Resource Capital Corp. Reports Results for Third Quarter 2006.

NEW YORK -- Resource Capital Corp. (NYSE: RSO) (the "Company" or eIuRCCeIN), a real estate investment trust focused on originating and investing in commercial real estate secured loans, whole loans, B-notes, mezzanine loans, mortgage-related securities and other real estate related assets and, to a lesser extent, higher-yielding commercial finance assets and asset-backed securities, reported estimated REIT taxable income of $9.2 million or $0.52 per diluted share for the quarter ended September 30, 2006, as compared to $4.6 million or $0.30 per diluted share for the quarter ended September 30, 2005 an increase of $4.6 million (101%) and $0.22 (73%) per diluted share, respectively. A reconciliation of estimated REIT taxable income to the CompanyeIUs GAAP net income accompanies this release. As previously reported, on September 28, 2006 the Company sold the remainder of its agency residential mortgage backed securities (eIuRMBSeIN) portfolio and terminated the related interest rate swap contract in order to redeploy its invested capital into higher earning asset classes. Consequently, included in the CompanyeIUs operating results for the quarter ended and nine months ended September 30, 2006 is a net loss of $8.3 million and $8.8 million, respectively, incurred as a result of this sale.

Including this transaction, the Company reported a net loss of $2.4 million or ($0.14) per diluted share for the quarter ended September 30, 2006 as compared to net income of $3.8 million or $0.24 per diluted share for the quarter ended September 30, 2005 a decrease of $6.2 million (164%) and $0.38 (158%) per diluted share, respectively. Net income for the nine months ended September 30, 2006 was $8.8 million, or $0.51 per diluted share, as compared to net income for the period ended September 30, 2005 of $6.0 million, or $0.39 per diluted share, an increase of $2.8 million (47%) and $0.12 (31%) per diluted share, respectively.

Pro-forma net income from on-going operations excludes the net realized loss from the agency RMBS sale. Pro-forma net income from on-going operations was $5.9 million for the quarter ended September 30, 2006 as compared to $3.8 million for the quarter ended September 30, 2005, an increase of $2.1 million. Pro-forma net income was $17.6 million for the nine month period ended September 30, 2006 as compared to $6.0 million for the period ended September 30, 2005 an increase of $11.6 million. The following table reconciles net income to pro-forma income from on-going operations for all periods:

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Pro-forma income from on-going operations is not a measure of financial performance under GAAP and accordingly, should not be considered as a substitute for net (loss) income.

Highlights for the third quarter and recent developments include:

* The Company paid a quarterly dividend of $0.37 per common share for the third quarter of 2006, an increase of $0.01 per common share or 3% from the dividend paid for the second quarter of 2006. This distribution was paid on October 13, 2006 to all shareholders of record as of September 29, 2006.

* The CompanyeIUs net interest income increased by $2.3 million or (38%) to $8.3 million for the quarter ended September 30, 2006 as compared to $6.0 million for the same period in 2005.

Commercial Real Estate

* The Company continued to increase its investment in commercial real estate loans. The portfolio of loans (net of repayments) grew by $147.1 million to $439.7 million at September 30, 2006 from $292.6 million at June 30, 2006. As of November 3, 2006, the Company had closed an additional $53.4 million of loans and is currently in the closing process for seven additional commercial real estate investment opportunities in excess of $147.0 million. In addition, RCC received a repayment in July 2006 on one loan of $27.5 million.

* On July 3, 2006, the Company added a direct loan origination team based in Los Angeles, led by Kyle Geoghegan and Darryl Myrose.

* On August 10, 2006, the Company closed Resource Real Estate Funding CDO 2006-1, Ltd. (eIuRREF CDO-1eIN) a collateralized debt obligation (eIuCDOeIN), that will provide long-term financing for a $345.0 million portfolio of commercial real estate loans. The Company retained approximately $79.4 million of equity in this financing. The notes issued by RREF CDO-1 bear interest at a weighted-average interest rate of LIBOR plus 0.82%. At September 30, 2006, the weighted average rate on all notes was 6.13%.

* On August 11, 2006, the Company closed on a new $300.0 million repurchase agreement facility with Column Financial, Inc., a subsidiary of Credit Suisse Securities (USA) LLC, to finance the purchase of commercial real estate loans. At September 30, 2006, the Company had borrowed $43.0 million under the facility with a weighted average interest rate of LIBOR plus 1.17% (6.50% at September 30, 2006).

Commercial Finance

* RCC continued to increase the size of its bank loan portfolio and ended the quarter with a total of $614.9 million of these loans, at cost, with a weighted-average spread of LIBOR plus 2.36% and a fair value of $613.9 million. The CompanyeIUs loan portfolio is match-funded through two CDOeIUs with a weighted-average cost of LIBOR plus 0.45%.

* RCCeIUs commercial finance subsidiary acquired an additional $68.6 million in direct financing leases and notes, net of sales and principal paydowns, since December 31, 2005, including $13.9 million since June 30, 2006.

Corporate Matters

* The Company issued a $25.8 unsecured junior subordinated debenture that bears interest at LIBOR plus 3.95% related to a trust preferred security (eIuTrupseIN) on September 29, 2006. RCC received net proceeds of $24.2 million from the issuance.

Balance Sheet Summary

At September 30, 2006, excluding the CompanyeIUs Agency RMBS portfolio, RCCeIUs investment portfolio totaled $1.6 billion and included the following: $467.0 million of commercial real estate-related investments, $368.5 million of asset backed securities, $614.9 million of bank loans, $91.9 million of direct financing leases and notes and $42.6 million of temporary cash investments. At September 30, 2006, RCCeIUs investment portfolio (excluding the financing related to the CompanyeIUs agency RMBS portfolio) was financed with $1.4 billion of total indebtedness and included the following: $1.2 billion of senior notes issued by CDOs secured primarily by commercial real estate related investments, mortgage-backed securities, syndicated bank loans and other asset-backed securities; $87.1 million outstanding under a term facility secured by equipment leases and notes and $51.5 million of unsecured junior subordinated debentures. The Agency RMBS repurchase agreement debt of $716.5 million was paid down on October 2, 2006 upon settlement of the trade and receipt of proceeds from the broker.

Book Value

The CompanyeIUs book value per common share at September 30, 2006 was $12.91 as compared to $12.46 at December 31, 2005, a 3.6% increase. Total stockholderseIU equity was $230.0 million at September 30, 2006 and $195.3 million at December 31, 2005. Total common shares outstanding were 17,821,434 and 15,682,334 at September 30, 2006 and December 31, 2005, respectively.

Investment Portfolio

The table below summarizes the amortized cost and estimated fair value of RCCeIUs investment portfolio as of September 30, 2006, classified by interest rate type. The table below includes both (i) the amortized cost of RCCeIUs investment portfolio and the related dollar price, which is computed by dividing amortized cost by par amount, and (ii) the estimated fair value of RCCeIUs investment portfolio and the related dollar price, which is computed by dividing the estimated fair value by par amount (in thousands, except percentages):

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About Resource Capital Corp.

Resource Capital Corp. is a specialty finance company that began operations in March 2005 and has elected and intends to continue to qualify as a real estate investment trust for federal income tax purposes. RCCeIUs investment strategy focuses on real estate-related assets, and, to a lesser extent, higher-yielding commercial finance assets with a concentration on the following asset classes: commercial real estate-related assets such as whole loans, B-notes, mezzanine loans and mortgage-related securities and commercial finance assets such as other asset-backed securities, syndicated bank loans, equipment leases and notes, trust preferred securities and private equity investments principally issued by financial institutions. RCC is externally managed by Resource Capital Manager, Inc., an indirect wholly owned subsidiary of Resource America, Inc. (Nasdaq: REXI), a specialized asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outside investors in the financial fund management, real estate, and equipment finance sectors. As of June 30, 2006, Resource America, Inc. managed approximately $10.5 billion of assets in these sectors.

For more information, please visit our website at www.resourcecapitalcorp.com or contact investors relations at [e-mail]

Safe Harbor Statement

Statements made in this release include forward-looking statements, which involve substantial risks and uncertainties. The CompanyeIUs actual results, performance or achievements could differ materially from those expressed or implied in this release. For information pertaining to risks related to these forward-looking statements, see Item 1A, under the caption eIuRisk FactorseIN contained in Item 1 of the CompanyeIUs Annual Report on Form 10-K.

The remainder of this release contains the CompanyeIUs consolidated balance sheets, consolidated statements of operations and a reconciliation of the CompanyeIUs estimated REIT taxable income.

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The Company believes that a presentation of estimated REIT taxable income provides useful information to investors regarding its financial condition and results of operations as this measurement is used to determine the amount of dividends that RCC is required to declare to our stockholders in order to maintain its status as a REIT for federal income tax purposes. Since RCC, as a REIT, expects to make distributions based on taxable earnings, RCC expects that its distributions may at times be more or less than its reported earnings. Total taxable income is the aggregate amount of taxable income generated by RCC and by its domestic and foreign taxable REIT subsidiaries. Estimated REIT taxable income excludes the undistributed taxable income of RCCeIUs domestic taxable REIT subsidiary, if any such income exists, which is not included in REIT taxable income until distributed by RCC. There is no requirement that RCCeIUs domestic taxable REIT subsidiary distribute its earnings to the Company. Estimated REIT taxable income, however, includes the taxable income of RCCeIUs foreign taxable REIT subsidiaries because the Company will generally be required to recognize and report its taxable income on a current basis. RCC uses estimated REIT taxable income for this purpose. Because not all companies use identical calculations, this presentation of estimated REIT taxable income may not be comparable to other similarly-titled measures of other companies.