Loans and Investments (Tables)

9 Months Ended

Sep. 30, 2014

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	%