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Securities | 9 Months Ended
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Sep. 30, 2014
Securities |
Securities | Note 4 — Securities The following is a summary of the Company’s securities classified as available-for-sale at September 30, 2014:
|  | Face |  | Amortized |  | Cumulative Unrealized |  | Carrying Value / Estimated |
|  | Value |  | Cost |  | (Loss) / Gain |  | Fair Value |
Commercial mortgage-backed security (CMBS) |  | $ | 2,100,000 |  | $ | 2,100,000 |  | $ | (100,000 | ) | $ | 2,000,000 |
Common equity securities |  | — |  | 58,789 |  | 470,315 |  | 529,104 |
Total available-for-sale securities |  | $ | 2,100,000 |  | $ | 2,158,789 |  | $ | 370,315 |  | $ | 2,529,104 |
The following is a summary of the Company’s securities classified as available-for-sale at December 31, 2013:
|  | Face |  | Amortized |  | Cumulative Unrealized |  | Cumulative Unrealized |  | Carrying Value / Estimated |
|  | Value |  | Cost |  | Gain |  | Loss |  | Fair Value |
Residential mortgage-backed security (RMBS) |  | $ | 39,013,690 |  | $ | 34,049,310 |  | $ | 437,774 |  | $ | (6,298 | ) | $ | 34,480,786 |
Commercial mortgage-backed security (CMBS) |  | 2,100,000 |  | 2,100,000 |  | — |  | — |  | 2,100,000 |
Common equity securities |  | — |  | 58,789 |  | 676,077 |  | — |  | 734,866 |
Total available-for-sale securities |  | $ | 41,113,690 |  | $ | 36,208,099 |  | $ | 1,113,851 |  | $ | (6,298 | ) | $ | 37,315,652 |
The following is a summary of the underlying credit rating of the Company’s available-for-sale debt securities at September 30, 2014 and December 31, 2013:
|  | September 30, 2014 |  | December 31, 2013 |
|  |  |  | Amortized |  | Percent |  |  |  | Amortized |  | Percent |
Rating (1) |  | # |  | Cost |  | of Total |  | # |  | Cost |  | of Total |
AA+ |  | — |  | $ | — |  | — |  | 1 |  | $ | 93,715 |  | — |
CCC |  | — |  | — |  | — |  | 1 |  | 18,417,402 |  | 51 | %
CCC- |  | 1 |  | 2,100,000 |  | 100 | % | 1 |  | 2,100,000 |  | 6 | %
NR |  | — |  | — |  | — |  | 7 |  | 15,538,193 |  | 43 | %
|  | 1 |  | $ | 2,100,000 |  | 100 | % | 10 |  | $ | 36,149,310 |  | 100 | %
| (1) |  | Based on the rating published by Standard & Poor’s for each security. NR stands for “not rated.”
In the first quarter of 2014, the Company sold all of its RMBS investments, which had an aggregate carrying value of $33.4 million, for approximately $33.9 million and recorded a net gain of $0.5 million to other income, net on the Company’s Consolidated Statement of Income, which includes the reclassification of a net unrealized gain of $0.4 million from accumulated other comprehensive loss on the Company’s Consolidated Balance Sheet. Included in these sales were two RMBS investments with deteriorated credit quality that had an aggregate carrying value of $25.8 million and that were sold for $25.9 million. The RMBS investments were financed with two repurchase agreements totaling $25.3 million which were repaid with the proceeds. See Note 7 — “Debt Obligations” for further details. The Company owns a CMBS investment, purchased at a premium in 2010 for $2.1 million, which is collateralized by a portfolio of hotel properties. The CMBS investment bears interest at a spread of 89 basis points over LIBOR, has a stated maturity of six years, but has an estimated life of approximately one year based on the extended maturity of the underlying asset and a fair value of $2.0 million and $2.1 million at September 30, 2014 and December 31, 2013, respectively. The Company owns 2,939,465 shares of common stock of CV Holdings, Inc., formerly Realty Finance Corporation, a commercial real estate specialty finance company, which had a fair value of approximately $0.5 million and $0.7 million at September 30, 2014 and December 31, 2013, respectively. Available-for-sale securities are carried at their estimated fair value with unrealized gains and losses reported in accumulated other comprehensive loss. The Company evaluates these securities periodically to determine whether a decline in their value is other-than-temporary, though such a determination is not intended to indicate a permanent decline in value. The Company’s evaluation is based on its assessment of cash flows, which is supplemented by third-party research reports, internal review of the underlying assets securing the investments, levels of subordination and the ratings of the securities and the underlying collateral. No other-than-temporary impairment was recorded on the Company’s available-for-sale securities for the three and nine months ended September 30, 2014 and 2013. The weighted average yield on the Company’s CMBS and RMBS investments based on their face values was 1.13% and 3.72%, including the amortization of premium and the accretion of discount, for the three months ended September 30, 2014 and 2013, respectively, and 1.90% and 4.05% for the nine months ended September 30, 2014 and 2013, respectively.

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