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VARIABLE INTEREST ENTITIES (Tables)

6 Months Ended

Jun. 30, 2013

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 non-consolidated VIEs and the Company's maximum exposure to loss associated with these VIEs in which it holds variable interests at June 30, 2013 (in thousands):



	Receivables from Managed Entities and Related Parties, Net ⁽¹⁾		Investments		Maximum Exposure to Loss in Non-consolidated VIEs
RRE Opportunity REIT	$	434	$	2,549	$	2,983
Trapeza entities	—		868		868
Ischus entities	185		—		185
	$	619	$	3,417	$	4,036


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

Gross unrealized loss and fair value of securities

Unrealized losses, along with the related fair values 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
(Restated)	Fair Value		Unrealized Loss			Number of Securities	Fair Value		Unrealized Loss		Number of Securities
June 30, 2013:
CLO securities	$	2,202	$	(187	)	2	$	—	$	—	—
Equity securities	97		(3		)	1	—		—		—
Total	$	2,299	$	(190	)	3	$	—	$	—	—

Allowance for loan losses and recorded investments

The following table is the aging of the Company’s past due financing receivables (presented gross of allowance for credit losses) as of June 30, 2013 (in thousands):



(Restated)	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	$	—	$	—	$	41,685	$	41,685	$	76	$	41,761
Real estate investment entities	833		868		16,622		18,323		2,536		20,859
Financial fund management entities	12		—		10		22		2,110		2,132
Other	—		—		—		—		138		138
	845		868		58,317		60,030		4,860		64,890
Rent receivables - real estate	7		5		24		36		7		43
Total financing receivables	$	852	$	873	$	58,341	$	60,066	$	4,867	$	64,933


(1)	Receivables are presented gross of an allowance for credit losses of $33.9 million and $656,000 related to the Company’s commercial finance and financial fund management investment entities. The remaining receivables from managed entities and related parties have no related allowance for credit losses.

Loan portfolios aging analysis

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):



(Restated)	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 had no related allowance for credit losses.

Impaired loans

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



(Restated)	Net Balance		Unpaid Balance		Specific Allowance		Average Investment in Impaired Assets
As of June 30, 2013
Financing receivables with a specific valuation allowance:
Receivables from managed entities – commercial finance	$	4,656	$	38,587	$	33,931	$	38,236
Receivable from managed entities - financial fund management	649		1,305		656		1,305
Rent receivables – real estate	—		29		29		40

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
Receivable from managed entities - financial fund management	848		1,305		457		1,305
Rent receivables – real estate	—		68		68		40

Schedule of Debt

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



	As of June 30, 2013				December 31, 2012
(Restated)	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	3,500		—		—
			—		—
Other Debt:
Senior Notes			10,000		10,000
Mortgage debt			10,380		10,473
Other debt			112		567
Total borrowings			$	20,492	$	21,040


(1)	The amount of the facility as shown has been reduced for the outstanding letter of credit of $503,000 at June 30, 2013 and December 31, 2012.

Fair value assets and liabilities measured on recurring basis

As of June 30, 2013, the fair values of the Company’s assets recorded at fair value on a recurring basis were as follows (in thousands):



(Restated)	Level 1		Level 2		Level 3		Total
Assets:
Investment securities	$	381	$	—	$	12,106	$	12,487

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):



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

Fair value assets unobservable input reconciliation

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 six months ended June 30, 2013 (in thousands) (restated):



	Investment Securities
Balance, beginning of year	$	10,367
Purchases	7,597
Income accreted	442
Payments and distributions received	(3,850		)
Impairment recognized in earnings	(214		)
Sales	(4,033		)
Gain on sales of trading securities	1,716
Unrealized holding gain on trading securities	484
Change in unrealized losses included in accumulated other comprehensive loss	(403		)
Balance, end of period	$	12,106



	Investment Securities

Balance, beginning of year	$	2,981
Purchases	11,578
Income accreted	853
Payments and distributions received	(3,201		)
Sales	(4,159		)
Impairment recognized in earnings	(74		)
Gains on sales of trading securities	1,216
Unrealized holding gain on trading securities	1,272
Change in unrealized losses included in accumulated other comprehensive loss	(99		)
Balance, end of period	$	10,367

Fair value assets and liabilities measured on nonrecurring basis

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



(Restated)	Level 1		Level 2		Level 3		Total
Six Months Ended June 30, 2013:
Asset:
Receivables from managed entities – commercial finance, real estate and financial fund management	$	—	$	—	$	8,269	$	8,269
Liability:
Apidos contractual commitment	$	—	$	—	$	1,062	$	1,062

Year Ended December 31, 2012:
Assets:
Receivables from managed entities – commercial finance and real estate	$	—	$	—	$	14,506	$	14,506
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
Total	$	—	$	727	$	50,804	$	51,531
Liability:
Apidos contractual commitment	$	—	$	—	$	589	$	589

Fair value financial instruments not reported at fair value

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):



	June 30, 2013				December 31, 2012
(Restated)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Receivables from managed entities	$	30,303	$	30,303	30,618		30,618
	$	30,303	$	30,303	$	30,618	$	30,618
Borrowings:
Real estate debt	$	10,380	$	11,075	$	10,473	$	11,398
Senior Notes	10,000		11,875		10,000		11,728
Other debt	112		112		567		567
	$	20,492	$	23,062	$	21,040	$	23,693

Resource Capital Corp [Member]

Debt Instrument [Line Items]

Condensed Financial Statements

The following reflects the detail of the assets and liabilities and operations of RSO, which the Company consolidated and included in its consolidated balance sheets and statements of operations.

RSO Balance Sheet detail (in thousands):



	June 30, 2013			December 31, 2012
	(Unaudited)
ASSETS ⁽¹⁾
Cash and cash equivalents	$	168,402		$	85,278
Restricted cash	100,961			94,112
Subtotal - Cash and cash equivalents	269,363			179,390

Investment securities, trading	12,266			24,843
Investment securities available-for-sale, pledged as collateral, at fair value	194,649			195,200
Investment securities available-for-sale, at fair value	40,359			36,390
Subtotal - Investments, at fair value	247,274			256,433

Loans held for sale	20,127			48,894
Loans, pledged as collateral and net of allowances of $14.1 million and $17.7 million	1,658,611			1,793,780
Loans receivable–related party	7,962			8,324
Subtotal - Loans before eliminations	1,686,700			1,850,998
Eliminations	(1,570		)	(1,570		)
Subtotal - Loans	1,685,130			1,849,428

Investment in real estate	55,361			75,386
Property available-for-sale	19,620			—
Investments in unconsolidated entities	63,405			45,413
Subtotal - Investments in real estate and unconsolidated entities before eliminations	138,386			120,799
Eliminations	(121		)	(93		)
Subtotal - Investments in real estate and unconsolidated entities	138,265			120,706

Linked transactions, net at fair value	25,281			6,835
Interest receivable	8,090			7,763
Deferred tax asset	3,120			2,766
Principal paydown receivable	3,133			25,570
Intangible assets	12,196			13,192
Prepaid expenses	6,118			10,396
Other assets	2,819			4,109
Subtotal - Other assets before eliminations	60,757			$	70,631
Eliminations	(32		)	(31		)
Subtotal - Other assets	60,725			$	70,600

Total assets - before eliminations	$	2,402,480		$	2,478,251
Total assets - after eliminations	$	2,400,757		$	2,476,557
LIABILITIES ⁽²⁾
Borrowings	$	1,558,910		$	1,785,600

Distribution payable	26,694			21,655
Accrued interest expense	3,276			2,918
Derivatives, at fair value	12,705			14,687
Accrued tax liability	3,817			13,641
Deferred tax liability	8,376			8,376
Accounts payable and other liabilities	11,258			18,029
Subtotal - other liabilities before eliminations	66,126			79,306
Eliminations	(1,937		)	(8,067		)
Subtotal - Other liabilities	64,189			71,239
Total liabilities - before eliminations	$	1,625,036		$	1,864,906
Total liabilities - after eliminations	$	1,623,099		$	1,856,839

The following table presents the details of noncontrolling interests attributable to RSO (in thousands):



	June 30, 2013			December 31, 2012
	(Unaudited)
Total stockholders' equity per RSO balance sheet	$	777,444		$	613,345
Eliminations	(33,957		)	(31,022		)
Noncontrolling interests attributable to RSO	$	743,487		$	582,323

RSO Balance Sheet detail (in thousands):



	June 30, 2013		December 31, 2012
	(Unaudited)
(1) Assets of consolidated VIEs of RSO included in the total assets above:
Restricted cash	$	94,285	$	90,108
Investments securities available-for-sale, pledged as collateral, at fair value	136,249		135,566
Loans held for sale	20,127		14,894
Loans, pledged as collateral and net of allowances of $9.5 million and $15.2 million	1,410,187		1,678,719
Interest receivable	5,654		5,986
Prepaid expenses	220		328
Principal receivable	31		25,570
Other assets	35		333
Total assets of consolidated RSO VIEs	$	1,666,788	$	1,951,504

(2) Liabilities of consolidated VIEs of RSO included in the total liabilities above:
Borrowings	$	1,345,454	$	1,614,882
Accrued interest expense	2,429		2,666
Derivatives, at fair value	12,237		14,078
Accounts payable and other liabilities	683		698
Total liabilities of consolidated RSO VIEs	$	1,360,803	$	1,632,324

RSO Income Statement Detail

(in thousands)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
REVENUES
Interest income:
Loans	$	26,184		$	23,012		$	53,996		$	46,627
Securities	3,896			3,551			7,538			6,956
Interest income − other	635			3,157			2,501			5,986
Total interest income	30,715			29,720			64,035			59,569
Interest expense	11,134			8,869			22,299			17,252
Net interest income	19,581			20,851			41,736			42,317
Rental income	5,052			2,034			11,226			3,953
Dividend income	17			17			33			34
Equity in losses of unconsolidated subsidiaries	72			(1,761		)	(353		)	(690		)
Fee income	1,527			2,141			2,937			3,751
Net realized and unrealized gain on sales of investment securities available-for-sale and loans	2,394			1,422			2,785			1,802
Net realized and unrealized (loss) gain on investment securities, trading	(1,751		)	1,424			(635		)	3,568
Unrealized gain (loss) and net interest income on linked transactions, net	(5,245		)	134			(5,504		)	253
Revenues from consolidated VIE - RSO	21,647			26,262			52,225			54,988
OPERATING EXPENSES
Management fees − related party	2,915			4,548			5,893			7,991
Equity compensation − related party	2,155			1,140			5,746			2,008
Professional services	903			617			2,349			1,717
Insurance	212			159			374			317
Rental operating expense	3,624			1,309			7,561			2,629
General and administrative	1,267			1,470			3,140			2,533
Depreciation and amortization	999			1,364			2,137			2,725
Income tax expense	1,737			384			3,499			2,999
Net impairment losses recognized in earnings	535			32			556			171
Provision for loan losses	(1,242		)	4,253			(200		)	6,431
Total operating expenses	13,105			15,276			31,055			29,521
Reclassification of income tax provision	(1,737		)	(384		)	(3,499		)	(2,999		)
Expenses from consolidated VIE - RSO	11,368			14,892			27,556			26,522
Adjusted operating income	10,279			11,370			24,669			28,466
OTHER REVENUE (EXPENSE)
Gain on the extinguishment of debt	—			5,464			—			5,464
Gain on sale of real estate	—			—			—			—
Other income from consolidated VIE - RSO	—			5,464			—			5,464
Income from continuing operations	10,279			16,834			24,669			33,930
Income tax provision - RSO	1,737			384			3,499			2,999
NET INCOME	8,542			16,450			21,170			30,931
Net income allocated to preferred shares	(1,800		)	(25		)	(3,111		)	(25		)
NET INCOME ALLOCABLE TO RSO COMMON SHARES	$	6,742		$	16,425		$	18,059		$	30,906

RSO Summarized Cash Flow Detail

(in thousands)



	Six Months Ended
	June 30
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:	(Unaudited)			(Unaudited)
Net income ⁽¹⁾	$	21,170		$	30,931
Line items included in "Change in cash attributable to consolidated VIE - RSO":
Provision for loan losses	(200		)	6,431
Depreciation of investments in real estate and other	1,202			789
Amortization of intangible assets	996			1,936
Amortization of term facilities	495			455
Accretion of net discounts on loans held for investment	(6,930		)	(8,013		)
Accretion of net discounts on securities available-for-sale	(1,430		)	(1,559		)
Amortization of discount on notes of CDOs	1,772			689
Amortization of debt issuance costs on notes of CDOs	1,965			2,356
Amortization of stock-based compensation	5,746			2,008
Amortization of terminated derivative instruments	193			113
Distribution accrued to preferred stockholders	(3,111		)	—
Accretion of interest-only available-for-sales securities	(485		)	—
Deferred income tax provision (benefit)	(115		)	(1,718		)
Purchase of securities, trading	(10,044		)	(8,348		)
Principal payments on securities, trading	3,272			898
Proceeds from sales of securities, trading	18,713			5,531
Net realized and unrealized loss (gain) on investment securities, trading	635			(3,568		)
Net realized gain on sales of investment securities available-for-sale and loans	(2,785		)	(1,802		)
Gain on early extinguishment of debt	—			(1,835		)
Net impairment losses recognized in earnings	548			171
Linked transactions fair value adjustments	6,385			—
Equity in losses of unconsolidated subsidiaries	353			690
Changes in operating assets and liabilities	6,635			(13,839		)
Subtotal - net cash provided by operating activities ⁽¹⁾	23,810			(18,615		)
Change in consolidated VIE - RSO cash for the period	(83,124		)	11,219
Subtotal -Change in cash attributable to operations of consolidated VIE - RSO before eliminations	(59,314		)	(7,396		)
Elimination of intercompany activity	(654		)	460
Subtotal - Change in cash attributable to operations of consolidated VIE - RSO	(59,968		)	(6,936		)

Non-cash incentive compensation to RAI ⁽¹⁾	—			613
Elimination of intercompany activity	—			(613		)
Non-cash incentive compensation to RAI - after eliminations	—			—

Net cash provided by operating activities (excluding eliminations)	44,980			12,929



	Six Months Ended
	June 30,
	2013			2012
CASH FLOWS FROM INVESTING ACTIVITIES:	(Unaudited)			(Unaudited)
Purchase of loans	(377,679		)	(340,523		)
Purchase of securities available-for-sale	(96,031		)	(39,184		)
Subtotal - purchase of loans and investment securities by consolidated VIE - RSO	(473,710		)	(379,707		)
Proceeds from sale of loans	170,450			93,236
Principal payments received on loans	386,686			240,407
Principal payments on securities available-for-sale	20,040			17,954
Proceeds from sale of securities available-for-sale	7,025			6,719
Principal payments received on loans – related parties	362			137
Subtotal - principal payments and proceeds from sale of loans and securities by consolidated VIE - RSO	584,563			358,453

Decrease in restricted cash	(5,926		)	64,085
Lines included in "Other - consolidated VIE - RSO":
Investment in unconsolidated entity	(15,534		)	1,470
Minority interest equity	1,759			—
Improvement of real estate held-for-sale	(404		)	(138		)
Proceeds from sale of real estate held-for-sale	—			2,886
Distributions from investments in real estate	522			851
Improvements in investments in real estate	(365		)	(504		)
Purchase of intangible asset	—			(1,517		)
Subtotal - other investing activities of consolidated VIE, before eliminations	(14,022		)	3,048
Eliminations	—			39
Subtotal - other investing activities of consolidated VIE	(14,022		)	3,087
Net cash provided by investing activities (excluding eliminations)	90,905			45,879

CASH FLOWS FROM FINANCING ACTIVITIES:
Items included in "Net borrowings (repayments) of debt by consolidated VIE - RSO":
Proceeds from borrowings:
Repurchase agreements	104,325			44,295
Payments on borrowings:
Collateralized debt obligations	(286,962		)	(108,881		)
Retirement of debt	—			(4,850		)
Net repayments of debt by consolidated VIE - RSO:	(182,637		)	(69,436		)
Distributions paid on common stock	(43,665		)	(36,900		)
Elimination of RAI dividend received	1,123			1,015
Distribution paid on RSO common stock, after eliminations	(42,542		)	(35,885		)
Items included in "Net proceeds from issuance of stock by consolidated VIE - RSO":
Net proceeds from issuances of common stock (net of offering costs of $4,265 and $0)	114,018			—
Net proceeds from dividend reinvestment and stock purchase plan (net of offering costs of $0 and $19)	18,164			32,282
Proceeds from issuance of 8.5% Series A redeemable preferred shares (net of offering costs of $486 and $0)	—			5,832
Proceeds from issuance of 8.25% Series B redeemable preferred shares (net of offering costs of $707 and $0)	47,644			—
Subtotal - Net proceeds from issuance of stock by consolidated VIE - RSO	179,826			38,114
Items included in "Other - consolidated VIE - RSO" in financing section:
Payment of debt issuance costs	(1,178		)	(586		)
Payment of equity to third party sub-note holders	(2,661		)	(1,219		)
Distributions paid on preferred stock	(2,446		)	—
Subtotal - Other consolidated VIE - RSO financing activity	(6,285		)	(1,805		)
Net cash used in financing activities (excluding eliminations)	$	(52,761	)	$	(70,027	)
NET INCREASE IN CASH AND CASH EQUIVALENTS	83,124			(11,219		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	85,278			43,116
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	168,402		$	31,897
SUPPLEMENTAL DISCLOSURE:
Interest expense paid in cash	$	20,214		$	8,253

Real property useful lives

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 lives

Schedule of Variable Interest Entities

The following table shows the classification, carrying value and maximum exposure to loss with respect to RSO’s unconsolidated VIEs as of June 30, 2013 (in thousands):



	Unconsolidated Variable Interest Entities
	LEAF Commercial Capital, Inc.		Unsecured Junior Subordinated Debentures			Resource Capital Asset Management CLOs		RRE VIP Borrower, LLC		Värde Investment Partners, LP		Life Care Funding		CVC Global Opps Fund		Total		Maximum Exposure to Loss ⁽¹⁾
Investment in unconsolidated entities	$	40,045	$	1,548		$	—	$	1,373	$	569	$	1,758	$	10,093	$	55,386	$	55,386
Intangible assets	—		—			12,140		—		—		—		—		12,140		$	12,140
Total assets	40,045		1,548			12,140		1,373		569		1,758		10,093		67,526

Borrowings	—		50,908			—		—		—		—		—		50,908		N/A
Total liabilities	—		50,908			—		—		—		—		—		50,908		N/A
Net asset (liability)	$	40,045	$	(49,360	)	$	12,140	$	1,373	$	569	$	1,758	$	10,093	$	16,618	N/A


(1)	RSO's maximum exposure to loss at June 30, 2013 does not exceed the carrying amount of its investment.

The following table shows the classification and carrying value of assets and liabilities of consolidated RSO VIEs as of June 30, 2013 (in thousands):



	Apidos I			Apidos III		Apidos Cinco		Apidos VIII		Whitney CLO I		RREF 2006		RREF 2007		Total
ASSETS
Restricted cash (1)	$	24,053		$	4,849	$	24,828	$	9,908	$	14,342	$	15,595	$	710	$	94,285
Investment securities available-for-sale, pledged as collateral, at fair value	8,006			6,410		12,359		1,940		29,794		11,388		66,352		136,249
Loans, pledged as collateral	110,092			159,424		309,278		321,792		77,108		173,959		258,534		1,410,187
Loans held for sale	850			234		299		17,955		789		—		—		20,127
Interest receivable	(90		)	642		1,074		788		318		1,239		1,683		5,654
Prepaid assets	24			21		22		29		45		16		63		220
Principal receivable	—			8		23		—		—		—		—		31
Other assets	—			—		35		—		—		—		—		35
Total assets (2)	$	142,935		$	171,588	$	347,918	$	352,412	$	122,396	$	202,197	$	327,342	$	1,666,788

LIABILITIES
Borrowings	126,093			159,068		323,152		330,123		108,027		116,111		182,880		$	1,345,454
Accrued interest expense	292			68		328		1,374		218		46		103		2,429
Derivatives, at fair value	—			—		—		—		—		1,455		10,782		12,237
Accounts payable and other liabilities	146			27		34		387		69		18		2		683
Total liabilities	$	126,531		$	159,163	$	323,514	$	331,884	$	108,314	$	117,630	$	193,767	$	1,360,803

(1) Includes $29.3 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

Supplemental disclosure of cash flow information (in thousands):



	Six Months Ended
	June 30,
	2013		2012
Non-cash financing activities include the following:
Distributions on common stock declared but not paid	$	25,399	$	17,254
Distribution on preferred stock declared but not paid	$	1,944	$	25
Income taxes paid in cash	$	9,113	$	8,253
Issuance of restricted stock	$	151	$	482

Investment trading securities at fair value

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
June 30, 2013:
Structured notes	$	8,471	$	4,146	$	(1,000	)	$	11,617
RMBS	1,956		—		(1,307		)	649
Total	$	10,427	$	4,146	$	(2,307	)	$	12,266

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

Available-for-sale securities, fair value

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
June 30, 2013:
CMBS	$	184,627	$	7,467	$	(15,595	)	$	176,499
ABS	23,687		1,898		(609		)	24,976
Corporate bonds	34,096		117		(680		)	33,533
Total	$	242,410	$	9,482	$	(16,884	)	$	235,008

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


(1)	As of June 30, 2013 and December 31, 2012, $194.6 million and $195.2 million, respectively, of securities were pledged as collateral security under related financings.

Estimated maturities of available-for-sale securities

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
June 30, 2013:
Less than one year	$	45,517	⁽¹⁾	$	50,111	4.84%
Greater than one year and less than five years	146,889			149,325		4.77%
Greater than five years and less than ten years	38,234			38,031		2.49%
Greater than ten years	4,368			4,943		4.03%
Total	$	235,008		$	242,410	4.40%

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%

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

Gross unrealized loss and fair value of securities

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
June 30, 2013:
CMBS	$	67,441	$	(9,410	)	$	11,400	$	(6,185	)	$	78,841	$	(15,595	)
ABS	259		(3		)	6,474		(606		)	6,733		(609		)
Corporate bonds	25,283		(680		)	—		—			25,283		(680		)
Total temporarily impaired securities	$	92,983	$	(10,093	)	$	17,874	$	(6,791	)	$	110,857	$	(16,884	)

December 31, 2012:
CMBS	$	25,803	$	(442	)	$	38,734	$	(16,197	)	$	64,537	$	(16,639	)
ABS	—		—			5,961		(1,115		)	5,961		(1,115		)
Corporate bonds	19,445		(190		)	—		—			19,445		(190		)
Total temporarily impaired securities	$	45,248	$	(632	)	$	44,695	$	(17,312	)	$	89,943	$	(17,944	)

Investments in real estate

The table below summarizes RSO’s investments in real estate (in thousands):



	As of June 30, 2013				As of December 31, 2012
	Book Value			Number of Properties	Book Value			Number of Properties
Multi-family property	$	22,033		1	$	42,179		2
Office property	10,149			1	10,149			1
Hotel property	25,668			1	25,608			1
Subtotal	57,850				77,936
Less: Accumulated depreciation	(2,489		)		(2,550		)
Investments in real estate	$	55,361			$	75,386

Aggregate estimated fair value of assets and liabilities acquired

The following table is a summary of the aggregate estimated fair value of the assets and liabilities acquired on the respective date of acquisition during the year ended December 31, 2012 (in thousands). There were no such acquisitions during the six months ended June 30, 2013.



Description	December 31, 2012
Assets acquired:
Investments in real estate	$	25,500
Other assets	(89		)
Total assets acquired	25,411
Liabilities assumed:
Accounts payable and other liabilities	3,750
Total liabilities assumed	3,750
Estimated fair value of net assets acquired	$	21,661

Summary of loans held for Investments

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



Loan Description	Principal			Unamortized (Discount) Premium (1)			Carrying Value (2)
June 30, 2013:
Bank loans (3)	$	1,015,953		$	(15,066	)	$	1,000,887
Commercial real estate loans:
Whole loans	611,271			(2,564		)	608,707
B notes	16,364			(99		)	16,265
Mezzanine loans	67,095			(85		)	67,010
Total commercial real estate loans	694,730			(2,748		)	691,982
Subtotal loans before allowances	1,710,683			(17,814		)	1,692,869
Allowance for loan loss	(14,131		)	—			(14,131		)
Total	$	1,696,552		$	(17,814	)	$	1,678,738

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

(1)

Amounts include deferred amendment fees of $325,000 and $450,000 and deferred upfront fees of $285,000 and $334,000 being amortized over the life of the bank loans as of June 30, 2013 and December 31, 2012, respectively. Amounts include loan origination fees of $2.5 million and $1.9 million and loan extension fees of $0 and $214,000 being amortized over the life of the commercial real estate loans as of June 30, 2013 and December 31, 2012, respectively.


(2)	Substantially all loans are pledged as collateral under various borrowings at June 30, 2013 and December 31, 2012, respectively.


(3)	Amounts include $20.1 million and $14.9 million of bank loans held for sale at June 30, 2013 and December 31, 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

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



	June 30, 2013		December 31, 2012
Less than one year	$	17,611	$	10,028
Greater than one year and less than five years	596,981		821,568
Five years or greater	386,295		361,718
	$	1,000,887	$	1,193,314

Summary of the commercial real estate loans

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



Description	Quantity	Amortized Cost		Contracted Interest Rates	Maturity Dates (3)
June 30, 2013:
Whole loans, floating rate ⁽¹⁾	44	$	608,707	LIBOR plus 2.50% to LIBOR plus 8.0%	September 2013 to February 2019
B notes, fixed rate	1	16,265		8.68%	April 2016
Mezzanine loans, fixed rate ⁽⁶⁾	4	67,010		0.50% to 20.00%	September 2014 to September 2019
Total ⁽²⁾	49	$	691,982

December 31, 2012:
Whole loans, floating rate ^{(1) (4) (5)}	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⁽⁶⁾	3	66,941		0.50% to 20.00%	September 2014 to September 2019
Total ⁽²⁾	43	$	667,051


(1)	Whole loans had $10.8 million and $8.9 million in unfunded loan commitments as of June 30, 2013 and December 31, 2012, respectively. These commitments are funded as the borrowers request additional funding and have satisfied the requirements to obtain this additional funding.


(2)	The total does not include an allowance for loan loss of $9.8 million and $8.0 million as of June 30, 2013 and December 31, 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.


(5)	Amount includes $34.0 million from two whole loans that were classified as loans held for sale at December 31, 2012.


(6)	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.

Summary of the weighted average life of the commercial real estate loans at amortized cost

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
June 30, 2013:
B notes	$	—	$	—	$	16,265	$	16,265
Mezzanine loans	—		20,813		46,197		67,010
Whole loans	4,000		—		604,707		608,707
Total ⁽¹⁾	$	4,000	$	20,813	$	667,169	$	691,982

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.

Allocation of allowance for loan loss

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
June 30, 2013:
B notes	$	197	1.39%
Mezzanine loans	632		4.47%
Whole loans	9,015		63.80%
Bank loans	4,287		30.34%
Total	$	14,131

December 31, 2012:
B notes	$	206	1.16%
Mezzanine loans	860		4.86%
Whole loans	6,920		39.12%
Bank loans	9,705		54.86%
Total	$	17,691

Allowance for loan losses and recorded investments

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			Loans Receivable-Related Party		Total
June 30, 2013:
Allowance for losses at January 1, 2013	$	7,986		$	9,705		$	—	$	17,691
Provision (benefit) for loan loss	1,948			(2,148		)	—		(200		)
Loans charged-off	(90		)	(3,270		)	—		(3,360		)
Allowance for losses at June 30, 2013	$	9,844		$	4,287		$	—	$	14,131
Ending balance:
Individually evaluated for impairment	$	4,000		$	3,351		$	—	$	7,351
Collectively evaluated for impairment	$	5,844		$	936		$	—	$	6,780
Loans acquired with deteriorated credit quality	$	—		$	—		$	—	$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	184,383		$	12,564		$	7,962	$	204,909
Collectively evaluated for impairment	$	507,599		$	988,323		$	—	$	1,495,922
Loans acquired with deteriorated credit quality	$	—		$	—		$	—	$	—

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		)
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

Credit quality indicators for Bank loans and Commercial real estate loans

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 June 30, 2013
Whole loans	$	553,333	$	—	$	55,374	$	—	$	—	$	608,707
B notes	16,265		—		—		—		—		16,265
Mezzanine loans	28,938		—		38,072		—		—		67,010
	$	598,536	$	—	$	93,446	$	—	$	—	$	691,982

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

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 June 30, 2013
Bank loans	$	888,643	$	45,933	$	30,731	$	2,889	$	12,564	$	20,127	$	1,000,887

As of December 31, 2012
Bank loans	$	1,095,148	$	33,677	$	27,837	$	16,318	$	5,440	$	14,894	$	1,193,314

Loan portfolios aging analysis

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
June 30, 2013:
Whole loans	$	—	$	—	$	—	$	—	$	608,707	$	608,707	$	—
B notes	—		—		—		—		16,265		16,265		—
Mezzanine loans	—		—		—		—		67,010		67,010		—
Bank loans	9,749		—		2,815		12,564		988,323		1,000,887		—
Loans receivable- related party	—		—		—		—		7,962		7,962		—
Total loans	$	9,749	$	—	$	2,815	$	12,564	$	1,688,267	$	1,700,831	$	—

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	$	—

Impaired loans

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



	Recorded Balance		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
June 30, 2013:
Loans without a specific valuation allowance:
Whole loans	$	129,546	$	129,546	$	—		$	117,221	$	5,575
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		986
Bank loans	—		—		—			—		—
Loans receivable - related party	6,061		6,061		—			—		348
Loans with a specific valuation allowance:
Whole loans	25,000		25,000		(4,000		)	23,333		1,442
B notes	—		—		—			—		—
Mezzanine loans	—		—		—			—		—
Bank loans	12,564		12,564		(3,351		)	—		—
Loans receivable - related party	—		—		—			—		—

Total:
Whole loans	$	154,546	$	154,546	$	(4,000	)	$	140,554	$	7,017
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		986
Bank loans	12,564		12,564		(3,351		)	—		—
Loans receivable - related party	6,061		6,061		—			—		348
	$	211,243	$	211,243	$	(7,351	)	$	178,626	$	8,351

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

Troubled debt restructurings on financing receivables

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 June 30, 2013:
Whole loans	—	$	—	$	—
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Loans receivable - related party	—	—		—
Total loans	—	$	—	$	—

Three Months Ended June 30, 2012:
Whole loans	—	$	—	$	—
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Loans receivable	—	—		—
Loans receivable - related party	—	—		—
Total loans	—	$	—	$	—



Six Months Ended June 30, 2013:
Whole loans	2	$	56,328	$	56,328
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Loans receivable - related party	1	6,592		6,592
Total loans	3	$	62,920	$	62,920

Six Months Ended June 30, 2012:
Whole loans	3	$	92,912	$	76,597
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Loans receivable	—	—		—
Loans receivable - related party	1	7,797		7,797
Total loans	4	$	100,709	$	84,394

Summary of intangible assets

The following table summarizes intangible assets at June 30, 2013 and December 31, 2012 (in thousands):



	Beginning Balance		Accumulated Amortization			Net Assets
June 30, 2013:
Investment in RCAM	$	21,213	$	(9,072	)	$	12,141
Investments in real estate:
In-place leases	2,461		(2,408		)	53
Above (below) market leases	29		(27		)	2
	2,490		(2,435		)	55
Total intangible assets	$	23,703	$	(11,507	)	$	12,196

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

Schedule of Debt

Certain information with respect to RSO’s borrowings at June 30, 2013 and December 31, 2012 is summarized in the following table (in thousands, except percentages):



	Outstanding Borrowings		Weighted Average Borrowing Rate	Weighted Average Remaining Maturity	Value of Collateral
June 30, 2013:
RREF CDO 2006-1 Senior Notes ⁽¹⁾	$	115,294	1.64%	33.1 years	$	167,682
RREF CDO 2007-1 Senior Notes ⁽²⁾	181,062		0.86%	33.3 years	236,129
Apidos CDO I Senior Notes ⁽³⁾	126,007		1.34%	4.1 years	142,748
Apidos CDO III Senior Notes ⁽⁴⁾	158,457		0.85%	7.0 years	170,079
Apidos Cinco CDO Senior Notes ⁽⁵⁾	320,848		0.78%	6.8 years	342,487
Apidos CLO VIII Senior Notes ⁽⁶⁾	302,250		2.13%	8.3 years	349,607
Apidos CLO VIII Securitized Borrowings ⁽¹¹⁾	19,250		16.45%	8.3 years	—
Whitney CLO I Senior Notes ⁽¹⁰⁾	101,982		2.47%	3.7 years	121,026
Whitney CLO I Securitized Borrowings ⁽¹¹⁾	5,467		9.14%	3.7 years	—
Unsecured Junior Subordinated Debentures ⁽⁷⁾	50,908		4.23%	23.2 years	—
Repurchase Agreements ⁽⁸⁾	163,785		2.19%	18 days	224,957
Mortgage Payable ⁽⁹⁾	13,600		4.14%	5.1 years	18,100
Total	$	1,558,910	1.78%	11.9 years	$	1,772,815

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


(1)	Amount represents principal outstanding of $115.7 million and $146.4 million less unamortized issuance costs of $409,000 and $728,000 as of June 30, 2013 and December 31, 2012, respectively. This CDO transaction closed in August 2006.


(2)	Amount represents principal outstanding of $182.0 million and $227.4 million less unamortized issuance costs of $909,000 and $1.4 million as of June 30, 2013 and December 31, 2012, respectively. This CDO transaction closed in June 2007.


(3)	Amount represents principal outstanding of $126.0 million and $203.2 million less unamortized issuance costs of $43,000 and $274,000 as of June 30, 2013 and December 31, 2012, respectively. This CDO transaction closed in August 2005.


(4)	Amount represents principal outstanding of $158.8 million and $222.0 million less unamortized issuance costs of $306,000 and $659,000 as of June 30, 2013 and December 31, 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 $1.2 million and $1.5 million as of June 30, 2013 and December 31, 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 $4.3 million and $4.7 million, and less unamortized discounts of $11.0 million and $11.9 million as of June 30, 2013 and December 31, 2012, respectively. This CDO transaction closed in October 2011. Apidos CLO VIII was called and the notes were paid in full in October 2013.


(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 $48.7 million and $47.5 million less unamortized deferred debt costs of $82,000 and $23,000 plus accrued interest costs of $28,000 and $37,000 related to CMBS repurchase facilities as of June 30, 2013 and December 31, 2012, respectively, and principal outstanding of $116.1 million and $59.1 million less unamortized deferred debt costs of $1.1 million and $348,000 plus accrued interest costs of $143,000 and $79,000 related to CRE repurchase facilities as of June 30, 2013 and December 31, 2012. Amount does not reflect CMBS repurchase agreement borrowings that are components of Linked Transactions. At June 30, 2013 and December 31, 2012, RSO had repurchase agreements of $66.6 million and $20.4 million 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.


(9)	Amount represents principal outstanding of $13.6 million as of June 30, 2013 and December 31, 2012, respectively. This real estate transaction closed in August 2011. The asset has been reclassified to property available-for-sale and is held at its amortized cost of $19.6 million on the consolidated balance sheet at June 30, 2013.

(10)

Amount represents principal outstanding of $103.7 million and $174.1 million less unamortized discounts of $1.7 million and $2.5 million as of June 30, 2013 and December 31, 2012, respectively. In September 2013, the Company called and liquidated Whitney CLO I. As a result, substantially all of the remaining assets were sold and the balance on the outstanding notes totaling $103.7 million was paid down.


(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.

Fair value assets and liabilities measured 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
June 30, 2013:
Assets:
Investment securities, trading	$	—	$	—	$	12,266	$	12,266
Investment securities available-for-sale	12,775		110,924		111,309		235,008
CMBS - linked transactions	—		9,517		15,764		25,281
Total assets at fair value	$	12,775	$	120,441	$	139,339	$	272,555

Liabilities:
Derivatives (net)	$	—	$	469	$	12,236	$	12,705
Total liabilities at fair value	$	—	$	469	$	12,236	$	12,705

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

Fair value assets unobservable input reconciliation

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, January 1, 2013	$	116,148
Total gains or losses (realized/unrealized):
Included in earnings	8,385
Purchases	62,315
Sales	(30,841		)
Paydowns	(14,013		)
Unrealized gains (losses) – included in Accumulated other comprehensive income	(2,655		)
Transfers from level 2	—
Ending balance, June 30, 2013	$	139,339

Fair value liabilities unobservable input reconciliation

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, 2013	$	14,077
Unrealized gains – included in Accumulated other comprehensive income	(1,841		)
Ending balance, June 30, 2013	$	12,236

Fair value assets and liabilities measured on nonrecurring basis

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
June 30, 2013:
Assets:
Loans held for sale	$	—	$	20,127	$	—	$	20,127
Impaired loans	—		7,987		—		7,987
Total assets at fair value	$	—	$	28,114	$	—	$	28,114

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

Significant unobservable inputs used in fair value measurements

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of June 30, 2013, the significant unobservable inputs used in the fair value measurements were as follows (in thousands):



	Fair Value at June 30 2013		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Interest rate swap agreements	$	12,705	Discounted cash flow	Weighted average credit spreads	5.00%

Fair value financial instruments not reported at fair value

The fair values of RSO’s remaining financial instruments that are not reported at fair value on the RSO consolidated balance sheets 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)
June 30, 2013:
Loans held-for-investment	$	1,658,611	$	1,662,941	$	—	$	980,520	$	682,421
Loans receivable-related party	$	7,962	$	7,962	$	—	$	—	$	7,962
CDO notes	$	1,330,617	$	1,162,243	$	—	$	1,162,243	$	—
Junior subordinated notes	$	50,908	$	17,402	$	—	$	—	$	17,402
Repurchase agreement	$	163,785	$	163,785	$	—	$	—	$	163,785

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
Repurchase agreement	$	106,303	$	106,303	$	—	$	—	$	106,303

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

Debt Instrument [Line Items]

Schedule of Amount at Risk under Credit Facility

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
June 30, 2013:
Wells Fargo Bank, National Association.⁽²⁾	$	9,722	18	1.45	%

December 31, 2012:
Wells Fargo Bank, National Association.⁽²⁾	$	10,722	18	1.53	%


(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)	$12.3 million and $12.2 million of linked repurchase agreement borrowings are being included as derivative instruments as of June 30, 2013 and December 31, 2012, respectively.

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

Debt Instrument [Line Items]

Schedule of Amount at Risk under Credit Facility

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



	Amount at Risk ⁽¹⁾		Weighted Average Maturity in Days	Weighted Average Interest Rate
June 30, 2013:
Wells Fargo	$	52,221	18	2.65	%

December 31, 2012
Wells Fargo	$	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] | Repurchase Agreements [Member] | JP Morgan Securities, LLC [Member]

Debt Instrument [Line Items]

Schedule of Amount at Risk under Credit Facility

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
June 30, 2013:
JP Morgan Securities, LLC ⁽²⁾	$	7,716	29	1.03	%

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)	$18.8 million and $4.7 million linked repurchase agreement borrowings are being included as derivative instruments as of June 30, 2013 and December 31, 2012.

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

Debt Instrument [Line Items]

Schedule of Amount at Risk under Credit Facility

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
June 30, 2013:
Wells Fargo Securities, LLC ⁽²⁾	$	9,048	28	1.08	%

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)	$23.1 million and $3.5 million of linked repurchase agreement borrowings are being included as derivative instruments as of June 30, 2013 and December 31, 2012.

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

Debt Instrument [Line Items]

Schedule of Amount at Risk under Credit Facility

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
June 30, 2013:
Deutsche Bank Securities, Inc.	$	6,671	28	1.40	%

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.