Good day, ladies and gentlemen. And welcome to the Q2 2014 Resource Capital Corp. Earnings Conference Call. My name is Darren, and I am your event manager. At this time, all participants are in listen-only mode. We’ll conduct a Q&A session towards the end of the conference. (Operator Instructions) As a reminder, this call is being recorded for replay purposes. And now I would like to turn the call over to Jonathan Cohen, President and CEO. Please proceed, sir.

Thank you. And thank you for joining the Resource Capital Corp. earnings conference call for the second quarter ended June 30, 2014. 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 Forms 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 any of 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 from the quarter. Adjusted funds from operations were $0.19 per share. During the quarter we funded $181 million of new commercial real estate loans. These loans will have future funding of $33 million, thereby totaling $214 million of new loan commitments. This is 138% increase as compared to $90 million in the same quarter last year and an 83% increase over our first quarter production. On July 30, RSO successfully completed a $354 million commercial real estate securitization, in which we issued term notes in the amount of $235 million to outside investors at a weighted average spread of 1.29% and on which we expect to earn a return of equity in excess of 15%. On June 10, RSO completed the issuance of its new 8.625% Series C Preferred Stock demand was strong and we issued 4.8 million shares of our new Preferred Stock for net proceeds of over $116 million. We, of course, paid a dividend of $0.20 for the quarter. With those highlights out of the way, I will now introduce my colleagues. With me today are Dave Bloom, Head of Real Estate; Dave Bryant, our Chief Financial Officer; and Purvi Kamdar, our Vice President of Investor Relations. In the second quarter, we earned $0.19 of adjusted funds from operations, closely matching our dividend of $0.20. Our book value was $5.24 having earned $0.11 this quarter, as compared to $0.05 earned in the similar quarter in 2013. We are making progress bridging the gap between AFFO and net income. We expect this gap to continue to close as we put proceeds from our perpetual preferred deal to work and continue to leverage our balance sheet to appropriate levels. Our real estate team has done in my opinion a tremendous job of…

Thanks, Jonathan. Resource Capital Corp.’s committed commercial mortgage and CMBS portfolio has a current balance in excess of $1.3 billion in a diverse and granular pool. RSO's commercial mortgage portfolios comprised of 65 individual loans, with an aggregate committed balance of approximately $1.1 billion and is comprised of 92% self-originated whole loans, 7% mezzanine loans and 1% B-notes. The underlying collateral base continues to be spread across the major asset categories and geographically diverse markets with the portfolio breakdown of 38% multi-family, 20% office, 16% hotel, 18% retail and 8% other, such as mixed use deals. During the second quarter of 2014, RSO closed new loans with commitments totaling approximately $214 million bringing total new loan origination for the first and second quarters of 2014 to $330.7 million. On a trailing 12-month basis RSO's aggregate loan originations volume is $518.1 million. Since the beginning of the third quarter, we have closed new whole loans with commitments totaling $40.5 million, bringing 2014 originations to-date to $371.2 million, as compare to total annual productions for 2013 of $348.2 millions. In addition, we’re in the process of closing additional new loans with an aggregate committed balance of approximately $144.8 million, provided that everything in process closes, RSO's new production for 2014 will stand at $516 million, that’s just one month into the third quarter. So, as Jonathan mentioned, RSO is well on its way to meeting our target annual production of between $600 million and $700 million of new originations. As we look at our forward pipeline it remains strong, with new loan originations totaling $137.8 million under application and final negotiation and an additional $450 million of new lending opportunities either quoted or past preliminary screening and deep into underwriting. With the closing last week of RSO 2014-CRE2 our second securitization, our…

Thank you, Dave. Now I will ask Dave Bryant, our Chief Financial Officer to discuss our financials.

Thank you, Jonathan. Resource Capital Corp. declared and paid a cash dividend for the second quarter of $0.20 per common share. Our adjusted funds from operations or AFFO for the quarter was $24 million or $0.19 per common share diluted. Determining AFFO for the second quarter, there were several non-cash adjustments that led to approximately $6.1 million and cash adjustments of $7 million, of which $3.1 million comes from the recognition of cash gains on the extinguishment of debt and $3.9 million from realized gains on the sale of real estate. We passed all of the interest coverage and over collateralization tests in our securitizations. Each of these financing structures performed well and generated strong cash flow to us in Q2 2014. We ended the quarter with approximately $320 million of real estate loan collateral posted on our term facilities. And when we closed our second real estate securitization since late 2013, we were able to fully pay off our real estate term facilities, thereby providing plenty of runway for our real estate loan pipeline that will fuel our expected growth. In the second quarter 2014, we saw a net increase of $782,000 in provisions for loan losses. There was $700,000 provision on the loan related to leasing fund that we took a preemptive write-down on, $60,000 on real estate loans and $26,000 on residential mortgage loans held for investment which was offset by a small decrease in provisions of $5000 on bank loans. We ended the period with $5.8 million in real estate allowances, $668,000 in bank loan allowances and $700,000 allowance on other commercial finance loans. Overall real estate credit has been excellent and I continue to characterize our bank loan portfolio credit as very benign. Only one bank loan for $1.6 million is delinquent out of a…

Thank you, Dave, and Dave. With that, before I open the call for questions, I want to reiterate our guidance of approximately $0.40 of AFFO for the next six months. We also reiterate our dividend guidance of $0.20 per quarter during 2014. With that, I will open the call for any questions.

(Operator Instructions) The first question is from the line of Jade Rahmani from KBW. Your line is open. Please go ahead.

Good morning and thanks for taking the question. Can you provide some color on the types of loans you’re originating and can you give a sense for the range of yields and other credit metrics, LTVs that service coverage ratios, specifically how those trended over the past quarter?

Sure. Dave Bloom can handle that.

We are still making loans that have positive cash flow. We are looking at debt service coverage going in, sort of, at a minimum of about 1, 2. I think at this point, we’re still maintaining a weighted average starting coupon of around 5% as we blend all of our production together, which is very consistent with where we've been and where we were in our last -- in our last securitization.

And what’s the range around that 5%?

This is Jon. I mean for multi-family, lower levered that we love that rounds out a nice securitization, it would be in mid 4% to 4.75%.

And what would be at the high end?

The high end probably would be 6.5% to 7% and that would be in still relatively low levered, that might be in retail hotel situation or office situation with lease-up component.

Okay. Are you still seeing around 50% of your originations from existing borrowers?

I would say that number probably is about a third only because -- it's a third to 50%. It depends how you really look at it in terms of number of loans or total dollars. Some of the bigger loans that we made recently have been to borrowers that are either new or have borrowed long time ago. We didn’t see them repeat. They may have borrowed in another form or another PE fund that they worked at.

Okay. And just over the last couple of weeks, have you seen any -- has any other volatility in the market led to higher loan yields or the loan market hasn’t had much reaction?

No, I wouldn’t say the loan market in this case, I would say in the middle market lending corporate side, we have seen a little bit of that but not in the real estate side.

Okay. Additionally, on the CLOs that you’re issuing, is the typical duration about 16 months or which I think you cited or is it a little longer than that?

No. I apologize if I confused you with the comment. The average call protection though is 16 months. For the AAAs, the weighted average life is 2.88 years. But these loans -- term finance of these loans go five years then the bonds go five years.

Right. But when they pay -- when loan repayments are received, they pay off the senior securities of these structured deleverages?

Right. That’s right. Although, we have a very good mechanism as Dave Bloom and his team put into the deal, which allows us to take future funding commitments and essentially put them back into the deal that we lever the transaction.

Okay. Just lastly on the North Port and corporate lending opportunity, how much flexibility is there under the REIT rules to grow those businesses? Can you talk about like how much capital you would expect to continue to allocate?

We don’t really -- I mean it’s opportunistic at this point, but we have a lot of flexibility if we want it.

Okay. Thanks a lot.

Thank you.

Thank you. And next question is from the line of Lee Cooperman from Omega Advisors.

Thank you and good morning. Jonathan, east wards, we of course paid a $0.20 dividend. I don’t think that the dividend commitments for 2014 is meaningful in itself because of the history. In 2009, we paid $1.15, 2010 and ‘11, we paid $1. We’re currently paying $0.80. Our AFFO from recurring operations is less than dividend. So I have a simple question. When do you expect and do you expect income AFFO from recurring activities to cover distribution?

Yes. We’ve been right around that level. The last two or three quarters $0.19 to $0.20. We’d like to see it go higher because there always are a portion of our gains that always have been maybe 10% to 15%, have always been from one-time activities, that’s just the portion of our business. So we’d like to see that higher to feel very comfortable with the dividend there. Obviously, we’re under incredible pressure from the market in terms of keeping with our desire to keep credit quality very high and not make silly loan, while being aggressively deploying capital and focused on not maintaining that dividend.

I know but that’s my question, based upon your internal budgets, do you expect to see…

We’re there now, I mean, we’re there at $0.19 to $0.20. We expect to be there and try to grow that a little bit from here on AFFO.

So you believe that you’ll be able to maintain the distribution beyond 2014?

That’s what we believe now, but I’m always very cautious (indiscernible), yes.

And secondly, if you could go through the arithmetic of raising capital at let say, $5.50 a share, take away your underwriting discount. What could you do with that money today that would be accretive to the distribution as oppose to presenting a risk to the distribution?

We have not done an offering for common stock. We’ve been issuing preferred stock at 5% -- I mean at 8.5%, which where we think, we can make money given our securitization at -- that we just completed at a 15% ROE. Our last securitization was north to 20%. So we’ve been basically focused on preferred stock. We did do a convertible, convertible in the high sixes, which we did nine month -- a year ago. You all quit -- we have not done an offering.

Right. Okay. Thank you.

Thank you.

Thank you. Your next question is from the line of Richard Eckert from MLV & Company. Thank you. Richard Eckert - MLV & Company: Hey, thanks for taking my call. Couple of quick questions. The first is there is a gain on the sale of real estate, was that from the Florida Resort property?

It was…

Rick, it was. Richard Eckert - MLV & Company: Okay. And second, for the second quarter in a row your capital allocation to commercial real estate has been around 70%, which seems a little low to me, isn’t it generally in the 80% to 85% range. I mean I know you plan on being opportunistic but it seems like the allocation to real estate, commercial real estate is somewhat low?

Yes. We will see that get back up to about 80% within the next six to nine months. It just a matter of us, we had $58 million of payoffs. We had properties we sold, so that number came down a little bit. Richard Eckert - MLV & Company: Thank you.

Thank you. Your next question is from the line of Matthew Stolzar from Pyrrho Capital. Please go ahead.

Hey guys.

Hi, Matthew.

Can you walk us through the gain on extinguishment of debt? And how do you think about or sort of just what that gain was from and how we should think about those going-forward?

That gain was from previous buybacks of bonds that went into GAAP income, but was not taken into AFFOs as a gain that those gains are taken in AFFO and we actually receive the cash from the sales of bonds or from the repayment of loans underlying those securitization. So it’s really -- it’s a little bit lumpy here and there, but as these things speed up and the old securitizations are paid down, we expected that to be probably an ongoing AFFO add back probably for the next couple of quarters.

Okay. And in terms of your leverage, where are you, would you say in terms of the progress of levering off the balance sheet? And how do you ultimately look at running this from a leverage perspective?

On the commercial real estate side, we’re looking at, probably somewhere in the 70% to 75% as where we’re comfortable, which would imply a little less than three times. On the corporate lending side, its really more one-to-one business. I think then on top of that we’re comfortable having another half a turn to or so of corporate leverage on top of that.

So when we think about sort of what your sources of capital will be going forward, I guess, how do you think about making that decision?

I would look at it that we will probably be able to grow our balance sheet by another somewhat $600 million to $1 billion on the leverage standpoint.

Got it. Thank you, guys.

Thank you. We have no further questions. So I’d like to turn the call back to Jonathan Cohen for closing remarks.

Well, we thank you very much for your support, both this quarter and many of you over the years. And we continue to make progress and we’re looking forward to reporting next quarter. Thank you.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a good day.