Mortgage Loans on Real Estate (Tables)

6 Months Ended

Jun. 30, 2014

Mortgage Loans on Real Estate [Abstract]

Our mortgage loan portfolio, summarized in the following table, totaled $2.5 billion at June 30, 2014 and $2.6 billion at December 31, 2013, with commitments outstanding of $38.6 million at June 30, 2014.



	June 30, 2014			December 31, 2013
	(Dollars in thousands)
Principal outstanding	$	2,570,950		$	2,607,698
Loan loss allowance	(26,582		)	(26,047		)
Deferred prepayment fees	(558		)	(569		)
Carrying value	$	2,543,810		$	2,581,082

Mortgage Loan Portfolio Summarized by Geographic Region and Property Type

The mortgage loan portfolio is summarized by geographic region and property type as follows:



	June 30, 2014				December 31, 2013
	Principal		Percent		Principal		Percent
	(Dollars in thousands)
Geographic distribution
East	$	774,014	30.1	%	$	765,717	29.4	%
Middle Atlantic	145,663		5.7	%	156,489		6.0	%
Mountain	328,284		12.8	%	356,246		13.7	%
New England	14,700		0.6	%	21,324		0.8	%
Pacific	303,922		11.8	%	317,431		12.2	%
South Atlantic	500,612		19.5	%	483,852		18.5	%
West North Central	338,343		13.1	%	351,794		13.5	%
West South Central	165,412		6.4	%	154,845		5.9	%
	$	2,570,950	100.0	%	$	2,607,698	100.0	%
Property type distribution
Office	$	533,472	20.8	%	$	590,414	22.6	%
Medical Office	104,025		4.0	%	125,703		4.8	%
Retail	729,497		28.4	%	711,364		27.3	%
Industrial/Warehouse	681,540		26.5	%	673,449		25.8	%
Hotel	43,784		1.7	%	61,574		2.4	%
Apartment	340,621		13.2	%	291,823		11.2	%
Mixed use/other	138,011		5.4	%	153,371		5.9	%
	$	2,570,950	100.0	%	$	2,607,698	100.0	%

Rollforward of Allowance for Credit Losses

The following tables present a rollforward of our specific and general valuation allowances for mortgage loans on real estate:



	Three Months Ended June 30, 2014						Three Months Ended June 30, 2013
	Specific Allowance			General Allowance			Specific Allowance			General Allowance
	(Dollars in thousands)
Beginning allowance balance	$	(16,462	)	$	(8,800	)	$	(22,631	)	$	(10,400	)
Charge-offs	1,808			—			2,612			—
Recoveries	255			—			—			—
Provision for credit losses	(2,883		)	(500		)	(1,157		)	(100		)
Ending allowance balance	$	(17,282	)	$	(9,300	)	$	(21,176	)	$	(10,500	)

	Six Months Ended June 30, 2014						Six Months Ended June 30, 2013
	Specific Allowance			General Allowance			Specific Allowance			General Allowance
	(Dollars in thousands)
Beginning allowance balance	$	(16,847	)	$	(9,200	)	$	(23,134	)	$	(11,100	)
Charge-offs	2,757			—			4,181			—
Recoveries	255			—			—			—
Provision for credit losses	(3,447		)	(100		)	(2,223		)	600
Ending allowance balance	$	(17,282	)	$	(9,300	)	$	(21,176	)	$	(10,500	)

Impaired Mortgage Loans on Real Estate by Basis of Impairment

The following table presents the total outstanding principal of loans evaluated for impairment by basis of impairment method:



	June 30, 2014		December 31, 2013
	(Dollars in thousands)
Individually evaluated for impairment	$	42,963	$	47,018
Collectively evaluated for impairment	2,527,987		2,560,680
Total loans evaluated for impairment	$	2,570,950	$	2,607,698

Real Estate Acquired Via Foreclosure or Deed In Lieu

The following table summarizes the activity in the real estate owned which was obtained in satisfaction of mortgage loans on real estate:



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(Dollars in thousands)
Real estate owned at beginning of period	$	20,592		$	28,764		$	22,844		$	33,172
Real estate acquired in satisfaction of mortgage loans	8,294			—			10,007			844
Additions	—			480			—			480
Sales	(4,118		)	(2,333		)	(7,148		)	(7,413		)
Impairments	—			(145		)	(799		)	(145		)
Depreciation	(162		)	(157		)	(298		)	(329		)
Real estate owned at end of period	$	24,606		$	26,609		$	24,606		$	26,609

Mortgage Loans By Credit Quality Indicator

We analyze credit risk of our mortgage loans by analyzing all available evidence on loans that are delinquent and loans that are in a workout period.



	June 30, 2014		December 31, 2013
	(Dollars in thousands)
Credit Exposure--By Payment Activity
Performing	$	2,559,419	$	2,593,276
In workout	2,213		6,248
Delinquent	—		—
Collateral dependent	9,318		8,174
	$	2,570,950	$	2,607,698

Aging of Financing Receivables

Aging of financing receivables is summarized in the following table, with loans in a "workout" period as of the reporting date considered current if payments are current in accordance with agreed upon terms:



	30 - 59 Days		60 - 89 Days		90 Days and Over		Total Past Due		Current		Collateral Dependent Receivables		Total Financing Receivables
	(Dollars in thousands)
Commercial Mortgage Loans
June 30, 2014	$	1,045	$	—	$	—	$	1,045	$	2,560,587	$	9,318	$	2,570,950
December 31, 2013	$	—	$	—	$	—	$	—	$	2,599,524	$	8,174	$	2,607,698

Impaired Financing Receivables

Financing receivables summarized in the following two tables represent all loans that we are either not currently collecting, or those we feel it is probable we will not collect, all amounts due according to the contractual terms of the loan agreements (all loans that we have worked with the borrower to alleviate short-term cash flow issues, loans delinquent for more than 60 days at the reporting date, loans we have determined to be collateral dependent and loans that we have recorded specific impairments on that we feel may continue to have performance issues).



	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)
June 30, 2014
Mortgage loans with an allowance	$	25,681	$	42,963	$	(17,282	)
Mortgage loans with no related allowance	2,656		2,656		—
	$	28,337	$	45,619	$	(17,282	)
December 31, 2013
Mortgage loans with an allowance	$	30,171	$	47,018	$	(16,847	)
Mortgage loans with no related allowance	3,264		3,264		—
	$	33,435	$	50,282	$	(16,847	)



	Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
Three months ended June 30, 2014
Mortgage loans with an allowance	$	27,054	$	600
Mortgage loans with no related allowance	2,656		13
	$	29,710	$	613
Three months ended June 30, 2013
Mortgage loans with an allowance	$	26,232	$	426
Mortgage loans with no related allowance	18,699		266
	$	44,931	$	692
Six months ended June 30, 2014
Mortgage loans with an allowance	$	27,236	$	1,235
Mortgage loans with no related allowance	2,656		—
	$	29,892	$	1,235
Six months ended June 30, 2013
Mortgage loans with an allowance	$	26,885	$	862
Mortgage loans with no related allowance	18,739		528
	$	45,624	$	1,390

Troubled Debt Restructurings on Financing Receivables

Mortgage loan workouts, refinances or restructures that are classified as TDRs are individually evaluated and measured for impairment. A summary of mortgage loans on commercial real estate with outstanding principal at June 30, 2014 and December 31, 2013 that we determined to be TDRs are as follows:



Geographic Region	Number of TDRs	Principal Balance Outstanding		Specific Loan Loss Allowance			Net Carrying Amount
		(Dollars in thousands)
June 30, 2014
South Atlantic	7	14,537		(3,911		)	10,626
East North Central	1	2,213		(467		)	1,746
West North Central	1	1,908		(474		)	1,434
	9	$	18,658	$	(4,852	)	$	13,806
December 31, 2013
East	1	$	3,712	$	(949	)	$	2,763
Mountain	7	22,140		(329		)	21,811
South Atlantic	7	13,930		(4,177		)	9,753
East North Central	1	2,219		(467		)	1,752
West North Central	1	1,938		(475		)	1,463
West South Central	1	1,714		(256		)	1,458
	18	$	45,653	$	(6,653	)	$	39,000