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Actionable news in RSO: RESOURCE CAPITAL Corp,

Resource Capital Corp. Reports Results for Three and Six Months Ended June 30, 2017

Significant Items and Highlights

  • GAAP net income allocable to common shares of $0.08 and $0.17 per share-diluted.

  • Core earnings, a non-GAAP measure, of $(0.10) and $(0.20) per share-diluted (see Schedule I).

  • Common stock cash dividends of $0.05 and $0.10 per share.

  • Resource Capital Corp. ("RSO") has monetized $196.6 million of the investments that were included in management's previously communicated strategic plan (the "Plan") (see Schedule III), of which $96.4 million and $152.0 million were liquidated during the three and six months ended June 30, 2017, respectively. Included in monetized assets of $196.6 million are subsequent cash receipts of: (i) $67.0 million reported in principal paydowns receivable and (ii) $3.1 million reported in other assets on the balance sheet at June 30, 2017. Proceeds from these transactions were received in early July 2017.

  • On July 31, 2017, RSO closed and received cash proceeds of $84.3 million in connection with the sale of LEAF Commercial Capital ("LCC"), an equity method investment carried on the balance sheet at $43.2 million at June 30, 2017. Including the LCC transaction, RSO has monetized $280.9 million of investments included in the Plan. This transaction, net of tax, is expected to increase book value by approximately $1.00 per common share.

  • RSO priced a $376.7 million commercial real estate ("CRE") debt securitization at a weighted average cost of the one-month London Interbank Offered Rate ("LIBOR") plus 1.03%, which closed on July 13, 2017.

  • Book value of $14.12 per common share at June 30, 2017, as compared to $14.16 per common share at March 31, 2017.

NEW YORK, Aug. 02, 2017 (GLOBE NEWSWIRE) -- Resource Capital Corp. (RSO) reported results for the three and six months ended June 30, 2017.

Second Quarter 2017 Results

  • GAAP net income allocable to common shares was $2.5 million, or $0.08 per share-diluted, and $5.2 million, or $0.17 per-share diluted, for the three and six months ended June 30, 2017, respectively, as compared to a GAAP net loss allocable to common shares of $1.5 million, or $(0.05) per share-diluted, for the three months ended June 30, 2016, and GAAP net income allocable to common shares of $8.1 million, or $0.26 per share-diluted, for the six months ended June 30, 2016.

  • GAAP net income for the three and six months ended June 30, 2017 includes the following activity:

    -- Realized gains of $5.6 million and $12.6 million, respectively, related to the repayment of CRE loans held for sale.
    -- Net loss of $5.0 million and $6.4 million, respectively, incurred by Primary Capital Mortgage, LLC ("PCM"). Of these losses, $4.2 million relates to the asset purchase agreement entered into on June 6, 2017.
    -- Realized gains of $1.8 million on the sale of two investment securities available-for-sale, for both periods then ended.
    -- Net loss of $345,000 on the disposition of an investment in Pearlmark Mezzanine Realty Partners IV, L.P., for both periods then ended.
  • Core earnings for the three and six months ended June 30, 2017 of $(3.0) million, or $(0.10) per share-diluted, and $(6.2) million, or $(0.20) per share-diluted, respectively. A reconciliation of GAAP net income (loss) to core earnings is set forth in Schedule I of this release.

Additional Items

  • RSO declared and paid common stock cash dividends of $0.05 per share for the second quarter and an aggregate of $0.10 per share for the six months ended June 30, 2017.
  • Substantially all of the $1.3 billion CRE loan portfolio comprises floating rate senior whole loans at June 30, 2017.
  • The CRE whole loan portfolio had a weighted average spread of 4.89% and a weighted average one-month LIBOR floor of 0.37% at June 30, 2017.
  • In June 2017, RSO priced a $376.7 million CRE debt securitization, which closed on July 13, 2017, and issued $251.5 million of notes at a weighted average cost of one-month LIBOR plus 1.03%.

The following table summarizes RSO's CRE loan activities and fundings of previous commitments, at par, for the three, six and twelve months ended June 30, 2017 (in millions, except percentages):


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