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Loans Receivable and Other Lending Investments, net | 12 Months Ended
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Dec. 31, 2015
Receivables [Abstract] |
Loans Receivable and Other Lending Investments, net | Loans Receivable and Other Lending Investments, net The following is a summary of the Company's loans receivable and other lending investments by class ($ in thousands):
| As of December 31,
Type of Investment | 2015 |  | 2014
Senior mortgages | $ | 975,915 |  |  | $ | 737,535 |
Corporate/Partnership loans | 643,270 |  |  | 497,796 |
Subordinate mortgages | 28,676 |  |  | 53,331 |
Total gross carrying value of loans | 1,647,861 |  |  | 1,288,662 |
Reserves for loan losses | (108,165 | ) |  | (98,490 | )
Total loans receivable, net | 1,539,696 |  |  | 1,190,172 |
Other lending investments—securities | 62,289 |  |  | 187,671 |
Total loans receivable and other lending investments, net(1) | $ | 1,601,985 |  |  | $ | 1,377,843 |
______________________________________________________________________________
(1) | The Company's recorded investment in loans as of December 31, 2015 and 2014 includes accrued interest of $9.0 million and $7.0 million, respectively, which are included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets.
In June 2015, the Company received a loan with a fair value of $146.7 million as a non-cash paydown on an existing $196.6 million loan and reduced the principal balance by the same amount. The loan received has been recorded as a loan receivable and is included in "Loans receivable and other lending investments, net" on the Company’s consolidated balance sheet. In connection with the transaction, the Company recorded a provision for loan losses of $25.9 million on the original loan resulting in a remaining balance of $24.0 million. In October 2015, the Company received full payment of the remaining balance. During the year ended December 31, 2015, the Company sold a loan with a carrying value of $5.5 million. No gain was recorded on the sale. During the years ended December 31, 2014 and 2013, the Company sold loans with aggregate carrying values of $30.8 million and $95.1 million, respectively, which resulted in gains (losses) of $19.1 million and $(0.6) million, respectively. Gains and losses on sales of loans are included in "Other income" in the Company's consolidated statements of operations. Reserve for Loan Losses—Changes in the Company's reserve for loan losses were as follows ($ in thousands):
| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Reserve for loan losses at beginning of period | $ | 98,490 |  |  | $ | 377,204 |  |  | $ | 524,499 |
Provision for (recovery of) loan losses(1) | 36,567 |  |  | (1,714 | ) |  | 5,489 |
Charge-offs | (26,892 | ) |  | (277,000 | ) |  | (152,784 | )
Reserve for loan losses at end of period | $ | 108,165 |  |  | $ | 98,490 |  |  | $ | 377,204 |
______________________________________________________________________________
(1) | For the years ended December 31, 2015, 2014 and 2013, the provision for loan losses includes recoveries of previously recorded loan loss reserves of $0.6 million, $10.1 million and $63.1 million, respectively.
The Company's recorded investment in loans (comprised of a loan's carrying value plus accrued interest) and the associated reserve for loan losses were as follows ($ in thousands):
| Individually Evaluated for Impairment(1) |  | Collectively Evaluated for Impairment(2) |  | Total
As of December 31, 2015 |  |  |  |  |
Loans | $ | 132,492 |  |  | $ | 1,524,347 |  |  | $ | 1,656,839 |
Less: Reserve for loan losses | (72,165 | ) |  | (36,000 | ) |  | (108,165 | )
Total | $ | 60,327 |  |  | $ | 1,488,347 |  |  | $ | 1,548,674 |
As of December 31, 2014 |  |  |  |  |
Loans | $ | 139,672 |  |  | $ | 1,156,031 |  |  | $ | 1,295,703 |
Less: Reserve for loan losses | (64,990 | ) |  | (33,500 | ) |  | (98,490 | )
Total | $ | 74,682 |  |  | $ | 1,122,531 |  |  | $ | 1,197,213 |
_______________________________________________________________________________
(1) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.2 million and $0.2 million as of December 31, 2015 and 2014, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status and therefore, the unamortized amounts associated with these loans are not currently being amortized into income.
(2) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $8.2 million and $10.6 million as of December 31, 2015 and 2014, respectively.
Credit Characteristics—As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments which are inherently uncertain and there can be no assurance that actual performance will be similar to current expectation. The Company's recorded investment in performing loans, presented by class and by credit quality, as indicated by risk rating, was as follows ($ in thousands):
| As of December 31,
| 2015 |  | 2014
| Performing Loans |  | Weighted Average Risk Ratings |  | Performing Loans |  | Weighted Average Risk Ratings
Senior mortgages | $ | 853,595 |  |  | 2.96 |  |  | $ | 611,009 |  |  | 2.73 |
Corporate/Partnership loans | 641,713 |  |  | 3.37 |  |  | 501,620 |  |  | 3.88 |
Subordinate mortgages | 29,039 |  |  | 3.64 |  |  | 53,836 |  |  | 2.87 |
Total | $ | 1,524,347 |  |  | 3.15 |  |  | $ | 1,166,465 |  |  | 3.23 |
As of December 31, 2015, the Company's recorded investment in loans, aged by payment status and presented by class, were as follows ($ in thousands):
| Current |  | Less Than and Equal to 90 Days |  | Greater Than 90 Days(1) |  | Total Past Due |  | Total
Senior mortgages | $ | 864,099 |  |  | $ | — |  |  | $ | 116,250 |  |  | $ | 116,250 |  |  | $ | 980,349 |
Corporate/Partnership loans | 647,451 |  |  | — |  |  | — |  |  | — |  |  | 647,451 |
Subordinate mortgages | 29,039 |  |  | — |  |  | — |  |  | — |  |  | 29,039 |
Total | $ | 1,540,589 |  |  | $ | — |  |  | $ | 116,250 |  |  | $ | 116,250 |  |  | $ | 1,656,839 |
_______________________________________________________________________________
(1) | As of December 31, 2015, the Company had four loans which were greater than 90 days delinquent and were in various stages of resolution, including legal proceedings, environmental concerns and foreclosure-related proceedings, and ranged from 1.0 to 7.0 years outstanding.
Impaired Loans—The Company's recorded investment in impaired loans, presented by class, were as follows ($ in thousands)(1):
| As of December 31, 2015 |  | As of December 31, 2014
| Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance |  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | $ | 126,754 |  |  | $ | 125,776 |  |  | $ | (69,627 | ) |  | $ | 130,645 |  |  | $ | 129,744 |  |  | $ | (64,440 | )
Corporate/Partnership loans | 5,738 |  |  | 5,738 |  |  | (2,538 | ) |  | 9,027 |  |  | 9,057 |  |  | (550 | )
Total | $ | 132,492 |  |  | $ | 131,514 |  |  | $ | (72,165 | ) |  | $ | 139,672 |  |  | $ | 138,801 |  |  | $ | (64,990 | )
_______________________________________________________________________________
(1) | All of the Company's non-accrual loans are considered impaired and included in the table above. As of December 31, 2014, impaired loans also includes certain loans modified through troubled debt restructurings in accordance with GAAP with a recorded investment of $10.4 million although they are performing and on accrual status.
The Company's average recorded investment in impaired loans and interest income recognized, presented by class, were as follows ($ in thousands):
| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
| Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | $ | — |  |  | $ | — |  |  | $ | 35,659 |  |  | $ | 1,922 |  |  | $ | 31,409 |  |  | $ | 9,269 |
Corporate/Partnership loans | — |  |  | — |  |  | — |  |  | — |  |  | 8,062 |  |  | 6,050 |
Subtotal | — |  |  | — |  |  | 35,659 |  |  | 1,922 |  |  | 39,471 |  |  | 15,319 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | 129,135 |  |  | 38 |  |  | 334,351 |  |  | 158 |  |  | 794,247 |  |  | 1,976 |
Corporate/Partnership loans | 24,252 |  |  | 12 |  |  | 52,963 |  |  | 181 |  |  | 77,661 |  |  | 323 |
Subordinate mortgages | — |  |  | — |  |  | — |  |  | — |  |  | 32,382 |  |  | — |
Subtotal | 153,387 |  |  | 50 |  |  | 387,314 |  |  | 339 |  |  | 904,290 |  |  | 2,299 |
Total: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | 129,135 |  |  | 38 |  |  | 370,010 |  |  | 2,080 |  |  | 825,656 |  |  | 11,245 |
Corporate/Partnership loans | 24,252 |  |  | 12 |  |  | 52,963 |  |  | 181 |  |  | 85,723 |  |  | 6,373 |
Subordinate mortgages | — |  |  | — |  |  | — |  |  | — |  |  | 32,382 |  |  | — |
Total | $ | 153,387 |  |  | $ | 50 |  |  | $ | 422,973 |  |  | $ | 2,261 |  |  | $ | 943,761 |  |  | $ | 17,618 |
There was no interest income related to the resolution of non-performing loans recorded during the years ended December 31, 2015 and 2014. During the year ended December 31, 2013, the Company recorded interest income of $13.3 million related to the resolution of non-performing loans. Interest income was not previously recorded while the loans were on non-accrual status. Troubled Debt Restructurings—During the year ended December 31, 2015, the Company modified two senior loans that were determined to be troubled debt restructurings. The Company restructured one non-performing loan with a recorded investment of $5.8 million to grant a maturity extension of one year. The Company also modified one non-performing loan with a recorded investment of $11.6 million to grant a discounted payoff option and a maturity extension of one year. The Company's recorded investment in these loans was not impacted by the modifications. During the year ended December 31, 2014, the Company restructured one non-performing senior loan that was determined to be a troubled debt restructuring with a recorded investment of $7.0 million to grant a maturity extension of one year and included conditional extension options. The Company's recorded investment in this loan was not impacted by the modification. During the year ended December 31, 2013, the Company restructured six senior loans that were determined to be troubled debt restructurings. The Company restructured two performing loans with a combined recorded investment of $4.6 million to grant maturity extensions of one year each. Non-performing loans with a combined investment of $174.5 million were also modified during the year ended December 31, 2013. Included in this balance were two loans with a combined recorded investment of $98.3 million in which the Company received $15.4 million of paydowns and accepted discounted payoff options on these loans. At the time of the restructuring, the Company reclassified the loans from non-performing to performing status as the Company believed the borrowers would perform under the modified terms of the agreements. The loans were repaid in January 2014 and July 2014 at the discounted payoff amount. Generally when granting concessions, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and in some cases lookback features or equity kickers to offset concessions granted should conditions impacting the loan improve. The Company's determination of credit losses is impacted by troubled debt restructurings whereby loans that have gone through troubled debt restructurings are considered impaired, assessed for specific reserves, and are not included in the Company's assessment of general loan loss reserves. Loans previously restructured under troubled debt restructurings that subsequently default are reassessed to incorporate the Company's current assumptions on expected cash flows and additional provision expense is recorded to the extent necessary. As of December 31, 2015, there were no unfunded commitments associated with modified loans considered troubled debt restructurings. Securities—Other lending investments—securities includes the following ($ in thousands):
| Face Value |  | Amortized Cost Basis |  | Net Unrealized Gain (Loss) |  | Estimated Fair Value |  | Net Carrying Value
As of December 31, 2015 |  |  |  |  |  |  |  |  |
Available-for-Sale Securities |  |  |  |  |  |  |  |  |
Municipal debt securities | $ | 1,010 |  |  | $ | 1,010 |  |  | $ | 151 |  |  | $ | 1,161 |  |  | $ | 1,161 |
Held-to-Maturity Securities |  |  |  |  |  |  |  |  |
Corporate debt securities | 54,549 |  |  | 61,128 |  |  | — |  |  | 61,199 |  |  | 61,128 |
Total | $ | 55,559 |  |  | $ | 62,138 |  |  | $ | 151 |  |  | $ | 62,360 |  |  | $ | 62,289 |
As of December 31, 2014 |  |  |  |  |  |  |  |  |
Available-for-Sale Securities |  |  |  |  |  |  |  |  |
Municipal debt securities | $ | 1,020 |  |  | $ | 1,020 |  |  | $ | 147 |  |  | $ | 1,167 |  |  | $ | 1,167 |
Held-to-Maturity Securities |  |  |  |  |  |  |  |  |
Corporate debt securities | 176,254 |  |  | 186,504 |  |  | — |  |  | 190,199 |  |  | 186,504 |
Total | $ | 177,274 |  |  | $ | 187,524 |  |  | $ | 147 |  |  | $ | 191,366 |  |  | $ | 187,671 |
As of December 31, 2015, the contractual maturities of the Company's securities were as follows ($ in thousands):
| Held-to-Maturity Securities |  | Available-for-Sale Securities
| Amortized Cost Basis |  | Estimated Fair Value |  | Amortized Cost Basis |  | Estimated Fair Value
Maturities |  |  |  |  |  |  |
Within one year | $ | 61,128 |  |  | $ | 61,199 |  |  | $ | — |  |  | $ | — |
After one year through 5 years | — |  |  | — |  |  | — |  |  | — |
After 5 years through 10 years | — |  |  | — |  |  | — |  |  | — |
After 10 years | — |  |  | — |  |  | 1,010 |  |  | 1,161 |
Total | $ | 61,128 |  |  | $ | 61,199 |  |  | $ | 1,010 |  |  | $ | 1,161 |

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