Good day ladies and gentlemen and welcome to the Q1 2012 Resource Capital Corporation Earnings Conference Call. My name is [Pomi] and I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder this call is being recorded for replay purposes. I would like to turn the conference over to Mr. Jonathan Cohen, President and CEO. Please proceed sir.

Thank you for joining the Resource Capital Corp. conference call for the first quarter ended March 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.

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 in the forms 8-K, 10-Q and 10-K and in particular, item 1-A on the Form 10-K 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.

First, a few highlights. Adjusted funds from operations or AFFO, for the three months ended March 31, 2012 was 18.6 million or $0.23 per share diluted. We paid a $0.20 per share for common share for the quarter in dividends or 16.9 million in aggregate on April 27, 2012 to stockholders of record as of March 30, 2012. Our book value increased to $5.46 per share this quarter from $5.38 as of December 31, 2011. Our GAAP net income for the three months ended March 31, 2012 was 14.5 million or $0.18 per share diluted as compared to 13.1 million or $0.22 for the three months ended March 31. 2011. Total revenues increased by 4.7 million or 23% as compared to the three months ended March 31, 2011 a year earlier. Provisions for loan losses decreased by 16% as compared to the three months ended March 31, 2011, and decreased 64% as compared to the three months ended December 31, 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; David Bryant, our Chief Financial Officer; and Purvi Kamdar, our Director of Investor Relations. After reviewing our quarterly results, one of our directors said to me, congratulations, seems very straightforward and good. That sentiment is a very good summary of our performance this quarter. We made money from our portfolio, grew our book value, our credit quality was good, we kept our debt levels relatively low and opportunities to expand the franchise and company remained ever present. From a financial standpoint, our Adjusted Funds From Operations or AFFO rose to $0.23 from $0.21 last quarter. We paid a sizeable and sustainable dividend of $0.20 for the quarter, and our book value per…

Rescource Capital Corp. commercial mortgage portfolio has a current committed of approximately $744 million in a granular pool of 49 individual loans. In the first quarter of 2012 through today, we closed and funded new loans totaling $17 million. We are committed to and are closing five additional loans totaling (inaudible) and have issued a negotiated term sheet on two more acquisition loans totaling 39.15 million, which will fund when the borrowers close on the properties that secure the loans. Aggregate new loan activities since the beginning of 2012 is $127.5 million This quarter marks a return to whole loan production levels that we were experiencing in 2007 before the credit crisis, when we were originating approximately $500 million annually. While real estate debt markets are mercurial and can vary from quarter-to-quarter; we’ve seen an overall firming of fundamentals in many markets and are underwriting our consistent forward pipeline of approximately $250 million at any given time. We are optimistic about meeting prior peak production levels and ultimately surpassing these numbers as we scale our well established origination platform. Since we restarted our loan origination activities in the late 2010, we have actively pursuing new loan opportunities; although there have been several pullbacks in the real estate finance markets, during which times our primary focus was on price discovery and the analysis of the credit trends. Taking in to accounts periods in 2011 that we were not in full origination mode, we’ve been actively looking in new lending opportunities for about 12 months in total. During the time since we commenced our lending efforts again, we have closed or are closing approximately 21 new loans totaling approximately $280 million. The average size of our new [advantage] loans is 13.3 million and weighted average starting coupon is 6.96%. However, when you…

Now I will also review our Syndicated Bank Loan portfolio. Resource Capital’s bank loan portfolio or Syndicated Bank Loan portfolio has a caring value of approximately $1.2 billion at amortized cost. Overall in my opinion, our portfolios remain in an excellent condition and little has changed since last quarter. As of March 31, 2012 we have specific reserves of 2.5 million and general reserves of 2.6 million as compared to specific reserves of 1.6 million and general reserves of 1.7 million for the fourth quarter. We continue to forecast a very, very benign outlook in corporate credit, especially at the loan level for the next year or two. The default rate for the last 12 months was less than 1% or 0.5%. This has been a terrific business line for Resource Capital, and we will continue to allocate capital to it. In addition to our portfolio of Syndicated Bank loans, we also collect management fees, for managing other CLOs. Since we bought the rights of managed five bank loan portfolios, we’ve received approximately $10.9 million in fees and received $2.1 million in fees this quarter alone. Now I will ask Dave Bryant, our Chief Financial Officer to discuss our financials.

RSO’s Board declared a cash dividend in the first quarter of $0.20 per common share of approximately 17 million in the aggregate. Our Adjusted Funds From Operations or AFFO was 18.6 million for the first quarter or $0.23 per common share. AFFO was impacted by several non-cash adjustments totaling 4.3 million and to a lesser extent cash items of approximately 300,000. This represents a payout ratio of approximately 91% and demonstrates our ability to cover the dividends from operating cash flow. We continue to pass all the critical interest coverage and over-collateralization test in our two real estate CDOs, and four bank loan CLOs through April of 2012. Each of these structured financings performed and continue to generate good cash flow to us in 2012. The CRE CDOs produced over 6.2 million and bank loan CLOs generated approximately 6.7 million of cash flow going to quarter ended March 31. This compares favorably to the same period in 2011 when these structures generated 5.1 million and 6.3 million from CRE and bank loans respectively. This reflects both improved credit, as well as our ability to get the restricted cash balances from the 2011 put to work. In addition in April, we received an initial distribution in our newest deal Apidos CLO VIII of 1.1 million. As of March 31, we have an excess of a 133 million of restricted cash in these structures on a combined basis. This is comprised of approximately 88.7 million and 44.3 million in our bank loans and it’s real estate deals respectively. Of these balances, 39 million and 44 million are available for reinvestment in our CLOs and CDOs, which we expect will provide meaningful spreads over the very low cost of the associated debt. In fact as Dave Bloom mentioned, we have commitment with borrowers…

With all discussion being behind us, I will open the call for any questions.

(Operator Instruction). Please standby for your first questions. Your first question comes from the line of Steve Delaney, JMP Securities. Please proceed.

Congratulations on the good progress in the first quarter. John I noticed that the common share count increased by about 5 million in the quarter. I know that you didn’t do a public offering. Was that a combination of DRIP plan issuance and may be a little bit of the aftermarket plan as well.

Yes. Well we don’t do that to market, but it was DRIP.

So it was all DRIP.

Yes.

I noticed recently while I guess not so much in the last couple of weeks, but in the February --.

Sorry Steve, I just wanted to mention that our average price was $5.54.

$5.54, okay.

Significantly above book value.

Right. So do you know an ATM plan actually set up and just not using it or you just haven’t gone.

We don’t use ATM plans we only DRIP when the price is at a level and that we feel like it’s productive to DRIP. So for instance, one month when the price is down we will not DRIP and then the next month if it’s out we may do something very small’ we’ll have use for the capital.

Got it. My second question is somewhat capital related too. It seems with this new $150 million line in the current flow, that you are in pretty good shape liquidity wise. In the balance sheet it doesn’t seem that you have any real near comp pressing needs for additional capital, things seemed to be balanced. But we did see some companies come to market in February and March some mortgage [REITs] and take advantage of this historically low rates and issue either straight preferred or unsecured senior notes, and coupons in the range of about 8%, but kind of like Dave Bryant mentioned, treating the trough as capital, I think we view that more as capital than we do as debt. I was just curious whether that type of security might have a roll in your balance sheet and might be appealing to you.

Well two things; first, we signed a deal with Wells Fargo. Obviously one of the reasons we are DRIPing is because we plan on expanding our balance sheet and to do $115 million line of credit you probably need $70 million of equity which we had some, but no we’ve put away more so that we can be super aggressive in expanding our commercial real estate finance loan origination effort, which is expanding as we speak. So that’s the first thing. The second thing; I think there is a great position in our balance sheet for a preferred more something like it in the 0.5% coupon. Obviously we’ll be very creative even if all we do is buy back our common shares. But we have reasons to believe we could put that money to work and use that to finally grow the dividend.

Okay, that’s helpful. And I apologize, you are getting an advance rate probably of something like what $0.70, $0.75 on the dollar on your warehouse line and I had in my off-the-top analysis had failed to focus on the fact that you do need capital to draw that line down.

Yeah. But we do have the capital, so I want to entrust that we are not looking to do any kind of offering of any kind on the common side. But we have, as I was saying, preferred stock at that rate obviously would be a lot cheaper for common share holders and if we can find the same type of investments we are making that would be accretive and a very productive thing for us.

My last question is, the origination volume looks like it might be a little lumpy, and I guess that’s because sort of the transactional nature of some of the transaction underlying these loans. But, would you say that run rate that maybe 15 is certainly low, but maybe that [70] is high and it’s looking out say over the balance of this year. Do you think may be something more in the 40 million to 50 million per quarter is more reasonable as far as what the average might be?

I think while it’s lumpy it’s a continuously building process, and then these yields, many are acquisition financing, so they will close in due time. I think that a run rate 75 million sounds comfortable; we’d certainly like to be dealing one.

Well I think what Dave is saying is, once we get up to - I mean it will lumpy for the next quarter too, but we plan on getting the originating between 250 million and 400 million a year of this product. By the way that’s the whole loan product that does not include mezzanine or other types of real estate finance that we might deal.

That’s very helpful. Congrats on the good start to the year.

Your next question comes from the line of Gabe Poggi. Please go ahead your line is open.

Couple of questions for you. Just so I have it straight here, you said that Dave and Dave both commented that you are fully filled on the second CDO that closes in June 3 and you already have commitments out in advance to have that fully filled up and so now you are going to go and use your Wells Fargo line for additional whole loan origination.

Yes.

Can you just remind us of just what the average LTV is off the current whole loan book and what you guys are looking to do from a go-forward perspective?

Average LTV is probably about 75% in the current whole loan books, that’s really where we are staying in our new loans to response equity in our deals the legacy loans are as I said performing and have come back from a low point. So we say we are between 70% and 75% (inaudible).

I know you guys commented last quarter, just want to make sure because your tax level was a little bit elevated this quarter relative to the run rates in 2011. Are you guys of over the hump with any retest issues. I know we had that one time event last quarter. I just want to make sure with the CDO being filled off, do you expect your tax rate to go back to that 1.8ish level, or should I assume the first quarter run rate going forward.

The first quarter run rate Dave was effected somewhat by a really strong performance in our structured notes and trading portfolio. So, probably closer to 1.8 to 2 is probably a decent run rate. We feel pretty good from where we test perspective for 2012 with, as you say, getting that money, put to work in the real estate CDOs and some other things that we expect to happen, not the least to which are some of these joint venture gains that Dave also mentioned in his remarks.

Gabe, you might look in Schedule II in the press release, where we talk about cash distribution and you’ll start to see the ramp up of real estate income even with in the 2006-I RREF and 2007-I RREF CDOs which are commercial real estate loans, and you will see some of the early syndicated bank loan deals are actually coming down a little bit. So you will see that shift from a - it’s great to have that income when we needed it, but now we are shifting back to the real estate side.

Perfect. That’s helpful. Two other just quick questions. Can you give me a breakout of your borrowings you just kind of dealt, what did your current REPO or warehouse balance was as of 1Q relative to your CDO balance.

Well we don’t really have one line that’s actively being used right now, because we haven’t started using the Wells Fargo line yet. These new loans are exposing hopefully one or two on to that. So we have - how much on the CMBS line?

I am sure you’ve an idea of how much you guys have put to work and then kind of what you still have left.

(inaudible) at the end of march we have about 65 of the 100 used on the CMBS facility. So there’s about 35 left there, and of course we haven’t touched the 150 yet, but obviously as Dave and other have said we expect to start doing that some time probably this quarter.

One last question guys if I might. From a transitional CRE perspective, outside it’s obviously your whole loan kind of core business, but you’d mentioned can you guys now own your hard asset. How much of - do you have a hard number for how much equity is like to allocate bucket. I know 62% of your total equity is in CRE, but does that kind of transitional distress, whatever the word you want to use. Do you have a targeted allocation for that asset class?

It’s typically about 5% to 7% of our equity, and that can change. Obviously we were buying opportunistically as the market was low. You will see us probably in the near future have some good gains on those and we’ll have to decide if that’s opportunistic or that. These come with a big dividend so it’s sort of a hard thing yet to balance.

Thank you. There are no further questions at this stage. (Operator Instruction).

Ma’am are there any other questions?

There are no questions coming through at the moment.

Okay. Well thank you very much. We’re always available to walk anybody through our business and we appreciate the support very much. See you next quarter.

Thank you for your participation in today’s conference. This concludes the presentation, you may now disconnect. Good day.