VARIABLE INTEREST ENTITIES (Tables) RSO

3 Months Ended

Dec. 31, 2012

Variable Interest Entity [Line Items]

The following table reflects the assets and liabilities of a real estate VIE which was included in the Company’s consolidated balance sheets (in thousands):



	September 30, 2012
Cash and property and equipment, net	$	727
Accrued expenses and other liabilities	189

Unrealized Losses Along with the Related Fair Value, Aggregated by the Length of Time the Investments were in a Continuous Unrealized Loss Position

Unrealized losses along with the related fair value and aggregated by the length of time the investments were in a continuous unrealized loss position, are as follows (in thousands, except number of securities):



	Less than 12 Months						More than 12 Months
	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses		Number of Securities
September 30, 2012
CLO securities	$	1,274	$	(15	)	1	$	—	$	—	—

Summary of the weighted average life of the commercial real estate loans at amortized cost [Table Text Block]

The following is a summary of the weighted average life of RSO’s commercial real estate loans, at amortized cost (in thousands):



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 average life of commercial real estate loans assumes full exercise of extension options available to borrowers.

Summarization of Activity in the Allowance for Credit Losses for the Company's Financing Receivables

The following table summarizes the activity in the allowance for credit losses for all financing receivables (in thousands):



	Receivables from Managed Entities			Leases and Loans			Rent Receivables		Total
Three Months Ended December 31, 2012:
Balance, beginning of period	$	27,580		$	—		$	33	$	27,613
Provision for credit losses	5,120			(3		)	35		5,152
Charge-offs	(140		)				—		(140		)
Recoveries	—			3			—		3
Balance, end of period	$	32,560		$	—		$	68	$	32,628

Ending balance, individually evaluated for impairment	$	32,560		$	—		$	—	$	32,560
Ending balance, collectively evaluated for impairment	—			—			68		68
Balance, end of period	$	32,560		$	—		$	68	$	32,628

Three Months Ended December 31, 2011:
Balance, beginning of period	$	10,490		$	430		$	15	$	10,935
Provision for credit losses	2,085			151			14		2,250
Charge-offs	—			(124		)	—		(124		)
Recoveries	—			25			—		25
Deconsolidation of LEAF	—			(482		)	—		(482		)
Balance, end of period	$	12,575		$	—		$	29	$	12,604

Ending balance, individually evaluated for impairment	$	12,575		$	—		$	—	$	12,575
Ending balance, collectively evaluated for impairment	—			—			29		29
Balance, end of period	$	12,575		$	—		$	29	$	12,604

Past Due Financing Receivables [Table Text Block]

The following table is the aging of the Company’s past due financing receivables (presented gross of allowance for credit losses) as of December 31, 2012 (in thousands):



	30-89 Days Past Due		Greater than 90 Days		Greater than 181 Days		Total Past Due		Current		Total
Receivables from managed entities and related parties: ⁽¹⁾
Commercial finance investment entities	$	—	$	—	$	40,112	$	40,112	$	118	$	40,230
Real estate investment entities	779		744		17,062		18,585		1,992		20,577
Financial fund management entities	6		—		47		53		2,140		2,193
Other	41		—		—		41		137		178
	826		744		57,221		58,791		4,387		63,178
Rent receivables - real estate	4		10		58		72		40		112
Total financing receivables	$	830	$	754	$	57,279	$	58,863	$	4,427	$	63,290


(1)	Receivables are presented gross of an allowance for credit losses of $29.6 million, $2.5 million and $457,000 related to the Company’s commercial finance, real estate and financial fund management investment entities, respectively. The remaining receivables from managed entities and related parties have no related allowance for credit losses.

The following table is the aging of the Company’s past due financing receivables (presented gross of allowance for credit losses) as of September 30, 2012 (in thousands):



	30-89 Days Past Due		Greater than 90 Days		Greater than 181 Days		Total Past Due		Current		Total
Receivables from managed entities and related parties: ⁽¹⁾
Commercial finance investment entities	$	—	$	—	$	38,834	$	38,834	$	148	$	38,982
Real estate investment entities	743		2,694		15,180		18,617		2,054		20,671
Financial fund management entities	6		—		46		52		2,141		2,193
Other	—		—		—		—		152		152
	749		2,694		54,060		57,503		4,495		61,998
Rent receivables - real estate	6		1		32		39		6		45
Total financing receivables	$	755	$	2,695	$	54,092	$	57,542	$	4,501	$	62,043


(1)	Receivables are presented gross of an allowance for credit losses of $25.1 million and $2.5 million related to the Company’s commercial finance and real estate investment entities, respectively. The remaining receivables from managed entities and related parties had no related allowance for credit losses.

Impaired Financing Receivables [Table Text Block]

The following table discloses information about the Company’s impaired financing receivables (in thousands):



	Net Balance		Unpaid Balance		Specific Allowance		Average Investment in Impaired Assets
As of December 31, 2012
Financing receivables with a specific valuation allowance:
Receivables from managed entities – commercial finance	$	8,633	$	38,219	$	29,586	$	38,110
Receivables from managed entities – real estate	2,291		4,808		2,517		4,630
Receivables from managed entities – financial fund management	848		1,305		457		1,305
Rent receivables – real estate	—		68		68		40

As of September 30, 2012
Financing receivables with a specific valuation allowance:
Receivables from managed entities – commercial finance	$	12,865	$	37,943	$	25,078	$	38,060
Receivables from managed entities – real estate	2,181		4,683		2,502		4,511
Rent receivables – real estate	12		45		33		45

Credit Facilities and Other Debt of the Company and Related Borrowings Outstanding

The credit facilities and other debt of the Company and related borrowings outstanding are as follows (in thousands):



	As of December 31, 2012				September 30, 2012
	Maximum Amount of Facility		Borrowings Outstanding		Borrowings Outstanding
Credit facilities:
TD Bank – secured revolving credit facility ⁽¹⁾	$	6,997	$	—	$	—
Republic Bank – secured revolving credit facility	3,366		—		—
			—		—
Other debt:
Senior Notes			10,000		10,000
Mortgage debt			10,473		10,531
Other debt			567		812
Total borrowings			$	21,040	$	21,343


(1)	The amount of the facility as shown has been reduced by $503,000 for an outstanding letter of credit at December 31, 2012 and September 30, 2012.

Company's Asset Recorded at Fair Value on Recurring Basis

As of December 31, 2012, the fair values of the Company’s assets recorded at fair value on a recurring basis were as follows (in thousands):



	Level 1		Level 2		Level 3		Total
Asset:	Restated
Investment securities	$	209	$	—	$	10,367	$	10,576

As of September 30, 2012, the fair values of the Company’s assets recorded at fair value on a recurring basis were as follows (in thousands):



	Level 1		Level 2		Level 3		Total
Assets:	Restated
Investment securities	$	195	$	—	$	6,835	$	7,030

Additional Information about Assets Measured at Fair Value on Recurring Basis for which the Company Has Utilized Level 3 Inputs to Determine Fair Value

The following table presents additional information about assets which were measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value during the three months ended December 31, 2012 (in thousands):



	Investment Securities
Balance, beginning of period	$	6,835
Purchases	4,608
Income accreted	223
Payments and distributions received	(613		)
Sales	(1,160		)
Gain on sales of trading securities	307
Unrealized holding gain on trading securities	164
Change in unrealized gains – included in accumulated other comprehensive loss	3
Balance, end of period	$	10,367

Fair Value Measurements, Nonrecurring [Table Text Block]

The Company recognized the following changes in carrying value of the assets measured at fair value on a non-recurring basis, as follows (in thousands):



	Level 1		Level 2		Level 3		Total
Three Months Ended December 31 , 2012:
Assets:
Receivables from managed entities – commercial finance, real estate and financial fund management	$	—	$	—	$	14,506	$	14,506

Fiscal Year Ended September 30, 2012:
Assets:
Receivables from managed entities – commercial finance and real estate	$	—	$	—	$	16,752	$	16,752
Investment in real estate	—		727		—		727
Investment in real estate - office building	—		—		906		906
Investment in CVC Credit Partners	—		—		28,600		28,600
Investment in Apidos-CVC preferred interest	—		—		6,792		6,792
Investment in LEAF	—		—		1,749		1,749
Total	$	—	$	727	$	54,799	$	55,526
Liability:
Apidos contractual commitment	$	—	$	—	$	589	$	589

Fair Value of Financial Instruments

The fair value of financial instruments required to be disclosed at fair value, excluding instruments valued on a recurring basis, is as follows (in thousands):



	December 31, 2012				September 30, 2012
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Receivables from managed entities and related parties, net	$	30,618	$	30,618	$	34,418	$	34,418
	$	30,618	$	30,618	$	34,418	$	34,418
Borrowings:
Corporate secured credit facilities and note	$	—	$	—	$	—	$	—
Real estate debt	10,473		11,398		10,531		11,554
Senior Notes	10,000		11,728		10,000		11,364
Other debt	567		567		812		812
	$	21,040	$	23,693	$	21,343	$	23,730

Schedule of Carrying amount of assets related to VIEs [Table Text Block]

The following table presents the carrying amounts of the assets in the Company's consolidated balance sheets that relate to the Company's variable interests in identified nonconsolidated VIEs and the Company's maximum exposure to loss associated with these VIEs in which it holds variable interests at December 31, 2012 (in thousands):



	Receivables from Managed Entities and Related Parties, Net ⁽¹⁾		Investments		Maximum Exposure to Loss in Non-consolidated VIEs
RRE Opportunity REIT	$	—	$	1,792	$	1,792
Ischus entities	237		—		237
Trapeza entities	—		912		912
	$	237	$	2,704	$	2,941


(1)	Exclusive of expense reimbursements due to the Company.

Resource Capital Corp [Member]

Variable Interest Entity [Line Items]

Schedule of Condensed Financial Statements [Table Text Block]

The following reflects the assets and liabilities and operations of RSO, which were consolidated by the Company:



RSO Balance sheet detail:
	December 31, 2012			September 30, 2012
ASSETS	(unaudited)			(unaudited)
Cash and cash equivalents	$	85,278		$	112,732
Restricted cash	94,112			56,718
Subtotal - Cash and cash equivalents (including restricted cash)	179,390			169,450

Investment securities, trading	24,843			25,804
Investment securities available-for-sale, pledged as collateral, at fair value	195,200			158,106
Investment securities available-for-sale, at fair value	36,390			30,138
Subtotal - Investments, at fair value	256,433			214,048

Loans held for sale	48,894			45,187
Loans, pledged as collateral and net of allowances of $17.7 million and $12.8 million	1,793,780			1,699,798
Loans receivable–related party	8,324			9,116
Subtotal - loans	1,850,998			1,754,101
Eliminations	(1,570		)	(1,677		)
Subtotal- Loans after eliminations	1,849,428			1,752,424

Investment in real estate	75,386			75,267
Investments in unconsolidated entities	45,413			47,020
Subtotal - Investments in real estate and unconsolidated entities	120,799			122,287
Eliminations	(93		)	(76		)
Subtotal - Investments in real estate and unconsolidated entities -after eliminations	120,706			122,211

Linked transactions, at fair value	6,835			2,744
Interest receivable	7,763			7,239
Deferred tax asset	2,766			666
Principal paydown receivable	25,570			11
Intangible assets	13,192			17,104
Prepaid expenses	10,396			8,507
Subscription receivable	—			24,213
Other assets	4,109			2,059
Subtotal - other assets	70,631			$	62,543
Eliminations	(31		)	(31		)
Subtotal - other assets after eliminations	70,600			62,512
Total assets (excluding eliminations)	$	2,478,251		$	2,322,429
LIABILITIES
Borrowings	$	1,785,600		$	1,670,010

Distribution payable	21,655			20,136
Accrued interest expense	2,918			3,197
Derivatives, at fair value	14,687			16,195
Accrued tax liability	13,641			7,598
Deferred tax liability	8,376			4,353
Accounts payable and other liabilities	18,029			13,449
Subtotal - other liabilities	79,306			64,928
Eliminations	(8,067		)	$	(6,633	)
Subtotal - other liabilities after eliminations	71,239			58,295
Total liabilities (excluding eliminations)	$	1,864,906		$	1,734,938

The following table presents the detail of noncontrolling interests attributable to RSO:



	December 31, 2012			September 30, 2012
	(unaudited)			(unaudited)
Total stockholders equity per RSO balance sheet	$	613,345		$	587,491
Eliminations	(31,022		)	(30,965		)
Noncontrolling interests attributable to RSO	$	582,323		$	556,526



RSO Consolidated Income Detail (in thousands)
	Three Months Ended December 31,
	2012			2011
REVENUES	(unaudited)			(unaudited)
Interest income:
Loans	$	38,273		$	26,035
Securities	3,776			3,507
Interest income − other	1,800			3,877
Total interest income	43,849			33,419
Interest expense	17,332			11,071
Net interest income	26,517			22,348
Rental income	4,821			1,884
Dividend income	18			518
Equity in (losses) earnings of unconsolidated subsidiaries	(1,240		)	819
Fee income	1,540			1,930
Net realized gain (loss) on sales of investment securities available-for-sale and loans	1,958			(1,821		)
Net realized and unrealized loss on investment securities, trading	(915		)	(560		)
Unrealized gain and net interest income on linked transactions, net	342			93
Revenues from consolidated VIE - RSO	33,041			25,211

OPERATING EXPENSES
Management fees − related party	5,000			2,400
Equity compensation − related party	1,224			1,127
Professional services	2,138			1,259
Insurance	161			161
Rental operating expense	3,590			1,348
General and administrative	1,057			754
Depreciation and amortization	1,911			1,754
Income tax expense	7,624			7,767
Net impairment losses recognized in earnings	—			2,249
Provision for loan losses	9,017			5,979
Total expenses	31,722			24,798
Reclassification of income tax provision	(7,624		)	(7,767		)
Expenses of consolidated VIE - RSO	24,098			17,031
Adjusted operating income including reclassification of tax provision	8,943			8,180
OTHER REVENUE (EXPENSE)
Gain on consolidation	2,498			—
Gains on the extinguishment of debt	11,235			—
Other income of consolidated VIE - RSO	13,733			—
Income from continuing operations	22,676			8,180
Income tax provision	7,624			7,767
NET INCOME	15,052			413
Net income allocated to preferred shares	(911		)	—
Net income attributable to RSO common shareholders	$	14,141		$	413

The table presented below is to provide detail of the summarized RSO cash flow line items included in the consolidated statements of cash flows:



RSO Summarized cash flow information (in thousands):
	Three Months Ended
	December 31,
	2012			2011
Line items included in RSO cash flows - operating section:	(unaudited)			(unaudited)
Net income ⁽¹⁾	$	15,052		$	413
Line items included in "Change in cash attributable to consolidated VIE - RSO":
Provision for loan losses	9,017			5,979
Depreciation of investments in real estate and other	574			335
Amortization of intangible assets	1,338			1,419
Amortization of term facilities	247			140
Depreciation on operating leases
Accretion of net discounts on loans held for investment	(7,079		)	(4,066		)
Accretion of net discounts on securities available-for-sale	(733		)	(851		)
Amortization of discount on notes of CDOs	1,433			234
Amortization of debt issuance costs on notes of CDOs	1,370			1,012
Amortization of stock-based compensation	1,224			1,127
Amortization of terminated derivative instruments	58			76
Accretion of interest-only available-for-sales securities	(256		)	—
Distribution to subordinated debt holder	(1,979		)	—
Deferred income tax provision (benefit)	3,644			(399		)
Purchase of securities, trading	—			(5,258		)
Principal payments on securities, trading	46			316
Net realized and unrealized gain on investment securities, trading	915			581
Net realized (gains) losses on investments	(1,958		)	1,800
Gain on early extinguishment of debt	(11,235		)	—
Net impairment losses recognized in earnings	—			2,249
Gain on consolidation	(2,498		)	—
Linked transactions fair value adjustments	(168		)	—
Equity in earnings of unconsolidated subsidiaries	1,240			(819		)
Adjust for impact of imputed interest on VIE accounting	1,879			—
Changes in operating assets and liabilities	(26,953		)	7,908
Subtotal- consolidated VIE - RSO operating activities ⁽¹⁾	(29,874		)	11,783
Change in consolidated VIE - RSO cash for the period	27,454			(14,219		)
Subtotal - Change in cash attributable to operations of consolidated VIE - RSO before eliminations	(2,420		)	(2,436		)
Elimination of intercompany activity	448			383
Subtotal - Change in cash attributable to operations of consolidated VIE - RSO	(1,972		)	(2,053		)

Non-cash incentive compensation to RAI ⁽¹⁾	654			—
Elimination of intercompany activity	(654		)	—
Non-cash incentive compensation to RAI - after eliminations	—			—
Net cash (used in) provided by operating activities ⁽¹⁾	(14,168		)	12,196



RSO Summarized cash flows information - (Continued) (in thousands)	Three Months Ended
	December 31,
	2012			2011
Line items included in RSO cash flows - investing section:	(unaudited)			(unaudited)
Purchase of loans	(170,811		)	(454,156		)
Investment in loans - related parties	—			(3,100		)
Purchase of securities available-for-sale	(49,125		)	(25,750		)
Purchase of loans and investments by consolidated VIE - RSO	(219,936		)	(483,006		)
Principal payments received on loans	213,410			78,223
Principal payments on securities available-for-sale	10,919			2,029
Proceeds from sale of securities available-for-sale	21,933			—
Principal payments received on loans – related parties	792			10,097
Proceeds from sale of loans	33,670			84,232
Principal payments and proceeds from sales received by consolidated VIE - RSO	280,724			174,581
(Increase) decrease in restricted cash	(34,657		)	8,680
Line items included in "Other - consolidated VIE - RSO":
Investment in unconsolidated entity	1,199			(4,860		)
Proceeds from sale of real estate held-for-sale	—			1,464
Purchase of investments in real estate	—			(970		)
Minority interest equity	114			—
Improvements in investments in real estate	(3,026		)	—
Investments in real estate assets	—			(689		)
Proceeds from sale of real estate	—			(370		)
Other investing activity of consolidated VIE - RSO, before eliminations	(1,713		)	(5,425		)
Elimination of intercompany activity	17			33
Other investing activity of consolidated VIE - RSO	(1,696		)	(5,392		)
Net cash provided by (used in) investing activities (before eliminations)	24,418			(305,170		)
Line items included in RSO cash flows - financing section:
Items included in "Net borrowings (repayments) of debt by consolidated VIE- RSO":
Repurchase agreements	37,301			17,924
Collateralized debt obligations	—			317,244
Collateralized debt obligations	(100,916		)	(27,550		)
Retirement of debt	(15,515		)	—
Subtotal- Net borrowings (repayments) of debt by consolidated VIE - RSO:	(79,130		)	307,618
Distributions paid on common stock	(19,819		)	(19,157		)
Elimination of RAI dividend received	534			631
Distribution paid on RSO common stock, after eliminations	(19,285		)	(18,526		)
Line items included in "Net proceeds from issuance of equity shares by consolidated VIE - RSO":
Net proceeds from dividend reinvestment and stock purchase plan (net of offering costs of $19 and $11)	22,620			17,462
Proceeds from issuance of 8.25% Series B redeemable preferred shares (net of offering costs of $1,201 and $0)	26,099			—
Subtotal- Net proceeds from issuance of equity shares of consolidated VIE - RSO	48,719			17,462
Line items included in "Other -financing activity of consolidated VIE -RSO":
Payment of debt issuance costs	—			(5,844		)
Payment of equity to third party sub-note holders	(1,320		)	—
Distributions paid on preferred stock	(520		)	—
Proceeds from CDO retained notes	14,366			7,114
Subtotal- Other financing activity of consolidated VIE - RSO:	12,526			1,270
Net cash (used in) provided by financing activities (excluding eliminations)	$	(37,704	)	$	307,193
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(27,454		)	14,219
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	112,732			28,897
CASH AND CASH EQUIVALENTS AT END OF PERIOD	85,278			43,116
SUPPLEMENTAL DISCLOSURE:
Interest expense paid in cash	$	17,160		$	7,967
Income taxes paid in cash	$	2,987		$	—

1 -Line items included in the RSO cash flow - operating activities.

Property, Plant and Equipment [Table Text Block]

RSO depreciates real property using the straight-line method over the estimated useful lives of the assets as follows:



Category	Term
Building	25 - 40 years
Site improvements	Lesser of the remaining life of building or useful life

Consolidated and Nonconsolidated VIEs

The following table shows the classification, carrying value and maximum exposure to loss with respect to RSO’s unconsolidated VIEs as of December 31, 2012 (in thousands):



	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

Net asset (liability)	$	33,071	$	(49,266	)	$	13,105	$	2,264	$	526	$	(300	)


(1)	RSO's maximum exposure to loss at December 31, 2012 does not exceed the carrying amount of its investment, subject to the LEAF Receivables Funding 3's contingent obligation as described above.

The following table shows the classification and carrying value of assets and liabilities of consolidated VIEs as of December 31, 2012 (in thousands):



	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


(1)	Includes $27.5 million available for reinvestment in certain of the CDOs.


(2)	Assets of each of the consolidated VIEs may only be used to settle the obligations of each respective VIE.

Schedule of Other Significant Noncash Transactions [Table Text Block]

Supplemental disclosure of cash flow information (in thousands):



	Three Months Ended
	December 31,
	2012			2011
Non-cash investing activities include the following:
Acquisition of real estate investments	$	(21,661	)	$	(33,073	)
Conversion of loans to investment in real estate	$	21,661		$	34,550
Net purchase of loans on warehouse line	$	—		$	(52,735	)
Acquisition of loans, pledged as collateral	$	(230,152	)	$	—

Non-cash financing activities include the following:
Distributions on common stock declared but not paid	$	21,024		$	19,979
Distribution on preferred stock declared but not paid	$	1,244		$	—
Issuance of restricted stock	$	2,189		$	1,203
Subscription receivable	$	1,248		$	—
Assumption of collateralized debt obligations	$	206,408		$	—
Acquisition of loans on warehouse line	$	—		$	52,735

Trading Securities (and Certain Trading Assets) [Table Text Block]

The following table summarizes RSO's structured notes and residential mortgage-backed securities (“RMBS”) which are classified as investment securities, trading and carried at fair value (in thousands):



	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

September 30, 2012
Structured notes	$	9,413	$	11,909	$	(1,066	)	$	20,256
RMBS	6,093		746		(1,291		)	5,548
Total	$	15,506	$	12,655	$	(2,357	)	$	25,804

Available-for-sale Securities [Table Text Block]

The following table summarizes RSO's investment securities, including those pledged as collateral and classified as available-for-sale, which are carried at fair value (in thousands):



	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

September 30, 2012
CMBS	$	176,343	$	3,262	$	(18,819	)	$	160,786
ABS	27,248		1,351		(1,664		)	26,935
Corporate Bonds	514		—		(14		)	500
Other asset-backed	—		23		—			23
Total	$	204,105	$	4,636	$	(20,497	)	$	188,244


(1)	As of December 31, 2012 and September 30, 2012, $195.2 million and $158.1 million, respectively, of securities were pledged as collateral security under related financings.

Estimated maturities of available for sale securities [Table Text Block]

The following table summarizes the estimated maturities of RSO’s CMBS, ABS and corporate bonds according to their estimated weighted average life classifications (in thousands, except percentages):



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	%

September 30, 2012
Less than one year	$	44,255	⁽¹⁾	$	45,662	4.68	%
Greater than one year and less than five years	103,989			117,739		4.83	%
Greater than five years and less than ten years	40,000			40,704		3.50	%
Greater than ten years	—			—		—	%
Total	$	188,244		$	204,105	4.51	%


(1)	RSO expects that the maturity date of these CMBS will either be extended or the CMBS will be paid in full.

Unrealized Losses Along with the Related Fair Value, Aggregated by the Length of Time the Investments were in a Continuous Unrealized Loss Position

The following table shows the fair value and gross unrealized losses, aggregated by investment category and length of time, of those individual investment securities available-for-sale that have been in a continuous unrealized loss position during the periods specified (in thousands):



	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	)

September 30, 2012
CMBS	$	30,069	$	(182	)	$	41,196	$	(18,637	)	$	71,265	$	(18,819	)
ABS	1,878		(21		)	6,943		(1,643		)	8,821		(1,664		)
Corporate Bonds	500		(14		)	—		—			500		(14		)
Total temporarily impaired securities	$	32,447	$	(217	)	$	48,139	$	(20,280	)	$	80,586	$	(20,497	)

Investments in real estate [Table Text Block]



	As of December 31, 2012				As of September 30, 2012
	Book Value			Number of Properties	Book Value			Number of Properties
Multi-family property	$	42,179		2	$	41,211		2
Office property	10,149			1	10,550			1
Hotel property	25,608			1	25,500			1
Subtotal	77,936				77,261
Less: Accumulated depreciation	(2,550		)		(1,994		)
Investments in real estate	$	75,386			$	75,267

Real Estate Acquisition, Pro Forma Information [Table Text Block]

The following unaudited pro forma information, after including the acquisition of real properties, is presented below as if the acquisitions occurred on January 1, 2011. The pro forma results for RSO are not necessarily indicative of the results which actually would have occurred if the acquisition had occurred on the first day of the period presented, nor is it indicative of RSO's future results (in thousands):



Description	Three Months Ended December 31, 2011
Total revenue, as reported	$	25,211
Pro forma revenue	$	29,156
Net income, reported	$	413
Pro forma net income	$	444

Schedule of Receivables with Imputed Interest [Table Text Block]

Loans held for investments - RSO

The following is a summary of RSO’s loans (in thousands):



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

September 30, 2012
Bank loans ⁽³⁾	$	1,138,867		$	(20,870	)	$	1,117,997
Commercial real estate loans:
Whole loans	557,416			(1,760		)	555,656
B notes	16,479			(122		)	16,357
Mezzanine loans	67,792			30			67,822
Total commercial real estate loans	641,687			(1,852		)	639,835
Subtotal loans before allowances	1,780,554			(22,722		)	1,757,832
Allowance for loan loss	(12,847		)	—			(12,847		)
Total	$	1,767,707		$	(22,722	)	$	1,744,985

(1)

Amounts include deferred amendment fees of $450,000 and $400,000 and deferred upfront fees of $334,000 and $360,000 being amortized over the life of the bank loans as of December 31, 2012 and September 30, 2012, respectively. Amounts include loan origination fees of $1.9 million and $1.6 million and loan extension fees of $214,000 and $98,000 being amortized over the life of the commercial real estate loans as of December 31, 2012 and September 30, 2012, respectively.


(2)	Substantially all loans are pledged as collateral under various borrowings at December 31, 2012 and September 30, 2012, respectively.


(3)	Amounts include $14.9 million and $11.2 million of bank loans held for sale at December 31, 2012 and September 30, 2012, respectively.


(4)	Amount includes $34.0 million from two whole loans which are classified as loans held for sale at December 31, 2012.

Summary of the weighted average life of bank loans at amortized cost [Table Text Block]

The following is a summary of the weighted average life of RSO’s bank loans, at amortized cost (in thousands):



	December 31, 2012		September 30, 2012
Less than one year	$	10,028	$	15,887
Greater than one year and less than five years	821,568		728,928
Five years or greater	361,718		373,182
	$	1,193,314	$	1,117,997

Summary of the commercial real estate loans [Table Text Block]

The following is a summary of RSO’s commercial real estate loans held for investment (in thousands):



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

September 30, 2012
Whole loans, floating rate ^{(1) (4) (5)}	36	$	555,656	LIBOR plus 2.00% to LIBOR plus 5.75%	November 2012 to February 2019
Whole loans, fixed rate	0	—		—%
B notes, fixed rate	1	16,357		8.68%	April 2016
Mezzanine loans, floating rate	2	15,842		LIBOR plus 2.50% to LIBOR plus 7.45%	December 2012 to August 2013
Mezzanine loans, fixed rate ⁽⁷⁾	3	51,980		0.50% to 18.72%	September 2014 to September 2019
Total ⁽²⁾	42	$	639,835


(1)	Whole loans had $8.9 million and $10.1 million in unfunded loan commitments as of December 31, 2012 and September 30, 2012, 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 $7.7 million as of December 31, 2012 and September 30, 2012, 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 September 30, 2012, respectively.


(5)	Floating rate whole loans include a $1.0 million and $800,000 preferred equity tranche of a whole loan that has a fixed rate of 10.0% as of December 31, 2012 and September 30, 2012, 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.

Allocation of Allowance for Loan Loss [Table Text Block]

The following is a summary of the allocation of the allowance for loan loss with respect to RSO’s commercial real estate and bank loans (in thousands, except percentages) by asset class:



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

September 30, 2012
B notes	$	207	1.61%
Mezzanine loans	858		6.67%
Whole loans	6,648		51.76%
Bank loans	5,134		39.96%
Total	$	12,847

Summarization of Activity in the Allowance for Credit Losses for the Company's Financing Receivables

The following tables show the allowance for loan losses and recorded investments in loans for the years indicated (in thousands):



	Commercial Real Estate Loans			Bank Loans			Lease Receivables		Loans Receivable-Related Party		Total
Three Months Ended December 31, 2012:
Allowance for losses at October 1, 2012	$	7,713		$	5,134		$	—	$	—	$	12,847
Provision for loan loss	384			8,633			—		—		9,017
Loans charged-off	(111		)	(3,892		)	—		—		(4,003		)
Recoveries	—			—			—		—		—
Noncontrolling interest eliminated in consolidation	—			(170		)	—		—		(170		)
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

Three Months Ended December 31, 2011:
Allowance for losses at October 1, 2011	$	25,112		$	3,502		$	—	$	—	$	28,614
Provision for loan loss	855			5,124			—		—		5,979
Loans charged-off	(1,746		)	(5,329		)	—		—		(7,075		)
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	$	—		$	—		$	—	$	—	$	—

Financing Receivable Credit Quality Indicators [Table Text Block]

Credit risk profiles of commercial real estate loans were as follows (in thousands):



	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 September 30, 2012
Whole loans	$	415,782	$	7,000	$	98,874	$	—	$	34,000	$	555,656
B notes	16,357		—		—		—		—		16,357
Mezzanine loans	23,322		—		44,500		—		—		67,822
	$	455,461	$	7,000	$	143,374	$	—	$	34,000	$	639,835

Credit risk profiles of bank loans were as follows (in thousands):



	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 September 30, 2012:
Bank loans	$	1,035,703	$	12,572	$	45,003	$	9,877	$	3,655	$	11,187	$	1,117,997

Past Due Financing Receivables [Table Text Block]

The following table shows the loan portfolio aging analysis as of the dates indicated at cost basis (in thousands):



	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	$	—

September 30, 2012
Whole loans	$	—	$	—	$	—	$	—	$	555,656	$	555,656	$	—
B notes	—		—		—		—		16,357		16,357		—
Mezzanine loans	—		—		—		—		67,822		67,822		—
Bank loans	—		—		3,655		3,655		1,114,342		1,117,997		—
Loans receivable- related party	—		—		—		—		9,116		9,116		—
Total loans	$	—	$	—	$	3,655	$	3,655	$	1,763,293	$	1,766,948	$	—

Impaired Financing Receivables [Table Text Block]

Impaired Loans

The following tables show impaired loans indicated (in thousands):



	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	$	906
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		367
Bank loans	—		—		—			—		—
Loans receivable - related party	6,754		6,754		—			—		203
Loans with a specific valuation allowance:
Whole loans	$	23,142	$	23,142	$	(2,142	)	$	22,576	$	191
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	$	1,097
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		—			—		203
	$	189,249	$	189,249	$	(5,378	)	$	175,330	$	1,667



	Recorded Balance		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
September 30, 2012:
Loans without a specific valuation allowance:
Whole loans	$	145,927	$	145,927	$	—		$	145,540	$	2,530
B notes	—		—		—			—		—
Mezzanine loans	—		—		—			—		—
Bank loans	—		—		—			—		—
Loans receivable - related party	7,439		7,439		—			—		648
Loans with a specific valuation allowance:
Whole loans	$	22,869	$	22,869	$	(1,869	)	$	22,394	$	610
B notes	—		—		—			—		—
Mezzanine loans	—		—		—			—		—
Bank loans	3,655		3,655		(2,131		)	—		—
Loans receivable - related party	—		—		—			—		—

Total:
Whole loans	$	168,796	$	168,796	$	(1,869	)	$	167,934	$	3,140
B notes	—		—		—			—		—
Mezzanine loans	—		—		—			—		—
Bank loans	3,655		3,655		(2,131		)	—		—
Loans receivable - related party	7,439		7,439		—			—		648
	$	179,890	$	179,890	$	(4,000	)	$	167,934	$	3,788

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

The following tables show troubled-debt restructurings in RSO's loan portfolio (in thousands):



	Number of Loans	Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Three Months Ended December 31, 2012:
Whole loans ⁽¹⁾	1	$	7,000	$	7,000
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Loans receivable - related party ⁽²⁾	—	—		—
Total loans	1	$	7,000	$	7,000

Three Months Ended December 31, 2011:
Whole loans	—	$	—	$	—
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Loans receivable	—	—		—
Loans receivable - related party	—	—		—
Total loans	—	$	—	$	—


(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 reflects a loan outstanding to LEAF Fund II, which is a commercial finance partnership that was sponsored and is managed/serviced by the Company. RSO has received paydowns on this loan for the year ended December 31, 2012 and currently has an outstanding balance of $6.8 million as of December 31, 2012.

Schedule of Intangible Assets and Goodwill [Table Text Block]

The following table summarizes intangible assets at December 31, 2012 and September 30, 2012 (in thousands).



	Beginning Balance		Accumulated Amortization			Net Asset
December, 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

September 30, 2012
Investment in RCAM	$	21,213	$	(4,213	)	$	17,000
Investments in real estate:
In-place leases	2,461		(2,363		)	98
Above (below) market leases	29		(23		)	6
	2,490		(2,386		)	104
Total intangible assets	$	23,703	$	(6,599	)	$	17,104

Credit Facilities and Other Debt of the Company and Related Borrowings Outstanding

RSO historically has financed the acquisition of its investments, including investment securities, loans and lease receivables, through the use of secured and unsecured borrowings in the form of CDOs, securitized notes, repurchase agreements, secured term facilities, warehouse facilities and trust preferred securities issuances. Certain information with respect to RSO’s borrowings at December 31, 2012 and September 30, 2012 is summarized in the following table (in thousands, except percentages):



	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 ⁽¹⁰⁾	171,555		1.82%	4.2 years	191,704
Whitney 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⁽¹²⁾	$	1,785,600	1.62%	12.5 years	$	2,089,296

September 30, 2012
RREF CDO 2006-1 Senior Notes ⁽¹⁾	$	145,594	1.42%	33.9 years	$	244,185
RREF CDO 2007-1 Senior Notes ⁽²⁾	263,977		0.83%	34.0 years	377,736
Apidos CDO I Senior Notes ⁽³⁾	231,313		1.14%	4.8 years	245,835
Apidos CDO III Senior Notes ⁽⁴⁾	244,082		0.87%	7.7 years	254,537
Apidos Cinco CDO Senior Notes ⁽⁵⁾	320,402		0.94%	7.6 years	342,406
Apidos CLO VIII Senior Notes ⁽⁶⁾	299,746		2.28%	9.1 years	349,857
Apidos CLO VIII Securitized Borrowings ⁽¹¹⁾	24,725		—%	9.1 years	—
Unsecured Junior Subordinated Debentures ⁽⁷⁾	50,767		4.40%	23.9 years	—
Repurchase Agreements ⁽⁸⁾	75,804		2.02%	18 days	97,115
Mortgage Payable ⁽⁹⁾	13,600		4.17%	5.8 years	18,100
Total	$	1,670,010	1.43%	14.0 years	$	1,929,771


(1)	Amount represents principal outstanding of $146.4 million and $146.4 million less unamortized issuance costs of $728,000 and $835,000 as of December 31, 2012 and September 30, 2012, respectively. This CDO transaction closed in August 2006.


(2)	Amount represents principal outstanding of $227.4 million and $265.8 million less unamortized issuance costs of $1.4 million and $1.8 million as of December 31, 2012 and September 30, 2012, respectively. This CDO transaction closed in June 2007.


(3)	Amount represents principal outstanding of $203.2 million and $231.8 million less unamortized issuance costs of $274,000 and $439,000 as of December 31, 2012 and September 30, 2012, respectively. This CDO transaction closed in August 2005.


(4)	Amount represents principal outstanding of $222.0 million and $244.9 million less unamortized issuance costs of $659,000 and $834,000 as of December 31, 2012 and September 30, 2012, 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 $1.6 million as of December 31, 2012 and September 30, 2012, 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 $5.1 million, and less unamortized discounts of $11.9 million and $12.8 million as of December 31, 2012 and September 30, 2012, 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 $47.4 million less unamortized deferred debt costs of $23,000 and $91,000 and accrued interest costs of $37,000 and $31,000 related to CMBS repurchase facilities as of December 31, 2012 and September 30, 2012, respectively, and principal outstanding of $59.1 million and $28.9 million less unamortized deferred debt costs of $348,000 and $479,000 accrued interest costs of $79,000 and $57,000 related to CRE repurchase facilities as of December 31, 2012 and September 30, 2012, respectively.


(9)	Amount represents principal outstanding of $13.6 million and $13.6 million less unamortized real estate financing costs of $0 and $0 as of December 31, 2012 and September 30, 2012, 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 RSO purchased a $20.9 million equity interest in Whitney CLO I which represents 67% of the outstanding preference shares. The transaction gave RSO 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.

Company's Asset Recorded at Fair Value on Recurring Basis

The following table presents information about RSO’s assets (including derivatives that are presented net) measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by RSO to determine such fair value as follows (in thousands):



	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

September 30, 2012
Assets:
Investment securities, trading	$	—	$	—	$	25,804	$	25,804
Investment securities available-for-sale	—		178,631		25,750		204,381
CMBS - Linked Transactions	—		—		—		—
Total assets at fair value	$	—	$	178,631	$	51,554	$	230,185

Liabilities:
Derivatives (net)	$	—	$	669	$	15,526	$	16,195
Total liabilities at fair value	$	—	$	669	$	15,526	$	16,195

Additional Information about Assets Measured at Fair Value on Recurring Basis for which the Company Has Utilized Level 3 Inputs to Determine Fair Value

The following table presents additional information about assets which are measured at fair value on a recurring basis for which RSO has utilized Level 3 inputs (in thousands):



	Level 3
Beginning balance, October 1, 2012	$	51,554
Total gains or losses (realized/unrealized)- included in earnings	(608		)
Sales	(2,451		)
Paydowns	(806		)
Unrealized gains -included in accumulated other comprehensive income	2,078
Transfers from level 2	66,381
Ending balance, December 31, 2012	$	116,148


	Level 3
Beginning balance, January 1, 2012	$	58,508
Total gains or losses (realized/unrealized):
Included in earnings	14,713
Purchases	8,341
Sales	(35,181		)
Paydowns	(1,206		)
Unrealized losses – included in accumulated other comprehensive income	6,379
Ending Balance, September 30, 2012	$	51,554

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table presents additional information about liabilities which are measured at fair value on a recurring basis for which RSO has utilized Level 3 inputs (in thousands):



	Level 3
Beginning balance, January 1, 2012	$	12,000
Unrealized losses – included in accumulated other comprehensive income	3,526
Balance, September 30, 2012	15,526
Unrealized losses – included in accumulated other comprehensive income	(1,449		)
Ending balance, December 31, 2012	$	14,077

Fair Value Measurements, Nonrecurring [Table Text Block]

The following table summarizes the financial assets and liabilities measured at fair value on a nonrecurring basis and indicates the fair value hierarchy of the valuation techniques utilized by RSO to determine such fair value as follows (in thousands):



	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

September 30, 2012:
Assets:
Loans held for sale	$	—	$	11,187	$	34,000	$	45,187
Impaired loans	—		1,434		21,000		22,434
Total assets at fair value	$	—	$	12,621	$	55,000	$	67,621

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of December 31, 2012, the significant unobservable inputs used in the fair value measurements were as follows (in thousands):



	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 of Financial Instruments

The fair values of RSO's remaining financial instruments that are not reported at fair value on the RSO consolidated balance sheet are reported below (in thousands):



			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

September 30, 2012:
Loans held-for-investment	$	1,699,798	$	1,746,421	$	—	$	1,113,128	$	633,293
Loans receivable-related party	9,116		9,116		—		—		9,116
CDO notes	1,505,114		1,235,358		—		1,235,358		—
Junior subordinated notes	50,767		17,261		—		—		17,261

Resource Capital Corp [Member] | CMBS - Term Repurchase Facilities [Member]

Variable Interest Entity [Line Items]

Schedule of Amount at Risk under Credit Facility [Table Text Block]

The following table shows information about the amount at risk under the 2011 Facility (dollars in thousands):



	Amount at Risk ⁽¹⁾		Weighted Average Maturity in Days	Weighted Average Interest Rate
December 31, 2012:
Wells Fargo Bank, National Association.	$	10,722	18	1.53%

September 30, 2012
Wells Fargo Bank, National Association.	$	11,833	18	1.56%


(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.

Resource Capital Corp [Member] | CRE - Term Repurchase Facility [Member]

Variable Interest Entity [Line Items]

Schedule of Amount at Risk under Credit Facility [Table Text Block]

Under the terms of the 2012 Facility and pursuant to a guarantee agreement dated February 27, 2012 (the “2012 Guaranty”), the registrant agreed to unconditionally and irrevocably guarantee to Wells Fargo the prompt and complete payment and performance of (a) all payment obligations owing by the RSO Companies to Wells Fargo under or in connection with the Facility and any other governing agreements and any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; (b) all expenses, including, without limitation, reasonable attorneys' fees and disbursements, that are incurred by Wells Fargo in the enforcement of any of the foregoing or any obligation of the registrant; and (c) any other obligations of the RSO Companies with respect to Wells Fargo under each of the governing documents. The 2012 Guaranty includes covenants that, among other things, limit the registrant's leverage and debt service ratios and require maintenance of certain levels of cash and net worth. RCC Real Estate was in compliance with all debt covenants as of December 31, 2012.



	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.

Resource Capital Corp [Member] | Deutsche Bank Securities, Inc [Member] | Repurchase Agreements Debt [Member]

Variable Interest Entity [Line Items]

Schedule of Amount at Risk under Credit Facility [Table Text Block]

The following table shows information about the amount at risk under this facility (dollars in thousands);



	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.

Resource Capital Corp [Member] | Wells Fargo Securities, LLC [Member] | Repurchase Agreements Debt [Member]

Variable Interest Entity [Line Items]

Schedule of Amount at Risk under Credit Facility [Table Text Block]

The following table shows information about the amount at risk under this facility (dollars in thousands);



	Amount at Risk ⁽¹⁾		Weighted Average Maturity in Days	Weighted Average Interest Rate
December 31, 2012:
Wells Fargo Securities, LLC	$	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.

Resource Capital Corp [Member] | JP Morgan Securities, LLC [Member] | Repurchase Agreements Debt [Member]

Variable Interest Entity [Line Items]

Schedule of Amount at Risk under Credit Facility [Table Text Block]

The following table shows information about the amount at risk under this facility (dollars in thousands);



	Amount at Risk ⁽¹⁾		Weighted Average Maturity in Days	Weighted Average Interest Rate
December 31, 2012:
JP Morgan Securities	$	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.