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Loans and Investments (Tables) | 9 Months Ended
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Sep. 30, 2014
Loans and Investments |
Schedule of composition of loan and investment portfolio |
|  | September 30, 2014 |  | Percent of Total |  | Loan Count |  | Wtd. Avg. Pay Rate (1) |  | Wtd. Avg. Remaining Months to Maturity |  | First Dollar LTV Ratio (2) |  | Last Dollar LTV Ratio (3) |
Bridge loans |  | $ | 1,213,584,295 |  | 73 | % | 98 |  | 5.25 | % | 16.8 |  | 0 | % | 74 | %
Mezzanine loans |  | 90,762,106 |  | 6 | % | 22 |  | 9.15 | % | 39.6 |  | 50 | % | 81 | %
Junior participation loans |  | 199,106,125 |  | 12 | % | 5 |  | 4.52 | % | 15.6 |  | 62 | % | 80 | %
Preferred equity investments |  | 152,465,838 |  | 9 | % | 18 |  | 5.68 | % | 50.0 |  | 63 | % | 84 | %
|  | 1,655,918,364 |  | 100 | % | 143 |  | 5.41 | % | 21.0 |  | 16 | % | 76 | %
Unearned revenue |  | (12,889,851 | ) |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses |  | (116,386,526 | ) |  |  |  |  |  |  |  |  |  |  |  |
Loans and investments, net |  | $ | 1,526,641,987 |  |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, 2013 |  | Percent of Total |  | Loan Count |  | Wtd. Avg. Pay Rate (1) |  | Wtd. Avg. Remaining Months to Maturity |  | First Dollar LTV Ratio (2) |  | Last Dollar LTV Ratio (3) |
Bridge loans |  | $ | 1,171,783,914 |  | 71 | % | 95 |  | 5.11 | % | 18.5 |  | 0 | % | 76 | %
Mezzanine loans |  | 118,550,172 |  | 7 | % | 27 |  | 7.02 | % | 58.2 |  | 56 | % | 83 | %
Junior participation loans |  | 248,337,542 |  | 15 | % | 7 |  | 4.21 | % | 19.6 |  | 60 | % | 81 | %
Preferred equity investments |  | 121,523,673 |  | 7 | % | 15 |  | 7.20 | % | 45.5 |  | 58 | % | 79 | %
|  | 1,660,195,301 |  | 100 | % | 144 |  | 5.26 | % | 23.5 |  | 17 | % | 77 | %
Unearned revenue |  | (14,218,237 | ) |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses |  | (122,277,411 | ) |  |  |  |  |  |  |  |  |  |  |  |
Loans and investments, net |  | $ | 1,523,699,653 |  |  |  |  |  |  |  |  |  |  |  |  |
| (1) |  | “Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balances of each loan in the Company’s portfolio, of the interest rate that is required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “Accrual Rate” to be paid at the maturity are not included in the weighted average pay rate as shown in the table.
| (2) |  | The “First Dollar LTV Ratio” is calculated by comparing the total of the Company’s senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which the Company will absorb a total loss of its position.
| (3) |  | The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of the Company’s loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which the Company will initially absorb a loss.
Summary of the loan portfolio's weighted average internal risk ratings and LTV ratios by asset class |
|  | September 30, 2014 |
Asset Class |  | Unpaid Principal Balance |  | Percentage of Portfolio |  | Wtd. Avg. Internal Risk Rating |  | First Dollar LTV Ratio |  | Last Dollar LTV Ratio |
Multi-family |  | $ | 1,112,022,423 |  | 67.2 | % | 3.0 |  | 12 | % | 74 | %
Office |  | 340,165,641 |  | 20.5 | % | 3.2 |  | 32 | % | 78 | %
Land |  | 125,846,967 |  | 7.6 | % | 3.9 |  | 6 | % | 87 | %
Hotel |  | 66,250,000 |  | 4.0 | % | 3.8 |  | 32 | % | 85 | %
Retail |  | 9,933,333 |  | 0.6 | % | 2.5 |  | 23 | % | 70 | %
Commercial |  | 1,700,000 |  | 0.1 | % | 3.5 |  | 63 | % | 67 | %
Total |  | $ | 1,655,918,364 |  | 100.0 | % | 3.2 |  | 16 | % | 76 | %
|  | December 31, 2013 |
Asset Class |  | Unpaid Principal Balance |  | Percentage of Portfolio |  | Wtd. Avg. Internal Risk Rating |  | First Dollar LTV Ratio |  | Last Dollar LTV Ratio |
Multi-family |  | $ | 1,068,529,815 |  | 64.4 | % | 3.3 |  | 14 | % | 75 | %
Office |  | 358,832,526 |  | 21.6 | % | 3.2 |  | 32 | % | 82 | %
Land |  | 116,751,563 |  | 7.0 | % | 4.0 |  | 3 | % | 88 | %
Hotel |  | 69,181,252 |  | 4.2 | % | 3.8 |  | 26 | % | 84 | %
Commercial |  | 24,900,145 |  | 1.5 | % | 3.0 |  | 3 | % | 49 | %
Condo |  | 15,250,000 |  | 0.9 | % | 3.7 |  | 41 | % | 65 | %
Retail |  | 6,750,000 |  | 0.4 | % | 2.5 |  | 0 | % | 63 | %
Total |  | $ | 1,660,195,301 |  | 100.0 | % | 3.3 |  | 17 | % | 77 | %
Summary of the changes in the allowance for loan losses |
|  | Three Months Ended |  | Nine Months Ended |
|  | September 30, 2014 |  | September 30, 2013 |  | September 30, 2014 |  | September 30, 2013 |
Allowance at beginning of the period |  | $ | 115,059,988 |  | $ | 146,563,765 |  | $ | 122,277,411 |  | $ | 161,706,313 |
Provision for loan losses |  | 2,860,000 |  | 1,500,000 |  | 7,810,000 |  | 5,500,000 |
Charge-offs (1) |  | — |  | (4,295,506 | ) | (6,501,079 | ) | (22,756,836 | )
Recoveries of reserves |  | (1,533,462 | ) | (749,768 | ) | (7,199,806 | ) | (1,430,986 | )
Allowance at end of the period |  | $ | 116,386,526 |  | $ | 143,018,491 |  | $ | 116,386,526 |  | $ | 143,018,491 |
| (1) |  | Comprised of a $6.5 million write off of a mezzanine loan for the nine months ended September 30, 2014; $2.8 million write off of a junior participation loan and a $1.5 million charge-off to previously recorded reserves for the three months ended September 30, 2013; and $21.3 million from writing off a bridge loan, two mezzanine loans and two junior participation loans as well as a $1.5 million charge-off to previously recorded reserves for the nine months ended September 30, 2013.
Summary of charge-offs and recoveries |
|  | Three Months Ended |  | Nine Months Ended |
|  | September 30, 2014 |  | September 30, 2013 |  | September 30, 2014 |  | September 30, 2013 |
Charge-offs: |  |  |  |  |  |  |  |  |
Multi-family |  | $ | — |  | $ | — |  | $ | (6,501,079 | ) | $ | (4,789,815 | )
Office |  | — |  | (4,295,506 | ) | — |  | (4,295,506 | )
Hotel |  | — |  | — |  | — |  | (3,671,515 | )
Condo |  | — |  | — |  | — |  | (10,000,000 | )
Total |  | $ | — |  | $ | (4,295,506 | ) | $ | (6,501,079 | ) | $ | (22,756,836 | )
Recoveries: |  |  |  |  |  |  |  |  |
Multi-family |  | $ | (1,533,462 | ) | $ | (45,274 | ) | $ | (7,199,806 | ) | $ | (726,492 | )
Office |  | — |  | (704,494 | ) | — |  | (704,494 | )
Total |  | $ | (1,533,462 | ) | $ | (749,768 | ) | $ | (7,199,806 | ) | $ | (1,430,986 | )
Net Recoveries (Charge-offs) |  | $ | 1,533,462 |  | $ | (3,545,738 | ) | $ | 698,727 |  | $ | (21,325,850 | )
Ratio of net recoveries (charge-offs) during the period to average loans and investments outstanding during the period |  | 0.1 | % | (0.2 | )% | 0.0 | % | (1.3 | )%
Summary of the company's impaired loans by asset class |
|  | September 30, 2014 |  | Three Months Ended September 30, 2014 |  | Nine Months Ended September 30, 2014 |
Asset Class |  | Unpaid Principal Balance |  | Carrying Value (1) |  | Allowance for Loan Losses |  | Average Recorded Investment (2) |  | Interest Income Recognized |  | Average Recorded Investment (2) |  | Interest Income Recognized |
Multi-family |  | $ | 39,855,812 |  | $ | 39,820,259 |  | $ | 37,085,812 |  | $ | 44,727,875 |  | $ | 257,014 |  | $ | 52,795,793 |  | $ | 689,284 |
Office |  | 45,086,582 |  | 39,220,375 |  | 25,472,444 |  | 45,086,582 |  | 517,319 |  | 40,586,582 |  | 1,303,615 |
Land |  | 119,130,578 |  | 115,285,638 |  | 50,128,270 |  | 118,752,869 |  | — |  | 117,608,264 |  | — |
Hotel |  | 34,750,000 |  | 34,249,959 |  | 3,700,000 |  | 34,875,000 |  | 231,808 |  | 17,375,000 |  | 403,182 |
Total |  | $ | 238,822,972 |  | $ | 228,576,231 |  | $ | 116,386,526 |  | $ | 243,442,326 |  | $ | 1,006,141 |  | $ | 228,365,639 |  | $ | 2,396,081 |
|  | December 31, 2013 |  | Three Months Ended September 30, 2013 |  | Nine Months Ended September 30, 2013 |
Asset Class |  | Unpaid Principal Balance |  | Carrying Value (1) |  | Allowance for Loan Losses |  | Average Recorded Investment (2) |  | Interest Income Recognized |  | Average Recorded Investment (2) |  | Interest Income Recognized |
Multi-family |  | $ | 65,735,773 |  | $ | 65,186,623 |  | $ | 50,786,697 |  | $ | 72,793,867 |  | $ | 932,323 |  | $ | 66,119,346 |  | $ | 2,314,028 |
Office |  | 36,086,582 |  | 29,474,065 |  | 23,972,444 |  | 42,403,007 |  | 292,982 |  | 38,203,007 |  | 1,245,497 |
Land |  | 116,085,950 |  | 112,810,558 |  | 47,518,270 |  | 139,074,948 |  | — |  | 139,061,228 |  | — |
Total |  | $ | 217,908,305 |  | $ | 207,471,246 |  | $ | 122,277,411 |  | $ | 254,271,822 |  | $ | 1,225,305 |  | $ | 243,383,581 |  | $ | 3,559,525 |
| (1) |  | Represents the unpaid principal balance of impaired loans less unearned revenue and other holdbacks and adjustments by asset class. Comprised of 12 loans at September 30, 2014 and 15 loans at December 31, 2013.
| (2) |  | Represents an average of the beginning and ending unpaid principal balance of each asset class.
Summary of the company's non-performing loans by asset class |
|  | September 30, 2014 |  | December 31, 2013 |
Asset Class |  | Carrying Value |  | Less Than 90 Days Past Due |  | Greater Than 90 Days Past Due |  | Carrying Value |  | Less Than 90 Days Past Due |  | Greater Than 90 Days Past Due |
Multi-family |  | $ | 32,000,000 |  | $ | — |  | $ | 32,000,000 |  | $ | 42,054,539 |  | $ | 32,000,000 |  | $ | 10,054,539 |
Office |  | 8,277,775 |  | — |  | 8,277,775 |  | 8,277,844 |  | — |  | 8,277,844 |
Total |  | $ | 40,277,775 |  | $ | — |  | $ | 40,277,775 |  | $ | 50,332,383 |  | $ | 32,000,000 |  | $ | 18,332,383 |
Summary of loan modifications and extensions by asset class that the entity considered to be troubled debt restructurings by asset class | A summary of loan modifications and extensions by asset class that the Company considered to be troubled debt restructurings during the three and nine months ended September 30, 2014 were as follows:
|  | Three Months Ended September 30, 2014 |  | Nine Months Ended September 30, 2014 |
Asset Class |  | Number of Loans |  | Original Unpaid Principal Balance |  | Original Rate of Interest |  | Extended Unpaid Principal Balance |  | Extended Rate of Interest |  | Number of Loans |  | Original Unpaid Principal Balance |  | Original Weighted Average Rate of Interest |  | Modified Unpaid Principal Balance |  | Modified Weighted Average Rate of Interest |
Hotel |  | 1 |  | $ | 35,000,000 |  | 1.95 | % | $ | 34,750,000 |  | 2.95 | % | 1 |  | $ | 35,000,000 |  | 1.95 | % | $ | 34,750,000 |  | 2.95 | %
A summary of loan modifications and extensions by asset class that the Company considered to be troubled debt restructurings during the three and nine months ended September 30, 2013 were as follows:
|  | Three Months Ended September 30, 2013 |  | Nine Months Ended September 30, 2013 |
Asset Class |  | Number of Loans |  | Original Unpaid Principal Balance |  | Original Rate of Interest |  | Extended Unpaid Principal Balance |  | Extended Rate of Interest |  | Number of Loans |  | Original Unpaid Principal Balance |  | Original Weighted Average Rate of Interest |  | Modified Unpaid Principal Balance |  | Modified Weighted Average Rate of Interest |
Multifamily |  | — |  | $ | — |  | — |  | $ | — |  | — |  | 1 |  | $ | 6,192,666 |  | 5.96 | % | $ | 6,192,666 |  | 5.96 | %
Office |  | — |  | — |  | — |  | — |  | — |  | 1 |  | 8,400,000 |  | 8.24 | % | 8,400,000 |  | 8.24 | %
Total |  | — |  | $ | — |  | — |  | $ | — |  | — |  | 2 |  | $ | 14,592,666 |  | 7.27 | % | $ | 14,592,666 |  | 7.27 | %

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