Loans Receivable and Other Lending Investments, net (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of the Company's loans and other lending investments by class

The following is a summary of the Company's loans receivable and other lending investments by class ($ in thousands):



	As of
Type of Investment	September 30, 2017			December 31, 2016
Senior mortgages	$	594,081		$	940,738
Corporate/Partnership loans	495,066			490,389
Subordinate mortgages	9,335			24,941
Total gross carrying value of loans	1,098,482			1,456,068
Reserves for loan losses	(76,189		)	(85,545		)
Total loans receivable, net	1,022,293			1,370,523
Other lending investments—securities	87,149			79,916
Total loans receivable and other lending investments, net	$	1,109,442		$	1,450,439

Schedule of changes in the Company's reserve for loan losses

Changes in the Company's reserve for loan losses were as follows ($ in thousands):



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Reserve for loan losses at beginning of period	$	78,789		$	110,371		$	85,545		$	108,165
(Recovery of) provision for loan losses⁽¹⁾	(2,600		)	(14,955		)	(8,128		)	(12,749		)
Charge-offs	—			—			(1,228		)	—
Reserve for loan losses at end of period	$	76,189		$	95,416		$	76,189		$	95,416

_______________________________________________________________________________


(1)	For the three and nine months ended September 30, 2016, the provision for loan losses includes recoveries of previously recorded asset-specific loan loss reserves of $11.7 million.

Schedule of recorded investment in loans and associated reserve for loan losses

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 September 30, 2017
Loans	$	238,155		$	865,953		$	1,104,108
Less: Reserve for loan losses	(60,989		)	(15,200		)	(76,189		)
Total⁽³⁾	$	177,166		$	850,753		$	1,027,919
As of December 31, 2016
Loans	$	253,941		$	1,209,062		$	1,463,003
Less: Reserve for loan losses	(62,245		)	(23,300		)	(85,545		)
Total⁽³⁾	$	191,696		$	1,185,762		$	1,377,458

_______________________________________________________________________________

(1)

The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.7 million and $0.4 million as of September 30, 2017 and December 31, 2016, 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 premiums of $6.2 million and $1.9 million as of September 30, 2017 and December 31, 2016, respectively.

(3)

The Company's recorded investment in loans as of September 30, 2017 and December 31, 2016 includes accrued interest of $5.6 million and $6.9 million, respectively, which are included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of September 30, 2017 and December 31, 2016, the total excludes $87.1 million and $79.9 million, respectively, of securities that are evaluated for impairment under ASC 320.

Schedule of investment in performing loans, presented by class and by credit quality, as indicated by risk rating

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 September 30, 2017			As of December 31, 2016
	Performing Loans		Weighted Average Risk Ratings	Performing Loans		Weighted Average Risk Ratings
Senior mortgages	$	515,610	2.47	$	859,250	3.12
Corporate/Partnership loans	340,980		2.76	335,677		3.09
Subordinate mortgages	9,363		3.00	14,135		3.00
Total	$	865,953	2.59	$	1,209,062	3.11

Schedule of recorded investment in loans, aged by payment status and presented by class

The Company's recorded investment in loans, aged by payment status and presented by class, was as follows ($ in thousands):



	Current		Less Than and Equal to 90 Days		Greater Than 90 Days⁽¹⁾		Total Past Due		Total
As of September 30, 2017
Senior mortgages	$	521,610	$	—	$	75,732	$	75,732	$	597,342
Corporate/Partnership loans	340,980		—		156,423		156,423		497,403
Subordinate mortgages	9,363		—		—		—		9,363
Total	$	871,953	$	—	$	232,155	$	232,155	$	1,104,108
As of December 31, 2016
Senior mortgages	$	868,505	$	—	$	76,677	$	76,677	$	945,182
Corporate/Partnership loans	335,677		—		157,146		157,146		492,823
Subordinate mortgages	24,998		—		—		—		24,998
Total	$	1,229,180	$	—	$	233,823	$	233,823	$	1,463,003

_______________________________________________________________________________

(1)

As of September 30, 2017, 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 8.0 years outstanding. As of December 31, 2016, 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 8.0 years outstanding.

Schedule of recorded investment in impaired loans, presented by class

The Company's recorded investment in impaired loans, presented by class, was as follows ($ in thousands)⁽¹⁾:



	As of September 30, 2017							As of December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance			Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Subordinate mortgages	$	—	$	—	$	—		$	10,862	$	10,846	$	—
Subtotal	—		—		—			10,862		10,846		—
With an allowance recorded:
Senior mortgages	81,732		81,848		(48,518		)	85,933		85,780		(49,774		)
Corporate/Partnership loans	156,423		145,849		(12,471		)	157,146		146,783		(12,471		)
Subtotal	238,155		227,697		(60,989		)	243,079		232,563		(62,245		)
Total:
Senior mortgages	81,732		81,848		(48,518		)	85,933		85,780		(49,774		)
Corporate/Partnership loans	156,423		145,849		(12,471		)	157,146		146,783		(12,471		)
Subordinate mortgages	—		—		—			10,862		10,846		—
Total	$	238,155	$	227,697	$	(60,989	)	$	253,941	$	243,409	$	(62,245	)

____________________________________________________________


(1)	All of the Company's non-accrual loans are considered impaired and included in the table above.

Schedule of average recorded investment in impaired loans and interest income recognized, presented by class

The Company's average recorded investment in impaired loans and interest income recognized, presented by class, were as follows ($ in thousands):



	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2017				2016				2017				2016
	Average Recorded Investment		Interest Income Recognized		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	$	—	$	—	$	4,608	$	114	$	—	$	—	$	4,575	$	226
Subordinate mortgages	5,501		385		11,567		—		8,227		385		5,784		—
Subtotal	5,501		385		16,175		114		8,227		385		10,359		226
With an allowance recorded:
Senior mortgages	82,007		—		127,494		—		83,100		—		127,169		—
Corporate/Partnership loans	156,399		—		81,108		—		156,811		—		43,339		—
Subtotal	238,406		—		208,602		—		239,911		—		170,508		—
Total:
Senior mortgages	82,007		—		132,102		114		83,100		—		131,744		226
Corporate/Partnership loans	156,399		—		81,108		—		156,811		—		43,339		—
Subordinate mortgages	5,501		385		11,567		—		8,227		385		5,784		—
Total	$	243,907	$	385	$	224,777	$	114	$	248,138	$	385	$	180,867	$	226

Schedule of other lending investments - securities

Other lending investments—securities include the following ($ in thousands):



	Face Value		Amortized Cost Basis		Net Unrealized Gain (Loss)		Estimated Fair Value		Net Carrying Value
As of September 30, 2017
Available-for-Sale Securities
Municipal debt securities	$	21,230	$	21,230	$	875	$	22,105	$	22,105
Held-to-Maturity Securities
Debt securities	65,007		65,044		1,158		66,202		65,044
Total	$	86,237	$	86,274	$	2,033	$	88,307	$	87,149
As of December 31, 2016
Available-for-Sale Securities
Municipal debt securities	$	21,240	$	21,240	$	426	$	21,666	$	21,666
Held-to-Maturity Securities
Debt securities	58,454		58,250		2,753		61,003		58,250
Total	$	79,694	$	79,490	$	3,179	$	82,669	$	79,916