Good day ladies and gentlemen and welcome to the Q1 2011 Resource Capital Corporation Earnings Conference Call. My name is Towanda and I will be your coordinator for today. (Operator instructions.) I would now like to turn the presentation over to Mr. Jonathan Cohen, President and CEO of Resource Capital Corp. Please proceed sir.

Thank you. Thank you for joining the Resource Capital Corp conference all for Q1 ended March 31st 2011. I am Jonathan Cohen, President and CEO of Resource Capital Corp. Before I begin I would like to ask Purvi Kamdar, our Director of Investor Relations to read the safe harbor statement.

Thank you Jonathan. When used in this conference call, the words “believe, anticipate, expect” and similar expressions are intended to identify forward-looking statements. Although the company believes that these forward-looking statements are based on reasonable assumptions such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from these contained in the forward-looking statements. These risks and uncertainties are discussed in the company’s report filed with the SEC including its reports in the form 8-K, 10-Q and 10-K and in particular item one on the form 10-K report under the title Risk Factors. This is a caution not to place undue reliance on these forward-looking statements which speak only as a (inaudible). This company undertakes no obligation to update any of these forward-looking statements. And with that I’ll turn it back to Jonathan.

Thank you Purvi. First for a few highlights. For the three months ended March 31st 2011 we had adjusted net income of $15.7 million or $.26 per share diluted as compared to $10.1 million or $.27 per share diluted for the 3 months ending March 31st 2010. Estimated REIT taxable income for the three months ended March 31st 2011 was $8.6 million or $.14 per share diluted as compared to $9.3 million or $.24 per share diluted for the three months ended March 31st 2010. We announced a dividend of $.25 per common share for the quarter or $17.6 million in aggregate, which was paid on April 28th 2011 to stockholders on record on March 31st 2011. Book value increased to $6.08 per common share as of March 31st 2011, an increase of almost 2% since December 31st 2010. With those highlights out of the way I will not introduce my colleagues. With me today are David Blume our Senior Vice President in charge of Real Estate Lending, David Bryant our Chief Financial Officer, Christopher Allen our Senior Vice President of our Leverage Loan Business and Purvi Kamdar our Director of Investor Relations. In my opinion Q1 2011 saw great improvement in the outlook for Resource Capital. We saw an increase in our net interest income of over 35% and revenues grew by more than 50% compared to last year at the same time. We made significant investments and restarted our commercial mortgage origination platform. We are truly a new company. Including those loans that we are committed to sell, we have strong real estate loans that we are committed to sell. We have shrunk our pre-2008 real estate B-noted Mezzanine loan exposure to under $137 million from a peak of $312 million in December of 2007. We are extremely…

Thanks very much Jonathan. Resource Capital Corps commercial mortgage portfolio has a current committed balance of approximately $657 million in a granular pool of 41 individual loans. Our portfolio of commercial mortgage positions is in components as follows. 78% whole loans, 15% mezzanine loans and 7% B-notes. Of note in our portfolio composition is the significant increase in the percentage of self-originated whole loans and the corresponding decrease in our subordinate debt positions. Year-over-year we have realized a 15% increase in our whole loan positions from 63% in May of 2010 to the 78% we have today and the corresponding decrease in our subordinate debt position is from 26% mezzanine loans and 11% B-notes in May of 2010 as compared to the 15% and 7% respectably today. The collateral base underlying the portfolio continues to be spread across the major asset categories in geographically diverse markets with a portfolio breakdown of 34% multifamily, 14% office, 30% hotel, 14% retail and 8% other such as light industrial and self-storage. We continue to see both sale and financing transaction volumes increasing and liquidity returning to the market. And we continue to experience pay offs in our portfolio. During Q1 through today we closed three new loans totaling approximately $26 million and have another three loans totaling approximately $30 million that are approved and in the closing process for a total of $65 million in aggregate new loan production. We currently have a full forward pipeline of approximately $200 million of new transactions and will continue to convert select opportunities to loans for our portfolio. We see increased liquidity in all segments of the market and after the close of the quarter we again took advantage of this increased liquidity by shelling out of two subordinate depositions; one B-note and one mezzanine loan…

Thanks Dave. Now I’d like to review the first part of our investment in commercial finance and then introduce Christopher Allen to discuss the second aspects syndicated bank loans. In January we transformed our previous investment in leasing into a new one and now we own our interest through a joint venture we formed with Lead Financial and Guggenheim Securities. This joint venture is going well and is building its balance sheet, its proprietary vendor finance programs and its staff. Remember we also have warrant to purchase 48% of the business at a nominal price. These warrants give us the upside we are looking for while the coupon gives us the ability to generate a nice current return. Stay tuned for the progress of this venture. While we wait we will simply flip the 10% cash and pick coupons. As for syndicated bank loan business I wanted to introduce Christopher Allen, our Senior Vice President of Leverage Loans who will walk us through our existing portfolio, our new purchase of the management (inaudible) of Churchill Pacific Asset Management, CPAM, now called RCAM. Chris has been a senior officer here since our inception in 2005 and I welcome him as a participant in these calls.

Thank you Jonathan. I’m very pleased to take a few moments to discuss our accomplishments in the bank loan phase. As Jonathan mentioned, I’m the Senior Vice President of Resource Capital and the Chief Operating Officer of Apidos Capital Management and one of the founding partners of that business along with Gretchen Bergstresser. The bank loan business has grown in importance at Resource Capital and I’m glad to have the opportunity to discuss that today and in the future. Resource Capital has direct exposure to bank loans through three CLOs managed by Apidos and it earns fees on additional bank loans through its ownership of Resource Capital Asset Management, formerly Churchill Pacific Asset Management. Resource Capital’s three bank loan portfolios have a carrying value of $905.3 million and approximately $930.9 million in par value. Resource Capital Asset Management has assets under management of approximately $1.8 billion. For the most recent quarter the three CLOs that the company owns produced interest income 33% higher than in Q1 of 2010. Apidos CLOs have produced annualized equity returns greater than 23% since inception. The current cash on cash returns based upon our original investment of $79.5 million is approximately 33%. The carrying value of our bank loan portfolio is approximately $49 million representing approximately $.69 of book value per share such that the return on equity of our bank loan investments is approximately 54% with remaining upside accretion from discounted loans and securities purchased of nearly $26 million. Over all, in my opinion, the portfolios are in excellent condition. They remain very diversified across industries. The average position size is about 40 basis points or roughly $1.2 million. The highest concentrations are in healthcare, business services, broadcasting and entertainment and printing and publishing. Included in the top ten holdings are issuers such as…

Thank you Chris. Now I will ask Dave Bryant, our Chief Financial Officer to quickly walk us through the financials.

Thank you Jonathan. Our estimated REIT taxable income for Q1 2011 was $8.6 million or $.14 per common share. I want to add a few thoughts about the REIT taxable income for Q1 2011. There were two non-cash losses from GAAP earnings to arrive at the estimated REIT income number, namely losses from a real estate joint venture of $4.4 million and net [Break in audio] to tax adjustments of $1.6 million from our foreign TRS subsidiaries for losses previously recognized on the books. These combined non-cash items of approximately $6.4 million representing timing differences reduced REIT income by nearly $.11 per share without effecting our ability to pay the dividend which of course was $.25 per share as declared by RSA board. At March 21st 2011 RCC’s investment portfolio was financed with approximately $1.5 million total indebtedness that included $1.4 billion CDO senior notes, $51.5 million sourced from our unsecured (inaudible) subordinated debentures related to our two TruPS issuances in 2006 and approximately $15 million of repurchase agreement debt from our new Wells Fargo facility. We ended the period with $427.2 million in book equity. RCC’s borrowing of $1.5 billion had a weighted average rate of 1.07% at March 31st, a sign of the ongoing low interest rate environment. We remain committed to our long stated philosophy of maximizing match funding and our investment portfolio is almost completely match funded by long term borrowers at quarter end. We continue to pass all of the critical interest coverage and over collateralization tests in our two real estate CDOs and three bank loan CLOs through April of 2011. Each of these structures performed and generated stable cash flow to RCC in Q1. The CRE CDOs produced over $5.1 million and bank loan CLOs generated over $6.3 million of cash flow during…

Thanks Dave. We are excited to reap the benefits of new opportunities we have already seized and to take advantage of even more opportunities. But we have started to do so already and we look forward to sharing the results with you in the future period. Now we will open up this call to any questions if there are any.

Thank you. (Operator Instructions.) Your first question comes from the line of Steve Delaney with JMP Securities. Please proceed. Steve Delaney – JMP Securities : Thank you. Good morning everyone and congratulations on a very solid Q1 and start to 2011. I guess this is for Dave Blume. I just wanted to, I was trying to take as many notes as I could but I’ll make sure I understand the origination activity year to date and pending. Was it two loans for $18.3 million that actually closed in Q1?

Since Q1 through today because we had some other loans closing, it was a total of $26 million and it was three.

And Steve that includes future funding components to those loans whereas the $18.3 was the amount funded physically during Q1. Steve Delaney – JMP Securities: So year to date we’re at three loans, through today, three new loans at roughly $26 million.

Exactly, actually no, yes, but with another $39 million that are in the closing process. Steve Delaney – JMP Securities: And that’s what I wanted to go to as part two of my question. So as far as pending you would expect to close before maybe June 30, you know, how many loans and for what dollar amount would you be expecting?

Well (inaudible) I think that we’re going to close at $39 million in the next month and we probably expect another $15 to $20 million after that. And you should see basically the way it works is you know, you know as you start up this process every quarter will be more and then you’ll see exponential growth into the next quarter into closing. So we have apps that are going out now that in a pipeline of close to $200 million and so when we talk about putting out the money into this, into our restricted cash in our CRE, CDOs, we expect that to be three to six months before we get that all invested. Now I keep doing Dave Blume a disservice because I keep selling legacy loans granted at par or close to it so I keep replenishing those (inaudible) a little bit making his job a little bit harder. Steve Delaney – JMP Securities: Well it sounds like he’s got a lot on the desk. Would it be reasonable to think that, you know, once, because you are building this momentum that like somewhere around like at least $50 million or maybe $75 million a quarter, does that seem like a reasonable closing volume looking out to the second half?

Yes. Steve Delaney – JMP Securities: Okay. And then-

I just want to address that, as we get, Steve just, that’s probably right for the next few quarters but after that we’ll probably see a little bit of a hockey stick. Steve Delaney – JMP Securities: Okay.

Because just the work that’s going on in the front end now is massive. Steve Delaney – JMP Securities: And my last question, you touched on it in your answer, you know, you’ve sold I believe it’s four loans now between what you did in Q1 and what you have planned to sell here in Q2 of these subordinate loans. Do you feel, I mean have you about called out what you needed to or could we see some additional selling out of the portfolio from the legacy?

Well I mean to be honest we’re not actively selling but people are actively buying. So if we get a call tomorrow that says, “Hey we’ll take a loan off your hands at par,” after we’ve made 9% through the financial crisis on a loan that is not really that important to us and has binary risks, we always look at it. So there are a lot of private equity firms, a lot of private equity real estates firms that are looking at the legacy loans as a good way to position themselves in these buildings. And they want to control the buildings, a lot of times we own the first loft or the controlling piece so they’re very valuable to these players. So if we got a call tomorrow we could sell something. But it’s not as though any of these loans were that we picked up the phone and said we wanted to sell it to somebody specifically. Steve Delaney – JMP Securities: Got it. So it’s really a matter of somebody who’s strategically involved in that particular property as far as, or for, and that’s how they actually know about your role in the first place.

Right. Or it may be somebody who’s just calling the universe to see like we like Manhattan, we like LA, we like some area and we want to be involved. We like these buildings, they look up to CAP structures and come talk to us about it. Or it’s the owner of it and, you know, he’s trying to reposition it in a partnership. There’s lots of different scenarios that can happen here. But, no, there’s nothing on the horizon that we’re actually marketing. As of this point we’re happy with what we have. Steve Delaney – JMP Securities: Okay. Sounds good. I appreciate the color. Thanks.

Your next question comes from Gabe Poggi with FBR Capital Markets. Please proceed. Gabe Poggi – FBR Capital Markets: Hey good morning guys. Thanks for all the color; it was great on the conference call.

Sorry. It might have been a little too long but we’re trying- transparency is our middle name so. Gabe Poggi – FBR Capital Markets: First question is you guys mentioned that you’ve reduced your balance of pre-2008 mezzanine B-note exposure to $137 million. Can you remind me what the pre-2008 balance is in the first mortgages and what those first mortgage’s LTD is give or take right now. Just because I know you have a bigger balance of firsts. What I’m trying to get to is the balance of the legacies and the new stuff you’ve done.

Well it’s actually, I mean we haven’t really done any new mezzanines since then so and I may be wrong in this calculation and we’ll get back to you if I am but my gut is that it was about $660 million of loans so we have $137 million of pre-2008 mezz loans, we haven’t really, we’ve (inaudible) a small bit, not much. So you’d be talking about $500 million of first loans, first mortgages. Gabe Poggi – FBR Capital Markets: Right. But how much of that $520 is before it was originated?

Oh the bulk of it probably $440 million or so because we just started putting on new mortgages. Gabe Poggi – FBR Capital Markets: Okay, that’s helpful. Then in-

And then you asked about LCDs, they were underwritten at 75%. Probably at some point they had gone to 95%. They’re probably certainly on the multis back to 75% and it depends but it’s probably, I would say it’s slightly north of 80% probably on kind of an underwritten today. The whole, whole loan I’m talking about. Gabe Poggi – FBR Capital Markets: Got ya. That’s helpful. When you guys talked about kind of your capital recycling, Jonathan, you just mentioned you’re selling loans if there’s active bidders for loans and Dave is getting new capital recycle. What’s the general sprint pick up you guys are getting inside the CDOs as you recycle between-

Well I would say that if it’s an old mezzanine loan it’s probably break even to probably like if you sell some at 80% we’re probably getting 8%, you know, on a new whole loan though, so it’s a much better asset then we owned before plus some fees here and there and other place. But if we have a whole loan that’s prepaid which is also happening, we’re probably picking up 400 basis points. Gabe Poggi – FBR Capital Markets: Got ya.

But all the stuff we’ve been selling has been mezz and subordinate risk. Gabe Poggi – FBR Capital Markets: Right. And then one last question. Can you just provide a little more color on what you think kind of the go for and what opportunity set is for LEAF? I know you guys have a 10% if you clip your coupons but kind of the bigger picture down the line for LEAF.

Basically they’re rebuilding their balance sheet with our capital very successfully. And so as the quarters go by according to our position there we get more and more of a, you know, cash coupon out of them as well as we own 48% in nominal price and warrants and you know eventually we believe the banks are starved for leasing companies and other types of really high quality lending opportunities that are done on an actuarial basis through a, you know, a systematic approach. And I think that these kinds of companies will trade it big multiples within the next 36 months. So, you know, we’re fairly bullish on the prospects there. Gabe Poggi – FBR Capital Markets: Thank you guys. Good quarter.

(Operator Instructions.) And with no further questions in queue I would now like to hand the conference over to Mr. Jonathan Cohen for closing remarks.

Again we appreciate your support during the quarter and the past few quarters and we look forward to performing for you in the future. Thank you.

Thank you for joining today’s conference. That concludes the presentation.