“…Energy is not the business of Resource America. Neither is real estate.

Our true business is providing

investment opportunities for the individual investor.”
-Edward E. Cohen, 2001

thefactorbook.blogspot.com
 History of Resource America

 Founded in 1966 as SMTR Corp., an oil and natural gas company. Changed its name
to Resource Exploration, Inc. in 1970. Initially focused on drilling in Ohio and
Pennsylvania, but was operated out of Shreveport, Louisiana by oilman J.C. Trahan.

 In 1977, the company fell into distress and was taken over by Willard E. White, an
Ohio oilman who also served as Vice President of Atlas Energy Co. of suburban
Pittsburgh, Pennsylvania.

 Acquired as a penny stock in 1988 by current Chairman Edward Cohen and a group
of investors, including Jack Dorrance, patriarch of the Campbell’s Soup dynasty. The
group acquired a one-third stake in the company for $5.6 million.

 Cohen saw tax-shelter benefits and undervalued assets; became Chairman and
CEO, and renamed the company Resource America, Inc. in 1989.

thefactorbook.blogspot.com
 An Opportunistic Investment Vehicle

 According to current CEO Jonathan Z. Cohen, Resource America specializes in

seizing “opportunities that are relevant to the time.”

 Instead of reinvesting in the energy business in the early 1990s, Edward Cohen ran-
off Resource America’s existing reserves, earning roughly $10 million in three years.
He then began allocating capital to higher return investments:

 Acquired 54 distressed commercial real estate loans with a face value of $1.3 billion
following the S&L crisis; earned roughly 35% annualized yields for the rest of the
decade. Capitalized on Japan’s economic slump in the late ’90s as distressed
Japanese banks liquidated their U.S. holdings in leasing and real estate.

 In 1995, acquired FML Leasehold for $1.4 million from Fidelity Mutual Life Insurance
Co. Built into Fidelity Leasing and sold to ABN AMRO Bank for $583 million in 2000.
After-tax net proceeds to Resource America: $112 million.

thefactorbook.blogspot.com
 An Opportunistic Investment Vehicle

 Acquired Atlas Group for $47 million in stock in 1998, when Resource America
shares were trading at a historic high and the energy market was at a historic low.
This dramatically expanded Resource America’s Appalachian natural gas holdings
and valuable Marcellus Shale acreage.

 1998: Completed the IPO of a mortgage REIT, RAIT Financial Trust (NYSE: RAS), in
which Resource America became the largest shareholder at a cost of $12 million. By
2005, this investment produced over $35 million in capital gains and dividend income
for Resource America.

 2000: Completed the IPO of Atlas Pipeline Partners (NYSE: APL), a master limited
partnership in which Resource America retained a combined 51% of the general and
limited partnership interests.

 Entered the structured finance business in 2002 and completed the $330 million
Trapeza CDO I. By the end of fiscal year 2005, the company managed $6.1 billion in
structured finance assets.

thefactorbook.blogspot.com
 An Opportunistic Investment Vehicle

 2005: Completed the IPO of Resource Capital Corp. (NYSE: RSO), a mortgage REIT
managed by Resource America. At September 30, 2006, Resource America
managed $2.3 billion in assets on behalf of Resource Capital Corp.

 In 2005, Resource America also completed the spin off of Atlas America (NASDAQ:
ATLS) to Resource America shareholders, in the form of a tax-free distribution valued
at $91.4 million. By June 30, 2008, Atlas America’s market capitalization was
upwards of $1.8 billion.

 From September 30, 1996 to September 30, 2001, assets under management
(“AUM”) grew from $236 million to $1 billion; or at a 33.5% compound annual growth
rate (“CAGR”). Book value grew from $26.5 million to $235 million over the same
period, a nearly 55% CAGR.

 Excluding Resource America’s former energy subsidiary, AUM grew from $3.2 billion
at September 30, 2004, to $18 billion at September 30, 2008, a 54% CAGR,
reflecting the massive expansion of the company’s structured finance business.

thefactorbook.blogspot.com