Good day ladies and gentlemen and welcome to the Fourth Quarter 2011 Resource Capital Corporation Earnings Conference Call. My name is Kim and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session at the end of today’s conference. (Operator Instructions) As a reminder this call is being recorded. I will now turn the conference over to your host for today’s call, Mr. Jonathan Cohen, CEO and President. Please proceed, Mr. Cohen.

Thank you and thank you for joining the Resource Capital Corporation’s conference call for the fourth quarter and year ended December 31, 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 reports filed with the SEC including its reports on forms 8-K, 10-Q and 10-K and in particular, item 1-A on the Form 10-K report under the title Risk Factors. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as the date hereof. The 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, a few highlights. Adjusted funds from operations or AFFO, for the three months and year ended December 31, 2011 was $17 million, or $0.22 per share diluted and $63.9 million or $0.90 per share diluted respectively. Our GAAP net income for the three months and year ended December 31, 2011, were $413,000 or $0.01 per share diluted or $37.7 million or $0.53 per share diluted compared – respectively as compared to GAAP net loss for the three months ended December 21, 2010 of $9.4 million or $0.17 per share diluted and GAAP net income for the year ended December 31, 2010 of $19.4 million, or $0.41 per share diluted respectively, increases of $9.8 million or 104%, and $18.3 million, or 94% respectively. Total revenues increased by $9.6 million or 51%, and increased by $26.7 million or 40%, as compared to the three months in the year ended December 31, 2010. We paid a dividend of $0.25 per common share for the quarter or $20 million in aggregate on January 27, 2012, to stockholders of record as of December 30, 2011. With those highlights out of the way, I will now introduce my colleagues. With me today are David Bloom, Senior Vice President in charge of Real Estate Lending; David Bryant, our Chief Financial Officer; and Purvi Kamdar, our Director of Investor Relations. During the year ending December 31, 2011, Resource Capital Corp. shifted its approach to creating shareholder value from short-term or long-term thinking. When the year began, we were focused on first, the continuing overhang from the credit crisis that began in 2008. Second maximizing current returns from buying back earlier debt at a discount, and distributing as much cash to our shareholders as could be deemed responsible. And third, positioning the company for the…

Thanks, Jonathan. Resource Capital Corp’s commercial mortgage portfolio has a current committed balance of approximately $683 million, and a granted hole of 44 individual loans. The collateral basis underlying the portfolio continues to be spread across the major asset categories in geographically diverse markets, with a portfolio breakdown of 41% multifamily, 9% office, 23% hotel, 15% retail and 12% others such as mixed use and sub-storage. From the fourth quarter of 2011 through today, we originated foreign new loans with an aggregate balance of $49.6 million. Since real estate markets began to stabilize in late 2010, we have been actively originating new loans. Although there have been several pull backs in the real estate finance market during which time we focused exclusively on prices’ cover. Today we have closed or are closing 14 new loans with an aggregate balance of approximately $166 million with a weighted average coupon of 7.26%. When you take into account the typical 1% origination fee which is accreted to the income over the initial two-year term of the loans, our starting coupon is 7.76% on a floating rate basis over a LIBOR floor. Notwithstanding recent starting coupons of approximately 7.25%, we know pricing pressures CMBS has reemerged for stabilized assets, at fixed-rate coupons close to 5%, and as banks are aggressively looking to put out new floating rate loans at post-crisis valuations. We will continue to focus on credit quality and made prudent pricing investments as may be required for high-quality loans. Our portfolio of commercial mortgage possessions is in components as follows. 87% whole loans, 11% mezzanine loans, and 2% B-notes. We continue to benefit from an increasing percentage of whole loan positions in our portfolio having gained another 3% this quarter, which continues the trend that began as we started lending again and…

Thanks, Dave. Now I would like to review our investment in commercial finance. In early 2011, we transformed our previous investment into a new one and now we owned our interest through a joint venture we formed with LEAF Financial and Guggenheim Securities as well as Eos. Since then LEAF has made great progress in building its vendor programs and making high-quality leases. We completed its first securitization rated by Moody’s, which was widely distributed. Either good accomplishment in just a few months and we look forward to even making more progress in future periods. Now, I will also review our syndicated bank loan portfolio. Resource Capital’s bank loan portfolio has a carrying value of approximately $1.2 billion at number tight cost. Overall, in my opinion our portfolio has remained in excellent condition and little has changed since last quarter. As of December 31, 2011, we have specific reserves of $1.6 million and general reserves at $1.7 million as compared to specific reserves of 166,000 in general reserves of $3.3 million for the third quarter. We continued to forecasting very, very benign outlook in corporate credit for the next year or two. In the last 12 months, there was only one new loan default and one loan where he took conditional impairment. This was great for the last 12 months was 0.3%. As we mentioned last quarter, Resource Capital Asset Management was also entitled to earn incentive fees for performance in addition to the base fees earned for managing five bank loan portfolios. These were the bank loan portfolios that we managed for other investors. Since the deal closed, to purchase those management contracts, in February of last year, we are on track to receive what we estimate to be approximately $33 million over the next several years. We received $7.8 million in fees to date. Now, I will ask Dave Bryant, our Chief Financial Officer, to discuss our financials.

Thank you, Jonathan. RSO’s board declared a cash dividend for fourth quarter and full year 2011 of $0.25 and $1 per share, respectively. Last quarter, we began reporting on funds from operations, or FFO, as an operating performance measure. We are now expanding on that metric in reporting adjusted funds from operations, or AFFO, which reflects the normalize performance of our operations, and support both our current and longer-term earnings and growth that fuels our cash dividend payouts today, and going forward. Our AFFO income for the fourth quarter and year ended 2011, was $17 million or $0.22 per share, and $63.9 million or $0.90 per common share diluted. AFFO for the fourth quarter and year ended 2011 was impacted by several non-cash items, totaling $6.4 million and $15.8 million, and reduced adjusted FFO income by $0.08 and $0.22 per share respectively. Also, during the period, we took steps to ensure compliance of the 75% REIT gross income tax. We believe these tax compliance steps to be nonrecurring in nature, and not a normal part of our operations. We continue to pass all the critical interest coverage and over collateralization tests in our two real estate CDOs and four bank loan CLOs to February 2012. Each of these structured financings performed and provided stable cash flow to RSO in 2011. The real estate CDOs produced over $22 million, and bank loan CLOs generated over $27 million of cash flow during the year ended December 31. Notably, this cash flow will increase in 2012, as we deploy restricted cash available for reinvestment, and participate in cash flow from our new Apados CLO-8 beginning in 2012. As of December 31, we had in excess of $138 million of restricted cash in these structures, comprised of approximately $58 million in over $80 million…

Thanks, Dave. With that, I will open the call for any questions.

(Operator Instructions) And your first question comes from the line of Steve Delaney with JMP Securities. Please proceed. Steve Delaney – JMP Securities: Thank you. Good morning, everyone.

Good morning, Steve.

Good morning, Steve. Steve Delaney – JMP Securities: My first question, I have two things. First was to ask you about the while recognizing the big drop in the provision for credit losses year-over-year. I did notice that $6 million in the fourth quarter looked tired than we’ve in the last couple of quarters. And Dave Bryant did touch on that. I guess I was surprised to find that the majority of that was actually on bank loans rather than CRE. So could you maybe give us a little color as to – since the bank loan portfolio has performed so well, was there a specific credit exposure – can you hear me?

Yeah. I can hear you. Go ahead, Steve. Steve Delaney – JMP Securities: Yeah. I was just going to ask if there was a specific exposure that you are trying to shed, kind of like you’ve been shedding noise in the CRE portfolio. And as part of that, the – there was like $1.8 million of realized loss in the quarter on investments and loans available for sale and I didn’t know whether those two items were connected in some way. Thank you.

Yeah, Steve, just to address that, those – the reason we sold – so we – basically as we put forth most of the noise in that – in the quarter was from cash planning. What happened was the bank loan portfolio quite frankly over-performed in the real estate in terms of revenue and real estate was a little bit less. Mostly because it didn’t keep up with the speed of investments and profit that was coming from the commercial finance part of the business, recognizing as we needed to sell things on the bank, syndicated bank loan side or the commercial finance side, so were selling things that – at a slight discount in order to generate cash losses in order to come back into compliance for the retest. It really didn’t have anything to do with the quality of the assets or whether or not they would have been impaired. But just in selling them, we were generating losses so we were selling things. But even though we thought we’re perfectly good credits that would go to par that we had to generate losses. So we were selling what we had to at a discount in order to generate cash losses. But really had nothing to do with credit, it really had much more to do with tax planning and in the fourth quarter and as we mentioned, that won’t recur again because we’ve now bought real estate properties and have enough revenue that’s coming in from those real estate properties, or I should say, converted loans to equity so that we won’t have that problem, going forward. So the bank loan product – the bank loan portfolio is an excellent shape, and in no means were those losses kind of credit-oriented, as much as they were sold at a discount to generate tax losses... Steve Delaney – JMP Securities: That’s...

Those losses, Steve, I just geography, when the loans were sold at losses, the loss goes through the provision line item. Steve Delaney – JMP Securities: Understood. That’s very helpful, I apologize if I missed that nuance.

No, it’s a little bit confusing, but it really had more to do out-performance and tax planning than it did with credit area the credit on the bank loan portfolio is pristine. Steve Delaney – JMP Securities: And specifically, you’re referring to, I think, is 80% income tax for goodwill income, is that...

It’s 75 it’s kind of links to 75%, where at least 75% of your gross income must come from qualifying real estate. Steve Delaney – JMP Securities: Real estate? Yes. Okay, great. That’s helpful.

And as I pointed out, even though we took the hits there are, we did buy a large portfolio of, which is Apados 8, of bank loan portfolios at a deep discount, and so we actually have $40 million, $35 million of accretion that we haven’t accreted in the book, so when you add that back in, you obviously make up a lot of the difference that we, unfortunately, had to sell for tax reasons. Steve Delaney – JMP Securities: Understood. That’s helpful. And my second question had to do with the CMBS effort, which appears now to kind of be ramping up with the $100 million Wells line. You’ve talked a lot over the years about the strength of Gretchen’s team on the bank loans, could you just talk briefly about the resources you have within REXI, and who is specifically leading that CMBS underwriting effort, are you – and where in the caps stack are these like the AM and HA tranches and what type of un-levered yields you’re seeking to obtain there? Thanks.

Well, really, just want to be clear, I think we will have two efforts. One is on the CMBS side and that’s led by a woman named Joan Sapinsley and her team. Joan had over 20 years of experience leading the charge for a very large insurance company, Teachers, insurance company, one of the largest buyers to CMBS. She bought at Teachers everything from AAA down to subordinate notes. A true veteran of the CMBS, well, she’s been with us probably four or five years or more, and has done an excellent job of leading the charge on CMBS. We’re mostly buying at this point. We buy cyclically as AJs or AMs go down, we’ll buy them and rise them up and we have a lot of unbooked gains that are in that portfolio. From buying – which we sold out before now we bought when they went down, now they rallied significantly, as we mentioned in the call. But most of the time, right now we’re buying very short-dated AAA, very high up the stack. Basically looking for – even though it’s very short and are paying off very quickly so we have to replenish it, returns between 10% and 15% and betting a little bit more on our understanding of the rate of prepayment rather than the credit in the portfolio. Steve Delaney – JMP Securities: Okay. Very good. That’s helpful, Jonathan.

And then the second part of what we’re doing, just not to confuse you, we do have $100 million line to do that which we’ve been using. But we’ve also just secured a $150 million line which really goes to reinvigorate outside of the traditional CDOs that we’ve viewed. Our real estate lending business, which is lending to borrowers who want to borrow to buy or refinance properties that was some sort of value-add, transitional nature to it, so we are able to, and we think that that’s a mid teens kind of call it, 12% to 17% kind of low-level return business that we like a lot. Steve Delaney – JMP Securities: Very helpful. Good luck in 2012, now.

Thanks.

(Operator Instructions) Mr. Cohen, there is no further questions at this time.

Thank you very much, and we look forward to reporting on our next quarter.

Ladies and gentlemen, that does conclude today’s conference, thank you for your participation. You may now disconnect, and have a great day.