-

Cash Available for Distribution (“CAD”) per share of $0.28 for the quarter ended December 31, 2015 and $1.11 for the year ended December 31, 2015.  CAD per share, without real estate gains, of $0.19 for the quarter ended December 31, 2015 and $0.78 for the year ended December 31, 2015.

-

Earnings per share of $0.02 for the quarter ended December 31, 2015 and $0.08 for the year ended December 31, 2015.

-

Investments in mortgages and loans, at cost, increased 16.5% to $1.62 billion at December 31, 2015 from $1.39 billion at December 31, 2014.

-

RAIT originated $321.8 million of loans during the quarter ended December 31, 2015 and $996.9 million of loans for the year ended December 31, 2015.

-

RAIT paid a fourth quarter dividend of $0.09 per common share on January 29, 2016.

-

RAIT originated $321.8 million of loans during the quarter ended December 31, 2015 consisting of $71.9 million of fixed-rate conduit loans and $249.9 million of floating-rate bridge loans.  RAIT originated $996.9 million of loans during the year ended December 31, 2015 consisting of $384.1 million of fixed-rate conduit loans, $607.8 million of floating-rate bridge loans and a $5.0 million mezzanine loan.

-

RAIT sold $85.4 million of conduit loans during the quarter ended December 31, 2015 which generated fee income of $1.1 million. RAIT sold $425.0 million of conduit loans during the year ended December 31, 2015 which generated fee income of $7.2 million.

-

In December, RAIT closed its fifth non-recourse, floating-rate CMBS transaction totaling $347.4 million collateralized by floating rate commercial real estate first lien mortgage loans and pari passu participation interests in such mortgage loans.  The transaction involved the sale by a RAIT subsidiary of investment grade notes totaling approximately $263.6 million with a weighted average cost of LIBOR plus 2.62%.  RAIT affiliates retained certain investment grade notes and all of the below investment grade and un-rated subordinated interests totaling approximately $83.8 million.

-

CRE loan repayments were $121.6 million for the quarter ended December 31, 2015 and $291.2 million during the year ended December 31, 2015

-

As of December 31, 2015, RAIT’s investments in real estate were $2.5 billion which includes $1.4 billion of multi-family properties owned by Independence Realty Trust, Inc. (“IRT”) (NYSE MKT: IRT).  IRT is externally advised by RAIT and is a consolidated RAIT entity. IRT is a REIT focused on owning multifamily properties. At December 31, 2015, RAIT owned 15.5% of IRT’s outstanding common stock.

-

During the quarter ended December 31, 2015, RAIT sold three properties, consisting of two apartment communities and an office property, for $52.9 million and generated net proceeds of approximately $8.4 million after costs and full repayment of the underlying debt. IRT sold one apartment community for $33.6 million and generated net proceeds of approximately $14.2 million after costs and full repayment of the underlying debt.  During the year ended December 31, 2015, RAIT sold eight properties, six apartment communities and one office property, and one parcel of land for $141.4 million and generated net proceeds of approximately $27.5 million after costs and full repayment of the underlying debt.

-

During the three-months ended December 31, 2015, RAIT converted two loans secured by ten industrial properties and by one office property, respectively, into ownership of those properties. Those properties had an aggregate carrying value of $73.1 million.  

-

RAIT reported a $0.9 million asset impairment for the quarter ended December 31, 2015 on an office property in Denver, Colorado and a parcel of land in Daytona Beach, FL.  Both of these properties are currently under contract to be sold.

-

On September 17, 2015, IRT completed the acquisition of Trade Street Residential, Inc. adding nineteen high-quality properties with 4,989 units to its portfolio.  RAIT expects the acquisition to benefit RAIT through RAIT’s ownership of IRT common stock and increased fees paid to RAIT by IRT.  

-

Total assets under management increased 33.3% to $6.0 billion at December 31, 2015 from $4.5 billion at December 31, 2014.

-

RAIT’s property management companies managed 19,639 apartment units and 22.8 million square feet of office and retail space at December 31, 2015.

-

RAIT generated $9.3 million in asset and property management fees and incentive fees through its external management of IRT during the year ended December 31, 2015.

-

RAIT generated $12.8 million of property management and leasing fees primarily through its retail property manager subsidiary and through services provided by its multi-family property manager subsidiary to unaffiliated properties during the year ended December 31, 2015.

-

On December 7, 2015, RAIT’s Board of Trustees (the “Board”) declared a fourth quarter 2015 cash dividend on RAIT’s common shares of $0.09 per common share. The dividend was paid on January 29, 2016 to holders of record on January 8, 2016.

-

On November 4, 2015, the Board declared a fourth quarter 2015 cash dividend of $0.484375 per share on RAIT’s 7.75% Series A Cumulative Redeemable Preferred Shares, $0.5234375 per share on RAIT’s 8.375% Series B Cumulative Redeemable Preferred Shares and $0.5546875 per share on RAIT’s 8.875% Series C Cumulative Redeemable Preferred Shares. The dividends were paid on December 31, 2015 to holders of record on December 1, 2015.

2016 Annualized Projected

CAD⁽¹⁾

Net income (loss) allocable to common shares

$

22,792

-

$

31,892

Adjustments:

Gains on property sales

(5,766

)

-

(5,766

)

Depreciation, amortization expense and other items

60,324

-

60,324

CAD

$

77,350

-

$

86,450

CAD per share

$

0.85

-

$

0.95

CAD per share, without real estate gains

$

0.50

-

$

0.60

(1)

Constitutes forward-looking information.  Actual full 2016 CAD could vary significantly from the projections presented.  CAD may fluctuate based upon a variety of factors, including those described in “Forward Looking Statements” below.  Our estimate is based on the following key operating assumptions during 2016:

-

Gross loan originations of $200 million to $500 million.

-

No CMBS gain on sale profits.

-

RAIT property sale gains of $32 million. 

-

Loan repayments totaling $200 million.

-

No capital issuances in 2016.

For the Three-Months Ended

December 31,

2015

September 30, 2015

June 30,

2015

March 31,

2015

December 31,

2014

OPERATING DATA:

Lending:

Investments in loans

$

1,623,583

$

1,588,097

$

1,506,542

$

1,504,456

$

1,392,436

Gross loan production

$

321,837

$

237,674

$

218,613

$

218,770

$

255,900

CMBS gain on sales (included in fee income)

$

1,135

$

434

$

3,681

$

1,996

$

2,986

CMBS loans sold

$

85,430

$

116,251

$

130,401

$

92,897

$

170,679

Average CMBS Gain on Sale (points)

1.3

0.4

2.8

2.1

1.7

Real estate portfolio:

Gross real estate investments (a)

$

2,517,645

$

2,448,331

$

1,783,888

$

1,833,978

$

1,840,451

Property income (a)

$

69,464

$

55,459

$

55,534

$

53,274

$

46,096

Operating expenses (a)

$

31,476

$

25,832

$

26,416

$

25,277

$

22,948

Net operating income (a)

$

37,988

$

29,627

$

29,118

$

27,997

$

23,148

NOI margin (a)

54.7

%

53.4

%

52.4

%

52.6

%

50.2

%

EARNINGS & DIVIDENDS:

Earnings per Share -- diluted

$

0.02

$

(0.07

)

$

0.22

$

(0.09

)

$

(3.11

)

FFO per share

$

(0.08

)

$

(0.05

)

$

0.15

$

0.05

$

(2.97

)

CAD per share

$

0.28

$

0.27

$

0.37

$

0.19

$

0.26

CAD per share, without real estate gains

$

0.19

$

0.20

$

0.21

$

0.18

$

0.26

Dividends per share

$

0.09

$

0.18

$

0.18

$

0.18

$

0.18

CAD payout ratio

31.8

%

66.0

%

48.8

%

96.7

%

70.4

%

CAPITALIZATION AND COVERAGE RATIOS:

Debt:

Recourse

$

494,697

$

586,953

$

497,430

$

579,258

$

509,701

Non-recourse

2,864,753

2,613,028

2,164,098

2,107,499

2,105,965

Total debt

3,359,450

3,199,981

2,661,528

2,686,757

2,615,666

Preferred shares (par)

332,187

332,187

331,733

317,603

317,603

Common shares (market capitalization)

247,284

450,854

506,493

568,594

632,826

Noncontrolling interests, at carrying value

340,213

346,063

204,034

208,894

214,297

Total market capitalization

$

4,279,134

$

4,329,085

$

3,703,788

$

3,781,848

$

3,780,392

Total Liabilities/Total Gross Assets

77.9

%

77.2

%

77.5

%

78.0

%

77.3

%

Total Liabilities + Preferred/Total Gross Assets

85.0

%

84.6

%

86.4

%

86.5

%

85.9

%

Interest Coverage

1.94

x

1.81

x

2.12

x

1.93

x

2.20

x

Interest + Preferred Coverage

1.57

x

1.40

x

1.63

x

1.50

x

1.67

x

OTHER KEY BENCHMARKS:

Total Assets Under Management (AUM)

$

6,026,341

$

5,820,702

$

4,764,259

$

4,607,413

$

4,485,525

Total Gross Assets

$

4,645,622

$

4,475,217

$

3,754,148

$

3,741,103

$

3,681,955

(a)

Includes Independence Realty Trust.  

As of December 31

2015

2014

Assets

Investment in mortgages, loans and preferred equity interests, at amortized cost:

   Commercial mortgages, mezzanine loans and preferred equity interests

$

1,623,583

$

1,392,436

   Allowance for losses

(17,097

)

(9,218

)

Total investment in mortgages, loans and preferred equity interests

1,606,486

1,383,218

Investments in real estate, net of accumulated depreciation of $198,326 and $168,480, respectively

2,319,319

1,671,971

Investments in securities and security-related receivables, at fair value

—

31,412

Cash and cash equivalents

125,886

121,726

Restricted cash

213,012

124,220

Accrued interest receivable

47,343

51,640

Other assets

71,207

72,023

Deferred financing costs, net of accumulated amortization of $33,769 and $26,056, respectively

31,368

27,802

Intangible assets, net of accumulated amortization of $26,307 and $13,911, respectively

32,675

29,463

Total assets

$

4,447,296

$

3,513,475

Liabilities and Equity

Indebtedness

$

3,359,450

$

2,615,666

Accrued interest payable

9,834

10,269

Accounts payable and accrued expenses

39,672

54,962

Derivative liabilities

4,727

20,695

Deferred taxes, borrowers’ escrows and other liabilities

203,477

144,733

     Total liabilities

3,617,160

2,846,325

Series D cumulative redeemable preferred shares, $0.01 par value per share, 4,000,000 shares authorized, 4,000,000 and 4,000,000 shares issued and outstanding, respectively

85,395

79,308

Equity

Shareholders’ equity

Preferred shares, $0.01 par value per share, 25,000,000 shares authorized;

7.75% Series A cumulative redeemable preferred shares, liquidation preference $25.00 per share, 8,069,288 shares authorized, 5,306,084 and 4,775,569 shares issued and outstanding

53

48

8.375% Series B cumulative redeemable preferred shares, liquidation preference $25.00 per share, 4,300,000 shares authorized, 2,340,969 and 2,288,465 shares issued and outstanding

23

23

8.875% Series C cumulative redeemable preferred shares, liquidation preference $25.00 per share, 3,600,000 shares authorized, 1,640,425 and 1,640,100 shares issued and outstanding

17

17

Series E cumulative redeemable preferred shares, $0.01 par value per share, 4,000,000 shares authorized

—

—

Common shares, $0.03 par value per share, 200,000,000 shares authorized, 91,586,767 and 82,506,606 issued and outstanding, respectively, including 742,764 and 541,575  unvested restricted common share awards, respectively

2,748

2,473

Additional paid in capital

2,087,137

2,025,683

Accumulated other comprehensive income (loss)

(4,699

)

(20,788

)

Retained earnings (deficit)

(1,680,751

)

(1,633,911

)

Total shareholders’ equity

404,528

373,545

Noncontrolling interests

340,213

214,297

Total equity

744,741

587,842

Total liabilities and equity

$

4,447,296

$

3,513,475

Three-Months Ended

December 31

Year Ended

December 31

2015

2014

2015

2014

Revenue:

Net interest margin:

Investment interest income

$

26,609

$

30,537

$

98,432

$

133,419

Investment interest expense

(6,733

)

(7,968

)

(29,250

)

(30,310

)

Net interest margin

19,876

22,569

69,182

103,109

Rental income

69,464

46,096

233,731

162,281

Fee and other income

5,004

5,167

21,069

24,280

Total revenue

94,344

73,832

323,982

289,670

Expenses:

Interest expense

25,408

16,635

84,338

55,391

Real estate operating expenses

31,476

22,948

109,001

81,584

Compensation expenses

8,416

5,050

28,229

28,168

General and administrative expenses

5,825

4,414

20,779

17,653

Acquisition and integration expenses

1,684

950

16,527

2,358

Provision for loan losses

2,450

2,000

8,300

5,500

Depreciation and amortization expense

22,583

18,065

73,868

56,784

Total expenses

97,842

70,062

341,042

247,438

Operating Income

(3,498

)

3,770

(17,060

)

42,232

Other income (expense)

7

51

(1,009

)

(21,398

)

Gains (loss) on assets

19,094

(20

)

43,805

(5,370

)

Asset impairment

(929

)

—

(8,179

)

—

TSRE financing extinguishment and employee separation

   expenses

—

—

(27,508

)

—

Gains (losses) on IRT merger with TSRE

592

—

64,604

—

Gains (loss) on deconsolidation of VIEs

—

(215,804

)

—

(215,804

)

Gain (loss) on sale of collateral management contracts

—

4,549

—

4,549

Gain (loss) on debt extinguishment

—

—

—

2,421

Change in fair value of financial instruments

(1,828

)

(39,319

)

11,638

(98,752

)

Income (loss) before taxes

13,438

(246,773

)

66,291

(292,122

)

Income tax benefit (provision)

(1,478

)

(307

)

(2,798

)

2,147

Net income (loss)

11,960

(247,080

)

63,493

(289,975

)

Income allocated to preferred shares

(8,447

)

(8,365

)

(32,830

)

(28,993

)

(Income) loss allocated to noncontrolling interests

(1,682

)

444

(23,505

)

464

Net income (loss) available to common shares

$

1,831

$

(255,001

)

$

7,158

$

(318,504

)

EPS - BASIC

$

0.02

$

(3.11

)

$

0.08

$

(3.92

)

EPS - DILUTED

$

0.02

$

(3.11

)

$

0.08

$

(3.92

)

Weighted-average shares outstanding - Basic

90,642,318

81,970,075

85,524,073

81,328,129

Weighted-average shares outstanding - Diluted

90,842,752

81,970,075

86,457,871

81,328,129

Three-Months Ended

December 31

Year Ended                       December 31

2015

2014

2015

2014

CASH AVAILABLE FOR DISTRIBUTION (CAD):

Net Income (loss) available to common shares

$

1,831

$

(255,001

)

$

7,158

$

(318,504

)

Add-Back (Deduct):

Depreciation and amortization expense

22,583

18,065

73,868

56,784

Change in fair value of financial instruments

1,828

39,319

(11,638

)

98,752

(Gains) losses on assets

(7,803

)

20

(12,204

)

5,370

TSRE financing extinguishment and employee

   separation expenses

—

—

27,508

—

Gains (losses) on IRT merger with TSRE

(592

)

—

(64,604

)

—

(Gains) losses on deconsolidation of VIEs

—

215,804

—

215,804

(Gains) losses on debt extinguishment

—

—

—

(2,421

)

Taberna VIII and Taberna IX securitizations,

   net effect

—

(5,868

)

—

(26,931

)

Straight-line rental adjustments

148

1,440

95

1,111

Equity based compensation

914

630

4,466

4,407

Acquisition and integration expenses

1,684

950

16,527

2,358

Origination fees and other deferred items

10,768

5,554

35,660

19,596

Provision for losses

2,450

2,000

8,300

5,500

Asset impairment

929

—

8,179

—

Noncontrolling interest effect of certain adjustments

(9,056

)

(1,951

)

1,749

(4,302

)

CAD

$

25,684

$

20,962

$

95,064

$

57,524

CAD per share

$

0.28

$

0.26

$

1.11

$

0.71

CAD per share, without real estate gains

$

0.19

$

0.26

$

0.78

$

0.71

Weighted-average shares outstanding

90,642,318

81,970,075

85,524,073

81,328,129

FUNDS FROM OPERATIONS (FFO):

Net Income (loss) available to common shares

$

1,831

$

(255,001

)

$

7,158

$

(318,504

)

Add-Back (Deduct):

Depreciation

10,022

11,370

41,096

38,620

(Gains) Losses on the sale of real estate

(18,803

)

—

(43,514

)

319

FFO

$

(6,950

)

$

(243,631

)

$

4,740

$

(279,565

)

FFO per share--basic

$

(0.08

)

$

(2.97

)

$

0.06

$

(3.44

)

Weighted-average shares outstanding

90,642,318

81,970,075

85,524,073

81,328,129

Three-Months Ended

December 31

Year Ended                       December 31

2015

2014

2015

2014

Same store net operating income

$

20,736

$

19,359

$

53,712

$

48,077

Non same store net operating income and eliminations

17,252

3,789

71,018

32,620

Net interest margin

19,876

22,569

69,182

103,109

Fee and other income

5,004

5,167

21,069

24,280

Interest expense

(25,408

)

(16,635

)

(84,338

)

(55,391

)

Compensation expenses

(8,416

)

(5,050

)

(28,229

)

(28,168

)

General and administrative expenses

(5,825

)

(4,414

)

(20,779

)

(17,653

)

Acquisition and integration expenses

(1,684

)

(950

)

(16,527

)

(2,358

)

Provision for loan losses

(2,450

)

(2,000

)

(8,300

)

(5,500

)

Depreciation and amortization expense

(22,583

)

(18,065

)

(73,868

)

(56,784

)

Other income (expense)

7

51

(1,009

)

(21,398

)

Gains (loss) on assets

19,094

(20

)

43,805

(5,370

)

Asset impairment

(929

)

-

(8,179

)

-

TSRE financing extinguishment and employee separation expenses

-

-

(27,508

)

-

Gains (losses) on IRT merger with TSRE

592

-

64,604

-

Gains (loss) on deconsolidation of VIEs

-

(215,804

)

-

(215,804

)

Gain (loss) on sale of collateral management contracts

-

4,549

-

4,549

Gain (loss) on debt extinguishment

-

-

-

2,421

Change in fair value of financial instruments

(1,828

)

(39,319

)

11,638

(98,752

)

Income tax benefit (provision)

(1,478

)

(307

)

(2,798

)

2,147

Net Income (loss)

$

11,960

$

(247,080

)

$

63,493

$

(289,975

)