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DEBT | 12 Months Ended
--- | ---
Dec. 31, 2022
Debt Disclosure [Abstract] |
DEBT | 7. DEBT The following table summarizes the debt balances as of December 31, 2022 and 2021, and the debt activity for the year ended December 31, 2022 (in thousands):
|  |  |  | During the Year Ended December 31, 2022 |  |
|  | Balances as of December 31, 2021 |  | Debt Issuances & Assumptions |  | Repayments |  | Accretion & (Amortization) |  | Balances as of December 31, 2022
Mortgage Payable: |  |  |  |  |  |  |  |  |  |
Outstanding Balance |  | $ | 97,100 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 97,100 |
Deferred debt issuance costs — Mortgage Payable |  | (120) |  |  | — |  |  | — |  |  | 26 |  |  | (94) |
Total Mortgage Payable |  | 96,980 |  |  | — |  |  | — |  |  | 26 |  |  | 97,006 |
Secured Borrowings – Government Guaranteed Loans: |  |  |  |  |  |  |  |  |  |
Outstanding Balance |  | 6,671 |  |  | — |  |  | (692) |  |  | — |  |  | 5,979 |
Unamortized premiums |  | 305 |  |  | — |  |  | — |  |  | (47) |  |  | 258 |
Total Secured Borrowings—Government Guaranteed Loans |  | 6,976 |  |  | — |  |  | (692) |  |  | (47) |  |  | 6,237 |
Other Debt: |  |  |  |  |  |  |  |  |  |
2018 revolving credit facility |  | 60,000 |  |  | 110,000 |  |  | (170,000) |  |  | — |  |  | — |
2022 credit facility revolver |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
2022 credit facility term loan |  | — |  |  | 56,230 |  |  | — |  |  | — |  |  | 56,230 |
Junior subordinated notes |  | 27,070 |  |  | — |  |  | — |  |  | — |  |  | 27,070 |
SBA 7(a) loan-backed notes |  | 7,670 |  |  | — |  |  | (7,670) |  |  | — |  |  | — |
Borrowed funds from the Federal Reserve through the Paycheck Protection Program Liquidity Facility |  | 5,030 |  |  | — |  |  | (5,030) |  |  | — |  |  | — |
Deferred debt issuance costs — other |  | (989) |  |  | — |  |  | — |  |  | 210 |  |  | (779) |
Discount on junior subordinated notes |  | (1,592) |  |  | — |  |  | — |  |  | 95 |  |  | (1,497) |
Total Other Debt |  | 97,189 |  |  | 166,230 |  |  | (182,700) |  |  | 305 |  |  | 81,024 |
Total Debt, Net |  | $ | 201,145 |  |  | $ | 166,230 |  |  | $ | (183,392) |  |  | $ | 284 |  |  | $ | 184,267 |
Mortgage Payable—The mortgage payable is secured by a deed of trust on a property and assignments of rents receivable. As of December 31, 2022, the Company’s mortgage payable had a fixed interest rate of 4.14% per annum, with monthly payments of interest only, due on July 1, 2026. The loan is nonrecourse. Secured Borrowings—Government Guaranteed Loans—Secured borrowings—government guaranteed loans represent sold loans which are treated as secured borrowings because the loan sales did not meet the derecognition criteria provided for in ASC 860-30, Secured Borrowing and Collateral. These loans included cash premiums that are amortized as a reduction to interest expense over the life of the loan using the effective interest method and are fully amortized when the underlying loan is repaid in full. As of December 31, 2022, the Company’s secured borrowings-government guaranteed loans included $3.6 million of loans sold for a premium and excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 6.88% at December 31, 2022, and $2.4 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 4.57% at December 31, 2022. 2018 Revolving Credit Facility—In October 2018, the Company entered into a secured revolving credit facility with a bank syndicate that, as amended, allowed the Company to borrow up to $209.5 million, subject to a borrowing base calculation (the “2018 revolving credit facility”). The 2018 revolving credit facility was secured by properties in the Company’s real estate portfolio: eight office properties and one hotel property. In September 2020, the 2018 revolving credit facility was amended (the “2018 Credit Facility Modification”) to remedy the effect that COVID-19 had on the Company’s ability to borrow under the 2018 revolving credit facility during the period from September 2, 2020 through August 14, 2021 (the “Deferral Period”). The 2018 revolving credit facility bore interest during the Deferral Period at (A) the base rate plus 1.05% or (B) LIBOR plus 2.05% and (ii) bore interest after the Deferral Period, at (A) the base rate plus 0.55% or (B) LIBOR plus 1.55%. The 2018 revolving credit facility was also subject to an unused commitment fee of 0.15% or 0.25% depending on the amount of aggregate unused commitments. In October 2022, the Company executed a one-year extension of the 2018 revolving credit facility to extend its maturity to October 2023. In connection with the extension, the Company paid 25% of the extension fee specified in the 2018 revolving credit facility (i.e., 25% of 0.15% of each lender’s commitment being extended) on October 30, 2022. On December 16, 2022, the 2018 revolving credit facility was refinanced and replaced by the 2022 credit facility (as described below) and the remaining 75% of the extension fee specified in the 2018 revolving credit facility was not incurred. 2022 Credit Facility—In December 2022 the Company refinanced its 2018 credit facility and replaced it with a new 2022 credit facility, entered into with a bank syndicate, that includes a $56.2 million term loan (the “2022 Credit Facility Term Loan”) as well as a revolver allowing the Company to borrow up to $150.0 million (the “2022 Credit Facility Revolver”), both of which are collectively subject to a borrowing base calculation. The 2022 credit facility is secured by properties in the Company’s real estate portfolio: six office properties and one hotel property (as well as the hotel’s adjacent parking garage and retail property). The 2022 credit facility bears interest at (A) the base rate plus 1.50% or (B) SOFR plus 2.60%. As of December 31, 2022, the variable interest rate was 6.93%. The 2022 Credit Facility Revolver is also subject to an unused commitment fee of 0.15% or 0.25% depending on the amount of aggregate unused commitments. The 2022 credit facility guaranteed by the Company and the Company is subject to certain financial maintenance covenants. The 2022 credit facility matures in December 2025 and provides for two one-year extension options under certain conditions, including providing notice of the election and paying an extension fee of 0.15% of each lender’s commitment being extended on the effective date of such extension. As of December 31, 2022, $56.2 million was outstanding on the 2022 Credit Facility Term Loan and no amount was outstanding on the 2022 Credit Facility Revolver, while $150.0 million was available for future borrowings. Junior Subordinated Notes—The Company has junior subordinated notes with a variable interest rate which resets quarterly based on the three-month LIBOR plus 3.25%, with quarterly interest only payments. The junior subordinated balance is due at maturity on March 30, 2035. The junior subordinated notes may be redeemed at par at the Company’s option. SBA 7(a) Loan-Backed Notes—On May 30, 2018, the Company completed a securitization of the unguaranteed portion of certain of its SBA 7(a) loans receivable with the issuance of $38.2 million of unguaranteed SBA 7(a) loan-backed notes. The SBA 7(a) loan-backed notes are secured by deeds of trust or mortgages and are collateralized solely by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of the Company’s SBA 7(a) loans receivable. The SBA 7(a) loan-backed notes had monthly payments due as payments on the collateralized loans were received. As of December 31, 2022 all of the SBA 7(a) loan-backed notes had been paid off. The SBA 7(a) loan-backed notes bore interest at the lower of the one-month LIBOR plus 1.40% or the prime rate less 1.08%. As of December 31, 2021, the variable interest rate was 1.49%. The Company reflected the SBA 7(a) loans receivable as assets on its consolidated balance sheets and the SBA 7(a) loan-backed notes as debt on its consolidated balance sheets. The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes of $0 and $1.9 million, as of December 31, 2022 and 2021, respectively. Paycheck Protection Program Liquidity Facility—In June 2020, the Company commenced borrowing funds from the Federal Reserve through the PPP Liquidity Facility (the “PPPLF”) to finance all the loans the Company originated under the PPP. Advances under the PPPLF carried an interest rate of 0.35%, were made on a dollar-for-dollar basis based on the amount of loans originated under the PPP and were secured by loans made by the Company under the PPP. The maturity date of PPPLF borrowings was the same as the maturity date of the loans pledged to secure the extension of credit, generally two years. As of December 31, 2022 and 2021, $0 and $5.0 million, respectively, was outstanding under the PPPLF. As the PPP has ended all borrowings from the Federal Reserve have been repaid in full as of December 31, 2022. Deferred debt issuance costs, which represent legal and third-party fees incurred in connection with the Company’s borrowing activities, are capitalized and amortized to interest expense on a straight-line basis over the life of the related loan, approximating the effective interest method. Deferred debt issuance costs are presented net of accumulated amortization and are a reduction to total debt. As of December 31, 2022 and 2021, accrued interest and unused commitment fees payable of $562,000 and $467,000, respectively, are included in accounts payable and accrued expenses. Future principal payments on the Company’s debt (face value) as of December 31, 2022 are as follows:
Years Ending December 31, |  | Mortgage Payable |  | Secured Borrowings Principal (1) |  | 2022 Credit Facility |  | Junior Subordinated Notes |  | Total
|  | (in thousands)
2023 |  | $ | — |  |  | $ | 303 |  |  | $ | — |  |  | $ | — |  |  | $ | 303 |
2024 |  | — |  |  | 321 |  |  | — |  |  | — |  |  | 321 |
2025 |  | — |  |  | 341 |  |  | 56,230 |  |  | — |  |  | 56,571 |
2026 |  | 97,100 |  |  | 361 |  |  | — |  |  | — |  |  | 97,461 |
2027 |  | — |  |  | 383 |  |  | — |  |  | — |  |  | 383 |
Thereafter |  | — |  |  | 4,270 |  |  | — |  |  | 27,070 |  |  | 31,340 |
|  | $ | 97,100 |  |  | $ | 5,979 |  |  | $ | 56,230 |  |  | $ | 27,070 |  |  | $ | 186,379 |
(1)Principal payments on secured borrowings are generally dependent upon cash flows received from the underlying loans. The Company’s estimate of their repayment is based on scheduled payments on the underlying loans. The Company’s estimate will differ from actual amounts to the extent the Company experiences prepayments and or loan liquidations or charge-offs. No payment is due unless payments are received from the borrowers on the underlying loans.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI https://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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