XML 30 R55.htm IDEA: XBRL DOCUMENT

VARIABLE INTEREST ENTITIES (Tables)

12 Months Ended

Dec. 31, 2014

Variable Interest Entity [Line Items]

These cash flows include contractually specified servicing fees, late fees and other ancillary servicing revenue and were recorded within Other income as follows (in thousands):



	Year Ended
	December 31, 2014
Servicing fees from capitalized portfolio	$	1,649
Late Fees	$	81
Other ancillary servicing revenue	$	6

Schedule Loan Servicing Portfolio

The activity in the loan servicing portfolio associated with capitalized servicing rights consisted of (in thousands):



	Year Ended
	December 31, 2014
Balance, beginning of Period	$	433,153
Additions	519,915
Payoffs, sales and curtailments	(58,301		)
Balance, end of period	$	894,767

The activity in capitalized MSRs is recorded in other assets and consists of the followings (in thousands):



	Year Ended
	December 31, 2014
Balance, beginning of Period	$	4,885
Additions	6,446
Sales	—
Balance, end of period	$	11,331
Accumulated amortization	(2,457		)
Balance, end of period	$	8,874

Details of Company's Investments in Investment Vehicles, Including the Range of Interests it Owns

The following table details the Company’s investments in these vehicles, including the range of ownership interests owned (in thousands, except percentages):



	Range of Combined Ownership Interests	December 31,
	Range of Combined Ownership Interests	2014		2013
Real estate investment entities	1% – 12%	$	8,313	$	8,271
Financial fund management partnerships	0.01% - 50%	4,162		5,294
Trapeza entities	33% − 50%	614		777
Investments in unconsolidated entities		$	13,089	$	14,342

Property and Equipment, Net

Property and equipment, net, consist of the following (in thousands):



	Estimated Useful Life	December 31,
	Estimated Useful Life	2014			2013
Leasehold improvements	1-10 years	$	4,597		$	4,575
Furniture and equipment	3-7 years	4,006			3,692
Computer equipment	3-5 years	3,263			3,093
		11,866			11,360
Accumulated depreciation and amortization		(6,803		)	(5,516		)
Property and equipment, net		$	5,063		$	5,844

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information are as follows (in thousands, per share data):



	Years Ended December 31,
	2014			2013			2012
Cash (paid) received:
Interest	$	(1,654	)	$	(1,690	)	$	(1,980	)
Income tax payments	(1,268		)	(1,651		)	(1,367		)
Refund of income taxes	171			99			83

Dividends declared per common share	$	0.22		$	0.15		$	0.12

Non-cash activities:
Repurchases of common stock from employees in exchange for the payment of income taxes	$	370		$	136		$	1,719
Repurchase of common stock in exchange for the exercise of warrants	1,754			—			—
Issuance of treasury stock for the Company's investment savings plan	407			341			485
Common stock issued to former director in exchange for vested director units	—			—			135
Leasehold improvements paid by the landlord	—			1,496			—
Effects from the deconsolidation of entities: ⁽¹⁾
Receivables from managed entities and related parties, net	$	—		$	—		$	715
Investments in unconsolidated entities	—			—			(1,824		)
Other assets	—			—			20
Accrued expense and other liabilities	—			—			(938		)


(1)	Reflects the deconsolidation of Apidos and LEAF during 2012 and, as a result, the removal of the amounts noted above from the Company’s consolidated balance sheets. The sum of the assets removed and cash equated to the sum of the liabilities and equity that were similarly eliminated and, as such, there was no change in the Company’s total net assets.

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
December 31, 2014
CLO securities	$	2,643	$	(176	)	4	$	—	$	—	—
Equity securities	—		—			—	—		—		—
Total	$	2,643	$	(176	)	4	$	—	$	—	—

December 31, 2013
CLO securities	$	2,312	$	(196	)	3	$	—	$	—	—
Equity securities	92		(8		)	1	—		—		—
Total	$	2,404	$	(204	)	4	$	—	$	—	—

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 by all financing receivables by receivable type (in thousands):



	Receivables from Managed Entities			Leases and Loans			Rent Receivables			Total
Year Ended December 31, 2014:
Balance, beginning of year	$	36,229		$	—		$	14		$	36,243
Provision for (reversal of) credit losses	3,123			(62		)	(3		)	3,058
Charge-offs	(22,394		)	—			(11		)	(22,405		)
Recoveries	32			62			—			94
Balance, end of year	$	16,990		$	—		$	—		$	16,990

Ending balance, individually evaluated for impairment	$	16,990		$	—		$	—		$	16,990
Ending balance, collectively evaluated for impairment	—			—			—			—
Balance, end of year	$	16,990		$	—		$	—		$	16,990

Year Ended December 31, 2013:
Balance, beginning of year	$	32,560		$	—		$	68		$	32,628
Provision for (reversal of) credit losses	4,324			(42		)	(17		)	4,265
Charge-offs	(675		)	—			(37		)	(712		)
Recoveries	20			42			—			62
Balance, end of year	$	36,229		$	—		$	14		$	36,243

Ending balance, individually evaluated for impairment	$	36,229		$	—		$	—		$	36,229
Ending balance, collectively evaluated for impairment	—			—			14			14
Balance, end of year	$	36,229		$	—		$	14		$	36,243

Aging of the Company's Past Due Financing Receivables, Gross of Allowances for Credit Losses

The following table is the aging of the Company’s financing receivables (presented gross of allowance for credit losses) as of December 31, 2014 (in thousands):



	Current		30-89 Days Past Due		90-180 Days Past Due		Greater than 181 Days		Total Past Due		Total
Receivables from managed entities and related parties: ⁽¹⁾
Commercial finance investment entities	$	9	$	342	$	1,124	$	18,398	$	19,864	$	19,873
Real estate investment entities	6,613		772		1,214		15,134		17,120		23,733
Financial fund management entities	583		74		—		6		80		663
Other	3,024		—		—		—		—		3,024
	10,229		1,188		2,338		33,538		37,064		47,293
Rent receivables - real estate	76		11		1		—		12		88
Total financing receivables	$	10,305	$	1,199	$	2,339	$	33,538	$	37,076	$	47,381


(1)	Receivables are presented gross of an allowance for credit losses of $17.0 million related to one of the Company’s commercial finance investment entities. 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 financing receivables (presented gross of allowance for credit losses) as of December 31, 2013 (in thousands):



	Current		30-89 Days Past Due		90-180 Days Past Due		Greater than 181 Days		Total Past Due		Total
Receivables from managed entities and related parties: ⁽¹⁾
Commercial finance investment entities	$	48	$	—	$	—	$	44,355	$	44,355	$	44,403
Real estate investment entities	3,142		793		1,229		16,323		18,345		21,487
Financial fund management entities	1,071		35		3		29		67		1,138
Other	70		33		21		—		54		124
	4,331		861		1,253		60,707		62,821		67,152
Rent receivables - real estate	63		14		4		10		28		91
Total financing receivables	$	4,394	$	875	$	1,257	$	60,717	$	62,849	$	67,243


(1)	Receivables are presented gross of an allowance for credit losses of $36.2 million related to the Company’s commercial finance, real estate investment entities and financial fund management entities, respectively. The remaining receivables from managed entities and related parties have no related allowance for credit losses.

Information about Company's Impaired Financing Receivables

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
Year Ended December 31, 2014:
Financing receivables with a specific valuation allowance:
Receivables from managed entities – commercial finance	$	1,295	$	18,285	$	16,990	$	36,256

Year Ended December 31, 2013:
Financing receivables with a specific valuation allowance:
Receivables from managed entities – commercial finance	$	2,690	$	38,919	$	36,200	$	38,649
Receivables from managed entities – real estate	—		14		14		32

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, 2014				As of December 31, 2013
	Availability		Borrowings Outstanding		Borrowings Outstanding
Credit facilities:
TD Bank – secured revolving credit facility ⁽¹⁾	$	10,997	$	—	$	—
Republic Bank – secured revolving credit facility	3,000		—		—
			—		—
Other debt:
Senior Notes			10,000		10,000
Mortgage debt			10,088		10,287
Other debt			324		332
Total borrowings outstanding			$	20,412	$	20,619


(1)	The availability of the facility as shown has been reduced for outstanding letter of credit of $503,000 at December 31, 2014.

Company's Asset Recorded at Fair Value on Recurring Basis

The fair values of the Company’s assets and liabilities recorded at fair value on a recurring basis were as follows (in thousands):



	Level 1		Level 2		Level 3		Total
Assets - Investment securities
December 31, 2014	$	310	$	741	$	8,489	$	9,540
December 31, 2013	$	432	$	—	$	7,407	$	7,839



	Level 1		Level 2		Level 3		Total
Liabilities - Apidos contractual commitment
December 31, 2014	$	—	$	—	$	745	$	745
December 31, 2013	$	—	$	—	$	995	$	995

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 2014 (in thousands):



	Investment Securities
Balance, beginning of year	$	7,407
Purchases	15,063
Income accreted	995
Payments and distributions received	(3,753		)
Sales	(13,177		)
Gain on sales of investment securities	370
Gain on sales of trading securities	1,850
Unrealized holding losses on trading securities	(200		)
Change in unrealized losses included in accumulated other comprehensive loss	(66		)
Balance, end of year	$	8,489



	Investment Securities
Balance, beginning of year	$	10,367
Purchases	11,630
Income accreted	(14,058		)
Payments and distributions received	(1,055		)
Sales	(6,286		)
Impairment recognized in earnings	(214		)
Gain on sales of trading securities	899
Unrealized holding gain on trading securities	6,294
Change in unrealized losses included in accumulated other comprehensive loss	(170		)
Balance, end of year	$	7,407

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, 2014				December 31, 2013
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Borrowings:
Real estate debt	$	10,088	$	11,197	$	10,287	$	10,702
Senior Notes	10,000		12,820		10,000		12,619
Other debt	324		324		332		332
	$	20,412	$	24,341	$	20,619	$	23,653

Components of Income Taxes

The following table details the allocation of the Company's provision (benefit) for income taxes from continuing operations between RAI and RSO:



	Years Ended December 31,
	2014			2013			2012
RAI	$	5,853		$	1,657		13,117
RSO, net of eliminations	(2,212		)	(1,041		)	14,602
Total	$	3,641		$	616		$	27,719

The following table details the components of the Company's provision (benefit) for income taxes from continuing operations, excluding RSO (in thousands):



	Years Ended December 31,
	2014			2013			2012
Current tax (benefit) provision:
Federal	$	(170	)	$	746		$	—
State	592			1,042			1,225
Foreign	43			(156		)	56
Total current tax provision	465			1,632			1,281
Deferred tax provision (benefit)
Federal	5,039			1,399			13,045
State	349			(1,374		)	(1,209		)
Foreign	—			—			—
Total deferred tax provision	5,388			25			11,836
Total income tax provision	$	5,853		$	1,657		$	13,117

Reconciliation Between Federal Statutory Income Tax Rate and Effective Income Tax Rate

A reconciliation between the federal statutory income tax rate and the Company's effective income tax rate, excluding RSO, is as follows:



	Years Ended December 31,
	2014		2013		2012
Statutory tax rate	35	%	35	%	35	%
State and local taxes, net of federal benefit	5		(10	)	3
Deconsolidation adjustment	—		—		(6	)
Foreign adjustment	—		(2	)	—
Valuation allowance for deferred tax assets	—		—		3
Equity-based compensation (benefit) expense	(1	)	1		—
Dividend received deduction	(2	)	(2	)	—
Other items	2		(5	)	—
	39	%	17	%	35	%

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets, net, excluding RSO, are as follows (in thousands):



	December 31,
	2014			2013
Deferred tax assets related to:
Federal, foreign, state and local operating loss carryforwards	$	10,401		$	8,999
Capital loss carryforwards	1,192			450
Unrealized loss on investments	3,941			3,664
Investment in partnerships	2,201			2,572
Provision for credit losses	7,354			15,600
Accrued expenses	1,794			2,142
Employee equity compensation awards	1,864			1,005
Deferred income	40			—
Property and equipment basis differences	—			96
Gross deferred tax assets	28,787			34,528
Less: valuation allowance	(4,906		)	(4,584		)
	23,881			29,944
Deferred tax liabilities related to:
Intangible assets	(392		)	—
Unremitted foreign earnings	(76		)	—
Deferred income	—			(2,175		)
Property and equipment basis differences	(109		)	—
	(577		)	(2,175		)

Deferred tax assets, net	$	23,304		$	27,769

RSO [Member]

Variable Interest Entity [Line Items]

Variable Interest Entity, Maximum Exposure

The following table shows the classification, carrying value and maximum exposure to loss with respect to RSO’s unconsolidated VIEs as of December 31, 2014 (in thousands):



	Unconsolidated Variable Interest Entities
	LCC		Unsecured Junior Subordinated Debentures			Resource Capital Asset Management CDOs		Total			Maximum Exposure to Loss
Investment in unconsolidated entities	$	39,417	$	1,548		$	—	$	40,965		$	40,965
Intangible assets	—		—			9,434		9,434			9,434
Total assets	39,417		1,548			9,434		50,399

Borrowings	—		51,205			—		51,205			N/A
Total liabilities	—		51,205			—		51,205			N/A
Net asset (liability)	$	39,417	$	(49,657	)	$	9,434	$	(806	)	N/A

Details of Company's Investments in Investment Vehicles, Including the Range of Interests it Owns

The following table shows RSO's investments in unconsolidated entities as of 2014 and 2013 and equity in net earnings (losses) of unconsolidated subsidiaries for the years ended December 31, 2014, 2013 and 2012 (in thousands):



		Balance as of				Years Ended December 31,
	Ownership %	December 31, 2014		December 31, 2013		2014			2013			2012
Värde Investment Partners, L.P	7.5%	$	654	$	674	$	(20	)	$	148		$	(135	)
RRE VIP Borrower, LLC ⁽¹⁾		—		—		3,473			277			682
Investment in LCC Preferred Stock	28.4%	39,416		41,016		(1,555		)	(183		)	(3,256		)
Investment in CVC Global Credit Opportunities Fund	27.7%	18,209		16,177		2,032			1,177			—
Investment in Life Care Funding ⁽²⁾	50.2%	—		1,530		(75		)	(470		)	—
Investment in School Lane House ⁽¹⁾		—		975		912			—			—
		58,279		60,372		4,767			949			(2,709		)
Investment in RCT I and II ⁽³⁾	3.0%	1,548		1,548		2,387			2,401			2,494
Investment in Preferred Equity^{(1) (4)}		—		7,149		410			992			705
Total		$	59,827	$	69,069	$	7,564		$	4,342		$	490


(1.)	Investment in School Lane House, Investment in RRE VIP Borrower and the Investments in preferred equity were sold as of December 31, 2014.


(2.)	RSO began consolidating this investment during the first quarter of 2014. Ownership % represents ownership after consolidation.


(3.)	For the years ended December 31, 2014, 2013, and 2012 these amounts are recorded in interest expense on the RSO's consolidated statements of income.


(4.)	For the years ended December 31, 2014, 2013, and 2012 these amounts are recorded in interest income on loans on RSO's consolidated statements of income.

Schedule of Linked Transactions

The assets in the following table are accounted for as linked transactions. These linked repurchase agreements are not included in borrowings on RSO's consolidated balance sheets.



	December 31, 2014						December 31, 2013
	Borrowings Under Linked Transactions ⁽¹⁾		Value of Collateral Under Linked Transactions ⁽²⁾		Number of Positions as Collateral Under Linked Transactions	Weighted Average Interest Rate of Linked Transactions	Borrowings Under Linked Transactions ⁽¹⁾		Value of Collateral Under Linked Transactions ⁽²⁾		Number of Positions as Collateral Under Linked Transactions	Weighted Average Interest Rate of Linked Transactions
CMBS Term Repurchase Facility
Wells Fargo Bank	$	4,941	$	6,371	7	1.67%	$	6,506	$	8,345	7	1.65%

CRE Term Repurchase Facility
Wells Fargo Bank	—		—		—	—%	—		—		—	—%

Short-Term Repurchase Agreements - CMBS
JP Morgan Securities, LLC	—		—		—	—%	17,020		24,814		4	0.99%
Wells Fargo Securities, LLC	4,108		6,233		2	1.37%	21,969		30,803		9	1.19%
Deutsche Bank Securities, LLC	24,348		36,001		10	1.57%	18,599		29,861		9	1.43%
Totals	$	33,397	$	48,605			$	64,094	$	93,823


(1)	Equal to linked CMBS repurchase value plus accrued interest expenses totaling $20,000 and $38,000, of deferred debt issuance costs as of December 31, 2014 and 2013, respectively.


(2)	Does not include linked CMBS accrued interest receivable totaling $159,000 and $337,000 of deferred debt issuance costs as of December 31, 2014 and 2013, respectively.

Schedule of Short-term Debt

The following table sets forth certain information with respect to RSO's borrowings at December 31, 2014 and 2013 (dollars in thousands):



	December 31, 2014						December 31, 2013
	Outstanding Borrowings		Value of Collateral		Number of Positions as Collateral	Weighted Average Interest Rate	Outstanding Borrowings			Value of Collateral		Number of Positions as Collateral	Weighted Average Interest Rate
CMBS Term Repurchase Facility
Wells Fargo Bank ⁽¹⁾	$	24,967	$	30,180	33	1.35%	$	47,601		$	56,949	44	1.38%

CRE Term Repurchase Facilities
Wells Fargo Bank ⁽²⁾	179,762		258,223		15	2.38%	30,003			48,186		3	2.67%
Deutsche Bank AG ⁽³⁾	25,920		39,348		2	2.78%	(300		)	—		—	—%

Short-Term Repurchase Agreements - CMBS
Wells Fargo Securities, LLC	10,442		17,695		1	1.66%	—			—		—	—%
Deutsche Bank Securities, LLC	33,783		44,751		8	1.62%	—			—		—	—%

RMBS Term Repurchase Facility
Wells Fargo Bank (2)	22,212		27,885		6	1.16%	—			—		—	—%

Residential Mortgage Financing Agreements
New Century Bank	41,387		51,961		158	2.82%	11,916			13,089		74	4.17%
ViewPoint Bank, NA	—		—		—	—%	2,711			3,398		17	4.58%
Wells Fargo Bank	61,189		95,511		104	2.75%	—			—		—	—%
Totals	$	399,662	$	565,554			$	91,931		$	121,622


(1)	The Wells Fargo CMBS term facility borrowing includes $0 and $12,000, of deferred debt issuance costs as of December 31, 2014 and 2013, respectively.


(2)	The Wells Fargo CRE term repurchase facility borrowing includes $1.7 million and $732,000 of deferred debt issuance costs as of December 31, 2014 and 2013, respectively.


(3)	The Deutsche Bank term repurchase facility includes $268,000 and $300,000 of deferred debt issuance costs as of December 31, 2014 and 2013, respectively.


(4)	The Wells Fargo RMBS term repurchase facility includes $36,000 of deferred debt issuance costs as of December 31, 2014.

Condensed Financial Statements

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



RSO Balance Sheet Detail (in thousands):
	December 31,
	2014			2013
ASSETS ⁽¹⁾
Cash and cash equivalents	$	79,905		$	262,270
Restricted cash	122,138			63,309
Subtotal - Cash and cash equivalents	202,043			325,579
Investment securities, trading	20,786			11,558
Investment securities available-for-sale, pledged as collateral, at fair value	197,800			162,608
Investment securities available-for-sale, at fair value	77,920			52,598
Subtotal - Investments, at fair value	296,506			226,764
Loans, pledged as collateral and net of allowances of $4.6 million and $13.8 million	1,925,980			1,369,526
Loans receivable–related party	1,277			6,966
Loans held for sale, at fair value	111,736			21,916
Subtotal - Loans, before eliminations	2,038,993			1,398,408
Eliminations	(558		)	(950		)
Subtotal - Loans	2,038,435			1,397,458
Property available-for-sale	180			25,346
Investment in real estate	—			29,778
Investments in unconsolidated entities	59,827			69,069
Subtotal, Investments in real estate and unconsolidated entities, before eliminations	60,007			124,193
Eliminations	—			—
Subtotal, Investments in real estate and unconsolidated entities	60,007			124,193
Line items included in "other assets":
Linked transactions, net at fair value	15,367			30,066
Derivatives, at fair value	5,304			—
Interest receivable	16,260			8,965
Deferred tax asset	13,094			5,212
Principal paydown receivable	40,920			6,821
Intangible assets	9,736			11,822
Direct financing leases	2,109			—
Prepaid expenses	4,196			2,871
Other assets	24,604			10,726
Subtotal - Other assets, before eliminations	131,590			76,483
Eliminations	(109		)	(16		)
Subtotal - Other assets	131,481			76,467
Total assets (excluding eliminations)	$	2,729,139		$	2,151,427
Total assets (including eliminations)	$	2,728,472		$	2,150,461
LIABILITIES⁽²⁾
Borrowings	$	1,716,871		$	1,319,810
Eliminations	261			205
Subtotal Borrowings	1,717,132			1,320,015
Distribution payable	30,592			27,023
Accrued interest expense	2,123			1,693
Derivatives, at fair value	8,476			10,586
Accrued tax liability	9,219			1,629
Deferred tax liability	460			4,112
Accounts payable and other liabilities	9,287			12,650
Subtotal - Other liabilities, before eliminations	60,157			57,693
Eliminations	(2,596		)	(2,446		)
Subtotal - Other liabilities	57,561			55,247
Total liabilities (before eliminations)	$	1,777,028		$	1,377,503
Total liabilities (after eliminations)	$	1,774,693		$	1,375,262



RSO Balance Sheet Detail (in thousands):
	December 31,
	2014			2013
(1) Assets of consolidated RSO's VIEs included in the total assets above:
Cash and cash equivalents	$	25		$	—
Restricted cash	121,247			61,372
Investments securities available-for-sale, pledged as collateral, at fair value	119,203			105,846
Loans held for sale	282			2,376
Loans, pledged as collateral and net of allowances of $3.3 million and $8.8 million	1,261,137			1,219,569
Interest receivable	8,941			5,627
Prepaid expenses	221			247
Principal receivable	25,767			6,821
Other assets	(12		)	—
Total assets of consolidated VIEs	$	1,536,811		$	1,401,858

(2) Liabilities of consolidated RSO's VIEs included in the total liabilities above:
Borrowings	$	1,046,494		$	1,070,339
Accrued interest expense	1,000			918
Derivatives, at fair value	8,439			10,191
Unsettled loan purchases	(529		)	—
Accounts payable and other liabilities	(386		)	1,604
Total liabilities of consolidated VIEs	$	1,055,018		$	1,083,052

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



	December 31,
	2014			2013
Total stockholders' equity per RSO balance sheet	$	952,111		$	773,924
Eliminations	(35,568		)	(30,560		)
Noncontrolling interests attributable to RSO	$	916,543		$	743,364



RSO Income Statement Detail (in thousands):
	Balance as of December 31,
	2014			2013			2012
REVENUES
Interest income:
Loans	$	102,857		$	99,455		$	109,030
Securities	17,265			14,309			14,296
Interest income − other	6,785			4,212			10,004
Total interest income	126,907			117,976			133,330
Interest expense	45,473			61,010			42,792
Net interest income	81,434			56,966			90,538
Rental income	8,441			19,923			11,463
Dividend income	186			273			69
Fee income	9,385			5,821			7,068
Revenues from consolidated VIE - RSO	99,446			82,983			109,138
OPERATING EXPENSES
Management fees − related party	13,584			14,220			18,512
Equity compensation − related party	6,566			10,472			4,636
Rental operating expense	5,443			14,062			8,046
General and administrative - Corporate	15,263			12,304			9,773
General and administrative - PCM	19,598			2,203			—
Depreciation and amortization	2,737			3,855			5,885
Income tax (benefit) expense	(2,212		)	(1,041		)	14,602
Net impairment losses recognized in earnings	—			863			180
Provision for loan losses	1,804			3,020			16,818
Total operating expenses	62,783			59,958			78,452
Reclassification of income tax expense	2,212			1,041			(14,602		)
Expenses of consolidated VIE - RSO	64,995			60,999			63,850
Adjusted operating income	34,451			21,984			45,288
OTHER INCOME (EXPENSE)
Equity in earnings (losses) of unconsolidated subsidiaries	4,767			949			(2,709		)
Net realized gain on sales of investment securities available-for-sale and loans	15,283			9,637			4,106
Net realized and unrealized (loss) gain on investment securities, trading	(2,818		)	(324		)	12,435
Unrealized gain (loss) and net interest income on linked transactions, net	7,850			(3,841		)	728
(Loss) on reissuance/gain on extinguishment of debt	(4,442		)	—			16,699
Gains on the sale of real estate	6,127			16,616			—
Other (expense) income	(1,262		)	391			2,498
Other income, net, from consolidated VIE - RSO	25,505			23,428			33,757
Income from continuing operations	59,956			45,412			79,045
Income tax provision - RSO	(2,212		)	(1,041		)	14,602
NET INCOME	62,168			46,453			64,443
Net income allocated to preferred shares	(17,176		)	(7,221		)	(1,244		)
Net income allocable to non-controlling interest, net of tax	(965		)	—			—
NET INCOME ALLOCABLE TO RSO COMMON SHAREHOLDERS	$	44,027		$	39,232		$	63,199



RSO Cash Flow Detail (in thousands)
	Balance as of December 31,
	2014			2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	62,168		$	46,453		$	64,443
Items included in "Change in cash attributable to consolidated VIE - RSO":
Provision for loan losses	1,804			3,020			16,818
Depreciation of investments in real estate and other	690			1,946			1,838
Amortization of intangible assets	2,059			1,970			4,047
Amortization of term facilities	2,508			1,395			957
Accretion of net discounts on loans held for investment	(2,223		)	(9,521		)	(17,817		)
Accretion of net discounts on securities available-for-sale	(3,941		)	(2,712		)	(3,177		)
Amortization of discount on notes of securitizations	1,228			14,524			2,470
Amortization of debt issuance costs on notes of securitizations	3,601			7,426			4,700
Amortization of stock-based compensation	6,566			10,472			4,636
Amortization of terminated derivative instruments	282			339			227
Accretion of interest-only available-for-sales securities	(790		)	(1,005		)	(719		)
Non-cash incentive compensation to the Manager	—			484			1,468
Deferred income tax (benefit) expense	(11,536		)	(6,710		)	2,329
Purchase of mortgage loans held for sale, net	(96,536		)	(146		)	—
Purchase of securities, trading	(20,190		)	(11,044		)	(8,348		)
Principal payments on securities, trading	1,928			4,309			1,027
Proceeds from sales of securities, trading	1,747			19,696			33,579
Net realized and unrealized loss (gain) on investment securities, trading	2,818			324			(12,435		)
Net realized gains on sales of investment securities available-for-sale and loans	(15,283		)	(10,986		)	(4,106		)
Loss (gain) on the reissuance / (extinguishment) of debt	4,442			—			(16,699		)
Gain on sale of real estate	(6,127		)	(16,616		)	—
Settlement of derivative instruments - investing	(4,142		)	—			—
Net impairment losses recognized in earnings	—			855			180
Linked Transactions fair value adjustments	(5,615		)	6,018			(168		)
Equity in net (earnings) losses of unconsolidated subsidiaries	(4,767		)	(949		)	2,709
Adjust for impact of imputed interest on VIE accounting	—			—			1,879
Changes in operating assets and liabilities, net of acquisitions
Decrease (increase) in restricted cash	5,204			8,445			(2,062		)
(Increase) decrease in interest receivable, net of purchased interest	(7,295		)	(1,108		)	987
Decrease (increase) in principal paydowns receivable
Increase (decrease) in management fee payable	171			(6,357		)	3,929
Increase (decrease) in security deposits	4,696			(337		)	25
(Decrease) increase in accounts payable and accrued liabilities	(3,363		)	(16,327		)	6,329
Increase (decrease) in accrued interest expense	430			(1,445		)	(193		)
Increase (decrease) in other assets	9,873			7,259			(22,505		)
Subtotal - consolidated VIE - RSO operating activity	(131,761		)	3,219			1,905
Change in consolidated VIE - RSO cash for the period	182,365			(176,992		)	(42,162		)
Subtotal - Change in cash attributable to consolidated VIE - RSO before eliminations	50,604			(173,773		)	(40,257		)
Elimination of intercompany activity	(119		)	(712		)	932
Subtotal - Change in cash attributable to consolidated VIE - RSO	50,485			(174,485		)	(39,325		)
Non-cash incentive compensation to RAI	—			484			1,468
Elimination of intercompany activity	—			(484		)	(1,468		)
Non-cash incentive compensation to RAI, after eliminations	—			—			—
Net cash (used in) provided by operating activities (excluding eliminations)	(69,593		)	49,672			66,348





	Balance as of December 31,
	2014		2013		2012
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of loans	(1,019,721	)	(725,657	)	(649,983	)
Purchase of securities available-for-sale	(180,990	)	(136,282	)	(119,779	)
Subtotal - Purchase of loans and securities by consolidated VIE - RSO, before eliminations	(1,200,711	)	(861,939	)	(769,762	)
Eliminations	—		—		—
Subtotal - Purchase of loans and securities by consolidated VIE - RSO	(1,200,711	)	(861,939	)	(769,762	)
Principal payments received on loans	376,219		590,663		544,811
Proceeds from sale of loans	209,707		674,977		173,378
Principal payments on securities available-for-sale	56,053		52,812		47,284
Proceeds from sale of securities available-for-sale	147,171		11,893		28,652
Proceeds from sale of real estate held-for-sale	65,753		37,001		2,886
Principal payments received on loans – related parties	3,848		1,685		1,251
Subtotal - principal payments and proceeds from sales received by consolidated VIE - RSO, before eliminations	858,751		1,369,031		798,262
(Decrease) increase in restricted cash	(23,568	)	22,248		50,756
Items included in "Other -VIE, investing activity":

Acquisition of controlling interest in Moselle CLO S.A.	(30,433	)	—		—
Acquisition of Primary Capital Advisors, LC	—		(7,613	)	—
Return of investment in (investment in) unconsolidated entity	9,557		(28,034	)	474
Equity contribution to VIE	—		—		(710	)
Improvement of real estate held-for-sale	—		(404	)	(138	)
Distributions from investments in real estate	—		1,094		1,152
Improvements in investments in real estate	(221	)	(365	)	(3,878	)
Investment in loans - related parties	(1,572	)	(1,241	)	—
Purchase of furniture and fixtures	(69	)	(133	)	—
Acquisition of property and equipment	(865	)	(373	)	—
Subtotal - Other consolidated VIE - investing activity, before eliminations	(23,603	)	(37,069	)	(3,100	)
Eliminations	(479	)	(593	)	(47	)
Subtotal - Other consolidated VIE - investing activity	(24,082	)	(37,662	)	(3,147	)

Net cash (used in) provided by investing activities	(389,131	)	492,271		76,156




	Balance as of December 31,
	2014			2013			2012
CASH FLOWS FROM FINANCING ACTIVITIES:
Items included in "Net borrowings (repayments) of debt by consolidated VIE - RSO"
Proceeds from borrowings:
Repurchase agreements	277,875			15,226			71,121
CRE Securitization	235,344			260,840			—
6.0% Convertible senior notes	—			115,000			—
Senior secured revolving credit facility	113,500			—			—
Reissuance of debt	52,663			—			—
Payments on borrowings:
Collateralized debt obligations	(451,991		)	(797,573		)	(243,539		)
CRE Securitization	(34,000		)	—			—
Senior secured revolving credit facility	—			—			—
Mortgage payable	—			(13,600		)	—
Repurchase of issued bonds	—			—			—
Retirement of debt	—			—			(20,365		)
Proceeds received from non-controlling interests	14,213			5,531			114
Subtotal - net (repayments) borrowings of debt by consolidated VIE - RSO	207,604			(414,576		)	(192,669		)
Distributions paid on preferred stock	(15,008		)	(6,413		)	(613		)
Distributions paid on common stock	(104,225		)	(93,458		)	(74,050		)
Elimination of dividends paid to RAI	2,289			2,203			2,174
Distribution paid on common stock, after elimination	(101,936		)	(91,255		)	(71,876		)
Net proceeds from issuances of common stock (net of offering costs of $0, $3,837 and $2,165)	—			114,454			55,502
Net proceeds from dividend reinvestment and stock purchase plan (net of offering costs of $0, $0 and $19)	30,297			19,211			73,044
Proceeds from issuance of 8.5% Series A redeemable preferred shares (net of offering costs of $260, $3 and $781)	8,984			112			16,411
Proceeds from issuance of 8.25% Series B redeemable preferred shares (net of offering costs of $858, $1,670 and $1,201	47,481			56,214			26,099
Proceeds from issuance of 8.625% Series C redeemable preferred shares (net of offering costs of $300, $0 and $0)	116,268			—			—
Repurchase of common stock	(6,832		)	—			—
Subtotal - net proceeds from issuance of stock by consolidated VIE	196,198			189,991			171,056
Payment of debt issuance costs	(8,939		)	(9,786		)	(586		)
Settlement of derivative instruments	3,052			—			—
Payment of equity to third party sub-note holders	(2,323		)	(30,709		)	(3,480		)
Distributions paid on preferred stock	(15,008		)	(6,413		)	(613		)
Subtotal - Other consolidated VIE -RSO financing activity, before elimination	(23,218		)	(46,908		)	(4,679		)
Elimination	175			205			—
Subtotal - Other consolidated VIE -RSO financing activity after elimination	(23,043		)	$	(46,703	)	$	(4,679	)
Net cash provided by (used in) financing activities (excluding eliminations)	$	276,359		$	(364,951	)	$	(100,342	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(182,365		)	176,992			42,162
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	262,270			85,278			43,116
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	79,905		$	262,270		$	85,278
SUPPLEMENTAL DISCLOSURE:
Interest expense paid in cash	$	35,690		$	41,453		$	41,369
Income taxes paid in cash	$	3,305		$	10,710		$	22,758

Property and Equipment, Net

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

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information (in thousands):



	Years Ended
	December 31,
	2014		2013		2012
Non-cash investing activities include the following:
Assumption of direct financing leases and other assets ⁽¹⁾	$	2,385	$	—	$	—
Acquisition of real estate investments	$	—	$	—	$	(21,661	)
Conversion of loans to investment in real estate	$	—	$	—	$	21,661
Acquisition of loans, pledged as collateral	$	—	$	—	$	(230,152	)

Non-cash financing activities include the following:
Distributions on common stock declared but not paid	$	26,563	$	25,536	$	21,024
Distribution on preferred stock declared but not paid	$	6,044	$	2,159	$	1,244
Issuance of restricted stock	$	890	$	823	$	2,189
Contribution of security deposits and other liabilities ⁽¹⁾	$	457	$	—	$	—
Subscription receivable	$	—	$	—	$	1,248
Assumption of collateralized debt obligations	$	—	$	—	$	206,408


(1)	On December 31, 2014, RSO assumed direct financing leases and related assets and liabilities in satisfaction of a loan receivable - related party.

Investment Trading Securities at Fair Value

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



	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
As of December 31, 2014::
Structured notes	$	22,876	$	1,098	$	(3,188	)	$	20,786
RMBS	1,896		—		(1,896		)	—
Total	$	24,772	$	1,098	$	(5,084	)	$	20,786

As of December 31, 2013::
Structured notes	$	8,057	$	4,050	$	(1,000	)	$	11,107
RMBS	1,919		—		(1,468		)	451
Total	$	9,976	$	4,050	$	(2,468	)	$	11,558

Available-for-sale Securities

The following table summarizes RSO's sales of investment securities available-for-sale during the period indicated, (in thousands, except number of securities):



	Positions Sold	Par Amount Sold		Realized Gain (Loss)
For the Year Ended December 31, 2014:
CMBS position	5	$	27,370	$	573
ABS	8	$	11,574	$	2,922

For the Year Ended December 31, 2013:
CMBS position	4	$	14,500	$	466
Corporate bond position	35	$	34,253	$	(474	)

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
As of December 31, 2014::
CMBS	$	168,669	$	4,938	$	(3,202	)	$	170,405
RMBS	29,814		937		—			30,751
ABS	55,617		16,876		(336		)	72,157
Corporate Bonds	2,415		10		(18		)	2,407
Total	$	256,515	$	22,761	$	(3,556	)	$	275,720

As of December 31, 2013::
CMBS	$	185,178	$	7,570	$	(12,030	)	$	180,718
ABS	30,775		1,644		(394		)	32,025
Corporate Bonds	2,517		16		(70		)	2,463
Total	$	218,470	$	9,230	$	(12,494	)	$	215,206


(1)	As of December 31, 2014 and 2013, $197.8 million and $162.6 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, RMBS, 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
As of December 31, 2014::
Less than one year	$	78,095	⁽¹⁾	$	79,649	4.13	%
Greater than one year and less than five years	115,302			100,909		4.64	%
Greater than five years and less than ten years	20,177			17,516		16.45	%
Greater than ten years	62,146			58,441		7.86	%
Total	$	275,720		$	256,515	6.08	%

As of December 31, 2013::
Less than one year	$	39,256	⁽¹⁾	$	40,931	5.25	%
Greater than one year and less than five years	139,700			141,760		4.69	%
Greater than five years and less than ten years	26,526			25,707		1.10	%
Greater than ten years	9,724			10,072		7.90	%
Total	$	215,206		$	218,470	4.49	%


(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, gross unrealized losses and number of securities 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, except number of securities):



	Less than 12 Months						More than 12 Months						Total
	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities
As of December 31, 2014:
CMBS	$	35,860	$	(555	)	22	$	25,583	$	(2,647	)	13	$	61,443	$	(3,202	)	35
ABS	1,000		(278		)	8	958		(58		)	3	1,958		(336		)	11
Corporate Bonds	1,447		(18		)	1	—		—			—	1,447		(18		)	1
Total temporarily impaired securities	$	38,307	$	(851	)	31	$	26,541	$	(2,705	)	16	$	64,848	$	(3,556	)	47

As of December 31, 2013:
CMBS	$	52,012	$	(7,496	)	34	$	14,159	$	(4,534	)	10	$	66,171	$	(12,030	)	44
ABS	143		(1		)	1	6,692		(393		)	9	6,835		(394		)	10
Corporate Bonds	865		(70		)	1	—		—			—	865		(70		)	1
Total temporarily impaired securities	$	53,020	$	(7,567	)	36	$	20,851	$	(4,927	)	19	$	73,871	$	(12,494	)	55

Investments in real estate

The table below summarizes RSO's investments in real estate (in thousands, except number of properties):



	As of December 31, 2013:
	Book Value			Number of Properties
Multi-family property	$	22,107		1
Office property	10,273			1
Subtotal	32,380
Less: Accumulated depreciation	(2,602		)
Investments in real estate	$	29,778

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table sets forth the allocation of the purchase price (in thousands):



Assets acquired:
Cash and cash equivalents	$	1,233
Loans held for sale	15,021
Loans held for investment	2,071
Wholesale and correspondent relationships	600
Other assets	5,828
Total assets	24,753

Less: Liabilities assumed:
Borrowings	14,584
Other liabilities	2,165
Total liabilities	16,749

Gain on bargain purchase	391
Total cash purchase price	$	7,613

Schedule of Receivables with Imputed Interest

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



Loan Description	Principal			Unamortized (Discount) Premium ⁽¹⁾			Carrying Value ⁽²⁾
As of December 31, 2014:
Commercial real estate loans:
Whole loans	$	1,271,121		$	(7,529	)	$	1,263,592
B notes	16,120			(48		)	16,072
Mezzanine loans	67,446			(80		)	67,366
Total commercial real estate loans	1,354,687			(7,657		)	1,347,030
Bank loans	332,058			(1,410		)	330,648
Middle market loans	250,859			(746		)	250,113
Residential mortgage loans, held for investment	2,802			—			2,802
Subtotal loans before allowances	1,940,406			(9,813		)	1,930,593
Allowance for loan loss	(4,613		)	—			(4,613		)
Total loans before allowances	1,935,793			(9,813		)	1,925,980
Bank loans held for sale	282			—			282
Residential mortgage loans held for sale, at fair value (3)	111,454			—			111,454
Total loans held for sale	111,736			—			111,736
Total loans, net of allowance	$	2,047,529		$	(9,813	)	$	2,037,716

As of December 31, 2013:
Commercial real estate loans:
Whole loans	$	749,083		$	(3,294	)	$	745,789
B notes	16,288			(83		)	16,205
Mezzanine loans	64,417			(100		)	64,317
Total commercial real estate loans	829,788			(3,477		)	826,311
Bank loans	519,343			(3,950		)	515,393
Middle market loans	39,864			(84		)	39,780
Residential mortgage loans, held for investment	1,849			—			1,849
Subtotal loans before allowances	1,390,844			(7,511		)	1,383,333
Allowance for loan loss	(13,807		)	—			(13,807		)
Total loans before allowances	1,377,037			(7,511		)	1,369,526
Bank loans held for sale	2,377			—			2,377
Middle market loans held for sale	4,473			—			4,473
Residential mortgage loans held for sale, at fair value (3)	15,066			—			15,066
Total loans held for sale	21,916			—			21,916
Total loans, net of allowance	$	1,398,953		$	(7,511	)	$	1,391,442

(1)

Amounts include deferred amendment fees of $88,000 and $216,000 and deferred upfront fees of $82,000 and $141,000 being amortized over the life of the bank loans as of December 31, 2014 and 2013, respectively. Amounts include loan origination fees of $7.6 million and $3.3 million and loan extension fees of $0 and $73,000 being amortized over the life of the commercial real estate loans as of December 31, 2014 and 2013, respectively.


(2)	Substantially all loans are pledged as collateral under various borrowings at December 31, 2014 and 2013, respectively.


(3)	Residential mortgage loans held for sale, at fair value was comprised of $28.9 million and $82.6 million of agency-conforming and jumbo mortgage loans, respectively, as of December 31, 2014. The portfolio consisted of $15.1 million and $0 million of agency-conforming and jumbo mortgage loans, respectively, as of December 31, 2013.

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):



	December 31,
	2014		2013
Less than one year	$	7,829	$	36,985
Greater than one year and less than five years	274,332		366,848
Five years or greater	48,769		113,937
	$	330,930	$	517,770

Summary of the commercial real estate loans



	December 31,
	2014		2013
Less than one year	$	7,829	$	36,985
Greater than one year and less than five years	274,332		366,848
Five years or greater	48,769		113,937
	$	330,930	$	517,770

At December 31, 2014, RSO’s middle market loan portfolio consisted of $250.1 million of floating rate loans, which bear interest ranging between the one or three month LIBOR plus 5.5% and the one or three month LIBOR plus 9.25% with maturity dates ranging from December 2016 to November 2022.

At December 31, 2013, RSO’s middle market loan portfolio consisted of $44.3 million of floating rate loans, which bear interest ranging between the one or three month LIBOR plus 3.75%, and the one or three month LIBOR plus 10.5% with maturity dates ranging from October 2018 to December 2021.

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



	December 31,
	2014		2013
Less than one year	$	—	$	—
Greater than one year and less than five years	132,353		13,027
Five years or greater	117,760		31,226
	$	250,113	$	44,253

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
As of December 31, 2014:
B notes	$	55	1.19%
Mezzanine loans	230		4.99%
Whole loans	3,758		81.47%
Bank loans	570		12.36%
Total	$	4,613

As of December 31, 2013:
B notes	$	174	1.26%
Mezzanine loans	559		4.05%
Whole loans	9,683		70.13%
Bank loans	3,391		24.56%
Total	$	13,807

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				Middle Market Loans			Residential Mortgage Loans		Loans Receivable-Related Party			Total
As of December 31, 2014:
Allowance for Loan Losses:
Allowance for losses at January 1, 2014	$	10,416		$	3,391			$	—		$	—	$	—		$	13,807
Provision (recovery) for loan loss	(3,758		)	4,173				92			—		1,297			1,804
Loans charged-off	(2,615		)	(6,994		)		(92		)	—		(1,297		)	(10,998		)
Allowance for losses at December 31, 2014	$	4,043		$	570			$	—		$	—	$	—		$	4,613
Ending balance:
Individually evaluated for impairment	$	—		$	570			$	—		$	—	$	—		$	570
Collectively evaluated for impairment	$	4,043		$	—			$	—		$	—	$	—		$	4,043
Loans acquired with deteriorated credit quality	$	—		$	—			$	—		$	—	$	—		$	—
Loans:
Ending balance: ⁽¹⁾
Individually evaluated for impairment	$	166,180		$	1,350			$	250,113		$	—	$	1,277		$	418,920
Collectively evaluated for impairment	$	1,180,850		$	329,580			$	—		$	2,802	$	—		$	1,513,232
Loans acquired with deteriorated credit quality	$	—		$	—			$	—		$	—	$	—		$	—

As of December 31, 2013:
Allowance for Loan Losses:
Allowance for losses at January 1, 2013	$	7,986		$	9,705			$	—		$	—	$	—		$	17,691
Provision for loan loss	2,686			312				22			—		—			3,020
Loans charged-off	(256		)	(6,626		)		(22		)	—		—			(6,904		)
Allowance for losses at December 31, 2013	$	10,416		$	3,391			$	—		$	—	$	—		$	13,807
Ending balance:
Individually evaluated for impairment	$	4,572		$	2,621			$	—		$	—	$	—		$	7,193
Collectively evaluated for impairment	$	5,844		$	770			$	—		$	—	$	—		$	6,614
Loans acquired with deteriorated credit quality	$	—		$	—			$	—		$	—	$	—		$	—
Loans:
Ending balance: ⁽¹⁾
Individually evaluated for impairment	$	194,403		$	3,554			$	—		$	—	$	6,966		$	204,923
Collectively evaluated for impairment	$	631,908		$	558,469		⁽²⁾	$	—		$	16,915	$	—		$	1,207,292
Loans acquired with deteriorated credit quality	$	—		$	—			$	—		$	—	$	—		$	—

Financing Receivable Credit Quality Indicators

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



	Rating 1		Rating 2		Rating 3		Rating 4		Rating 5		Held for Sale		Total
As of December 31, 2014:
Bank loans	$	291,214	$	32,660	$	5,424	$	—	$	1,350	$	282	$	330,930

As of December 31, 2013:
Bank loans	$	448,224	$	42,476	$	18,806	$	2,333	$	3,554	$	2,377	$	517,770

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, 2014:
Whole loans	$	1,231,092	$	32,500	$	—	$	—	$	—	$	1,263,592
B notes	16,072		—		—		—		—		16,072
Mezzanine loans	45,432		21,934		—		—		—		67,366
	$	1,292,596	$	54,434	$	—	$	—	$	—	$	1,347,030

As of December 31, 2013:
Whole loans	$	680,718	$	32,500	$	32,571	$	—	$	—	$	745,789
B notes	16,205		—		—		—		—		16,205
Mezzanine loans	51,862		12,455		—		—		—		64,317
	$	748,785	$	44,955	$	32,571	$	—	$	—	$	826,311

Aging of the Company's Past Due Financing Receivables, Gross of Allowances for Credit Losses

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
As of December 31, 2014:
Whole loans	$	—	$	—	$	—	$	—	$	1,263,592	$	1,263,592	$	—
B notes	—		—		—		—		16,072		16,072		—
Mezzanine loans	—		—		—		—		67,366		67,366		—
Bank loans ⁽¹⁾	—		—		1,350		1,350		329,580		330,930		—
Middle market loans ⁽³⁾	—		—		—		—		250,113		250,113		—
Residential mortgage loans ⁽²⁾	443		82		119		644		113,612		114,256		—
Loans receivable-related party	—		—		—		—		1,277		1,277		—
Total loans	$	443	$	82	$	1,469	$	1,994	$	2,041,612	$	2,043,606	$	—

As of December 31, 2013:
Whole loans	$	—	$	—	$	—	$	—	$	745,789	$	745,789	$	—
B notes	—		—		—		—		16,205		16,205		—
Mezzanine loans	—		—		—		—		64,317		64,317		—
Bank loans ⁽¹⁾	—		—		3,554		3,554		514,216		517,770		—
Middle market loans ⁽³⁾	—		—		—		—		44,253		44,253		—
Residential mortgage loans ⁽²⁾	234		91		268		593		16,322		16,915		—
Loans receivable-related party	—		—		—		—		6,966		6,966		—
Total loans	$	234	$	91	$	3,822	$	4,147	$	1,408,068	$	1,412,215	$	—


(1)	Contains $282,000 and $2.4 million of bank loans held for sale at December 31, 2014 and 2013, respectively.


(2)	Contains $111.5 million and $15.1 million of residential mortgage loans held for sale at December 31, 2014 and 2013, respectively.


(3)	Contains $0 and $4.5 million of middle market loans held for sale at December 31, 2014 and 2013, respectively.

Information about Company's Impaired Financing Receivables

The following tables show impaired loans as of the dates indicated (in thousands):



	Recorded Balance		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
As of December 31, 2014:
Loans without a specific valuation allowance:
Whole loans	$	128,108	$	128,108	$	—		$	130,445	$	12,679
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	38,072	$	38,072	$	—		$	38,072	$	2,859
Bank loans	$	—	$	—	$	—		$	—	$	—
Middle market loans	$	—	$	—	$	—		$	—	$	—
Residential mortgage loans	$	2,082	$	2,082	$	—		$	2,082	$	148
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—
Loans with a specific valuation allowance:
Whole loans	$	—	$	—	$	—		$	—	$	—
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	—	$	—	$	—		$	—	$	—
Bank loans	$	1,350	$	1,350	$	(570	)	$	—	$	—
Middle market loans	$	—	$	—	$	—		$	—	$	—
Residential mortgage loans	$	—	$	—	$	—		$	—	$	—
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—

Total:
Whole loans	$	128,108	$	128,108	$	—		$	130,445	$	12,679
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		2,859
Bank loans	1,350		1,350		(570		)	—		—
Middle market loans	—		—		—			—		—
Residential mortgage loans	2,082		2,082		—			2,082		148
Loans receivable - related party	—		—		—			—		—
	$	169,612	$	169,612	$	(570	)	$	170,599	$	15,686



	Recorded Balance		Unpaid Principal Balance		Specific Allowance			Average Investment in Impaired Loans		Interest Income Recognized
As of December 31, 2013:
Loans without a specific valuation allowance:
Whole loans	$	130,759	$	130,759	$	—		$	123,495	$	8,439
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	38,072	$	38,072	$	—		$	38,072	$	1,615
Bank loans	$	—	$	—	$	—		$	—	$	—
Middle market loans	$	—	$	—	$	—		$	—	$	—
Residential mortgage loans	$	315	$	268	$	—		$	—	$	—
Loans receivable - related party	$	5,733	$	5,733	$	—		$	—	$	—
Loans with a specific valuation allowance:
Whole loans	$	25,572	$	25,572	$	(4,572	)	$	24,748	$	1,622
B notes	$	—	$	—	$	—		$	—	$	—
Mezzanine loans	$	—	$	—	$	—		$	—	$	—
Bank loans	$	3,554	$	3,554	$	(2,621	)	$	—	$	—
Middle market loans	$	—	$	—	$	—		$	—	$	—
Residential mortgage loans	$	—	$	—	$	—		$	—	$	—
Loans receivable - related party	$	—	$	—	$	—		$	—	$	—

Total:
Whole loans	$	156,331	$	156,331	$	(4,572	)	$	148,243	$	10,061
B notes	—		—		—			—		—
Mezzanine loans	38,072		38,072		—			38,072		1,615
Bank loans	3,554		3,554		(2,621		)	—		—
Middle market loans	—		—		—			—		—
Residential mortgage loans	315		268		—			—		—
Loans receivable - related party	5,733		5,733		—			—		—
	$	204,005	$	203,958	$	(7,193	)	$	186,315	$	11,676

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
Year Ended December 31, 2014:
Whole loans	3	$	99,739	$	99,739
B notes	—	—		—
Mezzanine loans	1	38,072		38,072
Bank loans	—	—		—
Middle market loans	—	—		—
Residential mortgage loans	—	—		—
Loans receivable - related party	—	—		—
Total loans	4	$	137,811	$	137,811

Year Ended December 31, 2013:
Whole loans	5	$	143,484	$	147,826
B notes	—	—		—
Mezzanine loans	—	—		—
Bank loans	—	—		—
Middle market loans	—	—		—
Loans receivable	1	6,592		6,592
Total loans	6	$	150,076	$	154,418

Schedule of Intangible Assets and Goodwill

The following table summarizes intangible assets at December 31, 2014 and 2013 (in thousands).



	Beginning Balance		Accumulated Amortization			Net Asset
December 31, 2014:
Investment in RCAM	$	21,213	$	(11,779	)	$	9,434
Investment in PCA:
Wholesale or correspondent relationships	600		(298		)	302
Total intangible assets	$	21,813	$	(12,077	)	$	9,736

As of December 31, 2013:
Investment in RCAM	$	21,213	$	(9,980	)	$	11,233
Investments in real estate:
In-place leases	2,461		(2,430		)	31
Above (below) market leases	29		(29		)	—
Investment in PCA:
Wholesale or correspondent relationships	600		(42		)	558
Total intangible assets	$	24,303	$	(12,481	)	$	11,822

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

Certain information with respect to RSO’s borrowings at December 31, 2014 and 2013 is summarized in the following table (in thousands, except percentages):



	Principal Outstanding		Unamortized Issuance Costs and Discounts		Outstanding Borrowings		Weighted Average Borrowing Rate	Weighted Average Remaining Maturity	Value of Collateral
As of December 31, 2014:
RREF CDO 2006-1 Senior Notes	$	61,423	$	—	$	61,423	2.12%	31.6 years	$	139,242
RREF CDO 2007-1 Senior Notes	130,340		133		130,207		1.19%	31.8 years	271,423
RCC CRE Notes 2013 Senior Notes	226,840		2,683		224,157		2.11%	14.0 years	249,983
RCC CRE 2014 Senior Notes	235,344		3,687		231,657		1.45%	17.3 years	346,585
Apidos CDO III Senior Notes	74,646		—		74,646		1.18%	5.7 years	85,553
Apidos Cinco CDO Senior Notes	255,664		201		255,463		0.81%	5.4 years	272,512
Moselle CLO Senior Notes, at fair value (7)	63,321		—		63,321		1.49%	5.0 years	93,576
Moselle CLO Securitized Borrowings, at fair value (1)	5,619		—		5,619		1.49%	5.0 years	—
Unsecured Junior Subordinated Debentures (2)	51,548		343		51,205		4.19%	21.8 years	—
6.0% Convertible Senior Notes	115,000		6,626		108,374		6.00%	3.9 years	—
CRE - Term Repurchase Facilities (3)	207,640		1,958		205,682		2.43%	20 days	297,571
CMBS - Term Repurchase Facility (4)	24,967		—		24,967		1.35%	20 days	30,180
RMBS - Term Repurchase Facility (6)	22,248		36		22,212		1.16%	1 day	27,885
Residential Mortgage Financing Agreements	102,576		—		102,576		2.78%	207 days	147,472
CMBS - Short Term Repurchase Agreements	44,225		—		44,225		1.63%	17 days	62,446
Senior Secured Revolving Credit Agreement (5)	113,500		2,363		111,137		2.66%	2.7 years	262,687
Total	$	1,734,901	$	18,030	$	1,716,871	2.09%	10.0 years	$	2,287,115



	Principal Outstanding		Unamortized Issuance Costs and Discounts		Outstanding Borrowings		Weighted Average Borrowing Rate	Weighted Average Remaining Maturity	Value of Collateral
As of December 31, 2013:
RREF CDO 2006-1 Senior Notes	$	94,209	$	205	$	94,004	1.87%	32.6 years	$	169,115
RREF CDO 2007-1 Senior Notes	178,556		719		177,837		0.84%	32.8 years	318,933
RCC CRE Notes 2013 Senior Notes	260,840		4,269		256,571		2.03%	15.0 years	305,586
Apidos CDO I Senior Notes	87,131		—		87,131		1.68%	3.6 years	103,736
Apidos CDO III Senior Notes	133,326		117		133,209		0.88%	6.7 years	145,930
Apidos Cinco CDO Senior Notes	322,000		853		321,147		0.74%	6.4 years	342,796
Whitney CLO I Securitized Borrowings (1)	440		—		440		—%	N/A	885
Unsecured Junior Subordinated Debentures (2)	51,548		543		51,005		4.19%	22.8 years	—
6.0% Convertible Senior Notes	115,000		8,465		106,535		6.00%	4.9 years	—
CRE - Term Repurchase Facilities (3)	30,736		1,033		29,703		2.67%	21 days	48,186
CMBS - Term Repurchase Facility (4)	47,613		12		47,601		1.38%	21 days	56,949
Residential Mortgage Financing Agreements	14,627		—		14,627		4.24%	56 days	16,487
Total	$	1,336,026	$	16,216	$	1,319,810	1.87%	13.1 years	$	1,508,603


(1)	The securitized borrowings were collateralized by the same assets as the Moselle CLO Senior Notes and Whitney CLO I Senior Notes.


(2)	Amount represents junior subordinated debentures issued to RCT I and RCT II in May 2006 and September 2006, respectively.


(3)	Amount also include accrued interest expense of $198,000 and $26,000 related to CRE repurchase facilities as of December 31, 2014 and 2013, respectively.


(4)	Amount also include accrued interest expense of $12,000 and $22,000 related to CMBS repurchase facilities as of December 31, 2014 and 2013, respectively. Amounts does not reflect CMBS repurchase agreement borrowings that are components of linked transactions.


(5)	Amount also include accrued interest expense of $31,000 related to CMBS short term repurchase facilities as of December 31, 2014.


(6)	Amount also include accrued interest expense of $20,000 related to RMBS repurchase facilities as of December 31, 2014.

(7)

The fair value option has been elected for the borrowings associated with Moselle CLO. As such, the outstanding borrowings and principal outstanding amounts are stated at fair value. The unpaid principal amounts of these borrowings were $63.3 million at December 31, 2014. Unpaid principal does not include subordinated notes with a fair value of $27.8 million that are owned by RSO and eliminate in consolidation.


(8)	Value of collateral includes $14.9 million of principal receivable at borrowed at December 31, 2014.

Schedule of Securitizations

Securitizations



Securitization	Closing Date	Maturity Dates	Reinvestment Period End	Total Note Paydowns as of December 31, 2014
				(in millions)
RREF CDO 2006-1 Senior Notes	August 2006	August 2046	September 2011	$	165.6
RREF CDO 2007-1 Senior Notes	June 2007	September 2046	June 2012	$	151.7
RCC CRE Notes 2013 Senior Notes	December 2013	December 2028	N/A	$	34.0
RCC CRE 2014 Senior Notes	July 2014	April 2032	N/A	$	—
Apidos CDO III Senior Notes	May 2006	September 2020	June 2012	$	187.9
Apidos Cinco CDO Senior Notes	May 2007	May 2020	May 2014	$	66.3
Moselle CLO S.A. Senior Notes	October 2005	January 2020	January 2012	$	100.3
Moselle CLO S.A. Securitized Borrowings	October 2005	January 2020	January 2012	$	—

Schedule of Amount at Risk under Credit Facility

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



	Amount at Risk⁽¹⁾		Weighted Average Maturity in Days	Weighted Average Interest Rate
As of December 31, 2014:
CMBS Term Repurchase Facility
Wells Fargo Bank, National Association	$	6,486	20	1.35%

RMBS Term Repurchase Facility
Wells Fargo Bank, National Association	$	5.017	1	1.16%

CRE Term Repurchase Facilities
Wells Fargo Bank, National Association	$	76,148	20	2.38%
Deutsche Bank Securities, LLC	$	13,017	19	2.78%

Short-Term Repurchase Agreements - CMBS
JP Morgan Securities, LLC	$	—	0	—%
Wells Fargo Securities, LLC	$	2,127	9	1.66%
Deutsche Bank Securities, LLC	$	11,810	20	1.62%

Residential Mortgage Financing Agreements
New Century Bank	$	853	242	2.82%
Wells Fargo Bank	$	6,902	183	2.75%

As of December 31, 2013:
CMBS Term Repurchase Facility
Wells Fargo Bank, National Association	$	10,796	21	1.38%

CRE Term Repurchase Facilities
Wells Fargo Bank, National Association	$	20,718	21	2.67%

Short-Term Repurchase Agreements - CMBS
JP Morgan Securities, LLC	$	7,882	11	0.99%
Wells Fargo Securities, LLC	$	8,925	2	1.19%
Deutsche Bank Securities, LLC	$	11,418	22	1.43%


(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.

Company's Asset Recorded at Fair Value on Recurring Basis



	Level 1		Level 2		Level 3		Total
As of December 31, 2014:
Assets:
Investment securities, trading	$	—	$	—	$	20,786	$	20,786
Investment securities available-for-sale	—		33,158		242,562		275,720
CMBS - linked transactions	—		—		15,367		15,367
Derivatives (net)	3,429		7		1,868		5,304
Total assets at fair value	$	3,429	$	33,165	$	280,583	$	317,177

Liabilities:
Moselle CLO Notes	$	—	$	—	$	68,940	$	68,940
Derivatives (net)	—		—		8,476		8,476
Total liabilities at fair value	$	—	$	—	$	77,416	$	77,416

As of December 31, 2013:
Assets:
Investment securities, trading	$	—	$	—	$	11,558	$	11,558
Investment securities available-for-sale	2,370		92		207,375		209,837
CMBS - linked transactions	—		—		30,066		30,066
Total assets at fair value	$	2,370	$	92	$	248,999	$	251,461

Liabilities:
Derivatives (net)	$	—	$	395	$	10,191	$	10,586
Total liabilities at fair value	$	—	$	395	$	10,191	$	10,586

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):



	CMBS Including Linked Transactions			ABS			RMBS			Structured Finance			Total
Beginning balance, January 1, 2014	$	210,785		$	26,656		$	451		$	11,107		$	248,999
Total gains or losses (realized or unrealized):
Included in earnings	235			3,740			(36		)	(3,638		)	301
Purchases	123,671			79,289			31,058			19,359			253,377
Sales	(110,825		)	(38,262		)	—			(2,396		)	(151,483		)
Paydowns	(43,891		)	(11,928		)	(825		)	(2,165		)	(58,809		)
Included in OCI	5,797			12,662			897			(1,481		)	17,875
Transfers into of Level 2	—			—			(31,545		)	—			(31,545		)
Transfers into Level 3	—			—			—			—			—
Ending balance, December 31, 2014	$	185,772		$	72,157		$	—		$	20,786		$	278,715

Fair Value, Liabilities Measured on Recurring Basis, 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 losses – included in accumulated other comprehensive income	(3,886		)
Beginning balance, January 1, 2014	10,191
Unrealized losses – included in accumulated other comprehensive income	(1,715		)
Ending balance, December 31, 2014	$	8,476

Changes in Carrying Value of Assets and Liabilities Measured at Fair Value on Non-recurring Basis

The following table summarizes 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
As of December 31, 2014:
Assets:
Loans held for sale	$	—	$	36,956	$	—	$	36,956
Impaired loans	—		1,678		137,811		139,489
Total assets at fair value	$	—	$	38,634	$	137,811	$	176,445

As of December 31, 2013:
Assets:
Loans held for sale	$	—	$	6,850	$	15,066	$	21,916
Impaired loans	—		225		—		225
Total assets at fair value	$	—	$	7,075	$	15,066	$	22,141

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of December 31, 2014, the significant unobservable inputs used in the fair value measurements were as follows (in thousands):



	Fair Value at December 31, 2014		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Interest rate swap agreements	$	8,476	Discounted cash flow	Weighted average credit spreads	5.12	%

Fair Value of Financial Instruments

The fair values of RSO’s remaining financial instruments that are not reported at fair value on the 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)
As of December 31, 2014:
Loans held-for-investment	$	1,925,980	$	1,909,019	$	—	$	570,071	$	1,338,948
Loans receivable-related party	$	1,277	$	1,277	$	—	$	—	$	1,277
CDO notes	$	1,046,493	$	975,762	$	—	$	—	$	975,762
Junior subordinated notes	$	51,205	$	17,699	$	—	$	—	$	17,699
Repurchase agreements	$	399,662	$	399,662	$	—	$	—	$	399,662
Senior secured revolving credit agreement	$	111,137	$	111,137	$	—	$	—	$	111,137

As of December 31, 2013:
Loans held-for-investment	$	1,369,526	$	1,358,434	$	—	$	545,352	$	813,082
Loans receivable-related party	$	6,966	$	6,966	$	—	$	—	$	6,966
CDO notes	$	1,070,339	$	653,617	$	—	$	653,617	$	—
Junior subordinated notes	$	51,005	$	17,499	$	—	$	—	$	17,499
Repurchase agreements	$	77,304	$	77,304	$	—	$	—	$	77,304

Components of Income Taxes

The following table details the components of income taxes (in thousands):



	Years Ended December 31,
	2014			2013			2012
Provision (benefit) for income taxes:
Current:
Federal	$	6,819		$	4,601		$	11,497
State	2,505			1,068			776
Total current	9,324			5,669			12,273

Deferred:
Federal	(9,450		)	(5,116		)	1,769
State	(2,086		)	(1,594		)	560
Total deferred	(11,536		)	(6,710		)	2,329
Income tax provision (benefit)	$	(2,212	)	$	(1,041	)	$	14,602

Reconciliation Between Federal Statutory Income Tax Rate and Effective Income Tax Rate

A reconciliation of the income tax benefit (provision) based upon the statutory tax rate to the effective income tax rate is as follows (in thousands):



	Years Ended December 31,
	2014			2013			2012
Statutory tax rate	$	(2,232	)	$	(588	)	$	9,518
State and local taxes, net of federal benefit	(375		)	(728		)	225
Permanent adjustments	41			2			32
Subpart F income	—			—			3,458
Basis difference in LCC investment	—			—			—
True-up of period tax expense	353			253			—
Other items	1			20			1,369
	$	(2,212	)	$	(1,041	)	$	14,602

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities are as follows (in thousands):



	December 31,
	2014			2013
Deferred tax assets related to:
Investment in securities	$	1,030		$	118
Intangible assets basis difference	2,533			2,725
Federal, state and local loss carryforwards	7,848			941
Subpart F income	—			1,359
Partnership investment	—			2
Deferred revenue	207			23
Accrued expenses	56			44
Amortization of intangibles	766			—
Unrealized gains losses	1,799			—
Mark to market adjustment	188			—
Charitable contribution carryforward	6			—
Equity compensation	167			—
Gain (loss) on sale of investments	116			—
Partnership investment	(1,622		)	—
Total deferred tax assets	13,094			5,212
Valuation allowance	—			—
Total deferred tax assets	$	13,094		$	5,212



Deferred tax liabilities related to:
Unrealized loss on investments	$	(366	)	$	(3,764	)
Equity investments	—			(153		)
Basis difference in LCC investment	—			(195		)
Depreciation	(1		)	—
Accrued expenses	(3		)	—
Partnership investment	(90		)	—
Total deferred tax liabilities	$	(460	)	$	(4,112	)

Deferred tax assets, net ⁽¹⁾	$	12,634		$	1,100


(1)	Deferred tax asset, net agrees to the Deferred tax assets less Deferred tax liability presented on RSO's Consolidated Balance Sheets as of December 31, 2014.

Schedule of Variable Interest Entities

The following table shows the classification and carrying value of assets and liabilities of consolidated VIEs as of December 31, 2014 (in thousands):



	Apidos I		Apidos III		Apidos Cinco		Apidos VIII		Whitney CLO I		RREF 2006-1			RREF 2007-1		RCC CRE Notes 2013		RCC CRE 2014			Moselle			RCM Global LLC			Total
ASSETS
Cash and cash equivalents	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—	$	—		$	—		$	25		$	25
Restricted cash ⁽¹⁾	416		3,104		20,142		5		116		20			250		2,713		—			94,481			—			121,247
Investment securities available-for-sale, pledged as collateral, at fair value	—		3,057		11,115		—		—		11,274			64,858		—		—			—			28,899			119,203
Loans, pledged as collateral	153		80,761		249,164		—		—		128,398			206,207		248,662		347,792			—			—			1,261,137
Loans held for sale	—		—		282		—		—		—			—		—		—			—			—			282
Interest receivable	—		327		858		—		—		2,293			1,979		1,279		1,396			—			809			8,941
Prepaid assets	2		21		19		—		—		78			64		37		—			—			—			221
Principal paydown receivable	—		—		—		—		—		—			—		20,500		2,207			3,060			—			25,767
Other assets	—		—		—		—		—		—			—		—		(12		)	—			—			(12		)
Total assets ⁽²⁾	$	571	$	87,270	$	281,580	$	5	$	116	$	142,063		$	273,358	$	273,191	$	351,383		$	97,541		$	29,733		$	1,536,811

LIABILITIES
Borrowings	$	—	$	74,646	$	255,463	$	—	$	—	$	61,424		$	130,207	$	224,157	$	231,657		$	68,940		$	—		$	1,046,494
Accrued interest expense	—		46		270		—		—		36			97		186		133			232			—			1,000
Derivatives, at fair value	—		—		—		—		—		864			7,575		—		—			—			—			8,439
Unsettled loan purchases	—		—		—		—		—		—			—		—		—			—			(529		)	(529		)
Accounts payable and other liabilities	8		40		17		—		—		(1		)	1		—		—			(453		)	2			(386		)
Total liabilities	$	8	$	74,732	$	255,750	$	—	$	—	$	62,323		$	137,880	$	224,343	$	231,790		$	68,719		$	(527	)	$	1,055,018


(1)	Includes $3.0 million available for reinvestment in certain of the securitizations.


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

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, 2014 (in thousands):



	Receivables from Managed Entities and Related Parties, Net ⁽¹⁾		Investments		Maximum Exposure to Loss in Non-consolidated VIEs
RREGPS	$	—	$	716	$	716
Ischus entities	204		—		204
Trapeza entities	—		614		614
	$	204	$	1,330	$	1,534


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