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Loans Receivable and Other Lending Investments, net | 12 Months Ended
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Dec. 31, 2016
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 | 2016 |  | 2015
Senior mortgages | $ | 940,738 |  |  | $ | 975,915 |
Corporate/Partnership loans | 490,389 |  |  | 643,270 |
Subordinate mortgages | 24,941 |  |  | 28,676 |
Total gross carrying value of loans | 1,456,068 |  |  | 1,647,861 |
Reserves for loan losses | (85,545 | ) |  | (108,165 | )
Total loans receivable, net | 1,370,523 |  |  | 1,539,696 |
Other lending investments—securities | 79,916 |  |  | 62,289 |
Total loans receivable and other lending investments, net | $ | 1,450,439 |  |  | $ | 1,601,985 |
In June 2015, the Company received a loan with a fair value of $146.7 million as a non-cash paydown on a $196.6 million loan and reduced the principal balance by the fair value to $49.9 million. 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 $24.0 million remaining balance of the original $196.6 million loan. During the year ended December 31, 2015, the Company sold a loan with a carrying value of $5.5 million. No gain or loss was recorded on the sale. During the year ended December 31, 2014, the Company sold loans with an aggregate carrying value of $30.8 million and recorded gains of $19.1 million. Gains on sales of loans are recorded in "Other income" in the Company's consolidated statements of operations. Reserve for Loan Losses—Changes in the Company's reserve for loan losses were as follows ($ in thousands):
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Reserve for loan losses at beginning of period | $ | 108,165 |  |  | $ | 98,490 |  |  | $ | 377,204 |
(Recovery of) provision for loan losses(1) | (12,514 | ) |  | 36,567 |  |  | (1,714 | )
Charge-offs | (10,106 | ) |  | (26,892 | ) |  | (277,000 | )
Reserve for loan losses at end of period | $ | 85,545 |  |  | $ | 108,165 |  |  | $ | 98,490 |
______________________________________________________________________________
(1) | For the years ended December 31, 2016, 2015 and 2014, the provision for loan losses includes recoveries of previously recorded asset-specific loan loss reserves of $13.7 million, $0.6 million and $10.1 million, respectively.
The Company's recorded investment in loans (comprised of a loan's carrying value plus accrued interest) and the associated reserve for loan losses were as follows ($ in thousands):
| Individually Evaluated for Impairment(1) |  | Collectively Evaluated for Impairment(2) |  | Total
As of December 31, 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 |
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(3) | $ | 60,327 |  |  | $ | 1,488,347 |  |  | $ | 1,548,674 |
_______________________________________________________________________________
(1) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.4 million and $0.2 million as of December 31, 2016 and 2015, 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. During the year ended December 31, 2016, the Company transferred a loan with a gross carrying value of $157.2 million to non-performing status due to the initiation of bankruptcy proceedings related to the collateral, which resulted in the release of $11.6 million of the general reserve. The Company performed a valuation and recorded a specific reserve of $12.5 million.
(2) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $1.9 million and $8.2 million as of December 31, 2016 and 2015, respectively.
(3) | The Company's recorded investment in loans as of December 31, 2016 and 2015 includes accrued interest of $6.9 million and $9.0 million, respectively, which are included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of December 31, 2016 and 2015, excludes $79.9 million and $62.3 million, respectively, of securities that are evaluated for impairment under ASC 320.
Credit Characteristics—As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments which are inherently uncertain and there can be no assurance that actual performance will be similar to current expectation. The Company's recorded investment in performing loans, presented by class and by credit quality, as indicated by risk rating, was as follows ($ in thousands):
| As of December 31,
| 2016 |  | 2015
| Performing Loans |  | Weighted Average Risk Ratings |  | Performing Loans |  | Weighted Average Risk Ratings
Senior mortgages | $ | 859,250 |  |  | 3.12 |  |  | $ | 853,595 |  |  | 2.96 |
Corporate/Partnership loans | 335,677 |  |  | 3.09 |  |  | 641,713 |  |  | 3.37 |
Subordinate mortgages | 14,135 |  |  | 3.00 |  |  | 29,039 |  |  | 3.64 |
Total | $ | 1,209,062 |  |  | 3.11 |  |  | $ | 1,524,347 |  |  | 3.15 |
The Company's recorded investment in loans, aged by payment status and presented by class, were as follows ($ in thousands):
As of December 31, 2016 | Current |  | Less Than and Equal to 90 Days |  | Greater Than 90 Days(1) |  | Total Past Due |  | Total
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 |
As of December 31, 2015 |  |  |  |  |  |  |  |  |
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, 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. 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, 2016 |  | As of December 31, 2015
| 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 | $ | 85,933 |  |  | $ | 85,780 |  |  | $ | (49,774 | ) |  | $ | 126,754 |  |  | $ | 125,776 |  |  | $ | (69,627 | )
Corporate/Partnership loans | 157,146 |  |  | 146,783 |  |  | (12,471 | ) |  | 5,738 |  |  | 5,738 |  |  | (2,538 | )
Subtotal | $ | 243,079 |  |  | $ | 232,563 |  |  | $ | (62,245 | ) |  | $ | 132,492 |  |  | $ | 131,514 |  |  | $ | (72,165 | )
Total: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | $ | 85,933 |  |  | $ | 85,780 |  |  | $ | (49,774 | ) |  | $ | 126,754 |  |  | $ | 125,776 |  |  | $ | (69,627 | )
Corporate/Partnership loans | 157,146 |  |  | 146,783 |  |  | (12,471 | ) |  | 5,738 |  |  | 5,738 |  |  | (2,538 | )
Subordinate mortgages | 10,862 |  |  | 10,846 |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 253,941 |  |  | $ | 243,409 |  |  | $ | (62,245 | ) |  | $ | 132,492 |  |  | $ | 131,514 |  |  | $ | (72,165 | )
_______________________________________________________________________________
(1) | All of the Company's non-accrual loans are considered impaired and included in the table above.
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,
| 2016 |  | 2015 |  | 2014
| 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 | $ | 3,661 |  |  | $ | 226 |  |  | $ | — |  |  | $ | — |  |  | $ | 35,659 |  |  | $ | 1,922 |
Subordinate mortgages | 6,799 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Subtotal | 10,460 |  |  | 226 |  |  | — |  |  | — |  |  | 35,659 |  |  | 1,922 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | 118,921 |  |  | — |  |  | 129,135 |  |  | 38 |  |  | 334,351 |  |  | 158 |
Corporate/Partnership loans | 66,101 |  |  | — |  |  | 24,252 |  |  | 12 |  |  | 52,963 |  |  | 181 |
Subtotal | 185,022 |  |  | — |  |  | 153,387 |  |  | 50 |  |  | 387,314 |  |  | 339 |
Total: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | 122,582 |  |  | 226 |  |  | 129,135 |  |  | 38 |  |  | 370,010 |  |  | 2,080 |
Corporate/Partnership loans | 66,101 |  |  | — |  |  | 24,252 |  |  | 12 |  |  | 52,963 |  |  | 181 |
Subordinate mortgages | 6,799 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 195,482 |  |  | $ | 226 |  |  | $ | 153,387 |  |  | $ | 50 |  |  | $ | 422,973 |  |  | $ | 2,261 |
There was no interest income related to the resolution of non-performing loans recorded during the years ended December 31, 2016, 2015 and 2014. 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 $7.0 million to grant a maturity extension of one year and included conditional extension options. The Company's recorded investment in this loan was not impacted by the modification. Generally when granting concessions, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and in some cases lookback features or equity kickers to offset concessions granted should conditions impacting the loan improve. The Company's determination of credit losses is impacted by troubled debt restructurings whereby loans that have gone through troubled debt restructurings are considered impaired, assessed for specific reserves, and are not included in the Company's assessment of general loan loss reserves. Loans previously restructured under troubled debt restructurings that subsequently default are reassessed to incorporate the Company's current assumptions on expected cash flows and additional provision expense is recorded to the extent necessary. As of December 31, 2016, there were no unfunded commitments associated with modified loans considered troubled debt restructurings. Securities—Other lending investments—securities includes the following ($ in thousands):
| Face Value |  | Amortized Cost Basis |  | Net Unrealized Gain (Loss) |  | Estimated Fair Value |  | Net Carrying Value
As of December 31, 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 |
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 |  |  |  |  |  |  |  |  |
Debt securities | 54,549 |  |  | 61,128 |  |  | 71 |  |  | 61,199 |  |  | 61,128 |
Total | $ | 55,559 |  |  | $ | 62,138 |  |  | $ | 222 |  |  | $ | 62,360 |  |  | $ | 62,289 |
As of December 31, 2016, 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 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
After one year through 5 years | 58,250 |  |  | 61,003 |  |  | — |  |  | — |
After 5 years through 10 years | — |  |  | — |  |  | — |  |  | — |
After 10 years | — |  |  | — |  |  | 21,240 |  |  | 21,666 |
Total | $ | 58,250 |  |  | $ | 61,003 |  |  | $ | 21,240 |  |  | $ | 21,666 |

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