Loans Receivable and Other Lending Investments, net (Tables)

9 Months Ended

Sep. 30, 2018

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, 2018			December 31, 2017
Senior mortgages	$	801,595		$	791,152
Corporate/Partnership loans⁽¹⁾	152,390			488,921
Subordinate mortgages	9,990			9,495
Total gross carrying value of loans	963,975			1,289,568
Reserves for loan losses	(54,695		)	(78,489		)
Total loans receivable, net	909,280			1,211,079
Other lending investments—securities	119,772			89,576
Total loans receivable and other lending investments, net	$	1,029,052		$	1,300,655

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(1)	In the second quarter 2018, the Company resolved a non-performing loan with a carrying value of $145.8 million. Refer to "Impaired Loans" section below.

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,
	2018		2017			2018			2017
Reserve for loan losses at beginning of period	$	54,495	$	78,789		$	78,489		$	85,545
Provision for (recovery of) loan losses	200		(2,600		)	18,237			(8,128		)
Charge-offs	—		—			(42,031		)	(1,228		)
Reserve for loan losses at end of period	$	54,695	$	76,189		$	54,695		$	76,189

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, 2018
Loans	$	66,936		$	901,936		$	968,872
Less: Reserve for loan losses	(40,395		)	(14,300		)	(54,695		)
Total⁽³⁾	$	26,541		$	887,636		$	914,177
As of December 31, 2017
Loans	$	237,877		$	1,056,944		$	1,294,821
Less: Reserve for loan losses	(60,989		)	(17,500		)	(78,489		)
Total⁽³⁾	$	176,888		$	1,039,444		$	1,216,332

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(1)

The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.5 million and $0.7 million as of September 30, 2018 and December 31, 2017, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status; 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 $3.4 million and net premiums of $6.2 million as of September 30, 2018 and December 31, 2017, respectively.

(3)

The Company's recorded investment in loans as of September 30, 2018 and December 31, 2017, including accrued interest of $5.4 million and $5.3 million, respectively, is included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of September 30, 2018 and December 31, 2017, the total amounts exclude $119.8 million and $89.6 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, 2018			As of December 31, 2017
	Performing Loans		Weighted Average Risk Ratings	Performing Loans		Weighted Average Risk Ratings
Senior mortgages	$	738,570	3.18	$	713,057	2.72
Corporate/Partnership loans	153,346		3.39	334,364		2.85
Subordinate mortgages	10,020		3.50	9,523		3.00
Total	$	901,936	3.22	$	1,056,944	2.77

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, 2018
Senior mortgages	$	744,570	$	—	$	60,936	$	60,936	$	805,506
Corporate/Partnership loans	153,346		—		—		—		153,346
Subordinate mortgages	10,020		—		—		—		10,020
Total	$	907,936	$	—	$	60,936	$	60,936	$	968,872
As of December 31, 2017
Senior mortgages	$	719,057	$	—	$	75,343	$	75,343	$	794,400
Corporate/Partnership loans	334,364		—		156,534		156,534		490,898
Subordinate mortgages	9,523		—		—		—		9,523
Total	$	1,062,944	$	—	$	231,877	$	231,877	$	1,294,821

_______________________________________________________________________________

(1)

As of September 30, 2018, the Company had two loans which were greater than 90 days delinquent and were in various stages of resolution, including legal and foreclosure-related proceedings and environmental matters, and ranged from 4.0 to 9.0 years outstanding. As of December 31, 2017, the Company had four loans which were greater than 90 days delinquent and were in various stages of resolution, including legal and foreclosure-related proceedings and environmental matters, and ranged from 1.0 to 9.0 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, 2018							As of December 31, 2017
	Recorded Investment		Unpaid Principal Balance		Related Allowance			Recorded Investment		Unpaid Principal Balance		Related Allowance
With an allowance recorded:
Senior mortgages	$	66,936	$	67,133	$	(40,395	)	$	81,343	$	81,431	$	(48,518	)
Corporate/Partnership loans	—		—		—			156,534		145,849		(12,471		)
Total	$	66,936	$	67,133	$	(40,395	)	$	237,877	$	227,280	$	(60,989	)

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(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,
	2018				2017				2018				2017
	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:
Subordinate mortgages	$	—	$	209	$	5,501	$	385	$	—	$	301	$	8,227	$	385
Subtotal	—		209		5,501		385		—		301		8,227		385
With an allowance recorded:
Senior mortgages	67,001		—		82,007		—		70,696		—		83,100		—
Corporate/Partnership loans	—		—		156,399		—		78,302		—		156,811		—
Subtotal	67,001		—		238,406		—		148,998		—		239,911		—
Total:
Senior mortgages	67,001		—		82,007		—		70,696		—		83,100		—
Corporate/Partnership loans	—		—		156,399		—		78,302		—		156,811		—
Subordinate mortgages	—		209		5,501		385		—		301		8,227		385
Total	$	67,001	$	209	$	243,907	$	385	$	148,998	$	301	$	248,138	$	385

Schedule of other lending investments - securities

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



	Face Value		Amortized Cost Basis		Net Unrealized Gain		Estimated Fair Value		Net Carrying Value
As of September 30, 2018
Available-for-Sale Securities
Municipal debt securities	$	21,185	$	21,185	$	97	$	21,282	$	21,282
Held-to-Maturity Securities
Debt securities	120,195		98,490		1,640		100,130		98,490
Total	$	141,380	$	119,675	$	1,737	$	121,412	$	119,772
As of December 31, 2017
Available-for-Sale Securities
Municipal debt securities	$	21,230	$	21,230	$	1,612	$	22,842	$	22,842
Held-to-Maturity Securities
Debt securities	66,618		66,734		1,581		68,315		66,734
Total	$	87,848	$	87,964	$	3,193	$	91,157	$	89,576

Schedule of contractual maturities of securities

As of September 30, 2018, 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	$	20,184	$	20,434	$	—	$	—
After one year through 5 years	78,306		79,696		—		—
After 5 years through 10 years	—		—		—		—
After 10 years	—		—		21,185		21,282
Total	$	98,490	$	100,130	$	21,185	$	21,282