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Resource America, Inc. Reports Operating Results for the Second Quarter Ended June 30, 2014

PHILADELPHIA, PA -- (Marketwired) -- 08/06/14 -- Resource America, Inc. (NASDAQ: REXI)

Second Quarter 2014 Highlights

  • Adjusted net income attributable to common shareholders of $4.6 million (see Schedule I)
  • Stand-alone operating income of $4.8 million as compared to a $97,000 loss for the prior year period
  • Increased gross assets under management by 17% to $18.9 billion since June 30, 2013
  • Book value per common share of $7.88

Second Quarter 2014 Results

Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $4.6 million, or $0.21 per common share-diluted, and $7.0 million, or $0.32 per common share-diluted, for the three and six months ended June 30, 2014 as compared to adjusted net income attributable to common shareholders of $502,000, or $0.02 per common share-diluted, and $3.0 million, or $0.14 per common share-diluted, for the three and six months ended June 30, 2013, respectively. A reconciliation of the Company's reported GAAP net income 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 $2.7 million, or $0.12 per common share-diluted, and $3.7 million, or $0.17 per common share-diluted, for the three and six months ended June 30, 2014, respectively, as compared to GAAP net income attributable to common shareholders of $1.1 million, or $0.05 per common share-diluted, and $1.6 million, or $0.07 per common share-diluted, for the three and six months ended June 30, 2013, respectively.

Assets Under Management

The following table details the Company's gross assets under management by operating segment, which increased by $2.8 billion (17%) from June 30, 2013 to 2014 (in billions):


                                                             June 30,
                                                      ----------------------
                                                         2014        2013
                                                      ----------  ----------
Financial fund management                             $     15.5  $     13.6
Real estate                                                  2.8         1.9
Commercial finance                                           0.6         0.6
                                                      ----------  ----------
                                                      $     18.9  $     16.1
                                                      ==========  ==========

  Net assets under management (1)                     $      8.8  $      7.1
                                                      ==========  ==========

(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 for the year ended December 31, 2013.

Highlights for the Second Quarter Ended June 30, 2014 and Recent Developments

REAL ESTATE ASSET MANAGEMENT:

Equity Asset Management

Resource Real Estate Opportunity REIT, Inc. ("Opportunity REIT I"), 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:

  • Increased total assets to $951.2 million at June 30, 2014, an increase of $662.4 million, or 229%, from $288.8 million at June 30, 2013.
  • Acquired four multifamily assets for $112.4 million, placed $120.4 million of financing on these assets and disposed of one additional asset for $10.5 million during the three months ended June 30, 2014.

In February 2014, Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II") commenced its initial public offering of common stock and will focus on acquiring multifamily rental properties and selected loans. Opportunity REIT II is offering up to $1 billion in common stock at a maximum price of $10 per share. The Company is the external manager. Through August 5, 2014, Opportunity REIT II has raised $8.1 million.

  • In June 2014, Opportunity REIT II acquired its first asset, a multifamily apartment complex, for $9.5 million, financing $7.5 million of the purchase price.

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:

  • During the quarter, raised $147.7 million in equity capital, including $116.2 million, net of underwriting discounts and expenses, in connection with the June 2014 Series C preferred stock offering of 4.8 million shares at a net price of $24.2125 (8.625% coupon) per share.
  • Originated $181.0 million of commercial real estate whole loans during the three months ended June 30, 2014.
  • In July 2014, completed a $354.0 million commercial real estate securitization that issued $235.0 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.29%.

The following additional highlights contributed to the Company's real estate asset management operations:

  • The Company's real estate operating segment increased its assets under management at June 30, 2014 to $2.8 billion, an increase of $908.7 million, or 47%, from June 30, 2013.
  • Real estate revenues increased 11% and 14% to $13.4 million and $26.7 million, for the three and six months ended June 30, 2014, respectively, as compared to $12.2 million and $23.5 million for the three and six months ended June 30, 2013, respectively.

FINANCIAL FUND MANAGEMENT:

Credit Asset Management

CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XVII, Ltd. (issuing notes with a par value of $500.0 million), Apidos CLO XVIII, Ltd. (issuing notes with a par value of $700.0 million) and CVC Cordatus Loan Fund III Limited (issuing notes with a par value of EUR 436.0 million). Since creating this joint venture in April 2012, CCP has closed 10 collateralized loan obligation issuers (issuing notes with a total par value of $5.3 billion) and expects to receive approximately $24.9 million in fees on an annual run rate basis. The Company has a 33% interest in this joint venture.

The following additional highlights contributed to the Company's financial fund asset management operations:

  • The Company's financial fund management operating segment increased its assets under management at June 30, 2014 to $15.5 billion, an increase of $1.9 billion, or 13%, from June 30, 2013.
  • Financial fund management revenues increased 233% and 126% to $8.1 million and $15.2 million, for the three and six months ended June 30, 2014, respectively, as compared to $2.4 million and $6.7 million for the three and six months ended June 30, 2013, respectively.

CORPORATE/OTHER:

Corporate Credit Facility Modification

  • In April 2014, the Company increased its revolving credit facility with TD Bank, N.A. to $11.5 million and extended the maturity from December 2014 to December 2017.

Share Repurchases

  • The Company repurchased 233,891 of its shares during the second quarter ended June 30, 2014 at an average price of $8.91 per share.

Dividends

  • The Company's Board of Directors authorized a cash dividend of $0.05 per share on the Company's common stock paid on July 31, 2014 to holders of record as of the close of business on July 17, 2014.
  • RSO's Board of Directors declared a cash dividend of $0.20 per common share for its quarter ended June 30, 2014.

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 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 attributable to common shareholders to adjusted net income attributable to common shareholders.


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

                                                   June 30,    December 31,
                                                     2014          2013
                                                 ------------  ------------
                                                  (unaudited)
ASSETS
  Cash                                           $     11,858  $     19,853
  Restricted cash                                         654           571
  Receivables                                           3,400           541
  Loans and receivables from managed entities and
   related parties, net                                32,586        30,923
  Investments in real estate, net                      17,084        17,696
  Investment securities, at fair value                 12,590         7,839
  Investments in unconsolidated loan manager           38,461        37,821
  Investments in unconsolidated entities               13,448        14,342
  Assets of consolidated variable interest entity
   ("VIE") - RSO:
    Cash and cash equivalents (including
     restricted cash)                                 313,528       325,579
    Investments, at fair value                        273,454       226,764
    Loans                                           1,785,135     1,397,458
    Investments in real estate and unconsolidated
     entities                                          89,989       124,193
    Other assets                                       96,062        76,467
                                                 ------------  ------------
      Total assets of consolidated VIE - RSO        2,558,168     2,150,461
                                                 ------------  ------------

  Property and equipment, net                           5,378         5,844
  Deferred tax assets, net                             24,607        27,769
  Other assets                                          5,212         4,791
                                                 ------------  ------------
    Total assets                                 $  2,723,446  $  2,318,451
                                                 ============  ============

LIABILITIES AND EQUITY
Liabilities:
  Accrued expenses and other liabilities         $     16,846  $     22,134
  Payables to managed entities and related
   parties                                              3,608         3,110
  Borrowings                                           20,558        20,619
  Liabilities of consolidated VIE - RSO:
    Borrowings                                      1,579,985     1,320,015
    Other liabilities                                  54,342        55,247
                                                 ------------  ------------
    Total liabilities of consolidated VIE - RSO     1,634,327     1,375,262
                                                 ------------  ------------
      Total liabilities                             1,675,339     1,421,125
                                                 ------------  ------------

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; 31,111,667 and 30,378,339 shares
   issued (including nonvested restricted stock
   of 674,701 and 400,194), respectively                  304           299
  Additional paid-in capital                          290,947       288,555
  Accumulated deficit                                 (24,290)      (26,025)
  Treasury stock, at cost; 10,667,202 and
   10,434,436 shares, respectively                   (109,906)     (107,874)
  Accumulated other comprehensive loss                 (1,257)       (1,231)
                                                 ------------  ------------
    Total stockholders' equity                        155,798       153,724
  Noncontrolling interests                                306           238
  Noncontrolling interests attributable to RSO        892,003       743,364
                                                 ------------  ------------
    Total equity                                    1,048,107       897,326
                                                 ------------  ------------
                                                 $  2,723,446  $  2,318,451
                                                 ============  ============



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

                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                 --------------------  --------------------
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
REVENUES:
Real estate (includes revenues of
 $2,302, $2,805, $4,985 and
 $5,093 related to RSO)          $  13,448  $  12,153  $  26,723  $  23,493
Financial fund management
 (includes revenues of $753,
 $(111), $960 and $270 related to
 RSO)                                8,141      2,445     15,216      6,732
Commercial finance (includes no
 revenue related to RSO)               (42)       (35)      (141)      (213)
                                 ---------  ---------  ---------  ---------
                                    21,547     14,563     41,798     30,012
Revenues from consolidated VIE -
 RSO                                34,608     21,647     66,539     52,225
Elimination of consolidated VIE
 revenues attributed to operating
 segments                           (3,040)    (2,725)    (5,920)    (5,425)
                                 ---------  ---------  ---------  ---------
  Total revenues                    53,115     33,485    102,417     76,812
                                 ---------  ---------  ---------  ---------
COSTS AND EXPENSES:
Real estate                          9,105      8,896     17,980     18,336
Financial fund management            2,779      1,694      7,168      4,222
Commercial finance                     123       (219)       226       (174)
General and administrative           2,729      2,149      5,883      4,302
Provision for credit losses          1,575      1,647      2,783      1,985
Depreciation and amortization          465        489        916        905
                                 ---------  ---------  ---------  ---------
                                    16,776     14,656     34,956     29,576
                                 ---------  ---------  ---------  ---------
Expenses from consolidated VIE -
 RSO                                19,861     11,368     32,985     27,556
Elimination of consolidated VIE
 expenses attributed to operating
 segments                           (3,053)    (2,663)    (5,872)    (5,317)
                                 ---------  ---------  ---------  ---------
  Total expenses                    33,584     23,361     62,069     51,815
                                 ---------  ---------  ---------  ---------
OPERATING INCOME                    19,531     10,124     40,348     24,997
                                 ---------  ---------  ---------  ---------

OTHER INCOME (EXPENSE):
Gain on sale of investment
 securities, net                       370         --        370         --
Other-than-temporary impairment
 on investments                         --         --         --       (214)
Interest expense                      (497)      (501)      (980)      (995)
Other income, net                       18         83        183        272
                                 ---------  ---------  ---------  ---------
                                      (109)      (418)      (427)      (937)
Other income, net, from
 consolidated VIE - RSO              2,509         --      1,178         --
Elimination of consolidated VIE
 other income attributed to
 operating segments                     11         31         29         62
                                 ---------  ---------  ---------  ---------
                                     2,411       (387)       780       (875)
                                 ---------  ---------  ---------  ---------
Income from continuing operations
 before taxes                       21,942      9,737     41,128     24,122
Income tax provision (benefit)       2,181     (1,511)     3,250     (1,657)
Income tax (benefit) provision -
 RSO                                  (446)     1,737       (430)     3,499
                                 ---------  ---------  ---------  ---------
Income from continuing operations   20,207      9,511     38,308     22,280
Loss from discontinued
 operations, net of tax                 --         --         --         (2)
                                 ---------  ---------  ---------  ---------
Net income                          20,207      9,511     38,308     22,278
Net (income) loss attributable to
 noncontrolling interests              (84)       (26)       (44)        17
Net income attributable to
 noncontrolling interests of
 consolidated VIE - RSO            (17,405)    (8,372)   (34,556)   (20,686)
                                 ---------  ---------  ---------  ---------
Net income attributable to common
 shareholders                    $   2,718  $   1,113  $   3,708  $   1,609
                                 =========  =========  =========  =========
Amounts attributable to common
 shareholders:
Income from continuing operations$   2,718  $   1,113  $   3,708  $   1,611
Discontinued operations                 --         --         --         (2)
                                 ---------  ---------  ---------  ---------
Net income                       $   2,718  $   1,113  $   3,708  $   1,609
                                 =========  =========  =========  =========

Basic earnings per share:
Continuing operations            $    0.13  $    0.05  $    0.18  $    0.08
Discontinued operations                 --         --         --         --
                                 ---------  ---------  ---------  ---------
Net income                       $    0.13  $    0.05  $    0.18  $    0.08
                                 =========  =========  =========  =========
Weighted average shares
 outstanding                        20,386     20,297     20,320     20,219
                                 =========  =========  =========  =========

Diluted earnings per share:
Continuing operations            $    0.12  $    0.05  $    0.17  $    0.07
Discontinued operations                 --         --         --         --
                                 ---------  ---------  ---------  ---------
Net income                       $    0.12  $    0.05  $    0.17  $    0.07
                                 =========  =========  =========  =========
Weighted average shares
 outstanding                        22,032     22,106     22,031     21,969
                                 =========  =========  =========  =========



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

The following table presents the consolidating statement of operations for the three months ended June 30, 2014:


                             RAI          RSO      Eliminations Consolidated
                         -----------  -----------  ------------ ------------
REVENUES:
Real estate              $    13,448  $        --  $        --  $    13,448
Financial fund management      8,141           --           --        8,141
Commercial finance               (42)          --           --          (42)
                         -----------  -----------  -----------  -----------
                              21,547           --           --       21,547
Revenues from
 consolidated VIE - RSO           --       34,608           --       34,608
Elimination of
 consolidated VIE
 revenues attributed to
 operating segments               --           --       (3,040)      (3,040)
                         -----------  -----------  -----------  -----------
  Total revenues              21,547       34,608       (3,040)      53,115
                         -----------  -----------  -----------  -----------
COSTS AND EXPENSES:
Real estate                    9,105           --           --        9,105
Financial fund management      2,779           --           --        2,779
Commercial finance               123           --           --          123
General and
 administrative                2,729           --           --        2,729
Provision for credit
 losses                        1,575           --           --        1,575
Depreciation and
 amortization                    465           --           --          465
                         -----------  -----------  -----------  -----------
                              16,776           --           --       16,776
Expenses of consolidated
 VIE - RSO                        --       19,415          446       19,861
Elimination of
 consolidated VIE
 expenses attributed to
 operating segments               --           --       (3,053)      (3,053)
                         -----------  -----------  -----------  -----------
  Total expenses              16,776       19,415       (2,607)      33,584
                         -----------  -----------  -----------  -----------
OPERATING INCOME               4,771       15,193         (433)      19,531
                         -----------  -----------  -----------  -----------

OTHER INCOME (EXPENSE):
Gain on sale of
 investment securities,
 net                             370           --           --          370
Interest expense                (497)          --           --         (497)
Other income, net                590           --         (572)          18
Other income, net, from
 consolidated VIE - RSO           --        2,509           --        2,509
Elimination of
 consolidated VIE other
 expense, net                     --           --           11           11
                         -----------  -----------  -----------  -----------
                                 463        2,509         (561)       2,411
                         -----------  -----------  -----------  -----------
Income from continuing
 operations before taxes       5,234       17,702         (994)      21,942
Income tax provision           2,181           --         (446)       1,735
                         -----------  -----------  -----------  -----------
Net income                     3,053       17,702         (548)      20,207
                         -----------  -----------  -----------  -----------
Net income attributable
 to noncontrolling
 interests                       (84)          --           --          (84)
Net income attributable
 to noncontrolling
 interests - RSO                  --       (3,025)     (14,380)     (17,405)
                         -----------  -----------  -----------  -----------
Net income attributable
 to common shareholders  $     2,969  $    14,677  $   (14,928) $     2,718
                         ===========  ===========  ===========  ===========



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

The following table presents the consolidating statement of operations for the three months ended June 30, 2013:


                             RAI          RSO      Eliminations Consolidated
                         -----------  -----------  ------------ ------------
REVENUES:
Real estate              $    12,153  $        --  $        --  $    12,153
Financial fund management      2,445           --           --        2,445
Commercial finance               (35)          --           --          (35)
                         -----------  -----------  -----------  -----------
                              14,563           --           --       14,563
Revenues from
 consolidated VIE - RSO           --       21,647           --       21,647
Elimination of
 consolidated VIE
 revenues attributed to
 operating segments               --           --       (2,725)      (2,725)
                         -----------  -----------  -----------  -----------
  Total revenues              14,563       21,647       (2,725)      33,485
                         -----------  -----------  -----------  -----------
COSTS AND EXPENSES:
Real estate                    8,896           --           --        8,896
Financial fund management      1,694           --           --        1,694
Commercial finance              (219)          --           --         (219)
General and
 administrative                2,153           --           (4)       2,149
Provision for credit
 losses                        1,647           --           --        1,647
Depreciation and
 amortization                    489           --           --          489
                         -----------  -----------  -----------  -----------
                              14,660           --           (4)      14,656
                         -----------  -----------  -----------  -----------
Expenses of consolidated
 VIE - RSO                        --       13,105       (1,737)      11,368
Elimination of
 consolidated VIE
 expenses attributed to
 operating segments               --           --       (2,663)      (2,663)
                         -----------  -----------  -----------  -----------
Total expenses                14,660       13,105       (4,404)      23,361
                         -----------  -----------  -----------  -----------
OPERATING (LOSS) INCOME          (97)       8,542        1,679       10,124
                         -----------  -----------  -----------  -----------

OTHER INCOME (EXPENSE):
Interest expense                (501)          --           --         (501)
Other income, net                640           --         (557)          83
Elimination of
 consolidated VIE other
 expense, net                     --           --           31           31
                         -----------  -----------  -----------  -----------
                                 139           --         (526)        (387)
                         -----------  -----------  -----------  -----------
Income from continuing
 operations before taxes          42        8,542        1,153        9,737
Income tax benefit            (1,511)          --        1,737          226
                         -----------  -----------  -----------  -----------
Net income                     1,553        8,542         (584)       9,511
Net income attributable
 to noncontrolling
 interests                       (26)          --           --          (26)
Net income attributable
 to noncontrolling
 interests - RSO                  --       (1,800)      (6,572)      (8,372)
                         -----------  -----------  -----------  -----------
Net income attributable
 to common shareholders  $     1,527  $     6,742  $    (7,156) $     1,113
                         ===========  ===========  ===========  ===========



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

The following table presents the consolidating statement of operations for the six months ended June 30, 2014:


                             RAI          RSO      Eliminations Consolidated
                         -----------  -----------  ------------ ------------
REVENUES:
Real estate              $    26,723  $        --  $        --  $    26,723
Financial fund management     15,216           --           --       15,216
Commercial finance              (141)          --           --         (141)
                         -----------  -----------  -----------  -----------
                              41,798           --           --       41,798
Revenues from
 consolidated VIE - RSO           --       66,539           --       66,539
Elimination of
 consolidated VIE
 revenues attributed to
 operating segments               --           --       (5,920)      (5,920)
                         -----------  -----------  -----------  -----------
Total revenues                41,798       66,539       (5,920)     102,417
                         -----------  -----------  -----------  -----------
COSTS AND EXPENSES:
Real estate                   17,980           --           --       17,980
Financial fund management      7,168           --           --        7,168
Commercial finance               226           --           --          226
General and
 administrative                5,883           --           --        5,883
Provision for credit
 losses                        2,783           --           --        2,783
Depreciation and
 amortization                    916           --           --          916
                         -----------  -----------  -----------  -----------
                              34,956           --           --       34,956
                         -----------  -----------  -----------  -----------
Expenses of consolidated
 VIE - RSO                        --       32,555          430       32,985
Elimination of
 consolidated VIE
 expenses attributed to
 operating segments               --           --       (5,872)      (5,872)
                         -----------  -----------  -----------  -----------
Total expenses                34,956       32,555       (5,442)      62,069
                         -----------  -----------  -----------  -----------
OPERATING INCOME               6,842       33,984         (478)      40,348
                         -----------  -----------  -----------  -----------

OTHER INCOME (EXPENSE):
Gain on sale of
 investment securities,
 net                             370           --           --          370
Interest expense                (980)          --           --         (980)
Other income, net              1,327           --       (1,144)         183
Other income, net, from
 consolidated VIE - RSO           --        1,178           --        1,178
Elimination of
 consolidated VIE other
 income, net                      --           --           29           29
                         -----------  -----------  -----------  -----------
                                 717        1,178       (1,115)         780
                         -----------  -----------  -----------  -----------
Income from continuing
 operations before taxes       7,559       35,162       (1,593)      41,128
Income tax provision           3,250           --         (430)       2,820
                         -----------  -----------  -----------  -----------
Net income                     4,309       35,162       (1,163)      38,308
                         -----------  -----------  -----------  -----------
Net income attributable
 to noncontrolling
 interests                       (44)          --           --          (44)
Net income attributable
 to noncontrolling
 interests - RSO                  --       (5,369)     (29,187)     (34,556)
                         -----------  -----------  -----------  -----------
Net income attributable
 to common shareholders  $     4,265  $    29,793  $   (30,350) $     3,708
                         ===========  ===========  ===========  ===========



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

The following table presents the consolidating statement of operations for the six months ended June 30, 2013:

                             RAI          RSO      Eliminations Consolidated
                         -----------  -----------  ------------ ------------
REVENUES:
Real estate              $    23,493  $        --  $        --  $    23,493
Financial fund management      6,732           --           --        6,732
Commercial finance              (213)          --           --         (213)
                         -----------  -----------  -----------  -----------
                              30,012           --           --       30,012
Revenues from
 consolidated VIE - RSO           --       52,225           --       52,225
Elimination of
 consolidated VIE
 revenues attributed to
 operating segments               --           --       (5,425)      (5,425)
                         -----------  -----------  -----------  -----------
Total revenues                30,012       52,225       (5,425)      76,812
                         -----------  -----------  -----------  -----------
COSTS AND EXPENSES:
Real estate                   18,336           --           --       18,336
Financial fund management      4,222           --           --        4,222
Commercial finance              (174)          --           --         (174)
General and
 administrative                4,310           --           (8)       4,302
Provision for credit
 losses                        1,985           --           --        1,985
Depreciation and
 amortization                    905           --           --          905
                         -----------  -----------  -----------  -----------
                              29,584           --           (8)      29,576
                         -----------  -----------  -----------  -----------
Expenses from
 consolidated VIE - RSO           --       27,556           --       27,556
Elimination of
 consolidated VIE
 expenses attributed to
 operating segments               --           --       (5,317)      (5,317)
                         -----------  -----------  -----------  -----------
Total expenses                29,584       27,556       (5,325)      51,815
                         -----------  -----------  -----------  -----------
OPERATING INCOME                 428       24,669         (100)      24,997
                         -----------  -----------  -----------  -----------

OTHER INCOME (EXPENSE):
Other-than-temporary
 impairment on
 investments                    (214)          --           --         (214)
Interest expense                (995)          --           --         (995)
Other income, net              1,385           --       (1,113)         272
Elimination of
 consolidated VIE other
 income, net                      --           --           62           62
                         -----------  -----------  -----------  -----------
                                 176           --       (1,051)        (875)
                         -----------  -----------  -----------  -----------
Income from continuing
 operations before taxes         604       24,669       (1,151)      24,122
Income tax (benefit)
 provision                    (1,657)       3,499           --        1,842
                         -----------  -----------  -----------  -----------
Income from continuing
 operations                    2,261       21,170       (1,151)      22,280
Loss from discontinued
 operations, net of tax           (2)          --           --           (2)
                         -----------  -----------  -----------  -----------
Net income                     2,259       21,170       (1,151)      22,278
                         -----------  -----------  -----------  -----------
Net loss attributable to
 noncontrolling interests         17           --           --           17
Net income attributable
 to noncontrolling
 interests - RSO                  --      (20,686)          --      (20,686)
                         -----------  -----------  -----------  -----------
Net income attributable
 to common shareholders  $     2,276  $       484  $    (1,151) $     1,609
                         ===========  ===========  ===========  ===========

Amounts attributable to
 common shareholders:
Income from continuing
 operations              $     2,278  $       484  $    (1,151) $     1,611
Discontinued operations           (2)          --           --           (2)
                         -----------  -----------  -----------  -----------
Net income               $     2,276  $       484  $    (1,151) $     1,609
                         ===========  ===========  ===========  ===========



Schedule I


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

                              Three Months Ended      Six Months Ended
                                   June 30,               June 30,
                            ---------------------  ---------------------
                               2014       2013        2014       2013
                            ---------- ----------  ---------- ----------
Net income attributable to
 common shareholders - GAAP $    2,718 $    1,113  $    3,708 $    1,609

Adjustments, net of tax:
Income, net of
 eliminations, attributable
 to consolidation of RSO           251        418         557        675
Loss attributable to
 commercial finance              1,180        844       2,070      2,852 (2)
Deferred tax provision
 (benefit)                         466     (1,873)        627     (2,098)
                            ---------- ----------  ---------- ----------
Adjusted net income
 attributable to common
 shareholders               $    4,615 $      502  $    6,962 $    3,038
                            ========== ==========  ========== ==========

Adjusted weighted average
 diluted shares outstanding     22,032     22,106      22,031     21,969
                            ========== ==========  ========== ==========

Adjusted net income
 attributable to common
 shareholders per common
 per share-diluted          $     0.21 $     0.02  $     0.32 $     0.14
                            ========== ==========  ========== ==========

(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 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, excluding the impact of the RSO consolidation, in both its
     real estate and financial fund management segments for the three and
     six months ended June 30, 2014 and 2013 separately from its commercial
     finance operations and deferred tax provision (benefit). Adjusted net
     income attributable to common shareholders should not be considered as
     an alternative to net income 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 attributable to common shareholders in the Company's
     consolidated financial statements to help analyze how the Company's
     business is performing.

(2)  Utilizes a full year continuing income tax rate of 35%.

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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