Second Quarter Highlights

 --  Second quarter 2009 Net Operating Income per share of $0.39. --  Second quarter 2009 common stock cash dividend of $0.30 per share. --  Resource Capital Corp. repurchased $7.5 million of its corporate notes     for $600,000 or at a 92% discount to par since during the second quarter     2009. --  Resource Capital Corp. has $69.3 million of liquidity at June 30,     2009. --  During the second quarter 2009, Resource Capital Corp. had $114.6     million of loans repaid or settled and eliminated $12.4 million of future     funding obligations.      

Resource Capital Corp. (NYSE: RSO) ("RCC" or the "Company"), a real estate investment trust whose investment strategy focuses on commercial real estate ("CRE") loan assets and, to a lesser extent, commercial finance assets, reported results for the second quarter ended June 30, 2009.

Other Highlights

 --  Net operating income for the three and six months ended June 30, 2009     was $9.5 million, or $0.39 per share and $19.7 million, or $0.81 per share,     respectively, as compared $10.3 million, or $0.42 per share and $21.0     million, or $0.84 per share, for the three and six months ended June 30,     2008, respectively, a decrease of $762,000 (7%) and $1.3 million (6%),     respectively.      --  REIT taxable income, a non-GAAP measure, for the three and six months     ended June 30, 2009 was $5.3 million, or $0.21 per share-diluted, and $11.4     million, or $0.46 per share-diluted, respectively, as compared to $9.4     million or $0.38 per share-diluted and $21.5 million or $0.86 per share-     diluted for the three and six months ended June 30, 2008, respectively, a     decrease of $4.1 million (44%) and $10.1 million (47%), respectively.      --  GAAP net loss for the quarter ended June 30, 2009 of $5.1 million, or     (-$0.21) per share, including provisions for loan and lease losses of $20.0     million and net unrealized losses on bank loans held for sale of $1.9     million or a total of (-$0.90) per share, as compared to GAAP net loss for     the quarter ended June 30, 2008 of (-$0.21) per share-diluted including     provisions for loan and lease losses of $15.7 million or (-$0.62) per share-     diluted.  GAAP net loss for the six months ended June 30, 2009 of $17.3     million, or (-$0.71) per share, including provisions for loan and lease     losses of $28.0 million, net unrealized losses on bank loans held for sale     of $10.9 million and other-than-temporary impairment charges of $5.6     million or a total of (-$1.82) per share, as compared to GAAP net income     for the six months ended June 30, 2008 of $0.16 per share-diluted including     provisions for loan and lease losses of $16.8 million or (-$0.67) per share-     diluted.      --  RCC announced a dividend of $0.30 per common share for the quarter     ended June 30, 2009, $7.5 million in the aggregate, paid on July 28, 2009     to stockholders of record as of June 19, 2009.      --  Economic book value, a non-GAAP measure, was $9.25 per common share as     of June 30, 2009.      --  GAAP book value was $6.66 per common share as of June 30, 2009.      --  RCC reduced the balance of its non-recourse repurchase facility     funding CRE loans to $3.3 million as of June 30, 2009 from $16.0 million as     of March 31, 2009.  This facility is secured by $24.6 million of pledged     collateral.      

Jonathan Cohen commented, "Although during the last few months the real estate market has continued to deteriorate, the bank loan market seems to have improved, our cash flow remained strong and our portfolio continued to perform decently as we worked diligently with our borrowers. Currently, we are focused on (i) asset management, (ii) exploiting the disconnect in the debt and equity marketplaces through select purchases of our own securities, (iii) building cash on our balance sheet and (iv) de-leveraging our real estate portfolios. Again, we look forward to paying a meaningful cash dividend for the third quarter."

Additional financial results for the second quarter ended June 30, 2009 and recent developments include:

General

 --  RCC's net interest income decreased by $808,000, or 6%, to $12.5     million for the second quarter ended June 30, 2009, from $13.3 million for     the same period in 2008.      

Commercial Real Estate

 --  RCC funded commitments on existing CRE loans, on a gross basis, of     $27.3 million during the second quarter ended June 30, 2009.      

The following table summarizes RCC's CRE loan repayment and orgination activities (including future funding obligations), at par, for the three, six and 12 months ended June 30, 2009 (in millions, except percentages) (unaudited):

                            Three      Six       12     Floating                           Months    Months    Months   Weighted  Weighted                            Ended     Ended     Ended    Average   Average                           June 30,  June 30,  June 30,  Spread     Fixed                             2009      2009      2009    (1) (2)   Rate (1)                           --------  --------  --------  --------  -------- Whole loans (3)           $   27.3  $   30.9  $   44.7      2.97%     7.90% Whole loans, future  funding obligations             -         -         -       N/A       N/A                           --------  --------  -------- New loans production          27.3      30.9      44.7 Sale of real estate  loans                       (29.8)    (29.8)    (29.8) Payoffs                          -      (7.0)    (59.5) Principal paydowns            (6.2)    (16.7)    (29.0) Whole loans, future  funding obligations             -         -         -                           --------  --------  -------- Net - new loans (4)       $   (8.7) $  (22.6) $  (73.6)                           ========  ========  ======== (1) Reflects rates on RCC's portfolio balance as of June 30, 2009. (2) Represents the weighted average rate above the London Interbank     Offered Rate ("LIBOR") on loans whose interest rate is based on LIBOR. (3) Includes fundings of previous commitments on transitional loans of     $3.7 million for the three months ended June 30, 2009, $7.3 million     for the six months ended June 30, 2009 and $21.1 million for the     12 months ended June 30, 2009. (4) The basis of new net loans does not include provisions for losses on     CRE loans of $9.1 million for the three months ended June 30, 2009,     $14.1 million for the six months ended June 30, 2009 and $17.2 million     for the 12 months ended June 30, 2009. 

Commercial Finance

 --  RCC's bank loan portfolio ended the second quarter with total     investments of $927.4 million, at amortized cost, with a weighted-average     spread of one-month and three-month LIBOR plus 2.52%.  All of RCC's bank     loan portfolio is match-funded through three collateralized loan obligation     ("CLO") issuances with a weighted-average cost of three-month LIBOR plus     0.47%.  During the quarter ended June 30, 2009, RCC received $78.6 million     of bank loan paydowns and repayments.      

Book Value

As of June 30, 2009, RCC's GAAP book value per common share was $6.66. Total stockholders' equity was $165.9 million as of June 30, 2009 as compared to $186.3 million as of December 31, 2008. Total common shares outstanding were 24,911,944 as of June 30, 2009 as compared to 25,344,867 as of December 31, 2008. The net decrease in RCC's stockholders' equity of $20.4 million was primarily the result of increased provisions for loan and lease losses of $28.0 million, losses on RCC's bank loan portfolio of $10.9 million, combined with a decrease in the value of marked-to-market securities of $11.3 million, which was partially offset by an increase in the value of interest rate swaps of $19.9 million and a gain on the extinguishment of debt of $6.9 million.

As of June 30, 2009, RCC's economic book value per share, a non-GAAP measure, was $9.25. Economic book value is computed by adding back to GAAP book value any unrealized losses on the Company's investments in commercial mortgage-backed securities ("CMBS") for which it expects to recover full par value at maturity, and on derivatives (cash flow hedges) that are associated with fixed-rate loans which it intends to hold until maturity, in excess of its value at risk, and that have not been adjusted through stockholders' equity for market fluctuations (see Note 1 of Schedule II in this release). Economic book value per share is computed by dividing the economic book value by the number of shares outstanding at the end of the period.

Investment Portfolio

The table below summarizes the amortized cost and net carrying amount of RCC's investment portfolio as of June 30, 2009, classified by interest rate type. The following table includes both (i) the amortized cost of RCC's investment portfolio and the related dollar price, which is computed by dividing amortized cost by par amount, and (ii) the net carrying amount of RCC's investment portfolio and the related dollar price, which is computed by dividing the net carrying amount by par amount (in thousands, except percentages) (unaudited):

                                                             Net                                                          carrying                                                           amount                                         Net                less                 Amortized   Dollar   carrying   Dollar  amortized   Dollar                  cost (3)   price     amount    price      cost     price                 ----------- ------  ----------- ------  ----------  ------   June 30, 2009   -------------   Floating rate   ------------- CMBS-private  placement      $    32,064 100.00% $    11,095  34.60% $  (20,969) -65.40% B notes (1)          26,500 100.00%      26,399  99.62%       (101)  -0.38% Mezzanine loans  (1)                129,184 100.00%     128,795  99.70%       (389)  -0.30% Whole loans (1)     426,292  99.88%     415,865  97.44%    (10,427)  -2.44% Bank loans (2)      924,988  97.83%     747,000  79.00%   (177,988) -18.83% Bank loans held  for sale (3)         2,401 100.00%       2,401 100.00%          -       -%                 -----------         -----------         ----------    Total     floating     rate          1,541,429  98.65%   1,331,555  85.22%   (209,874) -13.43%                 -----------         -----------         ----------    Fixed rate    ---------- CMBS - private  placement           38,614  91.78%       7,080  16.83%    (31,534) -74.95% B notes (1)          55,256 100.08%      55,089  99.78%       (167)  -0.30% Mezzanine loans  (1)                 81,313  94.76%      68,418  79.73%    (12,895) -15.03% Whole loans (1)      78,846  99.63%      78,614  99.34%       (232)  -0.29% Equipment  leases and  loans (4)            3,433 100.03%       2,833  82.55%       (600) -17.48%                 -----------         -----------         ----------    Total fixed     rate            257,462  96.92%     212,034  79.81%    (45,428) -17.11%                 -----------         -----------         ----------      Grand       total     $ 1,798,891  98.40% $ 1,543,589  84.44% $ (255,302) -13.96%                 ===========         ===========         ========== (1) Net carrying amount includes an allowance for loan losses of $24.2     million at June 30, 2009, allocated as follows:  B notes     ($0.3 million), mezzanine loans ($13.3 million) and whole loans     ($10.6 million). (2) The bank loan portfolio is carried at amortized cost less allowance     for loan loss and was $890.1 million at June 30, 2009.  Amount     disclosed represents net realizable value at June 30, 2009, which     includes $34.9 million allowance for loan losses at June 30, 2009. (3) Bank loans held for sale are carried at fair value and, therefore,     amortized cost is equal to fair value. (4) Net carrying amount includes a $0.6 million allowance for equipment     leases and loans losses at June 30, 2009.