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Resource America, Inc. Reports Operating Results for the Fourth Quarter and Year Ended December 31, 2013

PHILADELPHIA, PA -- (Marketwired) -- 03/10/14 -- Resource America, Inc. (NASDAQ: REXI)

Fourth Quarter 2013 Highlights

  • Adjusted net income attributable to common shareholders of $3.6 million (see Schedule I)
  • Stand-alone operating income of $4.0 million as compared to a $1.1 million loss for the prior year period
  • Increased assets under management by 13% during the year to $17.3 billion
  • Record fund raising of $194.5 million for Resource Real Estate Opportunity REIT, Inc.
  • Book value per common share of $7.87
  • Repurchased 324,000 shares at $9.28
  • Increased fourth quarter cash dividend by 25% to $.05 from $.04

Fourth Quarter 2013 Results
Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $3.6 million, or $0.16 per common share-diluted, and $11.9 million, or $0.54 per common share-diluted, for the three months and year ended December 31, 2013, respectively, as compared to adjusted net income attributable to common shareholders of $1.3 million, or $0.06 per common share-diluted, and $335,000, or $0.02 per common share-diluted, for the three months and year ended December 31, 2012, respectively. A reconciliation of the Company's reported GAAP net income (loss) attributable to common shareholders to adjusted net income attributable to common shareholders, a non-GAAP measure, is included as Schedule I to this release.

The Company reported GAAP net income attributable to common shareholders of $1.4 million, or $0.06 per common share-diluted, and $6.4 million, or $0.29 per common share-diluted, for the three months and year ended December 31, 2013, respectively, as compared to a GAAP net loss attributable to common shareholders of $1.5 million, or $0.08 per common share-diluted, for the three months ended December 31, 2012, and GAAP net income attributable to common shareholders of $24.0 million, or $1.14 per common share-diluted, for the year ended December 31, 2012. Included in GAAP net income attributable to common shareholders for the year ended December 31, 2012 was a $36.4 million gain, net of tax, on the sale of the Company's credit loan manager.

Assets Under Management
The following table details the Company's assets under management by operating segment, which increased by $2.0 billion (13%) from December 31, 2012 to 2013 (in billions):


                                                             December 31,
                                                         -------------------
                                                            2013      2012
                                                         --------- ---------
Financial fund management                                $    14.2 $    13.0
Real estate                                                    2.5       1.8
Commercial finance                                             0.6       0.5
                                                         --------- ---------
                                                         $    17.3 $    15.3
                                                         ========= =========

  Net assets under management (1)                        $     7.9 $     6.8
                                                         ========= =========

------
(1)  Net assets under management represents the proportionate share of
     assets managed by the Company after reflecting joint venture
     arrangements.

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/A for the fiscal year ended September 30, 2012.

Highlights for the Fourth Quarter and Year Ended December 31, 2013 and Recent Developments

REAL ESTATE ASSET MANAGEMENT:

Equity Asset Management
Resource Real Estate Opportunity REIT, Inc, a public non-traded real estate investment trust ("REIT") managed by the Company, which specializes in acquiring and managing distressed real estate assets, had the following highlights:

  • Raised a record $194.5 million during the three months ended December 31, 2013 and completed fundraising for this fund with a total equity capital raise of $635.0 million.
  • Increased total assets to $678.6 million at December 31, 2013, an increase of $496.4 million, or 272%, from December 31, 2012, including the acquisition during the three months ended December 31, 2013 of three multifamily assets for $98.3 million located in Alpharetta, GA, San Antonio, TX and Burnsville, MN.
  • In January 2014, acquired 10 multifamily assets totaling 2,513 units and two office properties that contain 75,518 rentable square feet for $51.2 million.

For the year ended December 31, 2013, the Company's real estate operating segment acquired 12 properties for $317.9 million, financed 11 properties for $147.8 million and disposed of six properties for $52.1 million.

On February 6, 2014, Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II") commenced its initial public offering of common stock and will focus on acquiring under-performing multifamily rental properties, distressed real estate and performing loans. Opportunity REIT II is offering up to $1 billion in common stock at a maximum price of $10 per share. Resource Real Estate will be the external manager.

Debt Asset Management
Resource Capital Corp. ("RSO"), a publicly-traded REIT managed by the Company which focuses on commercial real estate assets, had the following highlights:

  • Originated $97.4 million and $344.3 million of commercial real estate whole loans during the three months and year ended December 31, 2013, respectively.
  • In December 2013, completed a $307.8 million commercial real estate securitization that issued $260.8 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.86%.
  • In October 2013, acquired Primary Capital Advisors, a residential mortgage origination company, for $8.4 million.
  • In October 2013, completed a $115.0 million public offering of its 6.00% convertible senior notes due 2018.

The following additional highlights contributed to our real estate asset management operations:

  • The Company's real estate operating segment increased its assets under management at December 31, 2013 to $2.5 billion, an increase of $709.0 million, or 39%, from December 31, 2012.
  • Real estate revenues increased 34% and 27%, to $17.7 million and $57.1 million, for the three months and year ended December 31, 2013, respectively, as compared to $13.2 million and $45.1 million for the three months and year ended December 31, 2012, respectively.

FINANCIAL FUND MANAGEMENT:

Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XV, Ltd. (issuing notes with a par value of $500.0 million) and Apidos CLO XVI, Ltd. (issuing notes with a par value of $600.0 million) in October 2013 and January 2014, respectively. Since creating this joint venture in April 2012, CCP has closed seven collateralized loan obligation issuers (issuing notes with a total par value of $3.5 billion) and expects to receive approximately $15.9 million in fees on an annual run rate basis. The Company has a 33% interest in this joint venture.

The following additional highlight contributed to our financial fund asset management operations:
The Company's financial fund management operating segment increased its assets under management at December 31, 2013 to $14.2 billion, an increase of $1.1 billion, or 9%, from December 31, 2012.

CORPORATE/OTHER:

Share Repurchases

  • In November 2013, the Company repurchased 324,000 of its shares at $9.28 per share. From August 2012 to December 2013, the Company repurchased over 912,000 shares at an average price of $7.73 per share under its share repurchase program.
  • In December 2013, the Company's Board of Directors authorized the repurchase of up to one million shares of common stock, which replaced the August 2012 repurchase program.

Corporate Credit Facility Modification

  • In November 2013, the Company extended the maturity of its $3.5 million revolving credit facility with Republic Bank from December 2014 to December 2016.

Dividends

  • The Company's Board of Directors authorized an increase in the Company's cash dividend from $0.04 to $0.05 per share on the Company's common stock and payment on January 31, 2014 to holders of record as of the close of business on January 17, 2014.
  • RSO's Board of Directors declared a cash dividend of $0.20 per common share for its three months ended December 31, 2013.

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, its joint ventures, 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 [email protected].

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, or SEC. 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/A and in other of its public filings with the SEC. 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 Opportunity REIT II was declared effective by the SEC on February 6, 2014. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 1845 Walnut Street, 18th 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, consolidating statements of operations and reconciliation of GAAP net income (loss) attributable to common shareholders to adjusted net income attributable to common shareholders.


                           RESOURCE AMERICA, INC
                        CONSOLIDATED BALANCE SHEETS
                     (in thousands, except share data)
                                (unaudited)

                                                         December 31,
                                                   ------------------------
                                                       2013         2012
                                                   -----------  -----------

ASSETS
  Cash                                             $    19,853  $    11,899
  Restricted cash                                          571          638
  Receivables                                              541          468
  Receivables from managed entities and related
   parties, net                                         30,923       30,618
  Investments in real estate, net                       17,696       18,041
  Investment securities, at fair value                   7,839       10,576
  Investments in unconsolidated loan manager            37,821       37,221
  Investments in unconsolidated entities                14,342       13,156
  Assets of consolidated variable interest entity
   ("VIE") - RSO
    Cash and cash equivalents (including
     restricted cash)                                  325,579      179,390
    Investments, at fair value                         221,395      256,433
    Loans                                            1,397,458    1,849,428
    Investments in real estate and consolidated
     entities                                          129,562      120,706
    Other assets                                        76,467       70,600
                                                   -----------  -----------
      Total assets of consolidated VIE - RSO         2,150,461    2,476,557
                                                   -----------  -----------

  Property and equipment, net                            5,844        2,590
  Deferred tax assets, net                              27,769       28,274
  Other assets                                           4,791        6,726
                                                   -----------  -----------
    Total assets                                   $ 2,318,451  $ 2,636,764
                                                   ===========  ===========

LIABILITIES AND EQUITY
Liabilities:
  Accrued expenses and other liabilities           $    22,134  $    21,864
  Payables to managed entities and related parties       3,110        3,536
  Borrowings                                            20,619       20,735
  Liabilities of consolidated VIE - RSO
    Borrowings                                       1,320,015    1,785,600
    Other liabilities                                   55,247       71,239
                                                   -----------  -----------
    Total liabilities of consolidated VIE - RSO      1,375,262    1,856,839
                                                   -----------  -----------
      Total liabilities                              1,421,125    1,902,974
                                                   -----------  -----------

Commitments and contingencies

Equity:
  Preferred stock, $1.00 par value, 1,000,000
   shares authorized; none outstanding                       -            -
  Common stock, $.01 par value, 49,000,000 shares
   authorized;30,378,339 and 30,069,822 shares
   issued (including nonvested restricted stock of
   400,194 and 604,353), respectively                      299          295
  Additional paid-in capital                           288,555      286,048
  Accumulated deficit                                  (26,025)     (29,486)
  Treasury stock, at cost; 10,434,436 and
   9,914,090 shares, respectively                     (107,874)    (103,472)
  Accumulated other comprehensive loss                  (1,231)      (2,197)
                                                   -----------  -----------
    Total stockholders' equity                         153,724      151,188
  Noncontrolling interests                                 238          279
  Noncontrolling interests attributable to RSO         743,364      582,323
                                                   -----------  -----------
    Total equity                                       897,326      733,790
                                                   -----------  -----------
                                                   $ 2,318,451  $ 2,636,764
                                                   ===========  ===========


                           RESOURCE AMERICA, INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                   (in thousands, except per share data)
                                (unaudited)

                                  Three Months Ended        Years Ended
                                     December 31,          December 31,
                                 --------------------  --------------------
                                    2013       2012       2013       2012
                                 ---------  ---------  ---------  ---------
REVENUES:
Real estate (includes revenues
 of $2,806, $4,787, $12,600 and
 $13,956 related to RSO)         $  17,700  $  13,154  $  57,143  $  45,083
Financial fund management
 (includes revenues of $400,
 $(8), $1,120 and $4,894 related
 to RSO)                             4,539      2,675     19,773     18,053
Commercial finance (no revenues
 related to RSO)                       (98)      (124)      (341)    (1,659)
                                 ---------  ---------  ---------  ---------
                                    22,141     15,705     76,575     61,477
Revenues from consolidated VIE -
 RSO                                14,996     33,041     91,007    123,698
Elimination of consolidated VIE
 revenues attributed to
 operating segments                 (3,226)    (4,811)   (13,834)   (17,544)
                                 ---------  ---------  ---------  ---------
  Total revenues                    33,911     43,935    153,748    167,631
                                 ---------  ---------  ---------  ---------
COSTS AND EXPENSES:
Real estate                         11,098      7,998     40,612     30,475
Financial fund management            2,386      1,017     10,155     12,299
Commercial finance                     155        (49)        56        402
Restructuring expenses                   -          -          -        365
General and administrative           3,461      2,228     10,268      9,792
Impairment charges                       -          -          -      2,280
Provision for credit losses            472      5,152      4,265     20,148
Depreciation and amortization          618        492      1,936      2,084
                                 ---------  ---------  ---------  ---------
                                    18,190     16,838     67,292     77,845
Expenses from consolidated VIE -
 RSO                                19,492     24,098     62,602     63,850
Elimination of consolidated VIE
 expenses attributed to
 operating segments                 (3,037)    (4,762)   (13,215)   (17,351)
                                 ---------  ---------  ---------  ---------
  Total expenses                    34,645     36,174    116,679    124,344
                                 ---------  ---------  ---------  ---------
OPERATING (LOSS) INCOME               (734)     7,761     37,069     43,287
                                 ---------  ---------  ---------  ---------

OTHER INCOME (EXPENSE):
Gain on deconsolidation and sale
 of subsidiary                           -          -          -     54,542
Other-than-temporary impairment
 on investments                          -          -       (214)       (74)
Interest expense                      (511)      (522)    (2,036)    (2,289)
Other income, net                      175        106        575        112
Other income, net, from
 consolidated VIE - RSO                400     13,733     17,007     19,197
Elimination of consolidated VIE
 other income attributed to
 operating segments                     20         32        244        133
                                 ---------  ---------  ---------  ---------
                                        84     13,349     15,576     71,621
                                 ---------  ---------  ---------  ---------
(Loss) income from continuing
 operations before taxes              (650)    21,110     52,645    114,908
Income tax provision (benefit)       2,053       (241)     1,657     13,117
Income tax (benefit) provision -
 RSO                                (5,262)     7,624     (1,041)    14,602
                                 ---------  ---------  ---------  ---------
Income from continuing
 operations                          2,559     13,727     52,029     87,189
Loss from discontinued
 operations, net of tax                  -         (6)        (2)       (44)
                                 ---------  ---------  ---------  ---------
Net income                           2,559     13,721     52,027     87,145
Net loss (income) attributable
 to noncontrolling interests             3       (587)       (20)      (557)
Net income attributable to
 noncontrolling interests of
 consolidated VIE - RSO             (1,187)   (14,668)   (45,581)   (62,560)
                                 ---------  ---------  ---------  ---------
Net income (loss) attributable
 to common shareholders          $   1,375  $  (1,534) $   6,426  $  24,028
                                 =========  =========  =========  =========

Amounts attributable to common
 shareholders:
Income (loss) from continuing
 operations                      $   1,375  $  (1,528) $   6,428  $  24,072
Discontinued operations                  -         (6)        (2)       (44)
                                 ---------  ---------  ---------  ---------
Net income (loss)                $   1,375  $  (1,534) $   6,426  $  24,028
                                 =========  =========  =========  =========


                           RESOURCE AMERICA, INC.
             CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued)
                    (in thousands, except per share data)
                                 (unaudited)

                                     Three Months Ended      Years Ended
                                        December 31,         December 31,
                                    -------------------  -------------------
                                       2013      2012       2013      2012
                                    --------- ---------  --------- ---------
Basic earnings (loss) per share:
Continuing operations               $    0.07 $   (0.08) $    0.32 $    1.21
Discontinued operations                     -         -          -         -
                                    --------- ---------  --------- ---------
Net income (loss)                   $    0.07 $   (0.08) $    0.32 $    1.21
                                    --------- ---------  --------- ---------
Weighted average shares outstanding    20,104    20,077     20,217    19,919
                                    ========= =========  ========= =========

Diluted earnings (loss) per share:
Continuing operations               $    0.06 $   (0.08) $    0.29 $    1.14
Discontinued operations                     -         -          -         -
                                    --------- ---------  --------- ---------
Net income (loss)                   $    0.06 $   (0.08) $    0.29 $    1.14
                                    ========= =========  ========= =========
Weighted average shares outstanding    21,828    20,077     21,905    20,994
                                    ========= =========  ========= =========


                           RESOURCE AMERICA, INC.
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                               (in thousands)
                                 (unaudited)

The following table presents the consolidating statement of operations for the fourth quarter ended December 31, 2013:

                                RAI       RSO    Eliminations  Consolidated
                             --------  --------  ------------  ------------
REVENUES:
Real estate                  $ 17,700  $      -  $          -  $     17,700
Financial fund management       4,539         -             -         4,539
Commercial finance                (98)        -             -           (98)
                             --------  --------  ------------  ------------
                               22,141         -             -        22,141
                             --------  --------  ------------  ------------
Revenues from consolidated
 VIE - RSO                          -    14,996             -        14,996
Elimination of consolidated
 VIE revenues attributed to
 operating segments                 -         -        (3,226)       (3,226)
                             --------  --------  ------------  ------------
Total revenues                 22,141    14,996        (3,226)       33,911

COSTS AND EXPENSES:
Real estate                    11,098         -             -        11,098
Financial fund management       2,386         -             -         2,386
Commercial finance                155         -             -           155
General and administrative      3,461         -             -         3,461
Provision for credit losses       472         -             -           472
Depreciation and
 amortization                     618         -             -           618
                             --------  --------  ------------  ------------
                               18,190         -             -        18,190
Expenses from consolidated
 VIE - RSO                          -    14,230         5,262        19,492
Elimination of consolidated
 VIE expenses attributed to
 operating segments                 -         -        (3,037)       (3,037)
                             --------  --------  ------------  ------------
Total expenses                 18,190    14,230         2,225        34,645
                             --------  --------  ------------  ------------
OPERATING INCOME (LOSS)         3,951       766        (5,451)         (734)
                             --------  --------  ------------  ------------

OTHER INCOME (EXPENSE):
Interest expense                 (511)        -             -          (511)
Other income, net                 747         -          (572)          175
Other income, net, from
 consolidated VIE - RSO             -       400             -           400
Elimination of consolidated
 VIE other income, net              -         -            20            20
                             --------  --------  ------------  ------------
                                  236       400          (552)           84
                             --------  --------  ------------  ------------
Income (loss) from
 continuing operations
 before taxes                   4,187     1,166        (6,003)         (650)
Income tax provision
 (benefit)                      2,053         -        (5,262)       (3,209)
                             --------  --------  ------------  ------------
Net income (loss)               2,134     1,166          (741)        2,559
Net loss attributable to
 noncontrolling interests           3         -             -             3
Net income attributable to
 noncontrolling interests -
 RSO                                -    (2,114)          927        (1,187)
                             --------  --------  ------------  ------------
Net income attributable to
 common shareholders         $  2,137  $   (948) $        186  $      1,375
                             ========  ========  ============  ============


                           RESOURCE AMERICA, INC.
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                               (in thousands)
                                 (unaudited)

The following table presents the consolidating statement of operations for the fourth quarter ended December 31, 2012:

                                RAI       RSO    Eliminations  Consolidated
                             --------  --------  ------------  ------------
REVENUES:
Real estate                  $ 13,154  $      -  $          -  $     13,154
Financial fund management       2,675         -             -         2,675
Commercial finance               (124)        -             -          (124)
                             --------  --------  ------------  ------------
                               15,705         -             -        15,705
Revenues from consolidated
 VIE - RSO                          -    33,041             -        33,041
Elimination of consolidated
 VIE revenues attributed to
 operating segments                 -         -        (4,811)       (4,811)
                             --------  --------  ------------  ------------
Total revenues                 15,705    33,041        (4,811)       43,935
                             --------  --------  ------------  ------------

COSTS AND EXPENSES:
Real estate                     7,998         -             -         7,998
Financial fund management       1,017         -             -         1,017
Commercial finance                (49)        -             -           (49)
General and administrative      2,228         -             -         2,228
Provision for credit losses     5,152         -             -         5,152
Depreciation and
 amortization                     492         -             -           492
                             --------  --------  ------------  ------------
                               16,838         -             -        16,838
Expenses from consolidated
 VIE - RSO                          -    31,722        (7,624)       24,098
Elimination of consolidated
 VIE expenses attributed to
 operating segments                 -         -        (4,762)       (4,762)
                             --------  --------  ------------  ------------
Total expenses                 16,838    31,722       (12,386)       36,174
                             --------  --------  ------------  ------------
OPERATING (LOSS) INCOME        (1,133)    1,319         7,575         7,761
                             --------  --------  ------------  ------------

OTHER INCOME (EXPENSE):
Interest expense                 (522)        -             -          (522)
Other income, net                 640         -          (534)          106
Other income, net, from
 consolidated VIE - RSO             -    13,733             -        13,733
Elimination of consolidated
 VIE other income, net              -         -            32            32
                             --------  --------  ------------  ------------
                                  118    13,733          (502)       13,349
                             --------  --------  ------------  ------------
(Loss) income from
 continuing operations
 before taxes                  (1,015)   15,052         7,073        21,110
Income tax (benefit)
 provision                       (241)        -         7,624         7,383
                             --------  --------  ------------  ------------
(Loss) income from
 continuing operations           (774)   15,052          (551)       13,727
Loss from discontinued
 operations, net of tax            (6)        -             -            (6)
                             --------  --------  ------------  ------------
Net (loss) income                (780)   15,052          (551)       13,721
Net income attributable to
 noncontrolling interests        (587)        -             -          (587)
Net income attributable to
 noncontrolling interests -
 RSO                                -      (911)      (13,757)      (14,668)
                             --------  --------  ------------  ------------
Net (loss) income
 attributable to common
 shareholders                $ (1,367) $ 14,141  $    (14,308) $     (1,534)
                             ========  ========  ============  ============

Amounts attributable to
 common shareholders:
(Loss) income from
 continuing operations       $ (1,361) $ 14,141  $    (14,308) $     (1,528)
Discontinued operations            (6)        -             -            (6)
                             --------  --------  ------------  ------------
Net (loss) income            $ (1,367) $ 14,141  $    (14,308) $     (1,534)
                             ========  ========  ============  ============


                           RESOURCE AMERICA, INC.
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                               (in thousands)
                                 (unaudited)

The following table presents the consolidating statement of operations for the year ended December 31, 2013:

                                RAI       RSO    Eliminations  Consolidated
                             --------  --------  ------------  ------------
REVENUES:
Real estate                  $ 57,143  $      -  $          -  $     57,143
Financial fund management      19,773         -             -        19,773
Commercial finance               (341)        -             -          (341)
                             --------  --------  ------------  ------------
                               76,575         -             -        76,575
Revenues from consolidated
 VIE - RSO                          -    91,007             -        91,007
Elimination of consolidated
 VIE revenues attributed to
 operating segments                 -         -       (13,834)      (13,834)
                             --------  --------  ------------  ------------
Total revenues                 76,575    91,007       (13,834)      153,748
                             --------  --------  ------------  ------------

COSTS AND EXPENSES:
Real estate                    40,612         -             -        40,612
Financial fund management      10,155         -             -        10,155
Commercial finance                 56         -             -            56
General and administrative     10,268         -             -        10,268
Provision for credit losses     4,265         -             -         4,265
Depreciation and
 amortization                   1,936         -             -         1,936
                             --------  --------  ------------  ------------
                               67,292         -             -        67,292
Expenses from consolidated
 VIE - RSO                          -    61,561         1,041        62,602
Elimination of consolidated
 VIE expenses attributed to
 operating segments                 -         -       (13,215)      (13,215)
                             --------  --------  ------------  ------------
Total expenses                 67,292    61,561       (12,174)      116,679
                             --------  --------  ------------  ------------
OPERATING INCOME                9,283    29,446        (1,660)       37,069
                             --------  --------  ------------  ------------

OTHER INCOME (EXPENSE):
Other-than-temporary
 impairment on investments       (214)        -             -          (214)
Interest expense               (2,036)        -             -        (2,036)
Other income, net               2,816         -        (2,241)          575
Other income, net, from
 consolidated VIE - RSO             -    17,007             -        17,007
Elimination of consolidated
 VIE other income, net              -         -           244           244
                             --------  --------  ------------  ------------
                                  566    17,007        (1,997)       15,576
                             --------  --------  ------------  ------------
Income from continuing
 operations before taxes        9,849    46,453        (3,657)       52,645
Income tax provision            1,657         -        (1,041)          616
                             --------  --------  ------------  ------------
Income from continuing
 operations                     8,192    46,453        (2,616)       52,029
Loss from discontinued
 operations, net of tax            (2)        -             -            (2)
                             --------  --------  ------------  ------------
Net income                      8,190    46,453        (2,616)       52,027
Net income attributable to
 noncontrolling interests         (20)        -             -           (20)
Net income attributable to
 noncontrolling interests -
 RSO                                -    (7,221)      (38,360)      (45,581)
                             --------  --------  ------------  ------------
Net income attributable to
 common shareholders         $  8,170  $ 39,232  $    (40,976) $      6,426
                             ========  ========  ============  ============

Amounts attributable to
 common shareholders:
Income from continuing
 operations                  $  8,172  $ 39,232  $    (40,976) $      6,428
Discontinued operations            (2)        -             -            (2)
                             --------  --------  ------------  ------------
Net income                   $  8,170  $ 39,232  $    (40,976) $      6,426
                             ========  ========  ============  ============


                           RESOURCE AMERICA, INC.
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                               (in thousands)
                                 (unaudited)

The following table presents the consolidating statement of operations for the year ended December 31, 2012:

                                RAI       RSO    Eliminations  Consolidated
                             --------  --------  ------------  ------------
REVENUES:
Real estate                  $ 45,083  $      -  $          -  $     45,083
Financial fund management      18,053         -             -        18,053
Commercial finance             (1,659)        -             -        (1,659)
                             --------  --------  ------------  ------------
                               61,477         -             -        61,477
Revenues from consolidated
 VIE - RSO                          -   123,698             -       123,698
Elimination of consolidated
 VIE revenues attributed to
 operating segments                 -         -       (17,544)      (17,544)
                             --------  --------  ------------  ------------
Total revenues                 61,477   123,698       (17,544)      167,631
                             --------  --------  ------------  ------------
COSTS AND EXPENSES:
Real estate                    30,475         -             -        30,475
Financial fund management      12,299         -             -        12,299
Commercial finance                402         -             -           402
Restructuring expenses            365         -             -           365
General and administrative      9,792         -             -         9,792
Impairment charges              2,280         -             -         2,280
Provision for credit losses    20,148         -             -        20,148
Depreciation and
 amortization                   2,084         -             -         2,084
                             --------  --------  ------------  ------------
                               77,845         -             -        77,845
Expenses from consolidated
 VIE - RSO                          -    78,452       (14,602)       63,850
Elimination of consolidated
 VIE expenses attributed to
 operating segments                 -         -       (17,351)      (17,351)
                             --------  --------  ------------  ------------
Total expenses                 77,845    78,452       (31,953)      124,344
                             --------  --------  ------------  ------------
OPERATING (LOSS) INCOME       (16,368)   45,246        14,409        43,287
                             --------  --------  ------------  ------------

OTHER INCOME (EXPENSE):
Gain on deconsolidation and
 sale of subsidiary            54,542         -             -        54,542
Other-than-temporary
 impairment on investments        (74)        -             -           (74)
Interest expense               (2,289)        -             -        (2,289)
Other income, net               2,189         -        (2,077)          112
Other income, net, from
 consolidated VIE - RSO             -    19,197             -        19,197
Elimination of consolidated
 VIE other income, net              -         -           133           133
                             --------  --------  ------------  ------------
                               54,368    19,197        (1,944)       71,621
                             --------  --------  ------------  ------------
Income from continuing
 operations before taxes       38,000    64,443        12,465       114,908
Income tax provision           13,117         -        14,602        27,719
                             --------  --------  ------------  ------------
Income from continuing
 operations                    24,883    64,443        (2,137)       87,189
Loss from discontinued
 operations, net of tax           (44)        -             -           (44)
                             --------  --------  ------------  ------------
Net income                     24,839    64,443        (2,137)       87,145
Net income attributable to
 noncontrolling interests        (557)        -             -          (557)
Net income attributable to
 noncontrolling interests -
 RSO                                -    (1,244)      (61,316)      (62,560)
                             --------  --------  ------------  ------------
Net income attributable to
 common shareholders         $ 24,282  $ 63,199  $    (63,453) $     24,028
                             ========  ========  ============  ============

Amounts attributable to
 common shareholders:
Income from continuing
 operations                  $ 24,326  $ 63,199  $    (63,453) $     24,072
Discontinued operations           (44)        -             -           (44)
                             --------  --------  ------------  ------------
Net income                   $ 24,282  $ 63,199  $    (63,453) $     24,028
                             ========  ========  ============  ============

Schedule I


      RECONCILIATION OF GAAP NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
                               SHAREHOLDERS TO
        ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (1)
                   (in thousands, except per share data)
                                (unaudited)

                                   Three Months Ended       Years Ended
                                      December 31,         December 31,
                                  -------------------  --------------------
                                     2013      2012       2013       2012
                                  --------- ---------  ---------  ---------
Net income (loss) attributable to
 common shareholders - GAAP       $   1,375 $  (1,534) $   6,426  $  24,028

Adjustments, net of tax:
Loss, net of eliminations,
 attributable to consolidation of
 RSO                                    762       167      1,744        254
Loss attributable to commercial
 finance                                535     2,406      4,545     14,269
Gain on sale of subsidiary                -         -          -    (36,394)
Deferred tax provision (benefit)        887       279       (805)    (1,822)
                                  --------- ---------  ---------  ---------
Adjusted net income attributable
 to common shareholders           $   3,559 $   1,318  $  11,910  $     335
                                  ========= =========  =========  =========

Adjusted weighted average diluted
 shares outstanding (2)              21,828    21,199     21,905     20,994
                                  ========= =========  =========  =========

Adjusted net income attributable
 to common shareholders per
 common per share-diluted         $    0.16 $    0.06  $    0.54  $    0.02
                                  ========= =========  =========  =========

------

(1)  Adjusted net income attributable to common shareholders presents the
     Company's operations prior to the consolidation of RSO and without the
     effect of its commercial finance operations, gain on the sale of
     subsidiary and deferred tax provision (benefit). The Company believes
     that this provides useful information to investors since it allows
     investors to evaluate the Company's progress in both its real estate
     and financial fund management segments for the three months and year
     ended December 31, 2013 and 2012 separately from its commercial finance
     operations, gain realized on the sale of a subsidiary and deferred tax
     provision (benefit). Adjusted net income attributable to common
     shareholders should not be considered as an alternative to net income
     (loss) attributable to common shareholders (computed in accordance with
     GAAP). Instead, adjusted net income attributable to common shareholders
     should be reviewed in connection with net income (loss) attributable to
     common shareholders in the Company's consolidated financial statements,
     to help analyze how the Company's business is performing.
(2)  Dilutive shares used in the calculation of adjusted net income
     attributable to common shareholders per common share-diluted included
     an additional 1.1 million shares for the three months ended December
     31, 2012, which were anti-dilutive for the period and, as such, were
     not used in the calculation of GAAP net loss attributable to common
     shareholders per common share-diluted.

CONTACT:
Thomas C. Elliott
Chief Financial Officer
Resource America, Inc.
One Crescent Drive, Suite 203
Philadelphia, PA 19112
(215) 546-5005
(215) 640-6357 (fax)


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