Good day, ladies and gentlemen, and welcome to the Q2 2013 Resource Capital Corp Earnings Call. My name’s Jo and I’ll be your Operator for today. (Operator instructions.) As a reminder the call is being recorded for replay purposes. I would now like to turn the call 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 Earnings Conference Call for Q2 ended June 30, 2013. I am Jonathan Cohen, President and CEO of Resource Capital Corp. Before I begin I would like to ask Purvi Kamdar, our Vice President of Investor Relations, to read the Safe Harbor Statement.

Thank you, Jonathan. When used in this conference call the words “believes,” “anticipates,” “expects,” 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 those 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 Form 8(k), 10(q), and 10(k), and in particular Item 1A 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 of 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 were $0.16 for the three months ended June 30, 2013. Booked value to common shareholders was $5.55 per share at June 30, 2013. We paid a dividend of $0.20 per common share for the three months ended June 30, 2013. We originated during the quarter $91 million of new commercial real estate loans, an increase of nearly 50% over the past quarter – and as you’ll hear from Dave Bloom we expect this kind of trend to continue. 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 Vice President of Investor Relations. While this quarter saw a lower adjusted funds from operations number than we expected it was related to three items: first, dilution from the April offering of $115 million; second, lower revenue from the deleveraging CLOs holding syndicated bank loans; and third, the speed of payments of legacy loans on the commercial real estate side which was offset by the tremendous origination of $91 million of loans in the quarter. Do not fear. We are confident that we will earn in excess of the dividend in terms of AFFO for the second half of the year 2013. Therefore we are guiding to a $0.40 dividend for the second half of 2013. This confidence is driven by first our ability to originate commercial real estate loans at slightly higher rates and larger size than we had been; second, our shifting away from CLO structures on the corporate credit side of the business to a more direct middle market approach of origination; third, our focus on securitizing our commercial real…

Thanks, Jonathan. Resource Capital Corp’s commercial mortgage and CMBS portfolio has a current balance of approximately $1.05 billion in a diverse and granular pool. RSO’s commercial mortgage portfolio comprises 57 individual loans with an aggregate committed balance of approximately $852 million. The current committed balance of the commercial mortgage portfolio has increased by $120 million since our last call on May 8th which takes into account $25 million of loan payoffs since that point. The underlying collateral base continues to be in geographically diverse markets spread across the major asset categories with a portfolio breakdown of 33% multi-family, 13% office, 21% hotel, 21% retail, and 12% other such as mixed use and research and development. The portfolio is in components as follows: 89% whole loans, 9% mezzanine loans, and 2% B notes. During Q2 2013 through today RSO has closed nine new loans totaling $106 million with six more loans totaling another $108 million in process. RSO currently has applications issued for seven more loans totaling approximately $152 million; it is in negotiations on an additional $310 million of new lending opportunities; and is actively underwriting a forward pipeline in excess of $300 million. We have seen a steady increase in lending opportunities that fit our credit profile and are increasing loan production on a quarter-over-quarter basis with consistency. The loans that we currently have in process combined with the number of applications issued and the loans in negotiation exceeds prior peak production levels of approximately $600 million a year. We are pleased with the way that loan production is tracking and look forward to directly originated loan production continuing to increase on a quarterly and annual basis. As Jonathan mentioned, in addition to our $250 million term financing facility with Wells Fargo RSO now has an additional $200 million…

Thanks, Dave. Now I will also review our corporate loan portfolio. Resource Capital’s syndicated bank loan portfolio has a carrying value of approximately $1 billion of amortized costs. Overall our portfolios remain in excellent condition. As of June 30, 2013, we have specific reserves of $3.4 million and general reserves of $936,000 as compared to specific reserves of $2.6 million and general reserves of $5.2 million for Q1 2013. We continue to forecast a good outlook in corporate credit for the next couple of years. The default rate for the last twelve months was 0.16%. This has been a great 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 from our acquisition of the right to manage other CLOs of which during the quarter we earned fees of $1.5 million. As I mentioned earlier we are also beginning to make some direct investments and directly originate those investments in middle market loans. We’ve committed $8.1 million of capital into these loans so far through the end of July and hope to expand on that going forward. Now I will ask Dave Bryant, our CFO, to discuss our financials.

Thank you, Jonathan. RSO’s Board declared a cash dividend for Q2 of $0.20 per common share or approximately $25.4 million. Our adjusted funds from operations or AFFO for Q2 was $19.6 million or $0.16 per common share diluted. AFFO for Q2 was impacted by several non-cash adjustments netting to $11.2 million and to a lesser extent net cash inflows of approximately $1.3 million. We plan to grow AFFO in the second half of 2013 as we deploy liquidity into our CRE loan origination pipeline and monetize unrealized gains on certain equity real estate investments held on our balance sheet. We again passed all of the critical interest coverage and overcollateralization tests in our two real estate CDOs and five bank loan CLOs as of June, 2013. Each of these financing structures continued to perform well and to generate stable and even improving cash flow to us in 2013. The real estate CDOs produced approximately $28 million including a return of principle of $16.5 million with our ownership of the RREF 2006 senior note class which we again intend to reinvest in new loan originations. Bank loan CLOs generated approximately $16.6 million of cash flow for the six months ended June 30. These amounts compare favorably to the same period in 2012 when they generated $13.4 million and $14.7 million from real estate and bank loans respectively. This cash flow improvement reflects a benign credit environment as well as our ability to invest recycled capital. As of June 30th we have in excess of $94.3 million of restricted cash in these structures comprised of approximately $78.0 million and $16.3 million in our bank loans and real estate deals respectively. Of these balances, $29.3 million is available for reinvestment in two of our CLOs which we expect to provide meaningful spreads of…

Thanks, David. Now with that I will open the call for any questions if there are any.

Thank you. (Operator instructions.) I see you have no questions at this time. (Operator instructions.) Your first question comes from Jade Rahmani from KBW. Please proceed. Jade Rahmani – Keefe, Bruyette & Woods: Hi, good morning. Thanks for taking the questions. I wanted to find out if you could comment on loan pricing and the impact if any that you could point out following the recent volatility in rates?

I’ll give you my two bits and then I’ll hand it over to Dave Bloom. I would say that we’ve slightly widened but not considerably, but that we think that there’s a bigger pipeline because of it. So I would say volumes we expect to increase dramatically as you heard Dave Bloom speak. Rates I would say are modestly increased 25 bps, 50 bps but we’re not seeing anything like the CMBS market in terms of total rate blowout.

I would follow on exactly what Jonathan said. LIBOR has stayed relatively flat and it actually went down. We’ve gotten to the point where we’re seeing more deals, we’re getting incremental pricing on deals that have been around for a little while longer but basically flat with our borrowing costs remaining the same and really getting those same returns. Jade Rahmani – Keefe, Bruyette & Woods: And are you seeing any changes in borrower behavior, whether it be their underwriting assumptions or anything sector-specific perhaps relative to say multi-family? Anything that would cause their eagerness to take a loan to change?

Our underwriting assumptions are certainly taking into account an increase takeout cost which we always due when we stress assets. We are seeing more borrowers saying that they’re going to create more value kind of in transitional loan land until there’s real firming and more certainty in the CMBS world. So no, I mean it’s I think playing well for us but I think it’s a trend that will continue sort of based on the kind of law of maturities and deals that people still are committed to and will put more cash into to add to value before selling or putting permanent financing on. Jade Rahmani – Keefe, Bruyette & Woods: Great, thanks a lot.

Thanks, Jade.

Thank you. The next question comes from Gabe Poggi from EJF Capital. Please proceed. Gabe Poggi – EJF Capital: Hi, good morning guys. You may have gone through this, Dave Bryant – I just want to double check how much do you guys have of let’s call a newly originated CRE product that you’re currently carrying on your two lines? In other words what do you have right now that could eventually go into a securitization? And Jonathan, you talked on the last conference call about kind of a forward origination – I don’t want to call it “guidance” but you threw out a number, I think it was in the $400 million ballpark of what you think you can do from a new origination perspective for the year. If you can just put some color around that that’ll be great.

Well, I can start with question two. I think that we’re starting to look at numbers that are much higher given the kind of dynamics in the marketplace with CMBS more expensive, etc. So I would revise that guidance up given our almost $100 million that we did this quarter and the pipeline that we’re closing into Q3. I would say we’re starting to look at numbers between $500 million and $600 million in terms of originations. And I think Dave might be even more bullish than that but in some sort of area like that. And so Dave, do you want to take the first question?

Sure. Between what we have on the line and what’s currently in closing, and some that we’re holding unlevered – we’re roughly about $280 million, sort of the 462 [Ap-issued] under negotiation. Even assuming a one-third hit rate on them, and that’s just now – it goes up by the day – that’s an additional $152 million which really puts us where we need to be to get a [tape] together and as Jon said, go out as early as the end of Q3, beginning of Q4. Gabe Poggi – EJF Capital: Perfect, thanks guys.

Thank you, Gabe.

Thank you. There are no further questions so I’d like to turn the call over to you, Jonathan Cohen, for closing remarks.

Yeah, I just want to say just one more thing to Gabe, which is that you see in the marketplace a bunch of other companies coming out with securitization in our space. Pricing looks good; it’s getting tighter. We think there’s a lot of appetite here surely for the AAA bonds. You see guys leveraging up to 75%, 76%, all the way down to BBB+s that are in the marketplace. That bodes very attractively given where we’re leveraged today on an overall basis in our CRE portfolio as well as where we borrow on our two lines. So hopefully this works out tremendously well for us. We’ve been waiting to get some size rather than doing a little deal which is exciting. Also you’re also seeing in these deals ramp periods, even if they’re short, six to twelve months, maybe even 18 months which is very attractive rather than borrowing on a line at 225, 250, 275. If you can borrow on securitization at 180, 190, 200 or less depending on the structure that’s really just tremendous. So it bodes well for the future of Resource Capital driven mostly by the CRE origination which we’re seeing here. So with that I will thank everybody for attending the call and hopefully these comments although long were detailed and helpful. We look forward to speaking to you either during the quarter or on the next quarterly conference call. Thank you.

Thank you for your participation in today’s conference call. This concludes the presentation. You may now disconnect.