Resource America, Inc. Reports Operating Results for the Second Fiscal Quarter Ended March 31, 2012

For the second fiscal quarter and six months ended March 31, 2012, the Company reported a GAAP net loss attributable to common shareholders of $2.3 million, or $0.12 per common share-diluted, and $2.1 million, or $0.11 per common share-diluted, respectively, as compared to $4.3 million, or $0.22 per common share-diluted, and $4.8 million, or $0.25 per common share-diluted, for the second fiscal quarter and six months ended March 31, 2011, respectively.

Jonathan Cohen, CEO and President, commented, "The recent completion of our transaction creating CVC Credit Partners demonstrates the quality and value of our asset management platforms. We will recognize a gain of approximately $53 million, received gross proceeds of $25 million in cash, retained the right to collect substantial incentive fees and own 33% of a world-class global credit management business that we think will grow and prosper. Our other platforms are also advancing robustly. In real estate, both Resource Opportunity REIT and Resource Capital Corp. are growing and performing well. We end our second quarter very strong -- our businesses are doing well, we are growing, our balance sheet is in excellent condition and we are exploring opportunities to leverage those strengths to enhance shareholder value."

Assets Under Management

The following table details the Company's assets under management by operating segment, which decreased by $636.0 million (5%) from March 31, 2011 to March 31, 2012:

 
 
        
        
                                                     At March 31,      At March 31,
                                                         2012              2011
                                                   ---------------   ---------------
        Financial fund management                  $  10.9 billion   $  11.4 billion
        Real estate                                    1.6 billion       1.6 billion
        Commercial finance                             0.5 billion       0.7 billion
                                                   ---------------   ---------------
                                                   $  13.0 billion   $  13.7 billion
                                                   ===============   ===============
        
        
        
 
 

A description of how the Company calculates assets under management is set forth in Item 1 of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2011.

Highlights for the Second Fiscal Quarter Ended March 31, 2012 and Recent Developments

REAL ESTATE:

 
 
        
        --  Fundraising: Resource Real Estate, Inc. ("RRE"), the Company's real
            estate operating segment, has sponsored and is the external manager of
            Resource Real Estate Opportunity REIT, Inc. ("RRE Opportunity REIT"),
            which is a public non-traded real estate program. RRE Opportunity REIT
            raised a record $10.6 million and $23.3 million during the month and
            second fiscal quarter ended March 31, 2012. Through April 30, 2012,
            RRE Opportunity REIT has raised approximately $112.9 million in total
            capital.
        --  Resource Capital Corp. ("RSO") Capital Raised: RSO raised an
            additional $24.0 million through its dividend reinvestment program
            during the second fiscal quarter ended March 31, 2012.
        --  Second Quarter RRE Acquisitions: RRE made the following acquisitions:
            --  In January 2012, on behalf of an RSO joint venture, a
                non-performing note secured by a multifamily rental property
                located in Colorado Springs, CO for $5.0 million. In connection
                with this purchase, the Company received a $51,000 acquisition fee
                and will receive asset management fees in the future.
            --  In March 2012, on behalf of one of RRE's sponsored limited
                partnerships, a multifamily rental property located in Columbia,
                SC for $11.5 million. In connection with this purchase, the
                Company received acquisition fees totaling $368,000 and will
                receive both asset management and property management fees in the
                future.
            --  In March 2012, on behalf of RRE Opportunity REIT, a multifamily
                rental property located in Houston, TX for $11.4 million. In
                connection with this purchase, the Company received a $234,000
                acquisition fee and will receive both asset management and
                property management fees in the future.
            --  In March 2012, on behalf of RRE Opportunity REIT, a non-performing
                note secured by a multifamily rental property located in
                Hermantown, MN for $10.3 million. In connection with this
                purchase, the Company received a $217,000 acquisition fee and will
                receive asset management fees in the future.
        --  Disposition: In March 2012, RRE sold a $20.0 million multifamily
            property in Suitland, MD for a joint venture with an existing partner,
            in which RSO is a member. In connection with this sale, the Company
            earned a promoted return of $1.2 million and a $144,000 disposition
            fee.
        --  Resolution of Equity Interest: In January 2012, RRE, along with an
            existing joint venture partner, sold its interest in a multifamily
            property in Cleveland, OH and received proceeds of $327,000.
        --  Property Management: Resource Real Estate Management, Inc., the
            Company's property management subsidiary, increased the apartment
            units it manages to 16,513 units at 59 properties as of March 31, 2012
            from 15,204 units at 55 properties as of December 31, 2011.
        
        
 
 

FINANCIAL FUND MANAGEMENT:

 
 
        
        --  Creation of Global Credit Manager: In December 2011, the Company
            entered into a definitive agreement with CVC Capital Partners
            SICAV-FIS, S.A. ("CVC"), to create CVC Credit Partners, L.P. ("CCP"),
            a newly-formed Cayman Islands limited partnership jointly owned by the
            Company and CVC. CCP will be a global credit management business with
            over $7.5 billion in assets under management and offices in both the
            United States and Europe. On April 17, 2012, the Company closed on its
            sale of 100% of the common equity interests of Apidos Capital
            Management, LLC ("Apidos"). Pursuant to the sale and purchase
            agreement and related agreements between the Company and CVC dated as
            of December 29, 2011 (collectively, the "SPA"), the Company sold
            Apidos in exchange for (i) $25.0 million in cash, (ii) a 33% limited
            partner interest in CCP and its general partner. The Company is
            retaining certain incentive management fees that may be collected in
            the future relating to previously managed portfolios. The Company
            anticipates that these fees will begin to be collected in 2013. CVC is
            also contributing its existing credit manager, CVC Cordatus, to CCP.
        
        
 
 

COMMERCIAL FINANCE:

 
 
        
        --  Lease Origination/Platform Growth: LEAF Commercial Capital, Inc.
            ("LEAF") continued to grow its lease origination and servicing
            operations during the second fiscal quarter ended March 31, 2012.
            --  Lease originations continue to trend upward, having increased by
                159% and 26% during the second fiscal quarter ended March 31, 2012
                as compared to the second fiscal quarter ended March 31, 2011 and
                the first fiscal quarter ended December 31, 2011, respectively.
            --  LEAF's commercial finance assets at March 31, 2012 increased by
                40% from September 30, 2011.
            --  LEAF continues to further expand its field sales presence to
                provide dedicated support to its top-priority dealers. Highly
                experienced industry experts were added to the Northeastern,
                Midwestern, and Southern California market places. LEAF's field
                sales team will work with key dealers and branch offices of its
                national accounts by developing unique offerings and providing
                support to build the relationships with those dealers.
            --  LEAF launched its enhanced Cost Per Usage billing product and
                announced that it has become a Gold Technology Partner of Digital
                Gateway. The LEAF interface streamlines the process of
                transferring asset and transactional data from the Digital Gateway
                system, thereby reducing meter errors and accelerating the billing
                process.
        
        
 
 

OTHER:

 
 
        
        --  Corporate Credit Facility Modification: In January 2012, the Company
            extended its existing $3.5 million revolving credit facility with
            Republic Bank from December 2012 to December 2013.
        --  Dividends: The Company's Board of Directors authorized the payment on
            April 30, 2012 of a $0.03 cash dividend per share on the Company's
            common stock to holders of record as of the close of business on April
            20, 2012. RSO declared a cash dividend of $0.20 per common share for
            its first fiscal quarter ended March 31, 2012.
        
        
 
 

Resource America, Inc. is a specialized asset management company that uses industry specific expertise to evaluate, originate, service and manage investment opportunities for its own account and for outside investors in the real estate, financial fund management and commercial finance sectors.

For more information, please visit our website at www.resourceamerica.com or contact investor relations at pkamdar@resourceamerica.com.

Statements made in this release include forward-looking statements, which involve substantial risks and uncertainties. The Company's actual results, performance or achievements could differ materially from those expressed or implied in this release and its other reports filed with the Securities and Exchange Commission. For information pertaining to risks relating to these forward-looking statements, reference is made to the section "Risk Factors" contained in Item 1A of the Company's Annual Report on Form 10-K and in other of its public filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect new or changing information or events except as may be required by law.

A registration statement relating to securities offered by RRE Opportunity REIT was declared effective by the SEC on June 16, 2010. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 2005 Market Street, 15th Floor, Philadelphia, PA 19103.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The remainder of this release contains the Company's unaudited consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows and reconciliation of GAAP loss from continuing operations attributable to common shareholders to adjusted income (loss) from continuing operations attributable to common shareholders.