XML 128 R15.htm IDEA: XBRL DOCUMENT

Loans Receivable and Other Lending Investments, net

9 Months Ended

Sep. 30, 2019

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
Type of Investment	September 30, 2019			December 31, 2018
Senior mortgages	$	554,567		$	760,749
Corporate/Partnership loans	121,500			148,583
Subordinate mortgages	10,695			10,161
Total gross carrying value of loans	686,762			919,493
Reserves for loan losses	(30,401		)	(53,395		)
Total loans receivable, net	656,361			866,098
Other lending investments⁽¹⁾	151,928			122,126
Total loans receivable and other lending investments, net	$	808,289		$	988,224

____________________________________________________________


(1)	As of September 30, 2019, includes $44.2 million related to the acquisition of bowling centers from one of the Company's lessees (refer to Note 5).

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,
	2019			2018		2019			2018
Reserve for loan losses at beginning of period	$	53,408		$	54,495	$	53,395		$	78,489
(Recovery of) provision for loan losses	(3,805		)	200		(3,792		)	18,237
Charge-offs	(19,202		)	—		(19,202		)	(42,031		)
Reserve for loan losses at end of period	$	30,401		$	54,695	$	30,401		$	54,695

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, 2019
Loans	$	38,400		$	652,523		$	690,923
Less: Reserve for loan losses	(21,701		)	(8,700		)	(30,401		)
Total⁽³⁾	$	16,699		$	643,823		$	660,522
As of December 31, 2018
Loans	$	66,725		$	857,662		$	924,387
Less: Reserve for loan losses	(40,395		)	(13,000		)	(53,395		)
Total⁽³⁾	$	26,330		$	844,662		$	870,992

_______________________________________________________________________________

(1)

The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.1 million and $0.5 million as of September 30, 2019 and December 31, 2018, 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 $1.3 million and $3.1 million as of September 30, 2019 and December 31, 2018, respectively.

(3)

The Company's recorded investment in loans as of September 30, 2019 and December 31, 2018 includes accrued interest of $4.2 million and $4.9 million, respectively, which is included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of September 30, 2019, excludes $44.2 million of other lending investments that are evaluated for impairment when, based upon current information and events, the Company believes it is probable that it will be unable to collect all amounts due under the contractual terms of the lease (refer to Note 5). As of September 30, 2019 and December 31, 2018, the total amounts exclude $107.7 million and $122.1 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 designates loans as non-performing at such time as: (1) the loan becomes 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. All non-performing loans are placed on non-accrual status and income is only recognized in certain cases upon actual cash receipt.

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, 2019			As of December 31, 2018
	Performing Loans		Weighted Average Risk Ratings	Performing Loans		Weighted Average Risk Ratings
Senior mortgages	$	519,289	2.71	$	697,807	2.76
Corporate/Partnership loans	122,507		3.15	149,663		2.84
Subordinate mortgages	10,727		3.00	10,192		3.00
Total	$	652,523	2.80	$	857,662	2.77

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, 2019
Senior mortgages	$	519,289	$	—	$	38,400	$	38,400	$	557,689
Corporate/Partnership loans	122,507		—		—		—		122,507
Subordinate mortgages	10,727		—		—		—		10,727
Total	$	652,523	$	—	$	38,400	$	38,400	$	690,923
As of December 31, 2018
Senior mortgages	$	703,807	$	—	$	60,725	$	60,725	$	764,532
Corporate/Partnership loans	149,663		—		—		—		149,663
Subordinate mortgages	10,192		—		—		—		10,192
Total	$	863,662	$	—	$	60,725	$	60,725	$	924,387

_______________________________________________________________________________

(1)

As of September 30, 2019, the Company had one loan which was greater than 90 days delinquent and was in various stages of resolution, including legal and environmental matters, and was 10.3 years outstanding. As of December 31, 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 years to 9.0 years outstanding.

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



	As of September 30, 2019							As of December 31, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance			Recorded Investment		Unpaid Principal Balance		Related Allowance
With an allowance recorded:
Senior mortgages	$	38,400	$	38,501	$	(21,701	)	$	66,725	$	66,777	$	(40,395	)
Total	$	38,400	$	38,501	$	(21,701	)	$	66,725	$	66,777	$	(40,395	)

____________________________________________________________


(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 Three Months Ended September 30,								For the Nine Months Ended September 30,
	2019				2018				2019				2018
	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	$	—	$	—	$	—	$	301
Subtotal	—		—		—		209		—		—		—		301
With an allowance recorded:
Senior mortgages	38,572		—		67,001		—		39,074		—		70,696		—
Corporate/Partnership loans	—		—		—		—		—		—		78,302		—
Subtotal	38,572		—		67,001		—		39,074		—		148,998		—
Total:
Senior mortgages	38,572		—		67,001		—		39,074		—		70,696		—
Corporate/Partnership loans	—		—		—		—		—		—		78,302		—
Subordinate mortgages	—		—		—		209		—		—		—		301
Total	$	38,572	$	—	$	67,001	$	209	$	39,074	$	—	$	148,998	$	301

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



	Face Value		Amortized Cost Basis		Net Unrealized Gain		Estimated Fair Value		Net Carrying Value
As of September 30, 2019
Available-for-Sale Securities
Municipal debt securities	$	21,140	$	21,140	$	2,962	$	24,102	$	24,102
Held-to-Maturity Securities
Debt securities	100,000		83,593		—		83,593		83,593
Total	$	121,140	$	104,733	$	2,962	$	107,695	$	107,695
As of December 31, 2018
Available-for-Sale Securities
Municipal debt securities	$	21,185	$	21,185	$	476	$	21,661	$	21,661
Held-to-Maturity Securities
Debt securities	120,866		100,465		7		100,472		100,465
Total	$	142,051	$	121,650	$	483	$	122,133	$	122,126

As of September 30, 2019, 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	83,593		83,593		—		—
After 5 years through 10 years	—		—		—		—
After 10 years	—		—		21,140		24,102
Total	$	83,593	$	83,593	$	21,140	$	24,102

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details