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Loans Receivable and Other Lending Investments, net | 6 Months Ended
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Jun. 30, 2020
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 |  |
|  | June 30, 2020 |  | December 31, 2019
Construction loans |  |  |  |
Senior mortgages |  | $ | 496,465 |  |  | $ | 518,992 |
Corporate/Partnership loans |  | 96,464 |  |  | 95,394 |
Subtotal - gross carrying value of construction loans(1) |  | 592,929 |  |  | 614,386 |
Loans |  |  |  |
Senior mortgages |  | 53,142 |  |  | 53,592 |
Corporate/Partnership loans |  | 22,597 |  |  | 24,424 |
Subordinate mortgages |  | 11,252 |  |  | 10,877 |
Subtotal - gross carrying value of loans |  | 86,991 |  |  | 88,893 |
Other lending investments |  |  |  |
Financing receivables (refer to Note 5) |  | 45,033 |  |  | 44,339 |
Held-to-maturity debt securities |  | 87,755 |  |  | 84,981 |
Available-for-sale debt securities |  | 24,611 |  |  | 23,896 |
Subtotal - other lending investments |  | 157,399 |  |  | 153,216 |
Total gross carrying value of loans receivable and other lending investments |  | 837,319 |  |  | 856,495 |
Allowance for loan losses |  | (35,612) |  |  | (28,634) |
Total loans receivable and other lending investments, net |  | $ | 801,707 |  |  | $ | 827,861 |
____________________________________________________________ (1)As of June 30, 2020, 20%, or $119.3 million, gross carrying value of construction loans had completed construction and 35%, or $209.0 million, gross carrying value of construction loans had substantially completed construction. Allowance for Loan Losses—Changes in the Company's allowance for loan losses were as follows for the three months ended June 30, 2020 ($ in thousands):
|  |  | General Allowance |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Construction Loans |  | Loans |  | Held to Maturity Debt Securities |  | Financing Receivables |  | Specific Allowance |  | Total
Allowance for loan losses at beginning of period |  |  |  | $ | 9,724 |  |  | $ | 686 |  |  | $ | 53 |  |  | $ | 1,100 |  |  | $ | 21,701 |  |  | $ | 33,264 |
Provision for loan losses(1) |  |  |  | 2,012 |  |  | 219 |  |  | 58 |  |  | 59 |  |  | — |  |  | 2,348 |
Allowance for loan losses at end of period |  |  |  | $ | 11,736 |  |  | $ | 905 |  |  | $ | 111 |  |  | $ | 1,159 |  |  | $ | 21,701 |  |  | $ | 35,612 |
____________________________________________________________ (1)During the three months ended June 30, 2020, the Company recorded a provision for loan losses of $2.3 million (refer to Note 3) resulting from the macroeconomic impact of COVID-19 on commercial real estate markets, which was partially offset by a $0.3 million reduction in provision for loan losses for unfunded loan commitments that were funded during the three months ended June 30, 2020, and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities." Changes in the Company's allowance for loan losses were as follows for the six months ended June 30, 2020 ($ in thousands):
|  |  | General Allowance |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Construction Loans |  | Loans |  | Held to Maturity Debt Securities |  | Financing Receivables |  | Specific Allowance |  | Total
Allowance for loan losses at beginning of period |  |  |  | $ | 6,668 |  |  | $ | 265 |  |  | $ | — |  |  | $ | — |  |  | $ | 21,701 |  |  | $ | 28,634 |
Adoption of new accounting standard(1) |  |  |  | (353) |  |  | 98 |  |  | 20 |  |  | 964 |  |  | — |  |  | 729 |
Provision for loan losses(2) |  |  |  | 5,421 |  |  | 542 |  |  | 91 |  |  | 195 |  |  | — |  |  | 6,249 |
Allowance for loan losses at end of period |  |  |  | $ | 11,736 |  |  | $ | 905 |  |  | $ | 111 |  |  | $ | 1,159 |  |  | $ | 21,701 |  |  | $ | 35,612 |
____________________________________________________________ (1)On January 1, 2020, the Company recorded an increase to its allowance for loan losses of $3.3 million upon the adoption of ASU 2016-13 (refer to Note 3), of which $2.5 million related to expected credit losses for unfunded loan commitments and was recorded in "Accounts payable, accrued expenses and other liabilities." (2)During the six months ended June 30, 2020, the Company recorded a provision for loan losses of $6.2 million (refer to Note 3) resulting from the macroeconomic impact of COVID-19 on commercial real estate markets, which was partially offset by a $0.2 million reduction in provision for loan losses for unfunded loan commitments that were funded during the six months ended June 30, 2020, and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities." The Company's investment in loans and other lending investments and the associated allowance for loan losses were as follows as of June 30, 2020 and December 31, 2019 ($ in thousands):
| Individually Evaluated for Impairment(1) |  | Collectively Evaluated for Impairment |  | Total
As of June 30, 2020 |  |  |  |  |
Construction loans(2) | $ | — |  |  | $ | 592,929 |  |  | $ | 592,929 |
Loans(2) | 37,307 |  |  | 49,684 |  |  | 86,991 |
Financing receivables | — |  |  | 45,033 |  |  | 45,033 |
Held-to-maturity debt securities | — |  |  | 87,755 |  |  | 87,755 |
Available-for-sale debt securities(3) | — |  |  | 24,611 |  |  | 24,611 |
Less: Allowance for loan losses | (21,701) |  |  | (13,911) |  |  | (35,612) |
Total | $ | 15,606 |  |  | $ | 786,101 |  |  | $ | 801,707 |
As of December 31, 2019 |  |  |  |  |
Construction loans(2) | $ | — |  |  | $ | 614,386 |  |  | $ | 614,386 |
Loans(2) | 37,820 |  |  | 51,073 |  |  | 88,893 |
Financing receivables | — |  |  | 44,339 |  |  | 44,339 |
Held-to-maturity debt securities | — |  |  | 84,981 |  |  | 84,981 |
Available-for-sale debt securities(3) | — |  |  | 23,896 |  |  | 23,896 |
Less: Allowance for loan losses | (21,701) |  |  | (6,933) |  |  | (28,634) |
Total | $ | 16,119 |  |  | $ | 811,742 |  |  | $ | 827,861 |
_______________________________________________________________________________ (1)The carrying value of this loan includes an unamortized discount of $0.1 million as of June 30, 2020 and December 31, 2019. The Company's one loan individually evaluated for impairment represents a loan on non-accrual status; therefore, the unamortized amount associated with this loan is 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 $0.1 million and $0.7 million as of June 30, 2020 and December 31, 2019, respectively. (3)Available-for-sale debt securities are evaluated for impairment under ASC 326-30. Credit Characteristics—As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments, which are inherently uncertain, and there can be no assurance that actual performance will be similar to current expectation. The Company designates loans as non-performing at such time as: (1) the loan becomes 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. All non-performing loans are placed on non-accrual status and income is only recognized in certain cases upon actual cash receipt. The Company's amortized cost basis in performing senior mortgages, corporate/partnership loans, subordinate mortgages and financing receivables, presented by year of origination and by credit quality, as indicated by risk rating, as of June 30, 2020 were as follows ($ in thousands):
|  | Year of Origination |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior to 2016 |  | Total |
Senior mortgages |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1.0 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |
1.5 |  | — |  |  | — |  |  | 34,219 |  |  | — |  |  | — |  |  | — |  |  | 34,219 |  |
2.0 |  | — |  |  | — |  |  | 51,128 |  |  | — |  |  | — |  |  | — |  |  | 51,128 |  |
2.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
3.0 |  | — |  |  | 13,070 |  |  | 182,915 |  |  | 137,881 |  |  | 40,097 |  |  | 4,329 |  |  | 378,292 |  |
3.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
4.0 |  | — |  |  | — |  |  | — |  |  | 48,661 |  |  | — |  |  | — |  |  | 48,661 |  |
4.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
5.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
Subtotal(1) |  | $ | — |  |  | $ | 13,070 |  |  | $ | 268,262 |  |  | $ | 186,542 |  |  | $ | 40,097 |  |  | $ | 4,329 |  |  | $ | 512,300 |  |
Corporate/partnership loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1.0 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |
1.5 |  | — |  |  | — |  |  | 18,012 |  |  | — |  |  | — |  |  | — |  |  | 18,012 |  |
2.0 |  | — |  |  | — |  |  | 15,890 |  |  | — |  |  | — |  |  | — |  |  | 15,890 |  |
2.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
3.0 |  | — |  |  |  |  | 22,464 |  |  | — |  |  | — |  |  | — |  |  | 22,464 |  |
3.5 |  | — |  |  | — |  |  | 22,597 |  |  | — |  |  | 40,098 |  |  | — |  |  | 62,695 |  |
4.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
4.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
5.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
Subtotal |  | $ | — |  |  | $ | — |  |  | $ | 78,963 |  |  | $ | — |  |  | $ | 40,098 |  |  | $ | — |  |  | $ | 119,061 |  |
Subordinate mortgages |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1.0 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |
1.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
2.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
2.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
3.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11,252 |  |  | 11,252 |  |
3.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
4.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
4.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
5.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
Subtotal |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 11,252 |  |  | $ | 11,252 |  |
Financing receivables |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1.0 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |
1.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
2.0 |  | — |  |  | 45,033 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 45,033 |  |
2.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
3.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
3.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
4.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
4.5 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
5.0 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
Subtotal |  | $ | — |  |  | $ | 45,033 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 45,033 |  |
Total |  | $ | — |  |  | $ | 58,103 |  |  | $ | 347,225 |  |  | $ | 186,542 |  |  | $ | 80,195 |  |  | $ | 15,581 |  |  | $ | 687,646 |  |
____________________________________________________________ (1)As of June 30, 2020, excludes $37.3 million for one loan on non-accrual status. The Company's amortized cost basis in loans, aged by payment status and presented by class, was as follows ($ in thousands):
| Current |  | Less Than and Equal to 90 Days |  | Greater Than 90 Days(1) |  | Total Past Due |  | Total
As of June 30, 2020 |  |  |  |  |  |  |  |  |
Senior mortgages | $ | 512,300 |  |  | $ | — |  |  | $ | 37,307 |  |  | $ | 37,307 |  |  | $ | 549,607 |
Corporate/Partnership loans | 119,061 |  |  | — |  |  | — |  |  | — |  |  | 119,061 |
Subordinate mortgages | 11,252 |  |  | — |  |  | — |  |  | — |  |  | 11,252 |
Total | $ | 642,613 |  |  | $ | — |  |  | $ | 37,307 |  |  | $ | 37,307 |  |  | $ | 679,920 |
As of December 31, 2019 |  |  |  |  |  |  |  |  |
Senior mortgages | $ | 534,765 |  |  | $ | — |  |  | $ | 37,820 |  |  | $ | 37,820 |  |  | $ | 572,585 |
Corporate/Partnership loans | 119,818 |  |  | — |  |  | — |  |  | — |  |  | 119,818 |
Subordinate mortgages | 10,877 |  |  | — |  |  | — |  |  | — |  |  | 10,877 |
Total | $ | 665,460 |  |  | $ | — |  |  | $ | 37,820 |  |  | $ | 37,820 |  |  | $ | 703,280 |
_______________________________________________________________________________ (1)As of June 30, 2020 and December 31, 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 11.0 years and 10.5 years outstanding, respectively. Impaired Loans—The Company's impaired loan was as follows ($ in thousands):
| As of June 30, 2020 |  |  |  |  |  | As of December 31, 2019 |  |  |  |
| Amortized Cost |  | Unpaid Principal Balance |  | Related Allowance |  | Amortized Cost |  | Unpaid Principal Balance |  | Related Allowance
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages(1) | $ | 37,307 |  |  | $ | 37,407 |  |  | $ | (21,701) |  |  | $ | 37,820 |  |  | $ | 37,923 |  |  | $ | (21,701) |
Total | $ | 37,307 |  |  | $ | 37,407 |  |  | $ | (21,701) |  |  | $ | 37,820 |  |  | $ | 37,923 |  |  | $ | (21,701) |
____________________________________________________________ (1)The Company's non-accrual loan is considered impaired and included in the table above. The Company did not record any interest income on impaired loans for the six months ended June 30, 2020 and 2019. 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 June 30, 2020 |  |  |  |  |  |  |  |  |
Available-for-Sale Securities |  |  |  |  |  |  |  |  |
Municipal debt securities | $ | 20,680 |  |  | $ | 20,680 |  |  | $ | 3,931 |  |  | $ | 24,611 |  |  | $ | 24,611 |
Held-to-Maturity Securities |  |  |  |  |  |  |  |  |
Debt securities | 100,000 |  |  | 87,755 |  |  | — |  |  | 87,755 |  |  | 87,755 |
Total | $ | 120,680 |  |  | $ | 108,435 |  |  | $ | 3,931 |  |  | $ | 112,366 |  |  | $ | 112,366 |
As of December 31, 2019 |  |  |  |  |  |  |  |  |
Available-for-Sale Securities |  |  |  |  |  |  |  |  |
Municipal debt securities | $ | 21,140 |  |  | $ | 21,140 |  |  | $ | 2,756 |  |  | $ | 23,896 |  |  | $ | 23,896 |
Held-to-Maturity Securities |  |  |  |  |  |  |  |  |
Debt securities | 100,000 |  |  | 84,981 |  |  | — |  |  | 84,981 |  |  | 84,981 |
Total | $ | 121,140 |  |  | $ | 106,121 |  |  | $ | 2,756 |  |  | $ | 108,877 |  |  | $ | 108,877 |
As of June 30, 2020, the contractual maturities of the Company's securities were as follows ($ in thousands):
| Held-to-Maturity Debt Securities |  |  |  | Available-for-Sale Debt Securities |  |
| Amortized Cost Basis |  | Estimated Fair Value |  | Amortized Cost Basis |  | Estimated Fair Value
Maturities |  |  |  |  |  |  |
Within one year | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
After one year through 5 years | 87,755 |  |  | 87,755 |  |  | — |  |  | — |
After 5 years through 10 years | — |  |  | — |  |  | — |  |  | — |
After 10 years | — |  |  | — |  |  | 20,680 |  |  | 24,611 |
Total | $ | 87,755 |  |  | $ | 87,755 |  |  | $ | 20,680 |  |  | $ | 24,611 |

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- 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 Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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