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MORTGAGE LOAN RECEIVABLES | 9 Months Ended
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Sep. 30, 2015
Mortgage Loans on Real Estate [Abstract] |
MORTGAGE LOAN RECEIVABLES | 3. MORTGAGE LOAN RECEIVABLES September 30, 2015 ($ in thousands)
| Outstanding Face Amount |  | Carrying Value |  | Weighted Average Yield (1) |  | Remaining Maturity (years)
Mortgage loan receivables held for investment, at amortized cost | $ | 1,811,216 |  |  | $ | 1,798,362 |  |  | 7.61 | % |  | 1.58
Provision for loan losses | N/A |  |  | (3,550 | ) |  |  |  |
Total mortgage loan receivables held for investment, at amortized cost | 1,811,216 |  |  | 1,794,812 |  |  |  |  |
Mortgage loan receivables held for sale | 333,488 |  |  | 333,531 |  |  | 4.15 | % |  | 7.60
Total | $ | 2,144,704 |  |  | $ | 2,128,343 |  |  |  |  |  |
(1) September 30, 2015 LIBOR rates are used to calculate weighted average yield for floating rate loans. As of September 30, 2015, $347.1 million, or 19.3%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at fixed interest rates and $1.5 billion, or 80.7%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at variable interest rates, linked to LIBOR, some of which include interest rate floors. As of September 30, 2015, $333.5 million, or 100.0%, of the carrying value of our mortgage loan receivables held for sale, were at fixed interest rates. December 31, 2014 ($ in thousands)
| Outstanding Face Amount |  | Carrying Value |  | Weighted Average Yield (1) |  | Remaining Maturity (years)
Mortgage loan receivables held for investment, at amortized cost | $ | 1,536,923 |  |  | $ | 1,524,153 |  |  | 7.33 | % |  | 1.96
Provision for loan losses | N/A |  |  | (3,100 | ) |  |  |  |
Total mortgage loan receivables held for investment, at amortized cost | 1,536,923 |  |  | 1,521,053 |  |  |  |  |
Mortgage loan receivables held for sale | 417,955 |  |  | 417,955 |  |  | 4.31 | % |  | 9.72
Total | 1,954,878 |  |  | 1,939,008 |  |  |  |  |  |
(1) December 31, 2014 LIBOR rates are used to calculate weighted average yield for floating rate loans. As of December 31, 2014, $231.9 million, or 15.2%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at fixed interest rates and $1.3 billion, or 84.8%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at variable interest rates, linked to LIBOR, some of which include interest rate floors. As of December 31, 2014, $418.0 million, or 100%, of the carrying value of our mortgage loan receivables held for sale, were at fixed interest rates. The following table summarizes mortgage loan receivables by loan type ($ in thousands):
| September 30, 2015 |  | December 31, 2014
| Outstanding Face Amount |  | Carrying Value |  | Outstanding Face Amount |  | Carrying Value
Mortgage loan receivables held for sale |  |  |  |  |  |  |  |  |  |  |
First mortgage loan | $ | 333,488 |  |  | $ | 333,531 |  |  | $ | 417,955 |  |  | $ | 417,955 |
Total mortgage loan receivables held for sale | 333,488 |  |  | 333,531 |  |  | 417,955 |  |  | 417,955 |
Mortgage loan receivables held for investment, at amortized cost |  |  |  |  |  |  |  |  |  |  |
First mortgage loan | 1,524,080 |  |  | 1,512,731 |  |  | 1,373,476 |  |  | 1,361,754 |
Mezzanine loan | 287,136 |  |  | 285,631 |  |  | 163,447 |  |  | 162,399 |
Total mortgage loan receivables held for investment, at amortized cost | 1,811,216 |  |  | 1,798,362 |  |  | 1,536,923 |  |  | 1,524,153 |
Provision for loan losses | N/A |  |  | (3,550 | ) |  | N/A |  |  | (3,100 | )
Total | $ | 2,144,704 |  |  | $ | 2,128,343 |  |  | $ | 1,954,878 |  |  | $ | 1,939,008 |
For the nine months ended September 30, 2015 and 2014 the activity in our loan portfolio was as follows ($ in thousands):
| Mortgage loan receivables held for investment, at amortized cost |  | Mortgage loan receivables held for sale
Balance December 31, 2014 | $ | 1,521,054 |  |  | $ | 417,955 |
Origination of mortgage loan receivables | 840,652 |  |  | 1,781,355 |
Repayment of mortgage loan receivables | (575,028 | ) |  | (1,613 | )
Proceeds from sales of mortgage loan receivables | — |  |  | (1,923,883 | )
Realized gain on sale of mortgage loan receivables | — |  |  | 59,717 |
Transfer between held for investment and held for sale | — |  |  | — |
Accretion/amortization of discount, premium and other fees | 8,584 |  |  | — |
Loan loss provision | (450 | ) |  | — |
Balance September 30, 2015 | $ | 1,794,812 |  |  | $ | 333,531 |
| Mortgage loan receivables held for investment, at amortized cost |  | Mortgage loan receivables held for sale
Balance December 31, 2013 | $ | 539,078 |  |  | $ | 440,490 |
Origination of mortgage loan receivables | 951,438 |  |  | 2,027,845 |
Repayment of mortgage loan receivables | (159,329 | ) |  | (951 | )
Proceeds from sales of mortgage loan receivables | — |  |  | (2,379,818 | )
Realized gain on sale of mortgage loan receivables | — |  |  | 107,135 |
Transfer between held for investment and held for sale | (11,800 | ) |  | 11,800 |
Accretion/amortization of discount, premium and other fees | 4,342 |  |  | — |
Loan loss provision | (450 | ) |  | — |
Balance September 30, 2014 | $ | 1,323,279 |  |  | $ | 206,501 |
During the three and nine months ended September 30, 2015 and 2014, the transfers of financial assets via sales of loans have been treated as sales under ASC Topic 860 — Transfers and Servicing. At September 30, 2015 and December 31, 2014, there was $4.1 million and $4.2 million, respectively, of unamortized discounts included in our mortgage loan receivables held for investment, at amortized cost on our combined consolidated balance sheets. The Company evaluates each of its loans for potential losses at least quarterly. Its loans are typically collateralized by real estate directly or indirectly. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, as well as the financial and operating capability of the borrower. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash flow from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan at maturity, and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data. As a result of this analysis, the Company has concluded that none of its loans are individually impaired as of September 30, 2015 and December 31, 2014. However, based on the inherent risks shared among the loans as a group, it is probable that the loans had incurred an impairment due to common characteristics and inherent risks in the portfolio. Therefore, the Company has recorded a reserve, based on a targeted percentage level which it seeks to maintain over the life of the portfolio, as disclosed in the tables below. Historically, the Company has not incurred losses on any originated loans. At September 30, 2015 and December 31, 2014, there was one loan on non-accrual status with an amortized cost of $5.9 million and an unamortized discount of $2.2 million included in our mortgage loan receivables held for investment, at amortized cost on our combined consolidated balance sheets. This loan was not originated by the Company. Instead it was credit impaired at the time of acquisition, which was reflected in Ladder’s purchase price. Provision for Loan Losses ($ in thousands)
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2015 |  | 2014 |  | 2015 |  | 2014
Provision for loan losses at beginning of period | $ | 3,400 |  |  | $ | 2,800 |  |  | $ | 3,100 |  |  | $ | 2,500 |
Provision for loan losses | 150 |  |  | 150 |  |  | 450 |  |  | 450 |
Charge-offs | — |  |  | — |  |  | — |  |  | — |
Provision for loan losses at end of period | $ | 3,550 |  |  | $ | 2,950 |  |  | $ | 3,550 |  |  | $ | 2,950 |

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