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| Maryland                        |   | 20-2287134          |
|---------------------------------|--------|---------------------|
| (State or other jurisdiction of |   | (I.R.S. Employer    |
| incorporation or organization)  |   | Identification No.) |

| 712 5th Avenue, 10th Floor                           |
|------------------------------------------------------|
| New York, New York 10019                             |
| (Address of principal executive offices) (Zip code)  |
| (212) 506-3870                                       |
| (Registrant's telephone number, including area code) |

| Large accelerated filer |  ̈ |                                          | Accelerated filer         | R      |
|-------------------------|--------|-----------------------------------------------|---------------------------|--------|
| Non-accelerated filer   |  ̈ | (Do not check if a smaller reporting company) | Smaller reporting company |  ̈ |

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INDEX

|       |                                                                                                      | PAGE   |
|------------|-----------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                      |   |
| PART I     | FINANCIAL INFORMATION                                                                                     |   |
|       |                                                                                                      |   |
| Item 1.    | Financial Statements                                                                                      |   |
|       | Consolidated Balance Sheets – June 30, 2010 (unaudited) and December 31, 2009                       | 3      |
|       | Consolidated Statements of Operations (unaudited)Three and Six Months Ended June 30, 2010 and 2009        | 4      |
|       | Consolidated Statement of Changes in Stockholders’ Equity (unaudited)Six Months Ended June 30, 2010 | 5      |
|       | Consolidated Statements of Cash Flows (unaudited) Six Months EndedJune 30, 2010 and 2009                  | 6      |
|       | Notes to Consolidated Financial Statements – June 30, 2010 (unaudited)                              | 8      |
|       |                                                                                                      |   |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations               | 31     |
|       |                                                                                                      |   |
| Item 3.    | Quantitative and Qualitative Disclosures about Market Risk                                                | 49     |
|       |                                                                                                      |   |
| Item 4.    | Controls and Procedures                                                                                   | 50     |
|       |                                                                                                      |   |
| PART II    | OTHER INFORMATION                                                                                         |   |
|       |                                                                                                      |   |
| Item 6.    | Exhibits                                                                                                  | 51     |
|       |                                                                                                      |
| SIGNATURES | 52                                                                                                        |

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| Item 1. | Financial Statements |
|---------|----------------------|

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                       |   | June 30,    |      |   | December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|-----------|--------|--------------|--------|
|                                                                                                                                                                                       |   | 2010        |      |   | 2009         |   |
|                                                                                                                                                                                       |   | (Unaudited) |      |   |         |   |
| ASSETS                                                                                                                                                                                     |   |        |      |   |         |   |
| Cash and cash equivalents                                                                                                                                                                  |   | $           | 38,505    |   |         | $      | 51,991 |   |
| Restricted cash                                                                                                                                                                            |   |        | 108,613   |   |         |   | 85,125 |   |
| Investment securities trading                                                                                                                                                         |   |        | 4,985     |   |         |   | − |   |
| Investment securities available-for-sale, pledged as collateral, at fair value                                                                                                             |   |        | 48,424    |   |         |   | 39,304 |   |
| Investment securities available-for-sale, at fair value                                                                                                                                    |   |        | 7,105     |   |         |   | 5,238 |   |
| Investment securities held-to-maturity, pledged as collateral                                                                                                                              |   |        | 31,446    |   |         |   | 31,401 |   |
| Loans, pledged as collateral and net of allowances of $38.9 million and$47.1 million                                                                                                       |   |        | 1,511,695 |   |         |   | 1,558,687 |   |
| Loans held for sale                                                                                                                                                                        |   |        | 37,763    |   |         |   | 8,050 |   |
| Lease receivables, net of allowances of  $50,000 and$1.1 million and net of unearned income                                                                                      |   |        | 118,528   |   |         |   | 927 |   |
| Loans receivable – related party                                                                                                                                                     |   |        | 9,999     |   |         |   | − |   |
| Investments in unconsolidated entities                                                                                                                                                     |   |        | 5,111     |   |         |   | 3,605 |   |
| Interest receivable                                                                                                                                                                        |   |        | 5,587     |   |         |   | 5,754 |   |
| Other assets                                                                                                                                                                               |   |        | 6,610     |   |         |   | 3,878 |   |
| Total assets                                                                                                                                                                               |   | $           | 1,934,371 |   |         | $      | 1,793,960 |   |
| LIABILITIES                                                                                                                                                                                |   |        |      |   |         |   |   |   |
| Borrowings                                                                                                                                                                                 |   | $           | 1,592,397 |   |         | $      | 1,536,500 |   |
| Distribution payable                                                                                                                                                                       |   |        | 12,775    |   |         |   | 9,170 |   |
| Accrued interest expense                                                                                                                                                                   |   |        | 1,746     |   |         |   | 1,516 |   |
| Derivatives, at fair value                                                                                                                                                                 |   |        | 15,643    |   |         |   | 12,767 |   |
| Accounts payable and other liabilities                                                                                                                                                     |   |        | 9,997     |   |         |   | 5,177 |   |
| Total liabilities                                                                                                                                                                          |   |        | 1,632,558 |   |         |   | 1,565,130 |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                                                 |   |        |      |   |         |   |   |   |
| Preferred stock, par value $0.001:  100,000,000 shares authorized;no shares issued and outstanding                                                                               |   |        | −   |   |         |   | − |   |
| Common stock, par value $0.001:  500,000,000 shares authorized;50,968,334 and 36,545,737 shares issued and outstanding(including 559,459 and 437,319 unvested restricted shares) |   |        | 51        |   |         |   | 36 |   |
| Additional paid-in capital                                                                                                                                                                 |   |        | 481,897   |   |         |   | 405,517 |   |
| Accumulated other comprehensive loss                                                                                                                                                       |   |        | (57,506   | )      |         |   | (62,154 | ) |
| Distributions in excess of earnings                                                                                                                                                        |   |        | (176,065  | )      |         |   | (114,569 | ) |
| Retained earnings                                                                                                                                                                          |   |        | 53,436    |   |         |   | − |   |
| Total stockholders’ equity                                                                                                                                                           |   |        | 301,813   |   |         |   | 228,830 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                           |   | $           | 1,934,371 |   |         | $      | 1,793,960 |   |

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CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                         |   | Three Months Ended |       |   | Six Months Ended |   |
|--------------------------------------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                                                         |   | June 30,           |       |   | June 30,         |   |
|                                                         |   | 2010               |       |   | 2009             |   |   | 2010 |   |   | 2009 |   |
| REVENUES                                                     |   |               |       |   |             |   |   |   |   |   |   |   |
| Net interest income:                                         |   |               |       |   |             |   |   |   |   |   |   |   |
| Loans                                                        |   | $                  | 19,103     |   |             | $      | 21,507 |   |   | $ | 37,488 |   |   | $ | 44,128 |   |
| Securities                                                   |   |               | 2,895      |   |             |   | 1,345 |   |   |   | 5,769 |   |   |   | 2,766 |   |
| Leases                                                       |   |               | 1,928      |   |             |   | 2,093 |   |   |   | 2,163 |   |   |   | 4,326 |   |
| Interest income − other                                |   |               | 534        |   |             |   | 329 |   |   |   | 749 |   |   |   | 676 |   |
| Total interest income                                        |   |               | 24,460     |   |             |   | 25,274 |   |   |   | 46,169 |   |   |   | 51,896 |   |
| Interest expense                                             |   |               | 8,929      |   |             |   | 12,748 |   |   |   | 16,866 |   |   |   | 26,625 |   |
| Net interest income                                          |   |               | 15,531     |   |             |   | 12,526 |   |   |   | 29,303 |   |   |   | 25,271 |   |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                           |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Management fees − related party                        |   |               | 4,288      |   |             |   | 925 |   |   |   | 5,440 |   |   |   | 1,926 |   |
| Equity compensation − related party                    |   |               | 199        |   |             |   | 265 |   |   |   | 923 |   |   |   | 353 |   |
| Professional services                                        |   |               | 876        |   |             |   | 1,089 |   |   |   | 1,695 |   |   |   | 2,053 |   |
| Insurance                                                    |   |               | 180        |   |             |   | 217 |   |   |   | 392 |   |   |   | 389 |   |
| Depreciation on operating leases                             |   |               | 685        |   |             |   | − |   |   |   | 685 |   |   |   | − |   |
| General and administrative                                   |   |               | 862        |   |             |   | 462 |   |   |   | 1,507 |   |   |   | 867 |   |
| Income tax expense (benefit)                                 |   |               | 1,132      |   |             |   | 23 |   |   |   | 1,237 |   |   |   | (22 | ) |
| Total expenses                                               |   |               | 8,222      |   |             |   | 2,981 |   |   |   | 11,879 |   |   |   | 5,566 |   |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| NET OPERATING INCOME                                         |   |               | 7,309      |   |             |   | 9,545 |   |   |   | 17,424 |   |   |   | 19,705 |   |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| OTHER REVENUE (EXPENSE)                                      |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Impairment losses on investment securities                   |   |               | (8,896     | )      |             |   | (2,261 | ) |   |   | (7,584 | ) |   |   | (16,925 | ) |
| Recognized in other comprehensive loss                       |   |               | (2,838     | )      |             |   | (2,216 | ) |   |   | (1,526 | ) |   |   | (11,260 | ) |
| Net impairment losses recognized in earnings                 |   |               | (6,058     | )      |             |   | (45 | ) |   |   | (6,058 | ) |   |   | (5,665 | ) |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net realized gains on loans and investments                  |   |               | 2,718      |   |             |   | 465 |   |   |   | 2,864 |   |   |   | 701 |   |
| Provision for loan and lease losses                          |   |               | (7,897     | )      |             |   | (22,012 | ) |   |   | (23,268 | ) |   |   | (38,962 | ) |
| Gain on the extinguishment of debt                           |   |               | 16,407     |   |             |   | 6,900 |   |   |   | 23,035 |   |   |   | 6,900 |   |
| Other income                                                 |   |               | 883        |   |             |   | 20 |   |   |   | 771 |   |   |   | 42 |   |
| Total other revenue (expense)                                |   |               | 6,053      |   |             |   | (14,672 | ) |   |   | (2,656 | ) |   |   | (36,984 | ) |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS)                                            |   | $                  | 13,362     |   |             | $      | (5,127 | ) |   | $ | 14,768 |   |   | $ | (17,279 | ) |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| NET  INCOME (LOSS) PER SHARE – BASIC         |   | $                  | 0.30       |   |             | $      | (0.21 | ) |   | $ | 0.36 |   |   | $ | (0.71 | ) |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS) PER SHARE – DILUTED                  |   | $                  | 0.30       |   |             | $      | (0.21 | ) |   | $ | 0.36 |   |   | $ | (0.71 | ) |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OFSHARES OUTSTANDING – BASIC   |   |               | 44,424,281 |   |             |   | 24,369,581 |   |   |   | 41,223,517 |   |   |   | 24,427,452 |   |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OFSHARES OUTSTANDING – DILUTED |   |               | 44,724,087 |   |             |   | 24,369,581 |   |   |   | 41,555,127 |   |   |   | 24,427,452 |   |
|                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| DIVIDENDS DECLARED PER SHARE                                 |   | $                  | 0.25       |   |             | $      | 0.30 |   |   | $ | 0.50 |   |   | $ | 0.60 |   |

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STOCKHOLDERS’ EQUITY

|                                                      |   | Common Stock |       |   |   |   |    |                       |   |   |                                 |   |   |              |    |   |                                |   |    |                             |   |
|-----------------------------------------------------------|--------|--------------|------------|--------|--------|--------|---------|----------------------------|--------|--------|--------------------------------------|--------|--------|-------------------|---------|--------|-------------------------------------|--------|---------|----------------------------------|--------|
|                                                      |   | Shares       |       |   | Amount |   |    | Additional Paid-In Capital |   |   | Accumulated Other Comprehensive Loss |   |   | Retained Earnings |    |   | Distributions in Excess of Earnings |   |    | Total Stockholders’ Equity |   |   | Comprehensive Income |   |
| Balance, January 1, 2010                                  |   |         | 36,545,737 |   |   | $      | 36      |                       |   | $      | 405,517                              |   |   | $                 | (62,154 | )      |                                | $      | − |                             |   | $ | (114,569 | ) |   | $ | 228,830 |   |   |   |   |
| Proceeds from dividendreinvestment and stockpurchase plan |   |         | 5,386,043  |   |   |   | 5       |                       |   |   | 32,585                               |   |   |              | − |   |                                |   | − |                             |   |   | − |   |   |   | 32,590 |   |   |   |   |
| Proceeds from common stock offerings                      |   |         | 8,625,000  |   |   |   | 9       |                       |   |   | 45,273                               |   |   |              | − |   |                                |   | − |                             |   |   | − |   |   |   | 45,282 |   |   |   |   |
| Offering costs                                            |   |         | −    |   |   |   | − |                       |   |   | (2,772                               | )      |   |              | − |   |                                |   | − |                             |   |   | − |   |   |   | (2,772 | ) |   |   |   |
| Stock based compensation                                  |   |         | 411,554    |   |   |   | 1       |                       |   |   | 375                                  |   |   |              | − |   |                                |   | − |                             |   |   | − |   |   |   | 376 |   |   |   |   |
| Amortization of stockbased compensation                   |   |         | −    |   |   |   | − |                       |   |   | 919                                  |   |   |              | − |   |                                |   | − |                             |   |   | − |   |   |   | 919 |   |   |   |   |
| Net income                                                |   |         | −    |   |   |   | − |                       |   |   | −                              |   |   |              | − |   |                                |   | 14,768  |                             |   |   | − |   |   |   | 14,768 |   |   | $ | 14,768 |   |
| Securities available-for-sale,fair value adjustment, net  |   |         | −    |   |   |   | − |                       |   |   | −                              |   |   |              | 7,208   |   |                                |   | − |                             |   |   | − |   |   |   | 7,208 |   |   |   | 7,208 |   |
| Designated derivatives, fairvalue adjustment              |   |         | −    |   |   |   | − |                       |   |   | −                              |   |   |              | (2,560  | )      |                                |   | − |                             |   |   | − |   |   |   | (2,560 | ) |   |   | (2,560 | ) |
| Distributions on commonstock                              |   |         | −    |   |   |   | − |                       |   |   | −                              |   |   |              | − |   |                                |   | (14,768 | )                                |   |   | (8,060 | ) |   |   | (22,828 | ) |   |   |   |   |
| Comprehensive income                                      |   |         | −    |   |   |   | − |                       |   |   | −                              |   |   |              | − |   |                                |   | − |                             |   |   | − |   |   |   | − |   |   | $ | 19,416 |   |
| Balance, June 30, 2010                                    |   |         | 50,968,334 |   |   | $      | 51      |                       |   | $      | 481,897                              |   |   | $                 | (57,506 | )      |                                | $      | − |                             |   | $ | (122,629 | ) |   | $ | 301,813 |   |   |   |   |   |

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CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                              |   | Six Months Ended |     |
|---------------------------------------------------------------------------------------------------|--------|------------------|----------|
|                                                                                              |   | June 30,         |     |
|                                                                                              |   | 2010             |     |   | 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                             |   |             |     |   |   |   |
| Net income (loss)                                                                                 |   | $                | 14,768   |   |   | $ | (17,279 | ) |
| Adjustments to reconcile net income (loss) net cash provided byoperating activities:              |   |             |     |   |   |   |   |   |
| Provision for loan and lease losses                                                               |   |             | 23,268   |   |   |   | 38,962 |   |
| Depreciation and amortization of term facilities                                                  |   |             | 410      |   |   |   | 1,023 |   |
| Depreciation on operating leases                                                                  |   |             | 685      |   |   |   | − |   |
| Accretion of net discount on investments                                                          |   |             | (8,454   | ) |   |   | (2,436 | ) |
| Amortization of discount on notes of CDOs                                                         |   |             | 306      |   |   |   | 101 |   |
| Amortization of debt issuance costs on notes of CDOs                                              |   |             | 2,300    |   |   |   | 1,767 |   |
| Amortization of stock based compensation                                                          |   |             | 923      |   |   |   | 353 |   |
| Amortization of terminated derivative instruments                                                 |   |             | 272      |   |   |   | 238 |   |
| Non-cash incentive compensation to the Manager                                                    |   |             | 743      |   |   |   | (1 | ) |
| Unrealized losses on non-designated derivative instruments                                        |   |             | 44       |   |   |   | 37 |   |
| Net realized gains on investments                                                                 |   |             | (2,864   | ) |   |   | (701 | ) |
| Net impairment losses recognized in earnings                                                      |   |             | 6,058    |   |   |   | 5,665 |   |
| Gain on the extinguishment of debt                                                                |   |             | (23,035  | ) |   |   | (6,900 | ) |
| Changes in operating assets and liabilities                                                       |   |             | 3,001    |   |   |   | 573 |   |
| Net cash provided by operating activities                                                         |   |             | 18,425   |   |   |   | 21,402 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                             |   |             |     |   |   |   |   |   |
| Increase in restricted cash                                                                       |   |             | (20,128  | ) |   |   | − |   |
| Purchase of securities available-for-sale                                                         |   |             | (10,366  | ) |   |   | − |   |
| Principal payments on securities available-for-sale                                               |   |             | 988      |   |   |   | − |   |
| Proceeds from sale of securities available-for-sale                                               |   |             | 1,759    |   |   |   | − |   |
| Purchase of securities trading                                                                    |   |             | (9,490   | ) |   |   | − |   |
| Proceeds from sale of securities trading                                                          |   |             | 7,034    |   |   |   | − |   |
| Investment in unconsolidated entity                                                               |   |             | (1,506   | ) |   |   | − |   |
| Equity contribution to VIE                                                                        |   |             | (7,333   | ) |   |   | − |   |
| Purchase of loans                                                                                 |   |             | (161,998 | ) |   |   | (92,098 | ) |
| Principal payments received on loans                                                              |   |             | 134,627  |   |   |   | 51,520 |   |
| Proceeds from sales of loans                                                                      |   |             | 35,662   |   |   |   | 52,261 |   |
| Purchase of lease receivables                                                                     |   |             | (21,245  | ) |   |   | − |   |
| Payments received on lease receivables                                                            |   |             | 2,435    |   |   |   | 8,639 |   |
| Proceeds from sale of lease receivables                                                           |   |             | 656      |   |   |   | 2,125 |   |
| Investment in loans – related parties                                                       |   |             | (10,000  | ) |   |   | − |   |
| Payments received on loans – related parties                                                |   |             | 1        |   |   |   | − |   |
| Net cash (used in) provided by investing activities                                               |   |             | (58,904  | ) |   |   | 22,447 |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                             |   |             |     |   |   |   |   |   |
| Net proceeds from issuance of common stock (net of offering costs of$2,772 and $0)                |   |             | 42,510   |   |   |   | 174 |   |
| Net proceeds of dividend reinvestment and stock purchase plan(net of offering costs of $0 and $0) |   |             | 32,590   |   |   |   | − |   |
| Repurchase of common stock                                                                        |   |             | −  |   |   |   | (2,800 | ) |
| Proceeds from borrowings:                                                                         |   |             |     |   |   |   |   |   |
| Repurchase agreements                                                                             |   |             | −  |   |   |   | 18 |   |
| Secured term facility                                                                             |   |             | 6,500    |   |   |   | − |   |
| Payments on borrowings:                                                                           |   |             |     |   |   |   |   |   |
| Repurchase agreements                                                                             |   |             | −  |   |   |   | (13,754 | ) |
| Secured term facility                                                                             |   |             | (369     | ) |   |   | (13,395 | ) |
| Equipment-backed securitized notes                                                                |   |             | (1,201   | ) |   |   | − |   |
| Repurchase of issued bonds                                                                        |   |             | (33,315  | ) |   |   | (600 | ) |
| Payment of debt issuance costs                                                                    |   |             | (499     | ) |   |   | − |   |
| Distributions paid on common stock                                                                |   |             | (19,223  | ) |   |   | (17,522 | ) |
| Net cash provided by (used in) financing activities                                               |   |             | 26,993   |   |   |   | (47,879 | ) |

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|                                                |   | Six Months Ended |     |
|-----------------------------------------------------|--------|------------------|----------|
|                                                |   | June 30,         |     |
|                                                |   | 2010             |     |   | 2009 |   |
| NET DECREASE IN CASH AND CASH EQUIVALENTS           |   |             | (13,486  | ) |   |   | (4,030 | ) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD    |   |             | 51,991   |   |   |   | 14,583 |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD          |   | $                | 38,505   |   |   | $ | 10,553 |   |
| NON-CASH INVESTING AND FINANCING ACTIVITIES:        |   |             |     |   |   |   |   |   |
| Distributions on common stock declared but not paid |   | $                | 12,775   |   |   | $ | 7,532 |   |
| Issuance of restricted stock                        |   | $                | 338      |   |   | $ | 242 |   |
| Promissory note from sale of lease receivables      |   | $                | −  |   |   | $ | 7,545 |   |
| Transfer of lease receivables                       |   | $                | −  |   |   | $ | 89,763 |   |
| Transfer of secured term facility                   |   | $                | −  |   |   | $ | 82,319 |   |
| Assumption of equipment-backed securitized notes    |   | $                | 112,223  |   |   | $ | − |   |
| Acquisition of lease receivables                    |   | $                | (100,305 | ) |   | $ | − |   |
| Settlement of a secured term facility               |   | $                | (6,131   | ) |   | $ | − |   |
| Settlement of debt issuance costs                   |   | $                | (1,012   | ) |   | $ | − |   |
|                                                |   |             |     |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE:                            |   |             |     |   |   |   |   |   |
| Interest expense paid in cash                       |   | $                | 17,692   |   |   | $ | 25,029 |   |
| Income taxes paid in cash                           |   | $                | −  |   |   | $ | − |   |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|   | · | RCC Real Estate, Inc. (“RCC Real Estate”) holds real estate investments, including commercial real estate loans and commercial real estate-related securities.  RCC Real Estate owns 100% of the equity of the following variable interest entities (“VIEs”): |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Resource Real Estate Funding CDO 2006-1 (“RREF CDO 2006-1”), a Cayman Islands limited liability company and qualified real estate investment trust (“REIT”) subsidiary (“QRS”).  RREF CDO 2006-1 was established to complete a collateralized debt obligation (“CDO”) issuance secured by a portfolio of commercial real estate loans and commercial mortgage-backed securities. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Resource Real Estate Funding CDO 2007-1 (“RREF CDO 2007-1”), a Cayman Islands limited liability company and QRS.  RREF CDO 2007-1 was established to complete a CDO issuance secured by a portfolio of commercial real estate loans and commercial mortgage-backed securities. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | RCC Commercial, Inc. (“RCC Commercial”) holds bank loan investments and commercial real estate-related securities.  RCC Commercial owns 100% of the equity of the following VIEs: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos CDO I, Ltd. (“Apidos CDO I”), a Cayman Islands limited liability company and taxable REIT subsidiary (“TRS”).  Apidos CDO I was established to complete a CDO secured by a portfolio of bank loans. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos CDO III, Ltd. (“Apidos CDO III”), a Cayman Islands limited liability company and TRS.  Apidos CDO III was established to complete a CDO secured by a portfolio of bank loans. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos Cinco CDO, Ltd. (“Apidos Cinco CDO”), a Cayman Islands limited liability company and TRS.  Apidos Cinco CDO was established to complete a CDO secured by a portfolio of bank loans. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Resource TRS, Inc. (“Resource TRS”), the Company’s directly-owned TRS, holds all the Company’s lease receivables and structured notes and owns 100% of the equity of the following VIE: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | LEAF Receivables Funding 3, LLC, (“LEAF Funding 3”) was established to complete a securitization of lease receivables. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | an income approach utilizing an appropriate current risk-adjusted yield, time value and projected estimated losses from default assumptions based on analysis of underlying loan performance; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes on similar-vintage, higher rate, more actively traded commercial mortgage-backed securities (“CMBS”) adjusted as appropriate for the lower subordination level of the Company’s securities; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer quotes on the Company’s securities for which there is not an active market. |
|--------|--------|------------------------------------------------------------------------------------------|

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|                                  |   | Amortized Cost (1) |    |   | Unrealized Gains |   |    | Unrealized Losses |   |   | FairValue (1) |   |
|---------------------------------------|--------|--------------------|---------|--------|------------------|--------|---------|-------------------|--------|--------|---------------|--------|
| June 30, 2010:                        |   |               |    |   |             |   |    |              |   |   |          |   |
| Commercial mortgage-backed securities |   | $                  | 95,911  |   |             | $      | 6,315   |              |   | $      | (46,721       | )      |   | $ | 55,505 |   |
| Other asset-backed                    |   |               | − |   |             |   | 24      |              |   |   | −       |   |   |   | 24 |   |
| Total                                 |   | $                  | 95,911  |   |             | $      | 6,339   |              |   | $      | (46,721       | )      |   | $ | 55,529 |   |
|                                  |   |               |    |   |             |   |    |              |   |   |          |   |   |   |   |   |
| December 31, 2009:                    |   |               |    |   |             |   |    |              |   |   |          |   |   |   |   |   |
| Commercial mortgage-backed securities |   | $                  | 92,110  |   |             | $      | 2,622   |              |   | $      | (50,214       | )      |   | $ | 44,518 |   |
| Other asset-backed                    |   |               | 24      |   |             |   | − |              |   |   | −       |   |   |   | 24 |   |
| Total                                 |   | $                  | 92,134  |   |             | $      | 2,622   |              |   | $      | (50,214       | )      |   | $ | 44,542 |   |

----

| (1) | As of June 30, 2010 and December 31, 2009, $48.4 million and $39.3 million, respectively, of securities were pledged as collateral security under related financings. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Weighted Average Life                          |   | Fair Value |   |   | Amortized Cost |   |   | Weighted Average Coupon |   |
|------------------------------------------------|--------|------------|--------|--------|----------------|--------|--------|-------------------------|--------|
| June 30, 2010:                                 |   |       |   |   |           |   |   |                    |   |
| Less than one year                             |   | $          | 4,847  | (1)    |           | $      | 13,533 |                    |   |   | 1.71% |   |
| Greater than one year and less than five years |   |       | 7,907  |   |           |   | 21,361 |                    |   |   | 2.49% |   |
| Greater than five years                        |   |       | 42,775 |   |           |   | 61,017 |                    |   |   | 5.68% |   |
| Total                                          |   | $          | 55,529 |   |           | $      | 95,911 |                    |   |   | 4.41% |   |
|                                           |   |       |   |   |           |   |   |                    |   |   |   |   |
| December 31, 2009:                             |   |       |   |   |           |   |   |                    |   |   |   |   |
| Less than one year                             |   | $          | 7,503  |   |           | $      | 20,043 |                    |   |   | 1.50% |   |
| Greater than one year and less than five years |   |       | 4,346  |   |           |   | 12,728 |                    |   |   | 2.24% |   |
| Greater than five years                        |   |       | 32,693 |   |           |   | 59,363 |                    |   |   | 5.76% |   |
| Total                                          |   | $          | 44,542 |   |           | $      | 92,134 |                    |   |   | 4.35% |   |

----

| (1) | All of the $4.8 million of CMBS maturing in these categories are collateralized by floating-rate loans and are expected to extend until at least January 2011 as the debtors in the floating-rate structures have a contractual right to extend with options ranging from two one-year options to three one-year options.  Beyond the contractual extensions, the servicer may allow further extensions of the underlying floating rate loans. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                  |   | Less than 12 Months |   |   | More than 12 Months     |   |   | Total     |   |
|---------------------------------------|--------|---------------------|--------|--------|-------------------------|--------|--------|-----------|--------|
|                                  |   | FairValue           |   |   | Gross Unrealized Losses |   |   | FairValue |   |   | Gross Unrealized Losses |   |   | FairValue |   |   | Gross Unrealized Losses |   |
| June 30, 2010:                        |   |                |   |   |                    |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Commercial mortgage-backed securities |   | $                   | 12,910 |   |                    | $      | (9,528 | )         |   | $ | 8,029 |   |   | $ | (37,193 | ) |   | $ | 20,939 |   |   | $ | (46,721 | ) |
| Total temporarilyimpaired securities  |   | $                   | 12,910 |   |                    | $      | (9,528 | )         |   | $ | 8,029 |   |   | $ | (37,193 | ) |   | $ | 20,939 |   |   | $ | (46,721 | ) |
|                                  |   |                |   |   |                    |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009:                    |   |                |   |   |                    |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial mortgage-backed securities |   | $                   | 11,193 |   |                    | $      | (1,073 | )         |   | $ | 14,588 |   |   | $ | (49,141 | ) |   | $ | 25,781 |   |   | $ | (50,214 | ) |
| Total temporarilyimpaired securities  |   | $                   | 11,193 |   |                    | $      | (1,073 | )         |   | $ | 14,588 |   |   | $ | (49,141 | ) |   | $ | 25,781 |   |   | $ | (50,214 | ) |

|   | · | the length of time the market value has been less than amortized cost; |
|--------|--------|------------------------------------------------------------------------|

|   | · | the severity of the impairment; |
|--------|--------|---------------------------------|

|   | · | the expected loss of the security as generated by third party software; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | credit ratings from the rating agencies; |
|--------|--------|------------------------------------------|

|   | · | underlying credit fundamentals of the collateral backing the securities; and |
|--------|--------|------------------------------------------------------------------------------|

|   | · | whether, based upon the Company’s intent, it is more likely than not that the Company will sell the security before the recovery of the amortized cost basis. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an income approach utilizing an appropriate current risk-adjusted yield, time value and projected estimated losses from default assumptions based on historical analysis of underlying loan performance; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes on similar-vintage, higher rated, more actively traded CMBS securities adjusted for the lower subordination level of its securities; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer quotes on its securities for which there is not an active market. |
|--------|--------|--------------------------------------------------------------------------|

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|             |   | Amortized Cost (1) |   |   | Unrealized Gains |   |    | Unrealized Losses |   |   | FairValue |   |
|------------------|--------|--------------------|--------|--------|------------------|--------|---------|-------------------|--------|--------|-----------|--------|
| June 30, 2010:   |   |               |   |   |             |   |    |              |   |   |      |   |
| Structured notes |   | $                  | 4,985  |   |             | $      | − |              |   | $      | −   |   |   | $ | 4,985 |   |
| Total            |   | $                  | 4,985  |   |             | $      | − |              |   | $      | −   |   |   | $ | 4,985 |   |

----

| (1)   | Fair value approximates amortized cost as of June 30, 2010. |
|-----------------|-------------------------------------------------------------|

|                                      |   | Amortized Cost |   |   | Unrealized Gains |   |   | Unrealized Losses |   |   | FairValue |   |
|-------------------------------------------|--------|----------------|--------|--------|------------------|--------|--------|-------------------|--------|--------|-----------|--------|
| June 30, 2010:                            |   |           |   |   |             |   |   |              |   |   |      |   |
| Collateralized loan obligation securities |   | $              | 31,446 |   |             | $      | 278    |              |   | $      | (9,452    | )      |   | $ | 22,272 |   |
| Total                                     |   | $              | 31,446 |   |             | $      | 278    |              |   | $      | (9,452    | )      |   | $ | 22,272 |   |
|                                      |   |           |   |   |             |   |   |              |   |   |      |   |   |   |   |   |
| December 31, 2009:                        |   |           |   |   |             |   |   |              |   |   |      |   |   |   |   |   |
| Collateralized loan obligation securities |   | $              | 31,401 |   |             | $      | 267    |              |   | $      | (10,348   | )      |   | $ | 21,320 |   |
| Total                                     |   | $              | 31,401 |   |             | $      | 267    |              |   | $      | (10,348   | )      |   | $ | 21,320 |   |

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| Contractual Life                                |   | FairValue |   |   | Amortized Cost |   |   | Weighted Average Coupon |   |
|-------------------------------------------------|--------|-----------|--------|--------|----------------|--------|--------|-------------------------|--------|
| June 30, 2010:                                  |   |      |   |   |           |   |   |                    |   |
| Greater than five years and less than ten years |   | $         | 16,139 |   |           | $      | 19,766 |                    |   |   | 3.12% |   |
| Greater than ten years                          |   |      | 6,133  |   |           |   | 11,680 |                    |   |   | 4.31% |   |
| Total                                           |   | $         | 22,272 |   |           | $      | 31,446 |                    |   |   |   |   |
|                                            |   |      |   |   |           |   |   |                    |   |   |   |   |
| December 31, 2009:                              |   |      |   |   |           |   |   |                    |   |   |   |   |
| Greater than five years and less than ten years |   | $         | 15,628 |   |           | $      | 19,667 |                    |   |   | 3.06% |   |
| Greater than ten years                          |   |      | 5,692  |   |           |   | 11,734 |                    |   |   | 4.14% |   |
| Total                                           |   | $         | 21,320 |   |           | $      | 31,401 |                    |   |   |   |   |

|                                 |   | Less than 12 Months |   |   | More than 12 Months     |   |   | Total     |   |
|--------------------------------------|--------|---------------------|--------|--------|-------------------------|--------|--------|-----------|--------|
|                                 |   | FairValue           |   |   | Gross Unrealized Losses |   |   | FairValue |   |   | Gross Unrealized Losses |   |   | FairValue |   |   | Gross Unrealized Losses |   |
| June 30, 2010:                       |   |                |   |   |                    |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Collateralized loanobligations       |   | $                   | 5,834  |   |                    | $      | (317   | )         |   | $ | 12,095 |   |   | $ | (9,135 | ) |   | $ | 17,929 |   |   | $ | (9,452 | ) |
| Total temporarilyimpaired securities |   | $                   | 5,834  |   |                    | $      | (317   | )         |   | $ | 12,095 |   |   | $ | (9,135 | ) |   | $ | 17,929 |   |   | $ | (9,452 | ) |
| December 31, 2009:                   |   |                |   |   |                    |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Collateralized loanobligations       |   | $                   | 2,530  |   |                    | $      | (44    | )         |   | $ | 10,980 |   |   | $ | (10,304 | ) |   | $ | 13,510 |   |   | $ | (10,348 | ) |
| Total temporarilyimpaired securities |   | $                   | 2,530  |   |                    | $      | (44    | )         |   | $ | 10,980 |   |   | $ | (10,304 | ) |   | $ | 13,510 |   |   | $ | (10,348 | ) |

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| Loan Description                   |   | Principal |      |   | Unamortized(Discount) Premium |   |    | CarryingValue (1) |   |
|------------------------------------|--------|-----------|-----------|--------|-------------------------------|--------|---------|-------------------|--------|
| June 30, 2010:                     |   |      |      |   |                          |   |    |              |   |
| Bank loans (2)                |   | $         | 912,092   |   |                          | $      | (29,495 | )                 |   | $ | 882,597 |   |
| Commercial real estate loans:      |   |      |      |   |                          |   |    |              |   |   |   |   |
| Whole loans                        |   |      | 448,781   |   |                          |   | (107    | )                 |   |   | 448,674 |   |
| B notes  (2)        |   |      | 77,370    |   |                          |   | 8       |              |   |   | 77,378 |   |
| Mezzanine loans (2)           |   |      | 179,519   |   |                          |   | 154     |              |   |   | 179,673 |   |
| Total commercial real estate loans |   |      | 705,670   |   |                          |   | 55      |              |   |   | 705,725 |   |
| Subtotal loans before allowances   |   |      | 1,617,762 |   |                          |   | (29,440 | )                 |   |   | 1,588,322 |   |
| Allowance for loan loss            |   |      | (38,864   | )      |                          |   | − |              |   |   | (38,864 | ) |
| Total                              |   | $         | 1,578,898 |   |                          | $      | (29,440 | )                 |   | $ | 1,549,458 |   |
|                               |   |      |      |   |                          |   |    |              |   |   |   |   |
| December 31, 2009:                 |   |      |      |   |                          |   |    |              |   |   |   |   |
| Bank loans (2)                |   | $         | 893,183   |   |                          | $      | (27,682 | )                 |   | $ | 865,501 |   |
| Commercial real estate loans:      |   |      |      |   |                          |   |    |              |   |   |   |   |
| Whole loans                        |   |      | 484,464   |   |                          |   | (269    | )                 |   |   | 484,195 |   |
| B notes                            |   |      | 81,450    |   |                          |   | 27      |              |   |   | 81,477 |   |
| Mezzanine loans                    |   |      | 182,523   |   |                          |   | 163     |              |   |   | 182,686 |   |
| Total commercial real estate loans |   |      | 748,437   |   |                          |   | (79     | )                 |   |   | 748,358 |   |
| Subtotal loans before allowances   |   |      | 1,641,620 |   |                          |   | (27,761 | )                 |   |   | 1,613,859 |   |
| Allowance for loan loss            |   |      | (47,122   | )      |                          |   | − |              |   |   | (47,122 | ) |
| Total                              |   | $         | 1,594,498 |   |                          | $      | (27,761 | )                 |   | $ | 1,566,737 |   |

----

| (1)   | Substantially all loans are pledged as collateral under various borrowings at June 30, 2010 and December 31, 2009, respectively. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Amounts include $938,000 of bank loans, $19.9 million of B notes and $17.0 million of mezzanine loans held for sale as of June 30, 2010 and $8.1 million of bank loans held for sale as of December 31, 2009. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Description                       |   | Quantity |   |   | Amortized Cost |   | ContractedInterest Rates |   | Maturity Dates (3)                   |
|-----------------------------------|--------|----------|--------|--------|----------------|--------|--------------------------|--------|--------------------------------------|
| June 30, 2010:                    |   |     |   |   |           |   |                     |   |                                 |
| Whole loans, floating rate (1)    |   |     | 38     |   |           | $      | 446,271                  |   | LIBOR plus 1.50% to LIBOR plus 4.50% |   | August 2010 toMay 2017 |
| Whole loans, fixed rate (1)  |   |     | 1      |   |           |   | 2,403                    |   | 8.16%                                |   |  August 2012 |
| B notes, floating rate            |   |     | 3      |   |           |   | 26,500                   |   | LIBOR plus 2.50% to LIBOR plus 3.01% |   | October 2010 toJuly 2011 |
| B notes, fixed rate               |   |     | 3      |   |           |   | 50,878                   |   | 7.00% to 8.68%                       |   | July 2011 toJuly 2016 |
| Mezzanine loans, floating rate    |   |     | 10     |   |           |   | 121,048                  |   | LIBOR plus 2.15% to LIBOR plus 3.45% |   | August 2010 toJanuary 2013 |
| Mezzanine loans, fixed rate       |   |     | 5      |   |           |   | 58,625                   |   | 8.14% to 11.00%                      |   | August 2010 toSeptember 2016 |
| Total (2)                    |   |     | 60     |   |           | $      | 705,725                  |   |                                 |   |   |
|                              |   |     |   |   |           |   |                     |   |                                 |   |   |
| December 31, 2009:                |   |     |   |   |           |   |                     |   |                                 |   |   |
| Whole loans, floating rate (1)    |   |     | 32     |   |           | $      | 403,890                  |   | LIBOR plus 1.50% to LIBOR plus 4.40% |   | May 2010 toFebruary 2017 |
| Whole loans, fixed rate (1)  |   |     | 6      |   |           |   | 80,305                   |   | 6.98% to 10.00%                      |   | May 2010 toAugust 2012 |
| B notes, floating rate            |   |     | 3      |   |           |   | 26,500                   |   | LIBOR plus 2.50% to LIBOR plus 3.01% |   | July 2010 toOctober 2010 |
| B notes, fixed rate               |   |     | 3      |   |           |   | 54,977                   |   | 7.00% to 8.68%                       |   | July 2011 toJuly 2016 |
| Mezzanine loans, floating rate    |   |     | 10     |   |           |   | 124,048                  |   | LIBOR plus 2.15% to LIBOR plus 3.45% |   | May 2010 toJanuary 2013 |
| Mezzanine loans, fixed rate       |   |     | 5      |   |           |   | 58,638                   |   | 8.14% to 11.00%                      |   | May 2010 toSeptember 2016 |
| Total (2)                    |   |     | 59     |   |           | $      | 748,358                  |   |                                 |   |   |

----

| (1) | Whole loans had $6.0 million in unfunded loan commitments as of June 30, 2010 and $5.6 million as of December 31, 2009.  These commitments are funded as the loans require additional funding and the related borrowers have satisfied the requirements to obtain this additional funding. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The total does not include an allowance for loan losses of $27.6 million and $29.3 million recorded as of June 30, 2010 and December 31, 2009, respectively. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Excludes a floating rate whole loan which matured in July 2009 and is in foreclosure and a fixed rate mezzanine loan that matured in May 2010 and is in default. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Allowance for loan loss at January 1, 2010 |   | $      | 47,122  |   |
|--------------------------------------------|--------|--------|---------|--------|
| Provision for loan loss                    |   |   | 23,018  |   |
| Loans charged-off                          |   |   | (31,276 | )      |
| Recoveries                                 |   |   | − |   |
| Allowance for loan loss at June 30, 2010   |   | $      | 38,864  |   |

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|                           |   | June 30, |    |   | December 31, |   |
|--------------------------------|--------|----------|---------|--------|--------------|--------|
|                           |   | 2010     |    |   | 2009         |   |
| Leases, net of unearned income |   | $        | 80,437  |   |         | $      | 1,397 |   |
| Operating leases               |   |     | 19,921  |   |         |   | − |   |
| Notes receivable               |   |     | 18,220  |   |         |   | 670 |   |
| Subtotal                       |   |     | 118,578 |   |         |   | 2,067 |   |
| Allowance for lease losses     |   |     | (50     | )      |         |   | (1,140 | ) |
| Total                          |   | $        | 118,528 |   |         | $      | 927 |   |

|                                |   | June 30, |    |   | December 31, |   |
|-------------------------------------|--------|----------|---------|--------|--------------|--------|
|                                |   | 2010     |    |   | 2009         |   |
| Total future minimum lease payments |   | $        | 93,683  |   |         | $      | 1,610 |   |
| Unguaranteed residual               |   |     | 3,974   |   |         |   | − |   |
| Unearned income                     |   |     | (17,220 | )      |         |   | (213 | ) |
| Total                               |   | $        | 80,437  |   |         | $      | 1,397 |   |

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|                           |   | June 30, |   |   | December 31, |   |
|--------------------------------|--------|----------|--------|--------|--------------|--------|
|                           |   | 2010     |   |   | 2009         |   |
| Investment in operating leases |   | $        | 23,337 |   |         | $      | − |   |
| Accumulated depreciation       |   |     | (3,416 | )      |         |   | − |   |
| Total                          |   | $        | 19,921 |   |         | $      | − |   |

| Allowance for lease loss at January 1, 2010 |   | $      | 1,140  |   |
|---------------------------------------------|--------|--------|--------|--------|
| Provision for lease loss                    |   |   | 250    |   |
| Leases charged-off                          |   |   | (1,345 | )      |
| Recoveries                                  |   |   | 5      |   |
| Allowance for lease loss at June 30, 2010   |   | $      | 50     |   |

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|                                                    |   | Outstanding Borrowings |      |   | Weighted Average Borrowing Rate |   | Weighted Average Remaining Maturity |   | Value of Collateral   |   |
|---------------------------------------------------------|--------|------------------------|-----------|--------|---------------------------------|--------|-------------------------------------|--------|-----------------------|--------|
| June 30, 2010:                                          |   |                   |      |   |                            |   |                                |   |                  |   |
| RREF CDO 2006-1 Senior Notes (1)                        |   | $                      | 192,561   |   |                            |   | 1.34%                               |   | 36.1 years            |   | $ | 220,867 |   |
| RREF CDO 2007-1 Senior Notes (2)                        |   |                   | 339,441   |   |                            |   | 0.90%                               |   | 36.3 years            |   |   | 444,723 |   |
| Apidos CDO I Senior Notes (3)                      |   |                   | 319,425   |   |                            |   | 0.90%                               |   |   7.1 years |   |   | 304,647 |   |
| Apidos CDO III Senior Notes (4)                    |   |                   | 260,420   |   |                            |   | 0.99%                               |   | 10.0 years            |   |   | 245,286 |   |
| Apidos Cinco CDO Senior Notes (5)                  |   |                   | 319,081   |   |                            |   | 0.94%                               |   |   9.9 years |   |   | 309,173 |   |
| Equipment Contract Backed Notes,Series 2010-2 (6)  |   |                   | 109,921   |   |                            |   | 5.00%                               |   |   5.9 years |   |   | 118,528 |   |
| Unsecured Junior Subordinated Debentures (7)            |   |                   | 51,548    |   |                            |   | 6.26%                               |   | 26.2 years            |   |   | − |   |
| Total                                                   |   | $                      | 1,592,397 |   |                            |   | 1.43%                               |   | 18.4 years            |   | $ | 1,643,224 |   |
|                                                    |   |                   |      |   |                            |   |                                |   |                  |   |   |   |   |
| December 31, 2009:                                      |   |                   |      |   |                            |   |                                |   |                  |   |   |   |   |
| RREF CDO 2006-1 Senior Notes (1)                        |   | $                      | 240,227   |   |                            |   | 1.11%                               |   | 36.6 years            |   | $ | 267,153 |   |
| RREF CDO 2007-1 Senior Notes (2)                        |   |                   | 346,673   |   |                            |   | 0.81%                               |   | 36.8 years            |   |   | 435,225 |   |
| Apidos CDO I Senior Notes (3)                      |   |                   | 319,103   |   |                            |   | 0.86%                               |   |   7.6 years |   |   | 290,578 |   |
| Apidos CDO III Senior Notes (4)                    |   |                   | 260,158   |   |                            |   | 0.71%                               |   | 10.5 years            |   |   | 237,499 |   |
| Apidos Cinco CDO Senior Notes (5)                  |   |                   | 318,791   |   |                            |   | 0.78%                               |   | 10.4 years            |   |   | 299,874 |   |
| Unsecured Junior Subordinated Debentures (7)            |   |                   | 51,548    |   |                            |   | 6.19%                               |   | 26.7 years            |   |   | − |   |
| Total                                                   |   | $                      | 1,536,500 |   |                            |   | 1.02%                               |   | 20.4 years            |   | $ | 1,530,329 |   |

----

| (1) | Amount represents principal outstanding of $194.9 million and $243.5 million less unamortized issuance costs of $2.3 million and $3.3 million as of June 30, 2010 and December 31, 2009, respectively.  This CDO transaction closed in August 2006. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Amount represents principal outstanding of $343.5 million less unamortized issuance costs of $4.1 million as of June 30, 2010 and principal outstanding of $351.2 million less unamortized issuance costs of $4.6 million as of December 31, 2009.  This CDO transaction closed in June 2007. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Amount represents principal outstanding of $321.5 million less unamortized issuance costs of $2.1 million as of June 30, 2010 and $2.4 million as of December 31, 2009.  The CDO transaction closed in August 2005. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Amount represents principal outstanding of $262.5 million less unamortized issuance costs of $2.1 million as of June 30, 2010 and $2.3 million as of December 31, 2009.  This CDO transaction closed in May 2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Amount represents principal outstanding of $322.0 million less unamortized issuance costs of $2.9 million as of June 30, 2010 and $3.3 million as of December 31, 2009.  This CDO transaction closed in May 2007. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Amount represents principal outstanding of $111.3 million less unamortized issuance costs of $1.4 million as of June 30, 2010.  This transaction closed in May 2010. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Amount represents junior subordinated debentures issued to RCT I and RCT II in May 2006 and September 2006, respectively. |
|-----|---------------------------------------------------------------------------------------------------------------------------|

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|                                  |   | Non-Employee Directors |    |   | Non-Employees |   |     | Total  |   |
|---------------------------------------|--------|------------------------|---------|--------|---------------|--------|----------|--------|--------|
| Unvested shares as of January 1, 2010 |   |                   | 52,632  |   |          |   | 384,687  |   |   |   | 437,319 |   |
| Issued                                |   |                   | 16,939  |   |          |   | 320,800  |   |   |   | 337,739 |   |
| Vested                                |   |                   | (52,632 | )      |          |   | (162,967 | )      |   |   | (215,599 | ) |
| Forfeited                             |   |                   | − |   |          |   | −  |   |   |   | − |   |
| Unvested shares as of June 30, 2010   |   |                   | 16,939  |   |          |   | 542,520  |   |   |   | 559,459 |   |

|                              |   | Number of Options |    |   | Weighted Average Exercise Price |   |    | Weighted Average Remaining Contractual Term (in years) |   |   | Aggregate Intrinsic Value (in thousands) |   |
|-----------------------------------|--------|-------------------|---------|--------|---------------------------------|--------|---------|--------------------------------------------------------|--------|--------|------------------------------------------|--------|
| Outstanding as of January 1, 2010 |   |              | 607,666 |   |                            | $      | 14.99   |                                                   |   |   |                                     |   |   |   |
| Granted                           |   |              | − |   |                            |   | − |                                                   |   |   |                                     |   |   |   |
| Exercised                         |   |              | − |   |                            |   | − |                                                   |   |   |                                     |   |   |   |
| Forfeited                         |   |              | (5,000  | )      |                            |   | 15.00   |                                                   |   |   |                                     |   |   |   |
| Outstanding as of June 30, 2010   |   |              | 602,666 |   |                            | $      | 14.99   |                                                   |   |   | 5                                        |   |   | $ | 629 |   |
| Exercisable at June 30, 2010      |   |              | 602,666 |   |                            | $      | 14.99   |                                                   |   |   | 5                                        |   |   | $ | 629 |   |

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| Unvested Options            |   | Options |    |   | Weighted Average Grant DateFair Value |   |
|-----------------------------|--------|---------|---------|--------|---------------------------------------|--------|
| Unvested at January 1, 2010 |   |    | 21,666  |   |                                  | $      | 14.88 |   |
| Granted                     |   |    | − |   |                                  | $      | − |   |
| Vested                      |   |    | (21,666 | )      |                                  | $      | 14.88 |   |
| Forfeited                   |   |    | − |   |                                  | $      | − |   |
| Unvested at June 30, 2010   |   |    | − |   |                                  | $      | − |   |

| Vested Options               |   | Number ofOptions |    |   | Weighted Average Exercise Price |    | Weighted Average Remaining Contractual Term (in years) |   | Aggregate Intrinsic Value (in thousands) |   |
|------------------------------|--------|------------------|---------|--------|---------------------------------|---------|--------------------------------------------------------|--------|------------------------------------------|--------|
| Vested as of January 1, 2010 |   |             | 586,000 |   |                            | $       | 14.99                                                  |   |                                     |   |   |   |
| Vested                       |   |             | 21,666  |   |                            | $  |  14.88                                            |   |                                     |   |   |   |   |
| Exercised                    |   |             | − |   |                            | $  | −                                                |   |                                     |   |   |   |   |
| Forfeited                    |   |             | (5,000  | )      |                            | $  | 15.00                                                  |   |                                     |   |   |   |   |
| Vested as of June 30, 2010   |   |             | 602,666 |   |                            | $       | 14.99                                                  |   | 5                                        |   | $ | 629 |   |

|           |   | As of June 30, |         |
|----------------|--------|----------------|--------------|
|           |   | 2010           |         |
| Expected life  |   | 7 years        |         |
| Discount rate  |   |           |   2.58% |   |
| Volatility     |   |           | 97.05%       |   |
| Dividend yield |   |           | 16.75%       |   |

|                                                   |   | Three Month EndedJune 30, |   |   | Six Month EndedJune 30, |   |
|--------------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                                   |   | 2010                      |   |   | 2009                    |   |   | 2010 |   |   | 2009 |   |
| Options granted to Manager and non-employees           |   | $                         | (10    | )      |                    | $      | 2 |   |   | $ | 10 |   |   | $ | 1 |   |
| Restricted shares granted to Manager and non-employees |   |                      | 181    |   |                    |   | 235 |   |   |   | 857 |   |   |   | 296 |   |
| Restricted shares granted to non-employee directors    |   |                      | 28     |   |                    |   | 28 |   |   |   | 56 |   |   |   | 56 |   |
| Total equity compensation expense                      |   | $                         | 199    |   |                    | $      | 265 |   |   | $ | 923 |   |   | $ | 353 |   |

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|                                                               |   | Three Months Ended |       |   | Six Months Ended |   |
|--------------------------------------------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                                                               |   | June 30,           |       |   | June 30,         |   |
|                                                               |   | 2010               |       |   | 2009             |   |   | 2010 |   |   | 2009 |   |
| Basic:                                                             |   |               |       |   |             |   |   |   |   |   |   |   |
| Net income (loss)                                                  |   | $                  | 13,362     |   |             | $      | (5,127 | ) |   | $ | 14,768 |   |   | $ | (17,279 | ) |
| Weighted average number of shares outstanding                      |   |               | 44,424,281 |   |             |   | 24,369,581 |   |   |   | 41,223,517 |   |   |   | 24,427,452 |   |
| Basic net income (loss) per share                                  |   | $                  | 0.30       |   |             | $      | (0.21 | ) |   | $ | 0.36 |   |   | $ | (0.71 | ) |
|                                                               |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Diluted:                                                           |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                  |   | $                  | 13,362     |   |             | $      | (5,127 | ) |   | $ | 14,768 |   |   | $ | (17,279 | ) |
| Weighted average number of shares outstanding                      |   |               | 44,424,281 |   |             |   | 24,369,581 |   |   |   | 41,223,517 |   |   |   | 24,427,452 |   |
| Additional shares due to assumed conversion ofdilutive instruments |   |               | 299,806    |   |             |   | − |   |   |   | 231,610 |   |   |   | − |   |
| Adjusted weighted-average number of commonshares outstanding       |   |               | 44,724,087 |   |             |   | 24,369,581 |   |   |   | 41,455,127 |   |   |   | 24,427,452 |   |
| Diluted net income (loss) per share                                |   | $                  | 0.30       |   |             | $      | (0.21 | ) |   | $ | 0.36 |   |   | $ | (0.71 | ) |

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|   | · | an income approach utilizing an appropriate current risk-adjusted yield, time value and projected estimated losses from default assumptions based on analysis of underlying loan performance; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes on similar-vintage, higher rate, more actively traded CMBS adjusted as appropriate for the lower subordination level of the Company’s securities; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer quotes on the Company’s securities for which there is not an active market. |
|--------|--------|------------------------------------------------------------------------------------------|

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|                                     |   | Level 1 |    |   | Level 2 |   |    | Level 3 |   |   | Total   |   |
|------------------------------------------|--------|---------|---------|--------|---------|--------|---------|---------|--------|--------|---------|--------|
| Assets:                                  |   |    |    |   |    |   |    |    |   |   |    |   |
| Investment securities available-for-sale |   | $       | − |   |    | $      | − |    |   | $      | 55,529  |   |   | $ | 55,529 |   |
| Investment securities trading            |   |    | − |   |    |   | − |    |   |   | 4,985   |   |   |   | 4,985 |   |
| Total assets at fair value               |   | $       | − |   |    | $      | − |    |   | $      | 60,514  |   |   | $ | 60,514 |   |
| Liabilities:                             |   |    |    |   |    |   |    |    |   |   |    |   |   |   |   |   |
| Derivatives (net)                        |   | $       | − |   |    | $      | 15,644  |    |   | $      | − |   |   | $ | 15,644 |   |
| Total liabilities at fair value          |   | $       | − |   |    | $      | 15,644  |    |   | $      | − |   |   | $ | 15,644 |   |

|                                                                        |   | Level 3 |   |
|-----------------------------------------------------------------------------|--------|---------|--------|
| Beginning balance, January 1, 2010                                          |   | $       | 44,542 |   |
| Total gains or losses (realized/unrealized):                                |   |    |   |   |
| Included in earnings                                                        |   |    | (1,353 | ) |
| Purchases                                                                   |   |    | 10,117 |   |
| Unrealized gains – included in accumulated other comprehensive income |   |    | 7,208  |   |
| Ending balance, June 30, 2010                                               |   | $       | 60,514 |   |

|                       |   | Level 1 |    |   | Level 2 |   |   | Level 3 |   |   | Total   |   |
|----------------------------|--------|---------|---------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Assets:                    |   |    |    |   |    |   |   |    |   |   |    |   |
| Loans held for sale        |   | $       | − |   |    | $      | 938    |    |   | $      | 36,825  |   |   | $ | 37,763 |   |
| Impaired loans             |   |    | − |   |    |   | 3,494  |    |   |   | 77,863  |   |   |   | 81,357 |   |
| Total assets at fair value |   | $       | − |   |    | $      | 4,432  |    |   | $      | 114,688 |   |   | $ | 119,120 |   |

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|                      |   | Fair Value of Financial Instruments |      |
|---------------------------|--------|-------------------------------------|-----------|
|                      |   | (in thousands)                      |      |
|                      |   | June 30, 2010                       |      |   | December 31, 2009 |   |
|                      |   | Carrying value                      |      |   | Fair value |   |   | Carrying value |   |   | Fair value |   |
| Loans held-for-investment |   | $                                   | 1,543,141 |   |   | $ | 1,537,472 |   |   | $ | 1,590,088 |   |   | $ | 1,536,946 |   |
| CDOs                      |   | $                                   | 1,430,928 |   |   | $ | 869,976 |   |   | $ | 1,484,952 |   |   | $ | 857,262 |   |
| Junior subordinated notes |   | $                                   | 51,548    |   |   | $ | 18,042 |   |   | $ | 51,548 |   |   | $ | 18,042 |   |

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| Fair Value of Derivative Instruments as of June 30, 2010(in thousands) |   |
|------------------------------------------------------------------------|--------|
|                                                                   |   | Liability Derivatives |   |
|                                                                   |   | Notional Amount |   | Balance Sheet Location |   | Fair Value |   |
| Derivatives not designated as hedging instrumentsunder SFAS 133        |   |   |   |   |   |   |   |
| Interest rate cap agreement                                            |   | $ | 14,841 |   | Derivatives, at fair value |   | $ | 1 |   |
|                                                                   |   |   |   |   |   |   |   |   |   |
| Derivatives designated as hedging instrumentsunder SFAS 133            |   |   |   |   |   |   |   |   |   |
| Interest rate swap contracts                                           |   | $ | 167,322 |   | Derivatives, at fair value |   | $ | (15,644 | ) |
|                                                                   |   |   |   |   | Accumulated other comprehensive loss |   | $ | 15,644 |   |

| The Effect of Derivative Instruments on the Statement of Operations for theThree Months Ended June 30, 2010(in thousands) |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                      |   | Liability Derivatives |   |
|                                                                                                                      |   | Notional Amount |   | Statement of Operations  Location |   | Unrealized Loss (1) |   |
| Derivatives not designated as hedging instrumentsunder SFAS 133                                                           |   |   |   |   |   |   |   |
| Interest rate cap agreement                                                                                               |   | $ | 14,841 |   | Interest expense |   | $ | 8 |   |

| The Effect of Derivative Instruments on the Statement of Operations for theSix Months Ended June 30, 2010(in thousands) |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                    |   | Liability Derivatives |   |
|                                                                                                                    |   | Notional Amount |   | Statement of Operations  Location |   | Unrealized Loss (1) |   |
| Derivatives not designated as hedging instrumentsunder SFAS 133                                                         |   |   |   |   |   |   |   |
| Interest rate cap agreement                                                                                             |   | $ | 14,841 |   | Interest expense |   | $ | 44 |   |

----

| (1) | Negative values indicate a decrease to the associated balance sheet or consolidated statement of operations line items. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

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ITEM 2

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|   | · | $27.5 million of commercial real estate loan principal repayments; |
|--------|--------|--------------------------------------------------------------------|

|   | · | $107.1 million of bank loan principal repayments; and |
|--------|--------|-------------------------------------------------------|

|   | · | $35.7 million of bank loan sale proceeds. |
|--------|--------|-------------------------------------------|

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|                                                   |   | Three Months Ended |   |   | Three Months Ended |   |
|--------------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                                                   |   | June 30, 2010      |   |   | June 30, 2009      |   |
|                                                   |   |               |   |   | Weighted Average   |   |   |   |   |   | Weighted Average |   |
|                                                   |   | Interest Income    |   |   | Yield (1)          |   |   | Balance |   |   | Interest Income |   |   | Yield (1) |   |   | Balance |   |
| Interest income from loans:                            |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank loans                                             |   | $                  | 10,572 |   |               |   | 4.59% |   |   | $ | 913,646 |   |   | $ | 8,523 |   |   |   | 3.69% |   |   | $ | 958,104 |   |
| Commercial real estate loans                           |   |               | 8,531  |   |               |   | 4.68% |   |   | $ | 713,848 |   |   |   | 12,984 |   |   |   | 6.36% |   |   | $ | 791,167 |   |
| Total interest income from loans                       |   |               | 19,103 |   |               |   |   |   |   |   |   |   |   |   | 21,507 |   |   |   |   |   |   |   |   |   |
|                                                   |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income from securities:                       |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CMBS                                                   |   |               | 2,540  |   |               |   | 7.45% |   |   | $ | 136,221 |   |   |   | 883 |   |   |   | 4.73% |   |   | $ | 74,138 |   |
| Securities held-to-maturity                            |   |               | 318    |   |               |   | 3.52% |   |   | $ | 35,811 |   |   |   | 462 |   |   |   | 5.67% |   |   | $ | 32,442 |   |
| Other ABS                                              |   |               | 37     |   |               |   | N/A |   |   |   | N/A |   |   |   | − |   |   |   | N/A |   |   |   | N/A |   |
| Total interest income fromsecurities                   |   |               | 2,895  |   |               |   |   |   |   |   |   |   |   |   | 1,345 |   |   |   |   |   |   |   |   |   |
|                                                   |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leasing                                                |   |               | 1,928  |   |               |   | 18.42% |   |   | $ | 42,598 |   |   |   | 2,093 |   |   |   | 8.60% |   |   | $ | 92,846 |   |
|                                                   |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income – other:                         |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Temporary investmentin over-night repurchaseagreements |   |               | 534    |   |               |   | N/A |   |   |   | N/A |   |   |   | 329 |   |   |   | N/A |   |   |   | N/A |   |
| Total interest income − other                    |   |               | 534    |   |               |   |   |   |   |   |   |   |   |   | 329 |   |   |   |   |   |   |   |   |   |
| Total interest income                                  |   | $                  | 24,460 |   |               |   |   |   |   |   |   |   |   | $ | 25,274 |   |   |   |   |   |   |   |   |   |

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|                                                   |   | Six Months Ended |   |   | Six Months Ended |   |
|--------------------------------------------------------|--------|------------------|--------|--------|------------------|--------|
|                                                   |   | June 30, 2010    |   |   | June 30, 2009    |   |
|                                                   |   |             |   |   | Weighted Average |   |   |   |   |   | Weighted Average |   |
|                                                   |   | Interest Income  |   |   | Yield (1)        |   |   | Balance |   |   | Interest Income |   |   | Yield (1) |   |   | Balance |   |
| Interest income from loans:                            |   |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank loans                                             |   | $                | 20,293 |   |             |   | 4.43% |   |   | $ | 910,806 |   |   | $ | 17,420 |   |   |   | 3.76% |   |   | $ | 943,081 |   |
| Commercial real estate loans                           |   |             | 17,195 |   |             |   | 4.68% |   |   | $ | 720,453 |   |   |   | 26,707 |   |   |   | 6.53% |   |   | $ | 796,242 |   |
| Total interest income from loans                       |   |             | 37,488 |   |             |   |   |   |   |   |   |   |   |   | 44,127 |   |   |   |   |   |   |   |   |   |
|                                                   |   |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income from securities:                       |   |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CMBS                                                   |   |             | 5,074  |   |             |   | 7.26% |   |   | $ | 141,140 |   |   |   | 1,765 |   |   |   | 4.74% |   |   | $ | 74,138 |   |
| Securities held-to-maturity                            |   |             | 655    |   |             |   | 3.49% |   |   | $ | 35,877 |   |   |   | 1,002 |   |   |   | 6.40% |   |   | $ | 31,083 |   |
| Other ABS                                              |   |             | 40     |   |             |   | N/A |   |   | $ | N/A |   |   |   | − |   |   |   |     N/A |   |   |   | N/A |   |
| Total interest income fromsecurities                   |   |             | 5,769  |   |             |   |   |   |   |   |   |   |   |   | 2,767 |   |   |   |   |   |   |   |   |   |
|                                                   |   |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leasing                                                |   |             | 2,163  |   |             |   | 17.27% |   |   | $ | 25,986 |   |   |   | 4,326 |   |   |   | 8.60% |   |   | $ | 96,029 |   |
|                                                   |   |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income – other:                         |   |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Temporary investmentin over-night repurchaseagreements |   |             | 749    |   |             |   | N/A |   |   |   | N/A |   |   |   | 676 |   |   |   | N/A |   |   |   | N/A |   |
| Total interest income − other                    |   |             | 749    |   |             |   |   |   |   |   |   |   |   |   | 676 |   |   |   |   |   |   |   |   |   |
| Total interest income                                  |   | $                | 46,169 |   |             |   |   |   |   |   |   |   |   | $ | 51,896 |   |   |   |   |   |   |   |   |   |

----

| (1) | Certain one-time items reflected in interest income have been excluded in calculating the weighted average rate, since they are not indicative of expected future results. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a decrease in the weighted average balance of $77.3 million and $75.8 million on our commercial real estate loans to $713.8 million and $720.5 million for the three and six months ended June 30, 2010, respectively, from $791.2 million and $796.2 million for the three and six months ended June 30, 2009, respectively, primarily as a result of write-offs of impaired loans and to a lesser extent, payoffs and paydowns; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a decrease in the weighted average interest rate to 4.68% for the three and six months ended June 30, 2010, respectively from 6.36% and 6.53% for the three and six months ended June 30, 2009, respectively.  The reduced rate is primarily due to decreases in loans with LIBOR floors, which is a reference index for the rates payable on these loans, from loan modifications during 2009 and 2010.  At June 30, 2010 we had $189.6 million of loans with a weighted average LIBOR floor of 2.24% as compared to $390.4 million of loans with a weighted average LIBOR floor of 3.71% at June 30, 2009.  Management determined that seven of these modifications were due to financial distress of the borrowers and, accordingly, qualified as troubled debt restructurings. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | an increase of $1.0 million and $2.0 million in accretion income to $1.1 million and $2.2 million for the three and six months ended June 30, 2010, respectively from $110,000 and $220,000 for the three and six months ended June 30, 2009 respectively.  The increase in accretion income results from the purchase of $70.1 million of CMBS at discounts during the second half of 2009 and during 2010 and accretion of those discounts into income.  These discounted security purchases are made as we invest the proceeds from the loan and security payoffs from our borrowers and from the loans and securities we have sold, typically for credit reasons, and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an increase of the weighted average balance of $62.1 million and $67.0 million to $136.2 million and $141.1 million for the three and six months ended June 30, 2010, respectively, from $74.1 million for the three and six months ended June 30, 2009, respectively, as a result of the purchase of $70.1 million of securities during the second half of 2009 and during 2010. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                         |   | Three Months Ended |   |   | Three Months Ended |   |
|------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                         |   | June 30, 2010      |   |   | June 30, 2009      |   |
|                         |   |               |   |   | Weighted Average   |   |   |   |   |   | Weighted Average |   |
|                         |   | Interest Expense   |   |   | Yield              |   |   | Balance |   |   | Interest Expense |   |   | Yield |   |   | Balance |   |
| Bank loans                   |   | $                  | 2,341  |   |               |   | 1.02% |   |   | $ | 906,000 |   |   | $ | 4,154 |   |   |   | 1.81% |   |   | $ | 906,000 |   |
| Commercial real estate loans |   |               | 2,217  |   |               |   | 1.60% |   |   | $ | 548,381 |   |   |   | 2,652 |   |   |   | 1.60% |   |   | $ | 660,044 |   |
| Leasing                      |   |               | 1,020  |   |               |   | 8.70% |   |   | $ | 46,607 |   |   |   | 1,313 |   |   |   | 5.85% |   |   | $ | 85,550 |   |
| General                      |   |               | 3,351  |   |               |   | 5.36% |   |   | $ | 237,687 |   |   |   | 4,629 |   |   |   | 4.75% |   |   | $ | 363,173 |   |
| Total interest expense       |   | $                  | 8,929  |   |               |   |   |   |   |   |   |   |   | $ | 12,748 |   |   |   |   |   |   |   |   |   |

|                         |   | Six Months EndedJune 30, 2010 |   |   | Six Months EndedJune 30, 2009 |   |
|------------------------------|--------|-------------------------------|--------|--------|-------------------------------|--------|
|                         |   |                          |   |   | Weighted Average              |   |   |   |   |   | Weighted Average |   |
|                         |   | Interest Expense              |   |   | Yield                         |   |   | Balance |   |   | Interest Expense |   |   | Yield |   |   | Balance |   |
| Bank loans                   |   | $                             | 4,534  |   |                          |   | 0.99% |   |   | $ | 906,000 |   |   | $ | 9,873 |   |   |   | 2.24% |   |   | $ | 906,000 |   |
| Commercial real estate loans |   |                          | 4,330  |   |                          |   | 1.49% |   |   | $ | 567,740 |   |   |   | 5,277 |   |   |   | 1.60% |   |   | $ | 663,762 |   |
| Leasing                      |   |                          | 1,020  |   |                          |   | 8.68% |   |   | $ | 23,432 |   |   |   | 2,143 |   |   |   | 4.66% |   |   | $ | 88,775 |   |
| General                      |   |                          | 6,982  |   |                          |   | 5.30% |   |   | $ | 246,817 |   |   |   | 9,332 |   |   |   | 4.82% |   |   | $ | 367,886 |   |
| Total interest expense       |   | $                             | 16,866 |   |                          |   |   |   |   |   |   |   |   | $ | 26,625 |   |   |   |   |   |   |   |   |   |

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|                                |   | Three Months Ended |   |   | Six Months Ended |   |
|-------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                |   | June 30,           |   |   | June 30,         |   |
|                                |   | 2010               |   |   | 2009             |   |   | 2010 |   |   | 2009 |   |
| Management fees - related party     |   | $                  | 4,288  |   |             | $      | 925 |   |   | $ | 5,440 |   |   | $ | 1,926 |   |
| Equity compensation - related party |   |               | 199    |   |             |   | 265 |   |   |   | 923 |   |   |   | 353 |   |
| Professional services               |   |               | 876    |   |             |   | 1,089 |   |   |   | 1,695 |   |   |   | 2,053 |   |
| Insurance                           |   |               | 180    |   |             |   | 217 |   |   |   | 392 |   |   |   | 389 |   |
| Depreciation on operating leases    |   |               | 685    |   |             |   | − |   |   |   | 685 |   |   |   | − |   |
| General and administrative          |   |               | 862    |   |             |   | 462 |   |   |   | 1,507 |   |   |   | 867 |   |
| Income tax expense (benefit)        |   |               | 1,132  |   |             |   | 23 |   |   |   | 1,237 |   |   |   | (22 | ) |
| Total operating expenses            |   | $                  | 8,222  |   |             | $      | 2,981 |   |   | $ | 11,879 |   |   | $ | 5,566 |   |

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|                                         |   | Three Months Ended |   |   | Six Months Ended |   |
|----------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                         |   | June 30,           |   |   | June 30,         |   |
|                                         |   | 2010               |   |   | 2009             |   |   | 2010 |   |   | 2009 |   |
| Impairment losses on investment securities   |   | $                  | (8,896 | )      |             | $      | (2,261 | ) |   | $ | (7,584 | ) |   | $ | (16,925 | ) |
| Recognized in other comprehensive loss       |   |               | (2,838 | )      |             |   | (2,216 | ) |   |   | (1,526 | ) |   |   | (11,260 | ) |
| Net impairment losses recognized in earnings |   |               | (6,058 | )      |             |   | (45 | ) |   |   | (6,058 | ) |   |   | (5,665 | ) |
| Net realized gain on loans and investments   |   |               | 2,718  |   |             |   | 465 |   |   |   | 2,864 |   |   |   | 701 |   |
| Provision for loan and lease losses          |   |               | (7,897 | )      |             |   | (22,012 | ) |   |   | (23,268 | ) |   |   | (38,962 | ) |
| Gain on the extinguishment of debt           |   |               | 16,407 |   |             |   | 6,900 |   |   |   | 23,035 |   |   |   | 6,900 |   |
| Other income                                 |   |               | 883    |   |             |   | 20 |   |   |   | 771 |   |   |   | 42 |   |
| Total other revenue (expense)                |   | $                  | 6,053  |   |             | $      | (14,672 | ) |   | $ | (2,656 | ) |   | $ | (36,984 | ) |

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|                             |   | Amortizedcost (3) |      |   | Dollar price |   |                                                | Net carrying amount |   |   | Dollar price |       |   | Net carrying amount less amortized cost |               |   | Dollar price |   |
|----------------------------------|--------|-------------------|-----------|--------|--------------|--------|-----------------------------------------------------|---------------------|--------|--------|--------------|------------|--------|-----------------------------------------|--------------------|--------|--------------|--------|
| June 30, 2010                    |   |              |      |   |         |   |                                                |                |   |   |         |       |   |                                    |               |   |         |   |
| Floating rate                    |   |              |      |   |         |   |                                                |                |   |   |         |       |   |                                    |               |   |         |   |
| CMBS                             |   | $                 | 31,133    |   |         |   | 100.00%                                             |                |   | $      | 8,790        |       |   |                                    | 28.23%             |   |         | $      | (22,343 | ) |   |   | -71.77% |   |
| Structured notes                 |   |              | 4,985     |   |         |   |   49.85%                                       |                |   |   | 4,985        |       |   |                                    | 49.85%             |   |         |   | − |   |   |   |        −% |   |
| Other ABS                        |   |              | −   |   |         |   |         −% |                |   |   | 24           |       |   |                                    |    0.29% |   |         |   | 24 |   |   |   |    0.29% |   |
| B notes (1)                 |   |              | 26,500    |   |         |   | 100.00%                                             |                |   |   | 26,298       |       |   |                                    | 99.24%             |   |         |   | (202 | ) |   |   |   -0.76% |   |
| Mezzanine loans (1)         |   |              | 104,048   |   |         |   | 100.00%                                             |                |   |   | 103,255      |       |   |                                    | 99.24%             |   |         |   | (793 | ) |   |   |   -0.76% |   |
| Whole loans (1)             |   |              | 446,271   |   |         |   |   99.99%                                       |                |   |   | 428,123      |       |   |                                    | 95.92%             |   |         |   | (18,148 | ) |   |   |   -4.07% |   |
| Bank loans                       |   |              | 881,659   |   |         |   |   96.76%                                       |                |   |   | 836,794      |   (2) |   |                                    | 91.84%             |   |         |   | (44,865 | ) |   |   |   -4.92% |   |
| Loans held for sale (3)     |   |              | 17,938    |   |         |   |   98.41%                                  |                |   |   | 17,938       |       |   |                                    | 98.41%             |   |         |   | − |   |   |   |       −% |   |
| ABS held-to-maturity (4)         |   |              | 31,446    |   |         |   |   89.28%                                       |                |   |   | 22,272       |       |   |                                    | 63.24%             |   |         |   | (9,174 | ) |   |   | -26.04% |   |
| Total floating rate              |   |              | 1,543,980 |   |         |   |   97.05%                                       |                |   |   | 1,448,479    |       |   |                                    | 91.04%             |   |         |   | (95,501 | ) |   |   |   -6.01% |   |
| Fixed rate                       |   |              |      |   |         |   |                                                |                |   |   |         |       |   |                                    |               |   |         |   |   |   |   |   |   |   |
| CMBS                             |   |              | 64,778    |   |         |   |   61.18%                                       |                |   |   | 46,715       |       |   |                                    | 44.12%             |   |         |   | (18,063 | ) |   |   | -17.06% |   |
| B notes (1)                 |   |              | 31,053    |   |         |   |   99.62%                                       |                |   |   | 30,817       |       |   |                                    | 98.86%             |   |         |   | (236 | ) |   |   |   -0.76% |   |
| Mezzanine loans (1)         |   |              | 58,625    |   |         |   | 100.26%                                             |                |   |   | 51,447       |       |   |                                    | 87.99%             |   |         |   | (7,178 | ) |   |   | -12.27% |   |
| Whole loans (1)             |   |              | 2,403     |   |         |   |   97.60%                                       |                |   |   | 1,403        |       |   |                                    | 56.99%             |   |         |   | (1,000 | ) |   |   | -40.61% |   |
| Loans held for sale (3)     |   |              | 19,825    |   |         |   |   84.37%                                       |                |   |   | 19,825       |       |   |                                    | 84.37%             |   |         |   | − |   |   |   |        −% |   |
| Lease receivables (5)  |   |              | 118,578   |   |         |   | 100.00%                                             |                |   |   | 118,528      |       |   |                                    | 99.96%             |   |         |   | (50 | ) |   |   |   -0.04% |   |
| Total fixed rate                 |   |              | 295,262   |   |         |   |   86.83%                                       |                |   |   | 268,735      |       |   |                                    | 79.03%             |   |         |   | (26,527 | ) |   |   |   -7.80% |   |
| Grand total                      |   | $                 | 1,839,242 |   |         |   |   95.25%                                       |                |   | $      | 1,717,214    |       |   |                                    | 88.93%             |   |         | $      | (122,028 | ) |   |   |   -6.32% |   |
|                             |   |              |      |   |         |   |                                                |                |   |   |         |       |   |                                    |               |   |         |   |   |   |   |   |   |   |
| December 31, 2009                |   |              |      |   |         |   |                                                |                |   |   |         |       |   |                                    |               |   |         |   |   |   |   |   |   |   |
| Floating rate                    |   |              |      |   |         |   |                                                |                |   |   |         |       |   |                                    |               |   |         |   |   |   |   |   |   |   |
| CMBS                             |   | $                 | 32,043    |   |         |   | 100.00%                                             |                |   | $      | 11,185       |       |   |                                    | 34.91%             |   |         | $      | (20,858 | ) |   |   | -65.09% |   |
| Other ABS                        |   |              | 24        |   |         |   |     0.29%                            |                |   |   | 24           |       |   |                                    |    0.29% |   |         |   | − |   |   |   |        −% |   |
| B notes (1)                 |   |              | 26,500    |   |         |   | 100.00%                                             |                |   |   | 26,283       |       |   |                                    | 99.18%             |   |         |   | (217 | ) |   |   |   -0.82% |   |
| Mezzanine loans (1)         |   |              | 124,048   |   |         |   | 100.00%                                             |                |   |   | 123,033      |       |   |                                    | 99.18%             |   |         |   | (1,015 | ) |   |   |   -0.82% |   |
| Whole loans (1)             |   |              | 403,890   |   |         |   |   99.98%                                       |                |   |   | 382,371      |       |   |                                    | 94.65%             |   |         |   | (21,519 | ) |   |   |   -5.33% |   |
| Bank loans                       |   |              | 857,451   |   |         |   |   96.87%                                       |                |   |   | 798,614      |   (2) |   |                                    | 90.23%             |   |         |   | (58,837 | ) |   |   |   -6.64% |   |
| Loans held for sale (3)     |   |              | 8,050     |   |         |   |   78.88%                                       |                |   |   | 8,050        |       |   |                                    | 78.88%             |   |         |   | − |   |   |   |        −% |   |
| ABS held-to-maturity (4)         |   |              | 31,401    |   |         |   |   88.77%                                       |                |   |   | 21,287       |       |   |                                    | 60.18%             |   |         |   | (10,114 | ) |   |   | -28.59% |   |
| Total floating rate              |   |              | 1,483,407 |   |         |   |   97.23%                                       |                |   |   | 1,370,847    |       |   |                                    | 89.85%             |   |         |   | (112,560 | ) |   |   |   -7.38% |   |
| Fixed rate                       |   |              |      |   |         |   |                                                |                |   |   |         |       |   |                                    |               |   |         |   |   |   |   |   |   |   |
| CMBS                             |   |              | 60,067    |   |         |   |   64.08%                                       |                |   |   | 33,333       |       |   |                                    | 35.56%             |   |         |   | (26,734 | ) |   |   | -28.52% |   |
| B notes (1)                 |   |              | 54,977    |   |         |   | 100.05%                                             |                |   |   | 54,527       |       |   |                                    | 99.23%             |   |         |   | (450 | ) |   |   |   -0.82% |   |
| Mezzanine loans (1)         |   |              | 58,638    |   |         |   | 100.28%                                             |                |   |   | 53,200       |       |   |                                    | 90.98%             |   |         |   | (5,438 | ) |   |   |   -9.30% |   |
| Whole loans (1)             |   |              | 80,305    |   |         |   |   99.78%                                       |                |   |   | 79,647       |       |   |                                    | 98.96%             |   |         |   | (658 | ) |   |   |   -0.82% |   |
| Lease receivables (5)       |   |              | 2,067     |   |         |   | 100.05%                                             |                |   |   | 927          |       |   |                                    | 44.87%             |   |         |   | (1,140 | ) |   |   | -55.18% |   |
| Total fixed rate                 |   |              | 256,054   |   |         |   |   88.38%                                       |                |   |   | 221,634      |       |   |                                    | 76.50%             |   |         |   | (34,420 | ) |   |   | -11.88% |   |
| Grand total                      |   | $                 | 1,739,461 |   |         |   |   95.82%                                       |                |   | $      | 1,592,481    |       |   |                                    | 87.72%             |   |         | $      | (146,980 | ) |   |   |   -8.10% |   |

----

| (1) | Net carrying amount includes an allowance for loan losses of $27.6 million at June 30, 2010, allocated as follows:  B notes ($0.4 million), mezzanine loans ($8.0 million) and whole loans ($19.2 million).  Net carrying amount includes an allowance for loan losses of $29.3 million at December 31, 2009, allocated as follows:  B notes ($0.7 million), mezzanine loans ($6.4 million) and whole loans ($22.2 million). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The bank loan portfolio is carried at amortized cost less allowance for loan loss and was $870.4 million and $839.6 million at June 30, 2010 and December 31, 2009, respectively.  The amount disclosed represents net realizable value, which includes an $11.3 million and $17.8 million allowance for loan losses at June 30, 2010 and December 31, 2009, respectively. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Loans held for sale are carried at the lower of cost or market.  Amortized cost is equal to fair value. |
|-----|-------------------------------------------------------------------------------------------------------------------|

| (4) | ABS held-to-maturity are carried at amortized cost less any other-than-temporary impairment charges. |
|-----|-----------------------------------------------------------------------------------------------------------|

| (5) | Net carrying amount includes a $50,000 and $1.1 million allowance for lease loss at June 30, 2010 and December 31, 2009, respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | the length of time the market value has been less than amortized cost; |
|--------|--------|------------------------------------------------------------------------|

|   | · | the severity of the impairment; |
|--------|--------|---------------------------------|

|   | · | the expected loss on the security as generated by third party software; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | credit ratings from the rating agencies; |
|--------|--------|------------------------------------------|

|   | · | underlying credit fundamentals of the collateral backing the security; and |
|--------|--------|----------------------------------------------------------------------------|

|   | · | whether, based upon our intent, it is more likely than not that we will sell the security before the recovery of the amortized cost basis. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an income approach utilizing an appropriate current risk-adjusted yield, time value and projected estimated losses from default assumptions based on analysis of underlying loan performance; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes on similar-vintage, higher rate, more actively traded CMBS adjusted as appropriate for the lower subordination level of our securities; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer quotes on our securities for which there is not an active market. |
|--------|--------|--------------------------------------------------------------------------|

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|                            |   | June 30, 2010  |    |   | December 31, 2009 |   |
|---------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                            |   | Amortized Cost |    |   | Dollar Price      |   |   | Amortized Cost |   |   | Dollar Price |   |
| Moody’s Ratings Category: |   |           |    |   |              |   |   |   |   |   |   |   |
| Aaa                             |   | $              | 9,112   |   |              |   | 65.86% |   |   | $ | 11,690 |   |   |   |   64.70% |   |
| Aa1 through Aa3                 |   |           | 15,975  |   |              |   | 65.92% |   |   |   | 9,639 |   |   |   |   50.73% |   |
| A1 through A3                   |   |           | 9,669   |   |              |   | 65.59% |   |   |   | 4,826 |   |   |   |   56.14% |   |
| Baa1 through Baa3               |   |           | 1,209   |   |              |   | 40.30% |   |   |   | 2,021 |   |   |   |   33.68% |   |
| Ba1 through Ba3                 |   |           | 12,432  |   |              |   | 70.91% |   |   |   | 10,443 |   |   |   | 100.00% |   |
| B1 through B3                   |   |           | 15,602  |   |              |   | 75.74% |   |   |   | 24,449 |   |   |   |   85.27% |   |
| Caa1 through Caa3               |   |           | 11,024  |   |              |   | 84.80% |   |   |   | 12,832 |   |   |   |   98.71% |   |
| Ca through C                    |   |           | 20,888  |   |              |   | 69.46% |   |   |   | 16,210 |   |   |   |   73.68% |   |
| Total                           |   | $              | 95,911  |   |              |   | 70.00% |   |   | $ | 92,110 |   |   |   |   73.23% |   |
|                            |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| S&P Ratings Category:       |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| AAA                             |   | $              | 6,293   |   |              |   | 62.93% |   |   | $ | 5,997 |   |   |   |   59.97% |   |
| AA+ through AA-                 |   |           | − |   |              |   |        −% |   |   |   | 3,659 |   |   |   |   40.65% |   |
| A+ through A-                   |   |           | 6,404   |   |              |   | 70.57% |   |   |   | 6,544 |   |   |   |   62.75% |   |
| BBB+ through BBB-               |   |           | 27,139  |   |              |   | 70.21% |   |   |   | 11,955 |   |   |   |   59.49% |   |
| BB+ through BB-                 |   |           | 5,945   |   |              |   | 45.73% |   |   |   | 7,847 |   |   |   |   78.76% |   |
| B+ through B-                   |   |           | 4,885   |   |              |   | 48.85% |   |   |   | 9,081 |   |   |   |   90.81% |   |
| CCC+ through CCC-               |   |           | 45,233  |   |              |   | 88.19% |   |   |   | 47,027 |   |   |   |   83.54% |   |
| D                               |   |           | 12      |   |              |   |   0.25% |   |   |   | − |   |   |   |    83.54% |   |
| Total                           |   | $              | 95,911  |   |              |   | 70.00% |   |   | $ | 92,110 |   |   |   |           −% |   |
|                            |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average rating factor  |   |           | 3,568   |   |              |   |   |   |   |   | 2,971 |   |   |   |   |   |

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| Description                       |   | Quantity |   |   | Amortized Cost |    | ContractedInterest Rates |   | Maturity Dates (3)                   |
|-----------------------------------|--------|----------|--------|--------|----------------|---------|--------------------------|--------|--------------------------------------|
| June 30, 2010:                    |   |     |   |   |           |    |                     |   |                                 |
| Whole loans, floating rate (1)    |   |     | 38     |   |           | $       | 446,271                  |   | LIBOR plus 1.50% to LIBOR plus 4.50% |   | August 2010 toMay 2017 |
| Whole loans, fixed rate (1)  |   |     | 1      |   |           |    | 2,403                    |   | 8.16%                                |   |  August 2012 |
| B notes, floating rate            |   |     | 3      |   |           |    | 26,500                   |   | LIBOR plus 2.50% to LIBOR plus 3.01% |   | October 2010 toJuly 2011 |
| B notes, fixed rate               |   |     | 3      |   |           |    | 50,878                   |   | 7.00% to 8.68%                       |   | July 2011 toJuly 2016 |
| Mezzanine loans, floating rate    |   |     | 10     |   |           |    | 121,048                  |   | LIBOR plus 2.15% to LIBOR plus 3.45% |   | August 2010 toJanuary 2013 |
| Mezzanine loans, fixed rate       |   |     | 5      |   |           |    | 58,625                   |   | 8.14% to 11.00%                      |   | August 2010 toSeptember 2016 |
| Total (2)                    |   |     | 60     |   |           | $       | 705,725                  |   |                                 |   |   |
|                              |   |     |   |   |           |    |                     |   |                                 |   |   |
| December 31, 2009:                |   |     |   |   |           |    |                     |   |                                 |   |   |
| Whole loans, floating rate (1)    |   |     | 32     |   |           | $  | 403,890                  |   | LIBOR plus 1.50% to LIBOR plus 4.40% |   | May 2010 toFebruary 2017 |
| Whole loans, fixed rate (1)  |   |     | 6      |   |           |    | 80,305                   |   | 6.98% to 10.00%                      |   | May 2010 toAugust 2012 |
| B notes, floating rate            |   |     | 3      |   |           |    | 26,500                   |   | LIBOR plus 2.50% to LIBOR plus 3.01% |   | July 2010 toOctober 2010 |
| B notes, fixed rate               |   |     | 3      |   |           |    | 54,977                   |   | 7.00% to 8.68%                       |   | July 2011 toJuly 2016 |
| Mezzanine loans, floating rate    |   |     | 10     |   |           |    | 124,048                  |   | LIBOR plus 2.15% to LIBOR plus 3.45% |   | May 2010 toJanuary 2013 |
| Mezzanine loans, fixed rate       |   |     | 5      |   |           |    | 58,638                   |   | 8.14% to 11.00%                      |   | May 2010 toSeptember 2016 |
| Total (2)                    |   |     | 59     |   |           | $       | 748,358                  |   |                                 |   |   |

----

| (1) | Whole loans had $6.0 million in unfunded loan commitments as of June 30, 2010 and $5.6 million as of December 31, 2009.  These commitments are funded as the loans require additional funding and the related borrowers have satisfied the requirements to obtain this additional funding. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The total does not include an allowance for loan losses of $27.6 million and $29.3 million recorded as of June 30, 2010 and December 31, 2009, respectively. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Excludes a floating rate whole loan which matured in July 2009 and is in foreclosure and a fixed rate mezzanine loan that matured in May 2010 and is in default. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                            |   |   | June 30, 2010  |    |   | December 31, 2009 |   |
|---------------------------------|--------|--------|----------------|---------|--------|-------------------|--------|
|                            |   |   | Amortized cost |    |   | Dollar price      |   |   | Amortized cost |   |   | Dollar price |   |
| Moody’s ratings category: |   |   |           |    |   |              |   |   |   |   |   |   |   |
| Baa1 through Baa3               |   |   | $              | 29,935  |   |              |   |   98.39% |   |   | $ | 38,419 |   |   |   |   98.09% |   |
| Ba1 through Ba3                 |   |   |           | 436,625 |   |              |   |   97.00% |   |   |   | 404,609 |   |   |   |   96.91% |   |
| B1 through B3                   |   |   |           | 360,765 |   |              |   |   96.06% |   |   |   | 355,441 |   |   |   |   96.33% |   |
| Caa1 through Caa3               |   |   |           | 32,569  |   |              |   |   99.59% |   |   |   | 44,265 |   |   |   |   99.79% |   |
| Ca                              |   |   |           | 8,934   |   |              |   | 100.00% |   |   |   | 13,697 |   |   |   |   88.68% |   |
| No rating provided              |   |   |           | 13,769  |   |              |   |   93.97% |   |   |   | 9,070 |   |   |   |   91.64% |   |
| Total                           |   |   | $              | 882,597 |   |              |   |   96.74% |   |   | $ | 865,501 |   |   |   |   96.67% |   |
| S&P ratings category:       |   |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| BBB+ through BBB-               |   |   | $              | 62,683  |   |              |   |   98.98% |   |   | $ | 73,629 |   |   |   |   98.23% |   |
| BB+ through BB-                 |   |   |           | 359,193 |   |              |   |   97.25% |   |   |   | 353,725 |   |   |   |   97.11% |   |
| B+ through B-                   |   |   |           | 369,950 |   |              |   |   95.89% |   |   |   | 337,193 |   |   |   |   96.12% |   |
| CCC+ through CCC-               |   |   |           | 25,504  |   |              |   |   98.08% |   |   |   | 42,198 |   |   |   |   96.65% |   |
| CC+ through CC-                 |   |   |           | 1,634   |   |              |   | 100.25% |   |   |   | 3,104 |   |   |   | 100.13% |   |
| D                               |   |   |           |    | 7,297  |              |   |   | 100.01% |   |   |   | 8,602 |   |   |   |   95.91% |   |
| No rating provided              |   |   |           | 56,336  |   |              |   |   95.52% |   |   |   | 47,050 |   |   |   |   94.85% |   |
| Total                           |   |   | $              | 882,597 |   |              |   |   96.74% |   |   | $ | 865,501 |   |   |   |   96.67% |   |
| Weighted average rating factor  |   |   |           | 2,090   |   |              |   |   |   |   |   | 2,131 |   |   |   |   |   |

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|                            |   | June 30, 2010  |   |   | December 31, 2009 |   |
|---------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                            |   | Amortized cost |   |   | Dollar price      |   |   | Amortized cost |   |   | Dollar price |   |
| Moody’s ratings category: |   |           |   |   |              |   |   |   |   |   |   |   |
| Aa1 through Aa3                 |   | $              | 2,832  |   |              |   | 84.06% |   |   | $ | 2,854 |   |   |   | 82.89% |   |
| A1 through A3                   |   |           | 308    |   |              |   | 77.00% |   |   |   | 303 |   |   |   | 75.75% |   |
| Baa1 through Baa3               |   |           | 2,323  |   |              |   | 77.43% |   |   |   | − |   |   |   |        −% |   |
| Ba1 through Ba3                 |   |           | 4,440  |   |              |   | 96.00% |   |   |   | 4,427 |   |   |   | 95.72% |   |
| B1 through B3                   |   |           | 4,245  |   |              |   | 97.70% |   |   |   | 4,319 |   |   |   | 97.63% |   |
| Caa1 through Caa3               |   |           | 9,920  |   |              |   | 99.18% |   |   |   | 9,913 |   |   |   | 99.14% |   |
| Ca                              |   |           | 3,550  |   |              |   | 79.22% |   |   |   | 3,550 |   |   |   | 79.22% |   |
| No rating provided              |   |           | 3,828  |   |              |   | 76.59% |   |   |   | 6,035 |   |   |   | 75.44% |   |
| Total                           |   | $              | 31,446 |   |              |   | 89.28% |   |   | $ | 31,401 |   |   |   | 88.77% |   |
|                            |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| S&P ratings category:       |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| No rating provided              |   | $              | 31,446 |   |              |   | 89.28% |   |   | $ | 31,401 |   |   |   | 88.77% |   |
| Total                           |   | $              | 31,446 |   |              |   | 89.28% |   |   | $ | 31,401 |   |   |   | 88.77% |   |
| Weighted average rating factor  |   |           | 4,109  |   |              |   |   |   |   |   | 4,028 |   |   |   |   |   |

|                           |   | June 30, |    |   | December 31, |   |
|--------------------------------|--------|----------|---------|--------|--------------|--------|
|                           |   | 2010     |    |   | 2009         |   |
| Leases, net of unearned income |   | $        | 80,437  |   |         | $      | 1,397 |   |
| Operating leases               |   |     | 19,921  |   |         |   | − |   |
| Loans receivable               |   |     | 18,220  |   |         |   | 670 |   |
| Subtotal                       |   |     | 118,578 |   |         |   | 2,067 |   |
| Allowance for lease losses     |   |     | (50     | )      |         |   | (1,140 | ) |
| Total                          |   | $        | 118,528 |   |         | $      | 927 |   |

|                   |   | June 30, |   |   | December 31, |   |
|------------------------|--------|----------|--------|--------|--------------|--------|
|                   |   | 2010     |   |   | 2009         |   |
| Fixed assets           |   | $        | 1      |   |         | $      | 1 |   |
| Loan origination costs |   |     | 1,347  |   |         |   | 1,626 |   |
| Other receivables      |   |     | 2,104  |   |         |   | 555 |   |
| Prepaid assets         |   |     | 940    |   |         |   | 612 |   |
| Principal paydown      |   |     | 2,218  |   |         |   | 1,084 |   |
| Total                  |   | $        | 6,610  |   |         | $      | 3,878 |   |

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----

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|               | Benchmark rate |   | Notional value |    |   | Strike rate |   |   | Effective date |   | Maturity date |   | Fair value |   |
|--------------------|----------------|--------|----------------|---------|--------|-------------|--------|--------|----------------|--------|---------------|--------|------------|--------|
| Interest rate swap | 1 month LIBOR  |   | $              | 12,965  |   |        |   | 4.63   | %              |   | 12/04/06      |   | 07/01/11   |   | $ | (533 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 12,150  |   |        |   | 5.44   | %              |   | 06/08/07      |   | 03/25/12   |   |   | (999 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 12,750  |   |        |   | 5.27   | %              |   | 07/25/07      |   | 08/06/12   |   |   | (1,191 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 34,418  |   |        |   | 4.13   | %              |   | 01/10/08      |   | 05/25/16   |   |   | (2,528 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 1,681   |   |        |   | 5.72   | %              |   | 07/09/07      |   | 10/01/16   |   |   | (187 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 1,880   |   |        |   | 5.68   | %              |   | 07/13/07      |   | 03/12/17   |   |   | (388 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 81,879  |   |        |   | 5.58   | %              |   | 06/08/07      |   | 04/25/17   |   |   | (8,806 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 1,726   |   |        |   | 5.65   | %              |   | 06/28/07      |   | 07/15/17   |   |   | (188 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 3,850   |   |        |   | 5.65   | %              |   | 07/19/07      |   | 07/15/17   |   |   | (419 | ) |
| Interest rate swap | 1 month LIBOR  |   |           | 4,023   |   |        |   | 5.41   | %              |   | 08/07/07      |   | 07/25/17   |   |   | (405 | ) |
| Total              |           |   | $              | 167,322 |   |        |   | 5.17   | %              |   |          |   |       |   | $ | (15,644 | ) |

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----

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|                                                                   |   | Three Months Ended |    |   | Six Months Ended |   |
|------------------------------------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                                                   |   | June 30,           |    |   | June 30,         |   |
|                                                                   |   | 2010               |    |   | 2009             |   |   | 2010 |   |   | 2009 |   |
| Net income (loss) − GAAP                                         |   | $                  | 13,362  |   |             | $      | (5,127 | ) |   | $ | 14,768 |   |   | $ | (17,279 | ) |
| Taxable REIT subsidiary’s (income) loss                          |   |               | (1,345  | )      |             |   | 1,200 |   |   |   | (1,470 | ) |   |   | 1,200 |   |
|     Adjusted net income (loss)                          |   |               | 12,017  |   |             |   | (3,927 | ) |   |   | 13,298 |   |   |   | (16,079 | ) |
| Adjustments:                                                           |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation to related parties                            |   |               | 202     |   |             |   | 12 |   |   |   | (114 | ) |   |   | 29 |   |
| Capital loss carryover (utilization)/losses fromthe sale of securities |   |               | − |   |             |   | (642 | ) |   |   | − |   |   |   | 4,978 |   |
| Provisions for loan and lease losses unrealized                        |   |               | 8,529   |   |             |   | 9,742 |   |   |   | 24,029 |   |   |   | 9,100 |   |
| Asset Impairments                                                      |   |               | 6,058   |   |             |   | 45 |   |   |   | 6,058 |   |   |   | 5,665 |   |
| Equity in income of Real Estate Joint Venture                          |   |               | (4,891  | )      |             |   | − |   |   |   | (4,891 | ) |   |   | − |   |
| Deferral of extinguishment of debt income                              |   |               | (8,307  | )      |             |   | − |   |   |   | (8,307 | ) |   |   | − |   |
| Net book to tax adjustments for our taxableforeign REIT subsidiaries   |   |               | 261     |   |             |   | 145 |   |   |   | (6,117 | ) |   |   | 7,735 |   |
| Subpart F income limitation                                            |   |               | (322    | )      |             |   | − |   |   |   | − |   |   |   | − |   |
| Other net book to tax adjustments                                      |   |               | (188    | )      |             |   | (77 | ) |   |   | (1,271 | ) |   |   | (32 | ) |
| Estimated REIT taxable income                                          |   | $                  | 13,359  |   |             | $      | 5,298 |   |   | $ | 22,685 |   |   | $ | 11,396 |   |
|                                                                   |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Amounts per share – diluted                                      |   | $                  | 0.30    |   |             | $      | 0.21 |   |   | $ | 0.55 |   |   | $ | 0.46 |   |

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----

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|             |     |   |               |   |   | Annualized       |   |   |                  |   |   |     |   |
|------------------|----------|--------|--------------------|--------|--------|------------------|--------|--------|-----------------------|--------|--------|----------|--------|
|             |     |   |               |   |   | Interest         |   |   |                  |   |   |     |   |
|             |     |   |               |   |   | Coverage         |   |   | Overcollateralization |   |
|             |     |   | Cash Distributions |   |   | Cushion          |   |   | Cushion               |   |
|             |     |   | Year Ended         |   |   | Six Months Ended |   |   |                  |   |   | As of    |   |   | As of Initial |   |
|             |     |   | December 31,       |   |   | June 30,         |   |   | June 30,              |   |   | June 30, |   |   | Measurement |   |
| Name             | CDO Type |   | 2009 (1)           |   |   | 2010 (1)         |   |   | 2010 (2) (3)          |   |   | 2010 (4) |   |   | Date |   |
|             |     |   | (actual)           |   |   | (actual)         |   |   |                  |   |   |     |   |   |   |   |
| Apidos CDO I     | CLO      |   | $                  | 6,643  |   |             | $      | 3,837  |                  |   | $      | 1,898    |   |   | $ | 11,805 |   |   | $ | 17,136 |   |
| Apidos CDO III   | CLO      |   | $                  | 6,390  |   |             | $      | 3,066  |                  |   | $      | 3,099    |   |   | $ | 6,773 |   |   | $ | 11,269 |   |
| Apidos Cinco CDO | CLO      |   | $                  | 7,553  |   |             | $      | 3,714  |                  |   | $      | 3,844    |   |   | $ | 18,457 |   |   | $ | 17,774 |   |
| RREF 2006-1      | CRE CDO  |   | $                  | 13,222 |   |             | $      | 5,195  |                  |   | $      | 7,823    |   |   | $ | 11,295 |   |   | $ | 24,941 |   |
| RREF 2007-1      | CRE CDO  |   | $                  | 20,536 |   |             | $      | 7,947  |                  |   | $      | 13,420   |   |   | $ | 22,454 |   |   | $ | 26,032 |   |

----

| (1) | Distributions on retained equity interests in CDOs (comprised of note investment and preference share ownership). |
|-----|-------------------------------------------------------------------------------------------------------------------|

| (2) | Interest coverage includes annualized amounts based on the most recent trustee statements. |
|-----|--------------------------------------------------------------------------------------------|

| (3) | Interest coverage cushion represents the amount by which annualized interest income expected exceeds the annualized amount payable on all classes of CDO notes senior to the Company’s preference shares. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Overcollateralization cushion represents the amount by which the collateral held by the CDO issuer exceeds the maximum amount required. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | unrestricted cash and cash equivalents of of $20.5 million and restricted cash of $3.5 million in margin call accounts; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | capital available for reinvestment in its five CDO entities of $109.6 million, of which $1.7 million is designated to finance future funding commitments on CRE loans; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | capital available for reinvestment in its equipment backed securitized notes of $5.3 million. |
|--------|--------|-----------------------------------------------------------------------------------------------|

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----

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|                                           |   | Contractual Commitments(dollars in thousands) |      |
|------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                           |   | Payments due by period                        |      |
|                                           |   | Total                                         |      |   | Less than1 year |   |   | 1 – 3 years |   |   | 3 – 5 years |   |   | More than5 years |   |
| CDOs                                           |   | $                                             | 1,430,928 |   |   | $ | − |   |   | $ | − |   |   | $ | − |   |   | $ | 1,430,928 | (1) |
| Equipment contract backed notes, Series 2010-2 |   |                                          | 109,921   |   |   |   | − |   |   |   | − |   |   |   | − |   |   |   | 109,921 | (2) |
| Unsecured junior subordinated debentures       |   |                                          | 51,548    |   |   |   | − |   |   |   | − |   |   |   | − |   |   |   | 51,548 | (3) |
| Base management fees(4)                   |   |                                          | 5,648     |   |   |   | 5,648 |   |   |   | − |   |   |   | − |   |   |   | − |   |
| Total                                          |   | $                                             | 1,598,045 |   |   | $ | 5,648 |   |   | $ | − |   |   | $ | − |   |   | $ | 1,592,397 |   |

----

| (1) | Contractual commitment does not include $729,000, $4.7 million, $3.9 million, $4.7 million and $9.7 million of interest expense payable through the non-call dates of July 2010, May 2011, June 2011, August 2011 and June 2012, respectively, on Apidos CDO I, Apidos Cinco CDO, Apidos CDO III, RREF 2006-1 and RREF 2007-1.  The non-call date represents the earliest period under which the CDO assets can be sold, resulting in repayment of the CDO notes. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Contractual commitment does not include $35.9 million of interest expense payable through the non-call dates of May 2016 and on our equipment-backed securitized notes. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Contractual commitment does not include $1.3 million and $2.0 million of interest expense payable through the non-call dates of June 2011 and October 2011, respectively, on our trust preferred securities. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Calculated only for the next 12 months based on our current equity, as defined in our management agreement.  Our management agreement also provides for an incentive fee arrangement that is based on operating performance.  Because the incentive fee is not a fixed and determinable amount, it is not included in this table. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

(Back to Index)

| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

|                              |   | June 30, 2010                       |    |
|-----------------------------------|--------|-------------------------------------|---------|
|                              |   | Interest rates fall 100basis points |    |   | Unchanged |   |   | Interest rates rise 100basis points |   |
| CMBS (1)                          |   |                                |    |   |   |   |   |   |   |
| Fair value                        |   | $                                   | 48,223  |   |   | $ | 46,100 |   |   | $ | 44,096 |   |
| Change in fair value              |   | $                                   | 2,123   |   |   | $ | − |   |   | $ | (2,004 | ) |
| Change as a percent of fair value |   |                                | 4.61%   |   |   |   | −% |   |   |   | 4.35% |   |
|                              |   |                                |    |   |   |   |   |   |   |   |   |   |
| Hedging instruments               |   |                                |    |   |   |   |   |   |   |   |   |   |
| Fair value                        |   | $                                   | (33,075 | ) |   | $ | (15,644 | ) |   | $ | (16,698 | ) |
| Change in fair value              |   | $                                   | (17,431 | ) |   | $ | − |   |   | $ | (1,054 | ) |
| Change as a percent of fair value |   |                                | 111.42% |   |   |   | −% |   |   |   | -6.74% |   |

|                              |   | December 31, 2009                   |    |
|-----------------------------------|--------|-------------------------------------|---------|
|                              |   | Interest rates fall 100basis points |    |   | Unchanged |   |   | Interest rates rise 100basis points |   |
| CMBS (1)                          |   |                                |    |   |   |   |   |   |   |
| Fair value                        |   | $                                   | 34,815  |   |   | $ | 33,333 |   |   | $ | 31,914 |   |
| Change in fair value              |   | $                                   | 1,482   |   |   | $ | − |   |   | $ | (1,419 | ) |
| Change as a percent of fair value |   |                                | 4.45%   |   |   |   | −% |   |   |   | 4.26% |   |
|                              |   |                                |    |   |   |   |   |   |   |   |   |   |
| Hedging instruments               |   |                                |    |   |   |   |   |   |   |   |   |   |
| Fair value                        |   | $                                   | (27,870 | ) |   | $ | (12,812 | ) |   | $ | (10,559 | ) |
| Change in fair value              |   | $                                   | (15,058 | ) |   | $ | − |   |   | $ | 2,253 |   |
| Change as a percent of fair value |   |                                | 117.53% |   |   |   | −% |   |   |   | 17.59% |   |

----

| (1)   | Includes the fair value of available-for-sale investments that are sensitive to interest rate change. |
|-----------------|-------------------------------------------------------------------------------------------------------|

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|   | · | monitoring and adjusting, if necessary, the reset index and interest rate related to our mortgage-backed securities and our borrowings; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | attempting to structure our borrowing agreements for our CMBS to have a range of different maturities, terms, amortizations and interest rate adjustment periods; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | using derivatives, financial futures, swaps, options, caps, floors and forward sales, to adjust the interest rate sensitivity of our fixed-rate commercial real estate mortgages and CMBS and our borrowing. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 4. | CONTROLS AND PROCEDURES |
|---------|-------------------------|

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----

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| ITEM 6. | EXHIBITS |
|---------|----------|

| Exhibit No.                           |   | Description                                                                                                                                                                                                                                             |
|---------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                                   |   | Restated Certificate of Incorporation of Resource Capital Corp. (1)                                                                                                                                                                                     |
| 3.2                                   |   | Amended and Restated Bylaws of Resource Capital Corp. (1)                                                                                                                                                                                               |
| 4.1                                   |   | Form of Certificate for Common Stock for Resource Capital Corp. (1)                                                                                                                                                                                     |
|      4.2(a)       |   | Junior Subordinated Indenture between Resource Capital Corp. and Wells Fargo Bank, N.A., dated May 25, 2006. (2)                                                                                                                                        |
|      4.2(b)       |   | Amendment to Junior Subordinated Indenture and Junior Subordinated Note due 2036 between Resource Capital Corp. and Wells Fargo Bank, N.A., dated October 26, 2009 and effective September 30, 2009. (3)                                                |
|      4.3(a)       |   | Amended and Restated Trust Agreement among Resource Capital Corp., Wells Fargo Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative Trustees named therein, dated May 25, 2006. (2)                                                    |
|       4.3(b) |   | Amendment to Amended and Restated Trust Agreement and Preferred Securities Certificate among Resource Capital Corp., Wells Fargo Bank, N.A. and the Administrative Trustees named therein, dated October 26, 2009 and effective September 30, 2009. (3) |
|  4.4                             |   | Amended Junior Subordinated Note due 2036 in the principal amount of $25,774,000, dated October 26, 2009. (3)                                                                                                                                           |
|      4.5(a)       |   | Junior Subordinated Indenture between Resource Capital Corp. and Wells Fargo Bank, N.A., dated September 29, 2006. (4)                                                                                                                                  |
|       4.5(b) |   | Amendment to Junior Subordinated Indenture and Junior Subordinated Note due 2036 between Resource Capital Corp. and Wells Fargo Bank, N.A., dated October 26, 2009 and effective September 30, 2009. (3)                                                |
|       4.6(a) |   | Amended and Restated Trust Agreement among Resource Capital Corp., Wells Fargo Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative Trustees named therein, dated September 29, 2006. (4)                                              |
|       4.6(b) |   | Amendment to Amended and Restated Trust Agreement and Preferred Securities Certificate among Resource Capital Corp., Wells Fargo Bank, N.A. and the Administrative Trustees named therein, dated October 26, 2009 and effective September 30, 2009. (3) |
|   4.7                            |   | Amended Junior Subordinated Note due 2036 in the principal amount of $25,774,000, dated October 26, 2009. (3)                                                                                                                                           |
| 31.1                                  |   | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                     |
| 31.2                                  |   | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                     |
| 32.1                                  |   | Certification of Chief Executive Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                      |
| 32.2                                  |   | Certification of Chief Financial Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                      |

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| (1) | Filed previously as an exhibit to the Company’s registration statement on Form S-11, Registration No. 333-126517. |
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| (2) | Filed previously as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006. |
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| (3) | Filed previously as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009. |
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| (4) | Filed previously as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006. |
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SIGNATURES

|                 | RESOURCE CAPITAL CORP.                                                                                                                                                                                                                     |
|----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 | (Registrant)                                                                                                                                                                                                                               |
|                 |                                                                                                                                                                                                                                       |
| Date: August 6, 2010 | By:           /s/ Jonathan Z. Cohen                         |
|                 | Jonathan Z. Cohen                                                                                                                                                                                                                          |
|                 | Chief Executive Officer and President                                                                                                                                                                                                      |
|                 |                                                                                                                                                                                                                                       |

| Date: August 6, 2010 | By:           /s/ David J. Bryant                                |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 | David J. Bryant                                                                                                                                                                                                                                                                    |
|                 | Chief Financial Officer and Chief Accounting Officer                                                                                                                                                                                                                               |
|                 |                                                                                                                                                                                                                                                                               |

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