
|
|
(1)
|
Based on the closing price of our common stock on
December 31, 2012
of $5.60.
|
(2)
|
Represents shares of Resource America common stock.
|
(3)
|
Based upon the closing price of Resource America's common stock on
December 31, 2012
of $6.67.
|
(4)
|
Includes shares of our restricted stock that vest in 2013, 2014 and 2015, respectively as follows: Mr. J. Cohen - 119,251 shares, 238,486 shares and 99,985 shares; Mr. Bryant - 29,060 shares, 50,299 shares and 22,637 shares; Mr. Blomstrom - 55,909 shares, 134,078 shares and 51,093 shares; Mr. Bloom - 58,968 shares, 80,207 shares and 52,548 shares; and Mr. Brotman - 63,517 shares, 140,196 shares and 57,095 shares.
|
|
|
Stock Awards
|
||||
Name
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)
(1)
|
||
Jonathan Z. Cohen
|
|
19,267
|
|
|
107,895
|
|
|
|
|
|
|
||
David J. Bryant (our stock)
|
|
6,422
|
|
|
35,963
|
|
(Resource America stock)
|
|
2,408
|
|
|
13,906
|
|
|
|
|
|
|
||
Jeffrey D. Blomstrom
|
|
4,816
|
|
|
26,970
|
|
|
|
|
|
|
||
David E. Bloom
|
|
6,422
|
|
|
35,963
|
|
|
|
|
|
|
||
Jeffrey F. Brotman
|
|
6,422
|
|
|
35,963
|
|
|
(1)
|
Represents the per share market value of the respective common stock on the vesting dates multiplied by the number of shares vesting.
|
Name
(1)
|
|
Fees Earned or Paid in Cash ($)
|
|
Stock
Awards ($)
|
|
Total ($)
|
Walter T. Beach
|
|
102,500
|
|
22,495
(2)
|
|
124,995
|
William B. Hart
|
|
52,500
|
|
22,495
(2)
|
|
74,995
|
Murray S. Levin
|
|
52,500
|
|
22,495
(2)
|
|
74,995
|
P. Sherrill Neff
|
|
52,500
|
|
22,495
(2)
|
|
74,995
|
Gary Ickowicz
|
|
102,500
|
|
22,500
(3)
|
|
125,000
|
Edward E. Cohen
|
|
—
|
|
299,995
(4)
|
|
299,995
|
Steven J. Kessler
|
|
456.162
|
|
149,994
(5)
|
|
604,161
|
|
(1)
|
Table excludes Mr. J. Cohen, an NEO, whose compensation is set forth in the Summary Compensation Table.
|
(2)
|
On March 8, 2012, Messrs. Beach, Hart, Levin and Neff, were each granted 3,919 shares based upon a price of $5.74, the closing price on that day.
|
(3)
|
On February 1, 2012, Mr. Ickowicz was granted 3,833 shares based upon a price of $5.87, the closing price on that day.
|
(4)
|
On December 20, 2012, Mr. E. Cohen was granted 50,993 shares based upon a price of $5.89, the closing price on that day.
|
(5)
|
On January 6, 2012, Mr. Kessler was granted 8,865 shares based upon a price of $5.64, the closing price on that day. On December 20, 2012, Mr. Kessler was granted an additional 16,977 shares based upon a price of $5.89, the closing price on that day.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
|
Executive officers and directors
(2)
|
|
Shares
beneficially owned |
|
Percentage
(1)
|
||
Walter T. Beach
(4) (5)
|
|
389,324
|
|
|
*
|
|
Edward E. Cohen
(3)
|
|
625,053
|
|
|
*
|
|
Jonathan Z. Cohen
(3)
|
|
1,462,112
|
|
|
1.35
|
%
|
William B. Hart
(5)
|
|
41,728
|
|
|
*
|
|
Gary Ickowicz
(5)
|
|
24,411
|
|
|
*
|
|
Steven J. Kessler
(3)
|
|
150,842
|
|
|
*
|
|
Murray S. Levin
(5)
|
|
35,728
|
|
|
*
|
|
P. Sherrill Neff
(5)
|
|
10,332
|
|
|
*
|
|
|
|
|
|
|
||
Jeffrey D. Blomstrom
(3)
|
|
272,538
|
|
|
*
|
|
David E. Bloom
(3)
|
|
393,519
|
|
|
*
|
|
Jeffrey F. Brotman
(3)
|
|
273,652
|
|
|
*
|
|
David J. Bryant
(3)
|
|
173,371
|
|
|
*
|
|
All executive
officers and directors as a group (12 persons)
|
|
3,552,610
|
|
|
3.56
|
%
|
|
|
|
|
|
||
Other owners of more than 5% of outstanding shares
|
|
|
|
|
||
Blackrock, Inc.
(6)
|
|
5,792,906
|
|
|
5.36
|
%
|
|
(1)
|
Includes 255,000 shares of common stock issuable upon exercise of stock options.
|
(2)
|
The address for all of our executive officers and directors is c/o Resource Capital Corp., 712 Fifth Avenue, 12th Floor, New York, New York 10019.
|
(3)
|
Includes unvested restricted stock as follows: (i) Mr. Blomstrom - 147,458 shares; Mr. Bloom - 150,367 shares; Mr. Brotman - 159,463 shares; Mr. Bryant - 67,911 shares; Mr. E. Cohen - 50,933 shares; Mr. J. Cohen - 508,264 shares; and Mr. Kessler - 22,887 shares; all of these shares vest 33.3% per year; (ii) Mr. Brotman - 83,102 shares; Mr. J. Cohen - 138,504 shares; and Mr. Kessler - 13,850 shares; all of these shares vest in full on January 26, 2014; (iii) Mr. Blomstrom - 82,987 shares; Mr. Bloom - 27,662 shares; and Mr. Bryant - 27,662 shares; all of these shares vest in full on February 8, 2014. Each such person has the right to receive distributions on and vote, but not to transfer, all such shares.
|
(4)
|
Includes (i) 346,459 shares purchased by Beach Asset Management, LLC, Beach Investment Counsel, Inc. and/or Beach Investment Management, LLC, investment management firms for which Mr. Beach is a principal for themselves or accounts managed by them and for which Mr. Beach possesses investment and/or voting power. The address for these investment management firms is Five Tower Bridge, 300 Barr Harbor Drive, Suite 220, West Conshohocken, Pennsylvania 19428.
|
(5)
|
Includes (i) 3,393 shares of restricted stock issued to each of Messrs Beach, Hart, Levin and Neff on March 8, 2013 which vest on March 8, 2014; and (ii) 3,582 shares of restricted stock issued to Mr. Ickowicz on February 1, 2013, which vest on February 1, 2014. Each non-employee director has the right to receive distributions on and vote, but not to transfer, such shares.
|
(6)
|
This information is based on Form 13G filed with the SEC on January 30, 2013. Blackrock, Inc.'s address is 40 East 52nd Street, New York, NY 10022.
|
|
(a)
|
(b)
|
(c)
|
Plan category
|
Number of securities to be issued upon exercise of outstanding options,
warrants and rights
|
Weighted-average exercise price of outstanding options,
warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a)
|
Equity compensation
plans approved by
security holders:
|
|
|
|
Options
|
641,666
|
$14.45
|
|
Restricted stock
|
3,308,343
|
N/A
|
|
Total
|
3,950,009
|
|
1,544,016
(1)
|
|
(1)
|
We agreed to award certain personnel up to 224,000 shares of restricted stock upon the achievement of certain performance thresholds. The shares, which have been reserved for future issuance under the plans, have not been deducted from the number of securities remaining available for future issuance.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
•
|
We will not be permitted to invest in any investment fund or CDO structured, co-structured or managed by the Manager or Resource America other than those structured, co-structured or managed on our behalf. The Manager and Resource America will not receive duplicate management fees from any such investment fund or CDO to the extent we invest in it.
|
•
|
We will not be permitted to purchase investments from, or sell investments to, the Manager or Resource America, except that we may purchase investments that have been originated by the Manager or Resource America within 60 days before our investment.
|
•
|
Any transactions between entities managed by the Manager or Resource America and us must be approved by a majority of our independent directors.
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
1.
|
Financial Statements
|
2.
|
Financial Statements
|
Exhibit No.
|
|
Description
|
3.1(a)
|
|
Restated Certificate of Incorporation of Resource Capital Corp.
(1)
|
3.1(b)
|
|
Articles Supplementary 8.50% Series A Cumulative Redeemable Preferred Stock
(16)
|
3.1(c)
|
|
Articles Supplementary 8.50% Series A Cumulative Redeemable Preferred Stock
(17)
|
3.1(d)
|
|
Articles Supplementary 8.25% Series B Cumulative Redeemable Preferred Stock
(18)
|
3.1(e)
|
|
Articles Supplementary 8.25% Series B Cumulative Redeemable Preferred Stock
(22)
|
3.2
|
|
Amended and Restated Bylaws of Resource Capital Corp.
(1)
|
4.1(a)
|
|
Form of Certificate for Common Stock for Resource Capital Corp.
(1)
|
4.1(b)
|
|
Form of Certificate for 8.50% Series A Cumulative Redeemable Preferred Stock
|
4.1(c)
|
|
Form of Certificate for 8.25% Series B Cumulative Redeemable Preferred Stock
(18)
|
4.2(a)
|
|
Junior Subordinated Indenture between Resource Capital Corp. and Wells Fargo Bank, N.A., dated May 25, 2006.
(2)
|
4.2(b)
|
|
Amendment to Junior Subordinated Indenture and Junior Subordinated Note due 2036 between Resource Capital Corp. and Wells Fargo Bank, N.A., dated October 26, 2009 and effective September 30, 2009.
(6)
|
4.3(a)
|
|
Amended and Restated Trust Agreement among Resource Capital Corp., Wells Fargo Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative Trustees named therein, dated May 25, 2006.
(2)
|
4.3(b)
|
|
Amendment to Amended and Restated Trust Agreement and Preferred Securities Certificate among Resource Capital Corp., Wells Fargo Bank, N.A. and the Administrative Trustees named therein, dated October 26, 2009 and effective September 30, 2009.
(6)
|
4.4
|
|
Amended Junior Subordinated Note due 2036 in the principal amount of $25,774,000,
dated October 26, 2009.
(6)
|
4.5(a)
|
|
Junior Subordinated Indenture between Resource Capital Corp. and Wells Fargo Bank, N.A., dated September 29, 2006.
(3)
|
4.5(b)
|
|
Amendment to Junior Subordinated Indenture and Junior Subordinated Note due 2036 between Resource Capital Corp. and Wells Fargo Bank, N.A., dated October 26, 2009 and effective September 30, 2009.
(6)
|
4.6(a)
|
|
Amended and Restated Trust Agreement among Resource Capital Corp., Wells Fargo Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative Trustees named therein, dated September 29, 2006.
(3)
|
4.6(b)
|
|
Amendment to Amended and Restated Trust Agreement and Preferred Securities Certificate among Resource Capital Corp., Wells Fargo Bank, N.A. and the Administrative Trustees named therein, dated October 26, 2009 and effective September 30, 2009.
(6)
|
4.7
|
|
Amended Junior Subordinated Note due 2036 in the principal amount of $25,774,000, dated October 26, 2009.
(6)
|
10.1(a)
|
|
Amended and Restated Management Agreement between Resource Capital Corp., Resource Capital Manager, Inc. and Resource America, Inc. dated as of June 30, 2008.
(4)
|
10.1(b)
|
|
First Amendment to Amended and Restated Management Agreement between Resource Capital Corp., Resource Capital Manager, Inc. and Resource America, Inc. dated as of June 30, 2008.
(5)
|
10.1(c)
|
|
Second Amendment to Amended and Restated Management Agreement between Resource Capital Corp., Resource Capital Manager, Inc. and Resource America, Inc. dated as of August 17, 2010.
(8)
|
10.1(d)
|
|
Third Amendment to Amended and Restated Management Agreement between Resource Capital Corp., Resource Capital Manager, Inc. and Resource America, Inc. dated as of February 24, 2011.
(11)
|
10.1(e)
|
|
Fourth Amendment to Amended and Restated Management Agreement
(12)
|
10.1(f)
|
|
Second Amended and Restated Management Agreement between Resource Capital Corp, Resource Capital Manager, Inc. and Resource America, Inc. dated as of June 13, 2012.
(15)
|
10.2(a)
|
|
Master Repurchase and Securities Contract by and among RCC Commercial, Inc., RCC Real Estate Inc. and Wells Fargo Bank, National Association, dated February, 1, 2011.
(10)
|
10.2(b)
|
|
Guarantee Agreement made by Resource Capital Corp. in favor of Wells Fargo Bank, National Association, dated February 1, 2011.
(10)
|
10.3
|
|
2005 Stock Incentive Plan.
(1)
|
10.4
|
|
Amended and Restated 2007 Omnibus Equity Compensation Plan.
(7)
|
10.5
|
|
Services Agreement between Resource Capital Asset Management, LLC and Apidos Capital Management, LLC, dated February 24, 2011.
(11)
|
10.6
|
|
Revolving Judgment Note and Security Agreement between Resource Capital Corp and RCC Real Estate and the Bancorp Bank, dated July 7, 2011
(13)
|
10.7
|
|
At-the-Market Issuance Sale Agreement, dated June 28, 2012 among Resource Capital Corp. Resource Capital Manager and MLV & Co. LLC
(20)
|
10.7(a)
|
|
Master Repurchase and Securities Contract for $150 million between RCC Real Estate SPE 4, LLC, as seller, and Wells Fargo Bank, National Association, as buyer, dated February 27, 2012
(19)
|
10.7(b)
|
|
Guaranty Agreement made by Resource Capital Corp., as guarantor, in favor of Wells Fargo Bank, National Association
(19)
|
10.8
|
|
Transfer and Contribution Agreement by and among LEAF Financial Corporate, Resource TRS, Inc., Resource Capital Corp. and LEAF Commercial Capital, Inc. dated January 4, 2011.
(9)
|
10.9
|
|
At-the-Market Issuance Sale Agreement, dated November 19, 2012 among Resource Capital Corp. Resource Capital Manager and MLV & Co. LLC
(21)
|
12.1
|
|
Statements re Computation of Ratios
|
21.1
|
|
List of Subsidiaries of Resource Capital Corp.
|
23.1
|
|
Consent of Grant Thornton LLP
|
31.1
|
|
Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Executive Officer.
|
31.2
|
|
Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Financial Officer.
|
32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350.
|
32.2
|
|
Certification Pursuant to 18 U.S.C. Section 1350.
|
99.1
|
|
Master Repurchase and Securities Contract for $150,000,000 between RCC Real Estate SPE 4, LLC, as Seller, and Wells Fargo Bank, National Association, as Buyer, Dated February 27, 2012.
(14)
|
99.2
|
|
Guaranty made by Resource Capital Corp. as guarantor, in favor of Wells Fargo Bank, National Association, dated February 27, 2012
(14)
|
99.3
|
|
Federal Income Tax Consequences of our Qualification as a REIT
|
101
|
|
Interactive Data Files
|
|
(1)
|
Filed previously as an exhibit to the Company’s registration statement on Form S-11, Registration No. 333-126517.
|
(2)
|
Filed previously as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.
|
(3)
|
Filed previously as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.
|
(4)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on July 3, 2008.
|
(5)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on October 20, 2009.
|
(6)
|
Filed previously as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009.
|
(7)
|
Filed previously as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.
|
(8)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on August 19, 2010.
|
(9)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on January 6, 2011.
|
(10)
|
Filed previously as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.
|
(11)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on March 2, 2011
|
(12)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on March 20, 2012.
|
(13)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on July 7, 2011.
|
(14)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on March 2, 2012.
|
(15)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on June 13, 2012.
|
(16)
|
Filed previously as an exhibit to the Company’s registration statement on Form 8-A filed on June 8, 2012.
|
(17)
|
Filed previously as an exhibit to the Company’s Current Report on Form 8-K filed on June 29, 2012.
|
(18)
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on September 28, 2012.
|
(19)
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on March 2, 2012.
|
(20)
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on June 29, 2012.
|
(21)
|
Filed previously as an exhibit to the Company's Current Report o Form 8-K filed on October 1, 2012
|
|
|
|
RESOURCE CAPITAL CORP. (Registrant)
|
|
|
|
|
March 18, 2013
|
|
By:
|
By:
/s/ Jonathan Z. Cohen
|
|
|
|
Jonathan Z. Cohen
|
|
|
|
Chief Executive Officer and President
|
/s/ Steven J. Kessler
|
|
Chairman of the Board
|
|
March 18, 2013
|
STEVEN J. KESSLER
|
|
|
|
|
|
|
|
|
|
/s/ Jonathan Z. Cohen
|
|
Director, President and Chief Executive Officer
|
|
March 18, 2013
|
JONATHAN Z. COHEN
|
|
|
|
|
|
|
|
|
|
/s/ Walter T. Beach
|
|
Director
|
|
March 18, 2013
|
WALTER T. BEACH
|
|
|
|
|
|
|
|
|
|
/s/ Edward E. Cohen
|
|
Director
|
|
March 18, 2013
|
EDWARD E. COHEN
|
|
|
|
|
|
|
|
|
|
/s/ William B. Hart
|
|
Director
|
|
March 18, 2013
|
WILLIAM B. HART
|
|
|
|
|
|
|
|
|
|
/s/ Gary Ickowicz
|
|
Director
|
|
March 18, 2013
|
GARY ICKOWICZ
|
|
|
|
|
|
|
|
|
|
/s/ Murray S. Levin
|
|
Director
|
|
March 18, 2013
|
MURRAY S. LEVIN
|
|
|
|
|
|
|
|
|
|
/s/ P. Sherrill Neff
|
|
Director
|
|
March 18, 2013
|
P. SHERRILL NEFF
|
|
|
|
|
|
|
|
|
|
/s/ David J. Bryant
|
|
Senior Vice President
|
|
March 18, 2013
|
DAVID J. BRYANT
|
|
Chief Financial Officer,
|
|
|
|
|
Chief Accounting Officer and Treasurer
|
|
|
|
|
Balance at
beginning of period |
|
Charge to
expense |
|
Write-offs
|
|
Recoveries
|
|
Noncontrolling interest eliminated in consolidation
|
|
Balance at
end of period |
||||||||||||
Allowance for loan and lease loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2012
|
|
$
|
27,518
|
|
|
$
|
16,818
|
|
|
$
|
(26,645
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2011
|
|
$
|
34,303
|
|
|
$
|
13,896
|
|
|
(20,681
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
27,518
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2010
|
|
$
|
48,262
|
|
|
$
|
43,321
|
|
|
$
|
(57,330
|
)
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
34,303
|
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
|
Column G
|
|
Column H
|
|
Column I
|
|||||||||||
Description
|
|
Encumbrances
|
|
Initial Cost to Company
|
|
Cost Capitalized Subsequent to Acquisition
|
|
Gross Amount at which Carried at Close of Period
|
|
Accumulated Depreciation
|
|
Date of Construction
|
|
Date Acquired
|
|
Life on which Depreciation in Latest Income is Computed
|
|||||||||||
|
|
|
|
Buildings and Land Improvements
|
|
Improvements Carrying Costs
|
|
Buildings and Land Improvements Total
|
|
|
|
|
|
|
|
|
|||||||||||
Real estate owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Multi-family
Houston, TX |
|
$
|
13,600
|
|
|
$
|
18,100
|
|
|
$
|
3,163
|
|
|
$
|
20,216
|
|
|
$
|
856
|
|
|
1978
|
|
8/1/2011
|
|
27.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Multi-family
Memphis, TN |
|
22,400
|
|
(1
|
)
|
—
|
|
|
482
|
|
|
21,962
|
|
|
1,152
|
|
|
1973
|
|
6/14/2011
|
|
27.5
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Office Building
Pacific Palisades, CA |
|
12,150
|
|
(1
|
)
|
—
|
|
|
—
|
|
|
10,149
|
|
|
401
|
|
|
1980
|
|
6/24/2011
|
|
27.5
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Hotel Property
Coconut Grove, FL |
|
21,750
|
|
(1
|
)
|
—
|
|
|
—
|
|
|
25,609
|
|
|
141
|
|
|
1982
|
|
9/6/2012
|
|
39
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
$
|
69,900
|
|
|
$
|
18,100
|
|
|
$
|
3,645
|
|
|
$
|
77,936
|
|
|
$
|
2,550
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Real Estate
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
|
$
|
48,726
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Additions:
|
|
|
|
|
|
|
||||||
Acquisitions
|
|
—
|
|
|
17,054
|
|
|
—
|
|
|||
Acquired through foreclosure
|
|
25,608
|
|
|
—
|
|
|
—
|
|
|||
Improvements
|
|
3,645
|
|
|
43
|
|
|
—
|
|
|||
Other
|
|
—
|
|
|
31,629
|
|
|
—
|
|
|||
|
|
29,253
|
|
|
48,726
|
|
|
—
|
|
|||
Deductions:
|
|
|
|
|
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other − write-down
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, end of year
|
|
$
|
77,936
|
|
|
$
|
48,726
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Accumulated Depreciation
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
|
699
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Additions:
|
|
|
|
|
|
|
||||||
Depreciation expense
|
|
1,851
|
|
|
699
|
|
|
—
|
|
|||
|
|
1,851
|
|
|
699
|
|
|
—
|
|
|||
Deductions:
|
|
|
|
|
|
|
||||||
Balance, end of year
|
|
$
|
2,550
|
|
|
$
|
699
|
|
|
$
|
—
|
|
Type of Loan/ Borrower
|
|
Description / Location
|
|
Interest Payment Rates
|
|
Final Maturity Date
|
|
Periodic Payment
Terms (1) |
|
Prior Liens
(2)
|
|
Face Amount of Loans
(3)
|
|
Net Carrying Amount of Loans
|
||||
Whole Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Borrower A
|
|
Hotel/
Palm Springs, CA |
|
LIBOR + 2.50%
|
|
1/5/2018
|
|
I/O
|
|
—
|
|
$
|
21,849
|
|
|
$
|
21,849
|
|
Borrower B
|
|
Multi-Family/
Renton, WA |
|
LIBOR + 3.50%
|
|
1/10/2017
|
|
I/O
|
|
—
|
|
30,000
|
|
|
30,000
|
|
||
Borrower C
|
|
Hotel/
Tucson, AZ |
|
LIBOR + 3.50%
|
|
2/1/2019
|
|
I/O
|
|
—
|
|
32,500
|
|
|
32,500
|
|
||
Borrower D-1
|
|
Hotel/
Los Angeles, CA |
|
LIBOR + 3.00%
|
|
10/5/2017
|
|
I/O
(4)
|
|
—
|
|
21,000
|
|
|
21,000
|
|
||
Borrower D-2
|
|
Hotel/
Los Angeles, CA |
|
LIBOR + 3.50%
|
|
10/5/2017
|
|
N/A
(4)
|
|
—
|
|
2,142
|
|
|
2,142
|
|
||
Borrower E
|
|
Retail/Various
|
|
LIBOR + 2.31%
|
|
7/5/2015
|
|
I/O
|
|
—
|
|
26,899
|
|
|
26,712
|
|
||
Borrower F-1
|
|
Retail/
Hayward, CA |
|
LIBOR + 2.50%
|
|
1/5/2019
|
|
I/O
(5)
|
|
—
|
|
23,000
|
|
|
23,000
|
|
||
Borrower F-2
|
|
Retail/
Hayward, CA |
|
LIBOR + 2.50%
|
|
1/5/2019
|
|
I/O
(5)
|
|
—
|
|
1,705
|
|
|
1,705
|
|
||
Borrower G-1
|
|
Multi-Family/
San Francisco, CA |
|
LIBOR + 3.65%
|
|
1/2/2013
|
|
I/O
(6) (11)
|
|
—
|
|
29,548
|
|
|
29,548
|
|
||
Borrower G-2
|
|
Multi-Family/
San Francisco, CA |
|
N/A
|
|
1/2/2013
|
|
N/A
(6) (11)
|
|
—
|
|
4,452
|
|
|
4,452
|
|
||
Borrower H
|
|
Hotel/
Studio City, CA |
|
LIBOR + 3.70%
|
|
2/5/2017
|
|
I/O
|
|
—
|
|
27,655
|
|
|
27,655
|
|
||
Borrower I
|
|
Land/
Studio City, CA |
|
LIBOR + 3.45%
|
|
2/5/2017
|
|
I/O
|
|
—
|
|
27,886
|
|
|
27,886
|
|
||
Borrower J
|
|
Office/Torrance,CA
|
|
LIBOR + 3.25%
|
|
7/5/2015
|
|
I/O
|
|
—
|
|
22,000
|
|
|
21,813
|
|
||
Borrower K
|
|
Multi-Family/ Delmar, CA
|
|
LIBOR + 4.40%
|
|
1/5/2015
|
|
I/O
|
|
—
|
|
20,500
|
|
|
20,279
|
|
||
Borrower L-1
|
|
Multi-Family/
Parksville, MD |
|
LIBOR + 3.00%
|
|
2/4/2013
|
|
I/O
(7)
|
|
—
|
|
23,000
|
|
|
22,933
|
|
||
Borrower L-2
|
|
Multi-Family/
Parksville, MD |
|
15.0%
|
|
2/4/2013
|
|
I/O
(7) (8)
|
|
—
|
|
2,000
|
|
|
1,988
|
|
||
All other Whole
Loans individually
less than 3%
|
|
|
|
|
|
|
|
|
|
|
|
253,694
|
|
|
252,476
|
|
||
Total Whole Loans
|
|
|
|
|
|
|
|
|
|
|
|
$
|
569,830
|
|
|
$
|
567,938
|
|
Type of Loan/ Borrower
|
|
Description / Location
|
|
Interest Payment Rates
|
|
Final Maturity Date
|
|
Periodic
Payment
Terms
(1)
|
|
Periodic
Payment
Terms
(1)
|
|
Periodic
Payment
Terms
(1)
|
|
Prior
Liens
(2)
|
|
Face
Amount of
Loans
(3)
|
|
Net Carrying Amount of Loans
|
|
||||
Mezzanine Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Borrower M
|
|
Hotel/
Various |
|
LIBOR + 18.50%
|
|
9/7/2014
|
|
I/O
|
|
I/O
|
|
I/O
|
|
—
|
|
$
|
5,711
|
|
|
$
|
5,711
|
|
|
Borrower N
|
|
Hotel/
Various |
|
0.50%
|
|
9/7/2019
|
|
I/O
|
|
I/O
|
|
I/O
|
|
—
|
|
32,361
|
|
|
32,361
|
|
|
||
All other Mezzanine
Loans individually Less than 3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,919
|
|
|
44,714
|
|
|
||
Total Mezzanine Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,991
|
|
|
82,786
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
B Notes:
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
||||
All other B Notes
individually less than 3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,441
|
|
|
16,327
|
|
|
||
Total B Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,441
|
|
|
16,327
|
|
|
||
Total Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
669,262
|
|
(9)
|
$
|
667,051
|
|
(10)
|
(1)
|
IO = interest only
|
(2)
|
Represents only third-party liens
|
(3)
|
Does not include unfunded commitments.
|
(4)
|
Borrower D is a whole loan and the participations above represent the Senior (D-1) and Mezzanine (D-2) portions.
|
(5)
|
Borrower F is a whole loan and the participations above represent the Senior (F-1) and Mezzanine (F-2) portions.
|
(6)
|
Borrower G is a whole loan and the participations above represent the Senior (G-1) and Mezzanine (G-2) portions.
|
(7)
|
Borrower L is a whole loan and the participations above represents the Senior (L-1) and Mezzanine (L-2) portions. Loan was paid-off in full by borrower in February 2012.
|
(8)
|
Borrower L-1 is a whole loan that is categorized as a floating rate loan in the footnotes and MD&A. Loan was paid-off in full by borrower in February 2012.
|
(9)
|
All loans are current with respect to principal and interest payments due.
|
(10)
|
The net carrying amount of loans includes an allowance for loan loss of
$8.0 million
at
December 31, 2012
allocated as follows: Whole Loans (
$6.9 million
); Mezzanine Loans (
$860,000
) and B Notes (
$206,000
).
|
(11)
|
Classified in loans held for sale as of December 31, 2012. This loan held for sale settled on January 2, 2013.
|
Certificate Number:
|
|
shares
|
Dated:
|
|
|
|
|
|
Secretary
|
|
Chairman of the Board
|
Dated: ______________, 20___
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the period from
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 8, 2005
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(date operations
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
commenced)
|
||||||||||||||||
|
|
Year ended
|
|
Year ended
|
|
Year ended
|
|
Year ended
|
|
Year ended
|
|
Year ended
|
|
Year ended
|
|
through
|
||||||||||||||||
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|||||||||||||||||
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
2005
|
||||||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Pretax income before preferred shares
from continuing operations
|
|
$
|
79,045,303
|
|
|
$
|
49,752,614
|
|
|
$
|
25,167,380
|
|
|
$
|
6,336,588
|
|
|
$
|
(3,314,694
|
)
|
|
$
|
9,228,102
|
|
|
$
|
15,673,123
|
|
|
$
|
10,908,478
|
|
Fixed charges
|
|
42,809,788
|
|
|
30,450,471
|
|
|
36,486,361
|
|
|
45,450,398
|
|
|
79,640,808
|
|
|
121,585,223
|
|
|
101,870,728
|
|
|
43,084,726
|
|
||||||||
Total
|
|
$
|
121,855,091
|
|
|
$
|
80,203,085
|
|
|
$
|
61,653,741
|
|
|
$
|
51,786,986
|
|
|
$
|
76,326,114
|
|
|
$
|
130,813,325
|
|
|
$
|
117,543,851
|
|
|
$
|
53,993,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest (expensed and capitalized)
|
|
$
|
38,027,275
|
|
|
$
|
27,043,926
|
|
|
$
|
31,876,054
|
|
|
$
|
41,369,137
|
|
|
$
|
76,490,096
|
|
|
$
|
118,882,304
|
|
|
$
|
100,242,439
|
|
|
$
|
42,600,618
|
|
Amortized premiums, discounts
and capitalized expenses related
to indebtedness
|
|
4,765,109
|
|
|
3,387,123
|
|
|
4,590,397
|
|
|
4,058,255
|
|
|
3,128,657
|
|
|
2,681,235
|
|
|
1,608,237
|
|
|
460,869
|
|
||||||||
Estimate of interest within rental expenses
|
|
17,404
|
|
|
19,422
|
|
|
19,910
|
|
|
23,006
|
|
|
22,055
|
|
|
21,684
|
|
|
20,052
|
|
|
23,239
|
|
||||||||
Total
|
|
$
|
42,809,788
|
|
|
$
|
30,450,471
|
|
|
$
|
36,486,361
|
|
|
$
|
45,450,398
|
|
|
$
|
79,640,808
|
|
|
$
|
121,585,223
|
|
|
$
|
101,870,728
|
|
|
$
|
43,084,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Preferred stock dividend
|
|
$
|
1,243,971
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ratio of earnings to combined fixed charges
(1)
|
|
2.85
|
|
|
2.63
|
|
|
1.69
|
|
|
1.14
|
|
|
0.96
|
|
|
1.08
|
|
|
1.15
|
|
|
1.25
|
|
||||||||
Ratio of earnings to combined fixed charges
and preferred stock dividends (1) |
|
2.77
|
|
|
2.63
|
|
|
1.69
|
|
|
1.14
|
|
|
0.96
|
|
|
1.08
|
|
|
1.15
|
|
|
1.25
|
|
(1)
|
The Company did not have any shares of preferred stock outstanding until June 2012 and paid its first preferred stock dividend in July 2012.
|
Subsidiaries
|
|
State of Incorporation
|
860 VDP Preferred SPE, LLC
|
|
Delaware
|
Apidos CDO I, Ltd. (“TRS”)
|
|
Cayman Islands
|
Apidos CDO III, Ltd., (“TRS”)
|
|
Cayman Islands
|
Apidos Cinco CDO, Ltd (“TRS”)
|
|
Cayman Islands
|
Apidos CLO VIII
|
|
Cayman Islands
|
Aspen Park Preferred SPE, LLC
|
|
Delaware
|
Ischus II, LLC
|
|
Delaware
|
Kempton Downs Preferred SPE, LLC
|
|
Delaware
|
Life Care Funding, LLC
|
|
New York
|
Long Term Care Conversion, Inc.
|
|
Delaware
|
Long Term Care Conversion Funding, LLC
|
|
New York
|
Lynnfield Holdings, LLC
|
|
Delaware
|
Lynnfield Member LLC
|
|
Delaware
|
RCC Commercial II, Inc.
|
|
Delaware
|
RCC Commercial III, Inc.
|
|
Delaware
|
RCC Commercial, Inc.
|
|
Delaware
|
RCC Mayfair, LLC
|
|
Delaware
|
RCC OIP, LLC
|
|
Delaware
|
RCC Plaza Lofts 22, LLC
|
|
Delaware
|
RCC Real Estate Acquisition SPE, LLC
|
|
Delaware
|
RCC Real Estate SPE 2, LLC
|
|
Delaware
|
RCC Real Estate SPE 3, LLC
|
|
Delaware
|
RCC Real Estate SPE 4, LLC
|
|
Delaware
|
RCC Real Estate SPE, LLC
|
|
Delaware
|
RCC Real Estate, Inc.
|
|
Delaware
|
RCC SLH, LLC
|
|
Delaware
|
RCC Trust II
|
|
Delaware
|
RCC VIP Holdings, LLC
|
|
Delaware
|
RCC VIP Investor, LLC
|
|
Delaware
|
RCC Whispertree, LLC
|
|
Delaware
|
Resource Capital Asset Management, LLC
|
|
Delaware
|
Resource Capital Trust I
|
|
Delaware
|
Resource Real Estate Funding 2006-1 CDO Investor, LLC
|
|
Delaware
|
Resource Real Estate Funding 2007-1 CDO Investor, LLC
|
|
Delaware
|
Resource Real Estate Funding CDO 2006-1 Ltd.
|
|
Cayman Island
|
Resource Real Estate Funding CDO 2006-1, LLC
|
|
Delaware
|
Resource Real Estate Funding CDO 2007-1 Ltd.
|
|
Cayman Island
|
Resource Real Estate Funding CDO 2007-1, LLC
|
|
Delaware
|
Subsidiaries
|
|
State of Incorporation
|
Resource TRS II, Inc.
|
|
Delaware
|
Resource TRS III, Inc.
|
|
Delaware
|
Resource TRS IV, Inc.
|
|
Delaware
|
Resource TRS V, Inc
|
|
Delaware
|
Resource TRS, Inc.
|
|
Delaware
|
Resource TRS, LLC
|
|
Delaware
|
RRE Montclair, LLC
|
|
Delaware
|
RRE VIP Amaranth, LLC
|
|
Delaware
|
RRE VIP Birch Sycamore, LLC
|
|
Delaware
|
RRE VIP Borrower, LLC
|
|
Delaware
|
RRE VIP Camelot, LLC
|
|
Delaware
|
RRE VIP Coliseum Park, LLC
|
|
Delaware
|
RRE VIP Hunters West, LLC
|
|
Delaware
|
RRE VIP International Village, LLC
|
|
Delaware
|
RRE VIP Mansfield, LLC
|
|
Delaware
|
RRE VIP Pinnacle at Brownsboro, LLC
|
|
Delaware
|
RRE VIP Silver Leaf, LLC
|
|
Delaware
|
RRE VIP Willington, LLC
|
|
Delaware
|
RRE VIP Wingate, LLC
|
|
Delaware
|
RREF 2006 REO, LLC
|
|
Delaware
|
RREF 2007 REO, LLC
|
|
Delaware
|
RSO Equityco, LLC
|
|
Delaware
|
Sportsman's Lodge Preferred SPE, LLC
|
|
Delaware
|
Sportsman's Preferred SPE, LLC
|
|
Delaware
|
VDP Holdings, LLC
|
|
Delaware
|
Whitney CLO I, Ltd.
|
|
Cayman Island
|
1.
|
I have reviewed this report on Form 10-K for the
year ended
December 31, 2012
of Resource Capital, Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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March 18, 2013
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/s/ Jonathan Z. Cohen
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Jonathan Z. Cohen
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Chief Executive Officer
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1.
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I have reviewed this report on Form 10-K for the
year ended
December 31, 2012
of Resource Capital, Corp.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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March 18, 2013
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/s/ David J. Bryant
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David J. Bryant
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Chief Financial Officer and Chief Accounting Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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March 18, 2013
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/s/ Jonathan Z. Cohen
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Jonathan Z. Cohen
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Chief Executive Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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March 18, 2013
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/s/ David J. Bryant
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David J. Bryant
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Chief Financial Officer and Chief Accounting Officer
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•
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U.S. expatriates;
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persons who mark-to-market shares of our capital stock;
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subchapter S corporations;
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U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar;
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financial institutions;
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insurance companies;
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broker-dealers;
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regulated investment companies;
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trusts and estates;
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holders who receive shares of our capital stock through the exercise of employee shares options or otherwise as compensation;
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persons holding shares of our capital stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment;
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persons subject to the alternative minimum tax provisions of the Internal Revenue Code;
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persons holding shares of our capital stock through a partnership or similar pass-through entity;
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persons holding a 10% or more (by vote or value) beneficial interest in the company; and, except to the extent discussed below:
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tax-exempt organizations; and
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non-U.S. stockholders (as defined below).
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We will pay federal income tax on taxable income, including net capital gain, that we do not distribute to our stockholders during, or within a specified time period after, the calendar year in which the income is earned.
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We may be subject to the “alternative minimum tax” on any items of tax preference that we do not distribute or allocate to our stockholders.
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We will pay income tax at the highest corporate rate on:
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net income from the sale or other disposition of property acquired through foreclosure, or foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, and
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other non-qualifying income from foreclosure property.
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We will pay a 100% tax on net income earned on sales or other dispositions of property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business.
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If we fail to satisfy the 75% gross income test or the 95% gross income test due to reasonable cause and not willful neglect, as described below under “-Requirements for Qualification-Gross Income Tests,” and nonetheless continue to qualify as a REIT, we will pay a 100% tax on the amount by which we fail the 75% gross income test or the 95% gross income test, multiplied, in either case, by a fraction intended to reflect our profitability.
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In the event of a failure of any of the asset tests (other than certain de minimis failures of the 5% and 10% asset tests), as described below under “-Requirements for Qualification-Asset Tests,” as long as the failure was due to reasonable cause and not to willful neglect and we dispose of the assets or otherwise comply with such asset tests within six months after the last day of the quarter, we will pay a tax equal to the greater of (i) $50,000 or (ii) an amount determined by multiplying the highest federal income tax rate applicable to corporations by the net income from the nonqualifying assets during the period in which we failed to satisfy such asset tests.
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If we fail to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, and the violation is due to reasonable cause, we may retain our qualification as a REIT but will be required to pay a penalty of $50,000 for each such failure.
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If we fail to distribute during a calendar year at least the sum of:
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85% of our REIT ordinary income for the year,
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95% of our REIT capital gain net income for the year, and
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any undistributed taxable income from earlier periods,
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We may elect to retain and pay income tax on our net capital gain. In that case, a U.S. stockholder (as defined below) would be deemed to have paid tax on its proportionate share of our undistributed capital gain and include such proportionate share in income as long-term capital gains (to the extent that we make a timely designation of such gain to the stockholder) and would receive a credit for its proportionate share of the tax we paid or receive a refund to the extent the tax paid by us exceeds the U.S. stockholder's tax liability on the undistributed capital gains.
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We will be subject to a 100% excise tax on transactions between us and a TRS that are not conducted on an arm's-length basis.
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If we acquire any asset from a C corporation, or a corporation that generally is subject to full corporate-level tax, in a merger or other transaction in which we acquire a basis in the asset that is determined by reference either to the C corporation's basis in the asset or to another asset, we will pay tax at the highest regular corporate rate applicable if we recognize gain on the sale or disposition of the asset during the 10-year period after we acquire the asset. The amount of gain on which we will pay tax is the lesser of:
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the amount of gain that we recognize at the time of the sale or disposition, and
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the amount of gain that we would have recognized if we had sold the asset at the time we acquired it, assuming that the C corporation will not elect in lieu of this treatment to an immediate tax when the asset is acquired.
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If we own a residual interest in a real estate mortgage investment conduit, or REMIC, we will be taxable at the highest corporate rate on the portion of any excess inclusion income that we derive from the REMIC residual interests allocable to stockholders that are “disqualified organizations.” Similar rules will also apply if we own an equity interest in a taxable mortgage pool. To the extent that we own a REMIC residual interest or a taxable mortgage pool through a TRS, we will not be subject to this tax. For a discussion of “excess inclusion income,” see “-Requirements for Qualification-Taxable Mortgage Pools.” A “disqualified organization” includes:
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the United States;
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any state or political subdivision of the United States;
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any foreign government;
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any international organization;
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any agency or instrumentality of any of the foregoing;
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any other tax-exempt organization, other than a farmer's cooperative described in section 521 of the Internal Revenue Code, that is exempt both from income taxation and from taxation under the unrelated business taxable income provisions of the Internal Revenue Code; and
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any rural electrical or telephone cooperative.
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It is managed by one or more trustees or directors.
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Its beneficial ownership is evidenced by transferable shares, or by transferable certificates of beneficial interest.
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It would be taxable as a domestic corporation, but for the REIT provisions of the federal income tax laws.
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It is neither a financial institution nor an insurance company subject to special provisions of the federal income tax laws.
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At least 100 persons are beneficial owners of its shares or ownership certificates.
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Not more than 50% in value of its outstanding shares or ownership certificates is owned, directly or indirectly, by five or fewer individuals, which the federal income tax laws define to include certain entities, during the last half of any taxable year.
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It elects to be a REIT, or has made such an election for a previous taxable year, which has not been revoked or terminated, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status.
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It meets certain other qualification tests, described below, regarding the nature of its income and assets.
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substantially all of its assets consist of debt obligations or interests in debt obligations;
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more than 50% of those debt obligations are real estate mortgage loans or interests in real estate mortgage loans as of specified testing dates;
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the entity has issued debt obligations that have two or more maturities; and
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the payments required to be made by the entity on its debt obligations “bear a relationship” to the payments to be received by the entity on the debt obligations that it holds as assets.
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rents from real property;
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interest on debt secured by a mortgage on real property, or on interests in real property;
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dividends or other distributions on, and gain from the sale of, shares in other REITs;
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gain from the sale of real estate assets;
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income derived from a REMIC in proportion to the real estate assets held by the REMIC, unless at least 95% of the REMIC's assets are real estate assets, in which case all of the income derived from the REMIC; and
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income derived from the temporary investment of new capital that is attributable to the issuance of our stock or a public offering of our debt with a maturity date of at least five years and that we receive during the one-year period beginning on the date on which we received such new capital.
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an amount that is based on a fixed percentage or percentages of receipts or sales; and
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an amount that is based on the income or profits of a debtor, as long as the debtor derives substantially all of its income from the real property securing the debt from leasing substantially all of its interest in the property, and only to the extent that the amounts received by the debtor would be qualifying, “rents from real property” if received directly by a REIT.
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First, the amount of rent must not be based in whole or in part on the income or profits of any person. However, an amount received or accrued generally will not be excluded from rents from real property solely by reason of being based on fixed percentages of receipts or sales.
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Second, rents we receive from a “related party tenant” will not qualify as rents from real property in satisfying the gross income tests unless the tenant is a TRS, at least 90% of the property is leased to unrelated tenants and the rent paid by the TRS is substantially comparable to the rent paid by the unrelated tenants for comparable space. A tenant is a related party tenant if the REIT, or an actual or constructive owner of 10% or more of the REIT, actually or constructively owns 10% or more of the tenant.
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Third, if rent attributable to personal property, leased in connection with a lease of real property, is greater than 15% of the total rent received under the lease, then the portion of rent attributable to the personal property will not qualify as rents from real property.
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Fourth, we generally must not operate or manage our real property or furnish or render services to our tenants, other than through an “independent contractor” who is adequately compensated and from whom we do not derive revenue. However, we may provide services directly to tenants if the services are “usually or customarily rendered” in connection with the rental of space for occupancy only and are not considered to be provided for the tenants' convenience. In addition, we may provide a minimal amount of “non-customary” services to the tenants of a property, other than through an independent contractor, as long as our income from the services does not exceed 1% of our income from the related property. Furthermore, we may own up to 100% of the stock of a TRS, which may provide customary and non-customary services to tenants without tainting its rental income from the related properties.
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that is acquired by a REIT as the result of the REIT having bid on such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was default or default was imminent on a lease of such property or on indebtedness that such property secured;
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for which the related loan or lease was acquired by the REIT at a time when the default was not imminent or anticipated; and
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for which the REIT makes a proper election to treat the property as foreclosure property.
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on which a lease is entered into for the property that, by its terms, will give rise to income that does not qualify for purposes of the 75% gross income test, or any amount is received or accrued, directly or indirectly, pursuant to a lease entered into on or after such day that will give rise to income that does not qualify for purposes of the 75% gross income test;
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on which any construction takes place on the property, other than completion of a building or any other improvement, where more than 10% of the construction was completed before default became imminent; or
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which is more than 90 days after the day on which the REIT acquired the property and the property is used in a trade or business which is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income.
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our failure to meet such tests is due to reasonable cause and not due to willful neglect; and
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following such failure for any taxable year, a schedule of the sources of our income is filed in accordance with regulations prescribed by the Secretary of the Treasury.
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cash or cash items, including certain receivables;
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government securities;
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interests in real property, including leaseholds and options to acquire real property and leaseholds;
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interests in mortgage loans secured by real property;
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stock in other REITs;
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investments in stock or debt instruments during the one-year period following our receipt of new capital that we raise through equity offerings or public offerings of debt with at least a five-year term; and
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regular or residual interests in a REMIC.
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“Straight debt” securities, which is defined as a written unconditional promise to pay on demand or on a specified date a sum certain in money if (i) the debt is not convertible, directly or indirectly, into stock, and (ii) the interest rate and interest payment dates are not contingent on profits, the borrower's discretion, or similar factors. “Straight debt” securities do not include any securities issued by a partnership or a corporation in which we or any controlled TRS (i.e., a TRS in which we own directly or indirectly more than 50% of the voting power or value of the stock) hold non- “straight debt” securities that have an aggregate value of more than 1% of the issuer's outstanding securities. However, “straight debt” securities include debt subject to the following contingencies:
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a contingency relating to the time of payment of interest or principal, as long as either (i) there is no change to the effective yield of the debt obligation, other than a change to the annual yield that does not exceed the greater of 0.25% or 5% of the annual yield, or (ii) neither the aggregate issue price nor the aggregate face amount of the issuer's debt obligations held by us exceeds $1 million and no more than 12 months of unaccrued interest on the debt obligations can be required to be prepaid; and
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a contingency relating to the time or amount of payment upon a default or prepayment of a debt obligation, as long as the contingency is consistent with customary commercial practice.
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Any loan to an individual or an estate.
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Any “section 467 rental agreement,” other than an agreement with a related party tenant.
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Any obligation to pay “rents from real property.”
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Certain securities issued by governmental entities.
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Any security issued by a REIT.
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Any debt instrument issued by an entity treated as a partnership for federal income tax purposes to the extent of our interest as a partner in the partnership.
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Any debt instrument issued by an entity treated as a partnership for federal income tax purposes not described above if at least 75% of the partnership's gross income, excluding income from prohibited transaction, is qualifying income for purposes of the 75% gross income test described above in “-Requirements for Qualification-Gross Income Tests.”
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we satisfied the asset tests at the end of the preceding calendar quarter; and
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the discrepancy between the value of our assets and the asset test requirements arose from changes in the market values of our assets and was not wholly or partly caused by the acquisition of one or more non-qualifying assets
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the sum of
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90% of our “REIT taxable income,” computed without regard to the dividends paid deduction and our net capital gain, and
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90% of our after-tax net income, if any, from foreclosure property, minus
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the sum of certain items of non-cash income.
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85% of our REIT ordinary income for such year,
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95% of our REIT capital gain income for such year, and
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any undistributed taxable income from prior periods,
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Because we may deduct capital losses only to the extent of our capital gains, we may have taxable income that exceeds our economic income.
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We will recognize taxable income in advance of the related cash flow if any of our MBS are deemed to have original issue discount. We generally must accrue original issue discount based on a constant yield method that takes into account projected prepayments but that defers taking into account credit losses until they are actually incurred.
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We will include in our taxable income for federal income tax purposes, items of income from certain of our CDO entities, such as Apidos CDO I, Apidos CDO III, Apidos Cinco CDO and Apidos CLO VIII, in which we hold an interest, even in the absence of actual cash distributions.
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We may recognize taxable market discount income when we receive the proceeds from the disposition of, or principal payments on, loans that have a stated redemption price at maturity that is greater than our tax basis in those loans, although such proceeds often will be used to make non-deductible principal payments on related borrowings.
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We may recognize phantom taxable income from any residual interests in REMICs or equity interests in taxable mortgage pools not held through a TRS.
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a citizen or resident (as defined in Section 7701(b) of the Internal Revenue Code) of the United States;
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a corporation (including an entity treated as a corporation for federal income tax purposes) created or organized under the laws of the United States, any of its States, or the District of Columbia;
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an estate whose income is subject to federal income taxation regardless of its source; or
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any trust if (i) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has a valid election in place to be treated as a U.S. person.
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is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact; or
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provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding rules.
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the percentage of our dividends that the tax-exempt trust must treat as UBTI is at least 5%;
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we qualify as a REIT by reason of the modification of the rule requiring that no more than 50% of our stock be owned by five or fewer individuals that allows the beneficiaries of the pension trust to be treated as holding our stock in proportion to their actuarial interests in the pension trust; and
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either:
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one pension trust owns more than 25% of the value of our stock; or
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a group of pension trusts individually holding more than 10% of the value of our stock collectively owns more than 50% of the value of our stock.
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a lower treaty rate applies and the non-U.S. stockholder files an IRS Form W-8BEN evidencing eligibility for that reduced rate with us, or
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the non-U.S. stockholder files an IRS Form W-8ECI with us claiming that the distribution is effectively connected income.
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the gain is effectively connected with the non-U.S. stockholder's U.S. trade or business, in which case the non-U.S. stockholder will be subject to the same treatment as U.S. stockholders with respect to such gain, or
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the non-U.S. stockholder is a nonresident alien individual who is present in the U.S. for 183 days or more during the taxable year and certain other conditions are met, in which case the non-U.S. stockholder will incur a 30% tax on his or her capital gains.
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