þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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|
20-2287134
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(State or other jurisdiction of
|
|
(I.R.S. Employer
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incorporation or organization)
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|
Identification No.)
|
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717 Fifth Avenue, New York, New York 10022
|
||
(Address of principal executive offices) (Zip Code)
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||
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(212) 621-3210
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||
(Registrant's telephone number, including area code)
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||
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N/A
|
||
(Former name, former address and former fiscal year, if changed since last report)
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PAGE
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PART I
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Item 1:
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Item 2:
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Item 3:
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Item 4:
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PART II
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Item 1:
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Item 1A:
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Item 6:
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September 30,
2018 |
|
December 31,
2017 |
||||
|
(unaudited)
|
|
|
||||
ASSETS
(1)
|
|
|
|
||||
Cash and cash equivalents
|
$
|
48,053
|
|
|
$
|
181,490
|
|
Restricted cash
|
6,580
|
|
|
22,874
|
|
||
Accrued interest receivable
|
7,466
|
|
|
6,859
|
|
||
CRE loans, net of allowances of $1,736 and $5,328
|
1,514,829
|
|
|
1,284,822
|
|
||
Investment securities available-for-sale
|
352,778
|
|
|
211,737
|
|
||
Principal paydowns receivable
|
44,300
|
|
|
76,129
|
|
||
Investments in unconsolidated entities
|
1,596
|
|
|
12,051
|
|
||
Derivatives, at fair value
|
2,665
|
|
|
602
|
|
||
Other assets
|
13,298
|
|
|
7,793
|
|
||
Assets held for sale (amounts include $17,000 and $61,841 of legacy CRE loans held for sale in continuing operations, see Note 20)
|
17,854
|
|
|
107,718
|
|
||
Total assets
|
$
|
2,009,419
|
|
|
$
|
1,912,075
|
|
LIABILITIES
(2)
|
|
|
|
|
|
||
Accounts payable and other liabilities
|
$
|
12,793
|
|
|
$
|
5,153
|
|
Management fee payable
|
938
|
|
|
1,035
|
|
||
Accrued interest payable
|
3,937
|
|
|
4,387
|
|
||
Borrowings
|
1,422,906
|
|
|
1,163,485
|
|
||
Distributions payable
|
6,474
|
|
|
5,581
|
|
||
Preferred stock redemption liability
|
—
|
|
|
50,000
|
|
||
Derivatives, at fair value
|
—
|
|
|
76
|
|
||
Accrued tax liability
|
239
|
|
|
540
|
|
||
Liabilities held for sale (see Note 20)
|
1,787
|
|
|
10,342
|
|
||
Total liabilities
|
1,449,074
|
|
|
1,240,599
|
|
||
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Preferred stock, par value $0.001: 10,000,000 shares authorized 8.25% Series B Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share; 0 and 4,613,596 shares issued and outstanding
|
—
|
|
|
5
|
|
||
Preferred stock, par value $0.001: 10,000,000 shares authorized 8.625% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share; 4,800,000 and 4,800,000 shares issued and outstanding
|
5
|
|
|
5
|
|
||
Common stock, par value $0.001: 125,000,000 shares authorized; 31,657,420 and 31,429,892 shares issued and outstanding (including 422,592 and 483,073 unvested restricted shares)
|
32
|
|
|
31
|
|
||
Additional paid-in capital
|
1,082,344
|
|
|
1,187,911
|
|
||
Accumulated other comprehensive income
|
5,629
|
|
|
1,297
|
|
||
Distributions in excess of earnings
|
(527,665
|
)
|
|
(517,773
|
)
|
||
Total stockholders' equity
|
560,345
|
|
|
671,476
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
2,009,419
|
|
|
$
|
1,912,075
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
(unaudited)
|
|
|
||||
(1) Assets of consolidated variable interest entities ("VIEs") included in total assets above:
|
|
|
|
||||
Restricted cash
|
$
|
5,504
|
|
|
$
|
20,846
|
|
Accrued interest receivable
|
3,477
|
|
|
3,347
|
|
||
CRE loans, pledged as collateral and net of allowances of $927 and $1,330
|
780,302
|
|
|
603,110
|
|
||
Loans held for sale
|
—
|
|
|
13
|
|
||
Principal paydowns receivable
|
—
|
|
|
72,207
|
|
||
Other assets
|
132
|
|
|
73
|
|
||
Total assets of consolidated VIEs
|
$
|
789,415
|
|
|
$
|
699,596
|
|
|
|
|
|
||||
(2) Liabilities of consolidated VIEs included in total liabilities above:
|
|
|
|
||||
Accounts payable and other liabilities
|
$
|
41
|
|
|
$
|
96
|
|
Accrued interest payable
|
656
|
|
|
592
|
|
||
Borrowings
|
548,526
|
|
|
416,655
|
|
||
Total liabilities of consolidated VIEs
|
$
|
549,223
|
|
|
$
|
417,343
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
||||||||
CRE loans
|
$
|
26,496
|
|
|
$
|
21,953
|
|
|
$
|
74,314
|
|
|
$
|
65,327
|
|
Securities
|
5,217
|
|
|
1,661
|
|
|
12,878
|
|
|
5,298
|
|
||||
Other
|
123
|
|
|
369
|
|
|
261
|
|
|
2,464
|
|
||||
Total interest income
|
31,836
|
|
|
23,983
|
|
|
87,453
|
|
|
73,089
|
|
||||
Interest expense
|
17,322
|
|
|
13,853
|
|
|
47,865
|
|
|
42,454
|
|
||||
Net interest income
|
14,514
|
|
|
10,130
|
|
|
39,588
|
|
|
30,635
|
|
||||
Other revenue
|
25
|
|
|
130
|
|
|
82
|
|
|
2,022
|
|
||||
Total revenues
|
14,539
|
|
|
10,260
|
|
|
39,670
|
|
|
32,657
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management fees
|
2,813
|
|
|
4,924
|
|
|
8,438
|
|
|
10,242
|
|
||||
Equity compensation
|
757
|
|
|
895
|
|
|
2,383
|
|
|
2,417
|
|
||||
General and administrative
|
2,336
|
|
|
4,336
|
|
|
7,943
|
|
|
11,780
|
|
||||
Depreciation and amortization
|
36
|
|
|
26
|
|
|
68
|
|
|
126
|
|
||||
Impairment losses
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
||||
(Recovery of) provision for loan and lease losses, net
|
(461
|
)
|
|
(612
|
)
|
|
(1,260
|
)
|
|
518
|
|
||||
Total operating expenses
|
5,481
|
|
|
9,569
|
|
|
17,572
|
|
|
25,260
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
9,058
|
|
|
691
|
|
|
22,098
|
|
|
7,397
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity in earnings of unconsolidated entities
|
454
|
|
|
41,047
|
|
|
231
|
|
|
41,290
|
|
||||
Net realized and unrealized gain (loss) on investment securities available-for-sale and loans and derivatives
|
279
|
|
|
(1,465
|
)
|
|
569
|
|
|
15,619
|
|
||||
Net realized and unrealized (loss) gain on investment securities, trading
|
—
|
|
|
(9
|
)
|
|
53
|
|
|
(970
|
)
|
||||
Fair value adjustments on financial assets held for sale
|
(1,588
|
)
|
|
—
|
|
|
(6,244
|
)
|
|
58
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
(10,365
|
)
|
|
—
|
|
|
(10,365
|
)
|
||||
Other income (expense)
|
57
|
|
|
(690
|
)
|
|
574
|
|
|
(604
|
)
|
||||
Total other (expense) income
|
(798
|
)
|
|
28,518
|
|
|
(4,817
|
)
|
|
45,028
|
|
||||
|
|
|
|
|
|
|
|
||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES
|
8,260
|
|
|
29,209
|
|
|
17,281
|
|
|
52,425
|
|
||||
Income tax (expense) benefit
|
—
|
|
|
(4,464
|
)
|
|
31
|
|
|
(5,938
|
)
|
||||
NET INCOME FROM CONTINUING OPERATIONS
|
8,260
|
|
|
24,745
|
|
|
17,312
|
|
|
46,487
|
|
||||
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
|
364
|
|
|
(6,087
|
)
|
|
161
|
|
|
(10,832
|
)
|
||||
NET INCOME
|
8,624
|
|
|
18,658
|
|
|
17,473
|
|
|
35,655
|
|
||||
Net income allocated to preferred shares
|
(2,588
|
)
|
|
(6,014
|
)
|
|
(10,385
|
)
|
|
(18,043
|
)
|
||||
Consideration paid in excess of carrying value of preferred shares
|
—
|
|
|
—
|
|
|
(7,482
|
)
|
|
—
|
|
||||
Net loss allocable to non-controlling interest, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
||||
NET INCOME (LOSS) ALLOCABLE TO COMMON SHARES
|
$
|
6,036
|
|
|
$
|
12,644
|
|
|
$
|
(394
|
)
|
|
$
|
17,808
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
NET INCOME (LOSS) PER COMMON SHARE - BASIC:
|
|
|
|
|
|
|
|
||||||||
CONTINUING OPERATIONS
|
$
|
0.18
|
|
|
$
|
0.61
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.93
|
|
DISCONTINUED OPERATIONS
|
$
|
0.01
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.35
|
)
|
TOTAL NET INCOME (LOSS) PER COMMON SHARE - BASIC
|
$
|
0.19
|
|
|
$
|
0.41
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.58
|
|
NET INCOME (LOSS) PER COMMON SHARE - DILUTED:
|
|
|
|
|
|
|
|
||||||||
CONTINUING OPERATIONS
|
$
|
0.18
|
|
|
$
|
0.61
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.92
|
|
DISCONTINUED OPERATIONS
|
$
|
0.01
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.35
|
)
|
TOTAL NET INCOME (LOSS) PER COMMON SHARE - DILUTED
|
$
|
0.19
|
|
|
$
|
0.41
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.57
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC
|
31,229,969
|
|
|
30,857,232
|
|
|
31,186,057
|
|
|
30,810,259
|
|
||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED
|
31,477,398
|
|
|
31,115,152
|
|
|
31,186,057
|
|
|
31,017,108
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
8,624
|
|
|
$
|
18,658
|
|
|
$
|
17,473
|
|
|
$
|
35,655
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reclassification adjustments for realized (gains) losses on investment securities available-for-sale included in net income
|
(282
|
)
|
|
2,521
|
|
|
(65
|
)
|
|
1,342
|
|
||||
Unrealized gains (losses) on investment securities available-for-sale, net
|
1,871
|
|
|
(1,673
|
)
|
|
1,969
|
|
|
(3,167
|
)
|
||||
Reclassification adjustments associated with unrealized losses from interest rate hedges included in net income
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Unrealized gains on derivatives, net
|
824
|
|
|
136
|
|
|
2,428
|
|
|
211
|
|
||||
Total other comprehensive income (loss)
|
2,413
|
|
|
984
|
|
|
4,332
|
|
|
(1,597
|
)
|
||||
Comprehensive income before allocation to non-controlling interests and preferred shares
|
11,037
|
|
|
19,642
|
|
|
21,805
|
|
|
34,058
|
|
||||
Net income allocated to preferred shares
|
(2,588
|
)
|
|
(6,014
|
)
|
|
(10,385
|
)
|
|
(18,043
|
)
|
||||
Consideration paid in excess of carrying value of preferred shares
|
—
|
|
|
—
|
|
|
(7,482
|
)
|
|
—
|
|
||||
Net loss allocable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
||||
Comprehensive income allocable to common shares
|
$
|
8,449
|
|
|
$
|
13,628
|
|
|
$
|
3,938
|
|
|
$
|
16,211
|
|
|
Common Stock
|
|
Series B Preferred Stock
|
|
Series C Preferred Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income
|
|
Retained Earnings
|
|
Distributions in Excess of Earnings
|
|
Total Stockholders' Equity
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance, January 1, 2018
|
31,429,892
|
|
|
$
|
31
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
1,187,911
|
|
|
$
|
1,297
|
|
|
$
|
—
|
|
|
$
|
(517,773
|
)
|
|
$
|
671,476
|
|
Stock-based compensation
|
236,387
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Amortization of stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,383
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,383
|
|
||||||||
Retirement of common stock
|
(7,134
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
||||||||
Forfeiture of unvested stock
|
(1,725
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,473
|
|
|
—
|
|
|
17,473
|
|
||||||||
Distributions on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,385
|
)
|
|
—
|
|
|
(10,385
|
)
|
||||||||
Preferred stock redemption
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(107,881
|
)
|
|
—
|
|
|
(7,482
|
)
|
|
—
|
|
|
(115,368
|
)
|
||||||||
Securities available-for-sale, fair value adjustment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,904
|
|
|
—
|
|
|
—
|
|
|
1,904
|
|
||||||||
Designated derivatives, fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,428
|
|
|
—
|
|
|
—
|
|
|
2,428
|
|
||||||||
Distributions on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
394
|
|
|
(9,892
|
)
|
|
(9,498
|
)
|
||||||||
Balance, September 30, 2018
|
31,657,420
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
1,082,344
|
|
|
$
|
5,629
|
|
|
$
|
—
|
|
|
$
|
(527,665
|
)
|
|
$
|
560,345
|
|
|
For the Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
17,473
|
|
|
$
|
35,655
|
|
Net (income) loss from discontinued operations, net of tax
|
(161
|
)
|
|
10,832
|
|
||
Net income from continuing operations
|
17,312
|
|
|
46,487
|
|
||
Adjustments to reconcile net income from continuing operations to net cash provided by continuing operating activities:
|
|
|
|
||||
(Recovery of) provision for loan and lease losses, net
|
(1,260
|
)
|
|
518
|
|
||
Depreciation, amortization and accretion
|
1,919
|
|
|
1,763
|
|
||
Amortization of stock-based compensation
|
2,383
|
|
|
2,417
|
|
||
Sale of and principal payments on syndicated corporate loans held for sale
|
69
|
|
|
1,433
|
|
||
Sale of and principal payments on investment securities, trading
|
241
|
|
|
4,493
|
|
||
Net realized and unrealized (gain) loss on investment securities, trading
|
(53
|
)
|
|
970
|
|
||
Net realized and unrealized gain on investment securities available-for-sale and loans and derivatives
|
(569
|
)
|
|
(15,619
|
)
|
||
Fair value adjustments on financial assets held for sale
|
6,244
|
|
|
(58
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
10,365
|
|
||
Impairment losses
|
—
|
|
|
177
|
|
||
Equity in earnings of unconsolidated entities
|
(231
|
)
|
|
(41,290
|
)
|
||
Return on investment from investments in unconsolidated entities
|
411
|
|
|
49,713
|
|
||
Changes in operating assets and liabilities
|
4,443
|
|
|
3,917
|
|
||
Net cash provided by continuing operating activities
|
30,909
|
|
|
65,286
|
|
||
Net cash provided by discontinued operating activities
|
329
|
|
|
139,430
|
|
||
Net cash provided by operating activities
|
31,238
|
|
|
204,716
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Origination and purchase of loans
|
(570,036
|
)
|
|
(348,764
|
)
|
||
Principal payments received on loans and leases
|
399,472
|
|
|
474,729
|
|
||
Proceeds from sale of loans
|
16,709
|
|
|
—
|
|
||
Purchase of investment securities available-for-sale
|
(149,100
|
)
|
|
(121,887
|
)
|
||
Principal payments on investment securities available-for-sale
|
14,325
|
|
|
33,779
|
|
||
Proceeds from sale of investment securities available-for-sale
|
48
|
|
|
33,347
|
|
||
Acquisition of the remaining interest in Life Care Funding, LLC
|
—
|
|
|
(5
|
)
|
||
Return of capital from investments in unconsolidated entities
|
10,369
|
|
|
48,792
|
|
||
Proceeds from the sale of an investment in an unconsolidated entity
|
—
|
|
|
16,159
|
|
||
Settlement of derivative instruments
|
(46
|
)
|
|
(1,416
|
)
|
||
Net cash (used in) provided by continuing investing activities
|
(278,259
|
)
|
|
134,734
|
|
||
Net cash provided by discontinued investing activities
|
29,712
|
|
|
18,720
|
|
||
Net cash (used in) provided by investing activities
|
(248,547
|
)
|
|
153,454
|
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Retirement of common stock
|
(69
|
)
|
|
(98
|
)
|
||
Repurchase of preferred stock
|
(165,340
|
)
|
|
—
|
|
||
Net proceeds from (repayments of) repurchase agreements
|
126,740
|
|
|
(13,824
|
)
|
||
Proceeds from borrowings:
|
|
|
|
||||
Securitizations
|
397,452
|
|
|
251,449
|
|
||
Convertible senior notes
|
—
|
|
|
121,589
|
|
||
Payments on borrowings:
|
|
|
|
|
|||
Securitizations
|
(262,576
|
)
|
|
(266,378
|
)
|
||
Convertible senior notes
|
—
|
|
|
(108,690
|
)
|
||
Payment of debt issuance costs
|
(9,640
|
)
|
|
(8,253
|
)
|
||
Distributions paid on preferred stock
|
(12,670
|
)
|
|
(18,043
|
)
|
||
Distributions paid on common stock
|
(6,319
|
)
|
|
(4,685
|
)
|
|
For the Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by (used in) continuing financing activities
|
67,578
|
|
|
(46,933
|
)
|
||
Net cash used in discontinued financing activities
|
—
|
|
|
(133,139
|
)
|
||
Net cash provided by (used in) financing activities
|
67,578
|
|
|
(180,072
|
)
|
||
|
|
|
|
||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|
(149,731
|
)
|
|
178,098
|
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD
|
204,364
|
|
|
119,425
|
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD
|
$
|
54,633
|
|
|
$
|
297,523
|
|
SUPPLEMENTAL DISCLOSURE:
|
|
|
|
|
|
||
Interest expense paid in cash
|
$
|
41,341
|
|
|
$
|
38,062
|
|
Income taxes paid in cash
|
$
|
—
|
|
|
$
|
517
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
$
|
48,053
|
|
|
$
|
282,984
|
|
Restricted cash
|
6,580
|
|
|
14,539
|
|
||
Total cash, cash equivalents and restricted cash shown on the Company's consolidated statements of cash flows
|
$
|
54,633
|
|
|
$
|
297,523
|
|
|
|
CRE Securitizations
|
|
Other
|
|
Total
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Restricted cash
|
|
$
|
5,000
|
|
|
$
|
504
|
|
|
$
|
5,504
|
|
Accrued interest receivable
|
|
3,477
|
|
|
—
|
|
|
3,477
|
|
|||
CRE loans, pledged as collateral
|
|
780,302
|
|
|
—
|
|
|
780,302
|
|
|||
Other assets
|
|
132
|
|
|
—
|
|
|
132
|
|
|||
Total assets
(1)
|
|
$
|
788,911
|
|
|
$
|
504
|
|
|
$
|
789,415
|
|
|
|
|
|
|
|
|
||||||
LIABILITIES
|
|
|
|
|
|
|
||||||
Accounts payable and other liabilities
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
41
|
|
Accrued interest payable
|
|
656
|
|
|
—
|
|
|
656
|
|
|||
Borrowings
|
|
548,526
|
|
|
—
|
|
|
548,526
|
|
|||
Total liabilities
|
|
$
|
549,223
|
|
|
$
|
—
|
|
|
$
|
549,223
|
|
(1)
|
Assets of each of the Consolidated VIEs may only be used to settle the obligations of each respective VIE.
|
|
|
Unsecured Junior Subordinated Debentures
|
|
C40
|
|
Prospect Hackensack
|
|
Total
|
|
Maximum Exposure to Loss
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued interest receivable
|
|
$
|
33
|
|
|
$
|
172
|
|
|
$
|
—
|
|
|
$
|
205
|
|
|
$
|
—
|
|
CRE loans
|
|
—
|
|
|
—
|
|
|
19,372
|
|
|
19,372
|
|
|
$
|
19,372
|
|
||||
Investment securities available-for-sale
(1)
|
|
—
|
|
|
21,465
|
|
|
—
|
|
|
21,465
|
|
|
$
|
21,117
|
|
||||
Investments in unconsolidated entities
|
|
1,548
|
|
|
—
|
|
|
—
|
|
|
1,548
|
|
|
$
|
1,548
|
|
||||
Total assets
|
|
1,581
|
|
|
21,637
|
|
|
19,372
|
|
|
42,590
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued interest payable
|
|
693
|
|
|
—
|
|
|
—
|
|
|
693
|
|
|
N/A
|
|
|||||
Borrowings
|
|
51,548
|
|
|
—
|
|
|
—
|
|
|
51,548
|
|
|
N/A
|
|
|||||
Total liabilities
|
|
52,241
|
|
|
—
|
|
|
—
|
|
|
52,241
|
|
|
N/A
|
|
|||||
Net (liability) asset
|
|
$
|
(50,660
|
)
|
|
$
|
21,637
|
|
|
$
|
19,372
|
|
|
$
|
(9,651
|
)
|
|
N/A
|
|
(1)
|
The Company's investment in C40 is carried at fair value and its maximum exposure to loss is the amortized cost of the investment.
|
|
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Non-cash continuing financing activities include the following:
|
|
|
|
|
|
|
||
Proceeds from the private exchange of convertible senior notes
|
|
$
|
—
|
|
|
$
|
22,161
|
|
Payments on the private exchange of convertible senior notes
|
|
$
|
—
|
|
|
$
|
(22,161
|
)
|
Distributions on common stock accrued but not paid
|
|
$
|
4,749
|
|
|
$
|
1,566
|
|
Distribution on preferred stock accrued but not paid
|
|
$
|
1,725
|
|
|
$
|
4,010
|
|
Description
|
|
Quantity
|
|
Principal
|
|
Unamortized (Discount)
Premium, net (1) |
|
Amortized Cost
|
|
Allowance for Loan Losses
|
|
Carrying
Value (2) |
|
Contractual Interest Rates
(3)
|
|
Maturity Dates
(4)(5)(6)
|
||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE loans held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Whole loans
(7)(8)
|
|
78
|
|
$
|
1,501,076
|
|
|
$
|
(8,583
|
)
|
|
$
|
1,492,493
|
|
|
$
|
(1,736
|
)
|
|
$
|
1,490,757
|
|
|
1M LIBOR plus 2.50% to 1M LIBOR plus 6.25%
|
|
November 2018 to October 2021
|
Mezzanine loan
|
|
1
|
|
4,700
|
|
|
—
|
|
|
4,700
|
|
|
—
|
|
|
4,700
|
|
|
10.00%
|
|
June 2028
|
|||||
Preferred equity investment (see Note 3)
(9)(10)
|
|
1
|
|
19,545
|
|
|
(173
|
)
|
|
19,372
|
|
|
—
|
|
|
19,372
|
|
|
11.50%
|
|
April 2025
|
|||||
Total CRE loans held for investment
|
|
|
|
1,525,321
|
|
|
(8,756
|
)
|
|
1,516,565
|
|
|
(1,736
|
)
|
|
1,514,829
|
|
|
|
|
|
|||||
Total loans
|
|
|
|
$
|
1,525,321
|
|
|
$
|
(8,756
|
)
|
|
$
|
1,516,565
|
|
|
$
|
(1,736
|
)
|
|
$
|
1,514,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE loans held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Whole loans
(7)
|
|
70
|
|
$
|
1,297,164
|
|
|
$
|
(7,014
|
)
|
|
$
|
1,290,150
|
|
|
$
|
(5,328
|
)
|
|
$
|
1,284,822
|
|
|
1M LIBOR plus 3.60% to 1M LIBOR plus 6.25%
|
|
February 2018 to January 2021
|
Total CRE loans held for investment
|
|
|
|
1,297,164
|
|
|
(7,014
|
)
|
|
1,290,150
|
|
|
(5,328
|
)
|
|
1,284,822
|
|
|
|
|
|
|||||
Total loans
|
|
|
|
$
|
1,297,164
|
|
|
$
|
(7,014
|
)
|
|
$
|
1,290,150
|
|
|
$
|
(5,328
|
)
|
|
$
|
1,284,822
|
|
|
|
|
|
(1)
|
Amounts include unamortized loan origination fees of
$8.5 million
and
$6.7 million
and deferred amendment fees of
$295,000
and
$268,000
being amortized over the life of the loans at
September 30, 2018
and
December 31, 2017
, respectively.
|
(2)
|
Substantially all loans are pledged as collateral under various borrowings at
September 30, 2018
and
December 31, 2017
.
|
(3)
|
LIBOR refers to the London Interbank Offered Rate.
|
(4)
|
Maturity dates exclude contractual extension options, subject to the satisfaction of certain terms, that may be available to the borrowers.
|
(5)
|
Maturity dates exclude
one
whole loan, with an amortized cost of
$7.0 million
, in default at
December 31, 2017
.
|
(6)
|
Maturity dates exclude
one
whole loan, with an amortized cost of
$11.5 million
, in maturity default and performing with respect to debt service due in accordance with a forbearance agreement at
September 30, 2018
. The loan was classified as an asset held for sale and in maturity default at
December 31, 2017
.
|
(7)
|
Whole loans had
$92.2 million
and
$84.1 million
in unfunded loan commitments at
September 30, 2018
and
December 31, 2017
, respectively. These unfunded loan commitments are advanced as the borrowers formally request additional funding, as permitted under the loan agreement, and any necessary approvals have been obtained.
|
(8)
|
At June 30, 2018,
two
legacy CRE loans with amortized costs of
$28.3 million
were reclassified to whole loans from assets held for sale as the Company now intends to hold these loans to maturity.
|
(9)
|
The interest rate on the Company's preferred equity investment pays currently at
8.00%
. The remaining interest is deferred until maturity.
|
(10)
|
Beginning in April 2023, the Company has the right to unilaterally force the sale of the underlying property.
|
Description
|
|
2018
|
|
2019
|
|
2020 and Thereafter
|
|
Total
|
||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Whole loans
(1)
|
|
$
|
—
|
|
|
$
|
80,830
|
|
|
$
|
1,400,147
|
|
|
$
|
1,480,977
|
|
Mezzanine loan
|
|
—
|
|
|
—
|
|
|
4,700
|
|
|
4,700
|
|
||||
Preferred equity investment
|
|
—
|
|
|
—
|
|
|
19,372
|
|
|
19,372
|
|
||||
Total CRE loans
(1)(2)
|
|
$
|
—
|
|
|
$
|
80,830
|
|
|
$
|
1,424,219
|
|
|
$
|
1,505,049
|
|
|
|
|
|
|
|
|
|
|
||||||||
Description
|
|
2018
|
|
2019
|
|
2020 and Thereafter
|
|
Total
|
||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Whole loans
(2)
|
|
$
|
—
|
|
|
$
|
148,622
|
|
|
$
|
1,134,528
|
|
|
$
|
1,283,150
|
|
(1)
|
Excludes
one
whole loan, with an amortized cost of
$11.5 million
, in maturity default and performing with respect to debt service due in accordance with a forbearance agreement at
September 30, 2018
. The loan was classified as an asset held for sale and in maturity default at
December 31, 2017
.
|
(2)
|
Excludes
one
whole loan, with an amortized cost of
$7.0 million
, in default at
December 31, 2017
.
|
|
|
Nine Months Ended September 30, 2018
|
|
Year Ended December 31, 2017
|
||||
|
|
Commercial Real Estate Loans
|
|
Commercial Real Estate Loans
|
||||
Allowance for loan losses:
|
|
|
|
|
||||
Allowance for loan losses at beginning of period
|
|
$
|
5,328
|
|
|
$
|
3,829
|
|
(Recovery of) provision for loan losses, net
|
|
(1,260
|
)
|
|
1,499
|
|
||
Loans charged-off
|
|
(2,332
|
)
|
|
—
|
|
||
Allowance for loan losses at end of period
|
|
$
|
1,736
|
|
|
$
|
5,328
|
|
|
|
|
|
|
||||
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
|
Commercial Real Estate Loans
|
|
Commercial Real Estate Loans
|
||||
Allowance for loan losses ending balance:
|
|
|
|
|
|
|||
Individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
2,500
|
|
Collectively evaluated for impairment
|
|
$
|
1,736
|
|
|
$
|
2,828
|
|
Loans:
|
|
|
|
|
|
|||
Amortized cost ending balance:
|
|
|
|
|
||||
Individually evaluated for impairment
|
|
$
|
24,072
|
|
|
$
|
7,000
|
|
Collectively evaluated for impairment
|
|
$
|
1,492,493
|
|
|
$
|
1,283,150
|
|
|
|
|
Risk Rating
|
|
Risk Characteristics
|
|
|
|
1
|
|
• Property performance has surpassed underwritten expectations.
|
|
|
• Occupancy is stabilized, the property has had a history of consistently high occupancy, and the property has a diverse and high quality tenant mix.
|
|
|
|
2
|
|
• Property performance is consistent with underwritten expectations and covenants and performance criteria are being met or exceeded.
|
|
|
• Occupancy is stabilized, near stabilized or is on track with underwriting.
|
|
|
|
3
|
|
• Property performance lags behind underwritten expectations.
|
|
|
• Occupancy is not stabilized and the property has some tenancy rollover.
|
|
|
|
4
|
|
• Property performance significantly lags behind underwritten expectations. Performance criteria and loan covenants have required occasional waivers.
|
|
|
• Occupancy is not stabilized and the property has a large amount of tenancy rollover.
|
|
|
|
5
|
|
• Property performance is significantly worse than underwritten expectations. The loan is not in compliance with loan covenants and performance criteria and may be in default. Expected sale proceeds would not be sufficient to pay off the loan at maturity.
|
|
|
• The property has a material vacancy rate and significant rollover of remaining tenants.
|
|
|
• An updated appraisal is required.
|
|
Rating 1
|
|
Rating 2
|
|
Rating 3
(1)
|
|
Rating 4
|
|
Rating 5
(2)
|
|
Held for Sale
(3)
|
|
Total
|
||||||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Whole loans
|
$
|
—
|
|
|
$
|
1,376,836
|
|
|
$
|
110,808
|
|
|
$
|
4,849
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,492,493
|
|
Mezzanine loan
(4)
|
—
|
|
|
4,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,700
|
|
|||||||
Preferred equity investment
(4)
|
—
|
|
|
19,372
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,372
|
|
|||||||
Legacy CRE loans held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,000
|
|
|
17,000
|
|
|||||||
|
$
|
—
|
|
|
$
|
1,400,908
|
|
|
$
|
110,808
|
|
|
$
|
4,849
|
|
|
$
|
—
|
|
|
$
|
17,000
|
|
|
$
|
1,533,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Whole loans
|
$
|
65,589
|
|
|
$
|
1,040,883
|
|
|
$
|
171,841
|
|
|
$
|
4,837
|
|
|
$
|
7,000
|
|
|
$
|
—
|
|
|
$
|
1,290,150
|
|
Legacy CRE loans held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,841
|
|
|
61,841
|
|
|||||||
|
$
|
65,589
|
|
|
$
|
1,040,883
|
|
|
$
|
171,841
|
|
|
$
|
4,837
|
|
|
$
|
7,000
|
|
|
$
|
61,841
|
|
|
$
|
1,351,991
|
|
(1)
|
Includes
one
whole loan, with an amortized cost of
$11.5 million
, that was in maturity default at
September 30, 2018
. The loan is performing with respect to debt service due in accordance with a forbearance agreement at
September 30, 2018
.
|
(2)
|
Includes
one
whole loan, with an amortized cost of
$7.0 million
, that was in default at
December 31, 2017
.
|
(3)
|
Includes
one
and
two
legacy CRE loans that were in default with total carrying values of
$17.0 million
and
$22.5 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(4)
|
The Company's mezzanine loan and preferred equity investment are evaluated individually for impairment.
|
|
30-59 Days
|
|
60-89 Days
|
|
Greater
than 90 Days (1)(2) |
|
Total Past Due
(3)
|
|
Current
|
|
Total
Loans Receivable |
|
Total Loans > 90 Days and Accruing
(2)
|
||||||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,516
|
|
|
$
|
11,516
|
|
|
$
|
1,480,977
|
|
|
$
|
1,492,493
|
|
|
$
|
11,516
|
|
Mezzanine loan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,700
|
|
|
4,700
|
|
|
—
|
|
|||||||
Preferred equity investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,372
|
|
|
19,372
|
|
|
—
|
|
|||||||
Legacy CRE loans held for sale
|
—
|
|
|
—
|
|
|
17,000
|
|
|
17,000
|
|
|
—
|
|
|
17,000
|
|
|
—
|
|
|||||||
Total loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,516
|
|
|
$
|
28,516
|
|
|
$
|
1,505,049
|
|
|
$
|
1,533,565
|
|
|
$
|
11,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,000
|
|
|
$
|
7,000
|
|
|
$
|
1,283,150
|
|
|
$
|
1,290,150
|
|
|
$
|
—
|
|
Legacy CRE loans held for sale
|
11,516
|
|
|
—
|
|
|
11,000
|
|
|
22,516
|
|
|
39,325
|
|
|
61,841
|
|
|
—
|
|
|||||||
Total loans
|
$
|
11,516
|
|
|
$
|
—
|
|
|
$
|
18,000
|
|
|
$
|
29,516
|
|
|
$
|
1,322,475
|
|
|
$
|
1,351,991
|
|
|
$
|
—
|
|
(1)
|
Includes
one
whole loan, with an amortized cost of
$7.0 million
, that was in default at
December 31, 2017
.
|
(2)
|
Includes
one
whole loan, with an amortized cost of
$11.5 million
, that was in maturity default at
September 30, 2018
. The loan is performing with respect to debt service due in accordance with a forbearance agreement at
September 30, 2018
.
|
(3)
|
Includes
one
and
two
legacy CRE loans that were in default with total carrying values of
$17.0 million
and
$22.5 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
|
Recorded Balance
|
|
Unpaid Principal Balance
|
|
Specific Allowance
|
|
Average Investment in Impaired Loans
|
|
Interest Income Recognized
|
||||||||||
Loans without a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans with a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
7,000
|
|
|
$
|
7,000
|
|
|
$
|
(2,500
|
)
|
|
$
|
7,000
|
|
|
$
|
—
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
7,000
|
|
|
$
|
7,000
|
|
|
$
|
(2,500
|
)
|
|
$
|
7,000
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
(1)
|
||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
||||||||
CMBS
|
$
|
350,179
|
|
|
$
|
3,755
|
|
|
$
|
(1,156
|
)
|
|
$
|
352,778
|
|
Total
|
$
|
350,179
|
|
|
$
|
3,755
|
|
|
$
|
(1,156
|
)
|
|
$
|
352,778
|
|
|
|
|
|
|
|
|
|
||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||
CMBS
|
$
|
210,806
|
|
|
$
|
1,947
|
|
|
$
|
(1,174
|
)
|
|
$
|
211,579
|
|
ABS
|
259
|
|
|
—
|
|
|
(101
|
)
|
|
158
|
|
||||
Total
|
$
|
211,065
|
|
|
$
|
1,947
|
|
|
$
|
(1,275
|
)
|
|
$
|
211,737
|
|
(1)
|
At
September 30, 2018
and
December 31, 2017
,
$325.7 million
and
$169.6 million
, respectively, of investment securities available-for-sale were pledged as collateral under related financings.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||
|
Amortized
Cost
|
|
Fair Value
|
|
Weighted Average Coupon
|
|
Amortized
Cost
|
|
Fair Value
|
|
Weighted Average Coupon
|
||||||||
Less than one year
(1)
|
$
|
126,349
|
|
|
$
|
126,749
|
|
|
5.40%
|
|
$
|
25,475
|
|
|
$
|
25,275
|
|
|
5.55%
|
Greater than one year and less than five years
|
70,778
|
|
|
70,976
|
|
|
5.10%
|
|
126,273
|
|
|
127,104
|
|
|
4.65%
|
||||
Greater than five years and less than ten years
|
153,052
|
|
|
155,053
|
|
|
3.83%
|
|
59,317
|
|
|
59,358
|
|
|
3.53%
|
||||
Total
|
$
|
350,179
|
|
|
$
|
352,778
|
|
|
4.65%
|
|
$
|
211,065
|
|
|
$
|
211,737
|
|
|
4.45%
|
(1)
|
The Company expects that the payoff dates of these CMBS and ABS will either be extended or that the securities will be paid off in full.
|
|
Less than 12 Months
|
|
More than 12 Months
|
|
Total
|
|||||||||||||||||||||||||||
|
Fair
Value |
|
Unrealized Losses
|
|
Number of
Securities |
|
Fair
Value |
|
Unrealized Losses
|
|
Number of
Securities |
|
Fair
Value |
|
Unrealized Losses
|
|
Number of
Securities |
|||||||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
CMBS
|
$
|
39,398
|
|
|
$
|
(350
|
)
|
|
11
|
|
|
$
|
6,286
|
|
|
$
|
(806
|
)
|
|
6
|
|
|
$
|
45,684
|
|
|
$
|
(1,156
|
)
|
|
17
|
|
Total temporarily impaired securities
|
$
|
39,398
|
|
|
$
|
(350
|
)
|
|
11
|
|
|
$
|
6,286
|
|
|
$
|
(806
|
)
|
|
6
|
|
|
$
|
45,684
|
|
|
$
|
(1,156
|
)
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
CMBS
|
$
|
49,016
|
|
|
$
|
(888
|
)
|
|
12
|
|
|
$
|
1,308
|
|
|
$
|
(286
|
)
|
|
4
|
|
|
$
|
50,324
|
|
|
$
|
(1,174
|
)
|
|
16
|
|
ABS
|
158
|
|
|
(101
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
(101
|
)
|
|
1
|
|
||||||
Total temporarily impaired securities
|
$
|
49,174
|
|
|
$
|
(989
|
)
|
|
13
|
|
|
$
|
1,308
|
|
|
$
|
(286
|
)
|
|
4
|
|
|
$
|
50,482
|
|
|
$
|
(1,275
|
)
|
|
17
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||||||||||||||||||||||||
|
Positions Sold/Redeemed
|
|
Par Amount Sold/Redeemed
|
|
Amortized Cost
|
|
Realized Gain (Loss)
(1)
|
|
Proceeds
(2)
|
|
Positions Sold/Redeemed
|
|
Par Amount Sold/Redeemed
|
|
Amortized Cost
|
|
Realized Gain (Loss)
(1)
|
|
Proceeds
(2)
|
||||||||||||||||||
September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
ABS
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2
|
|
|
$
|
411
|
|
|
$
|
265
|
|
|
$
|
(217
|
)
|
|
$
|
48
|
|
CMBS
|
2
|
|
|
10,000
|
|
|
7,821
|
|
|
282
|
|
|
8,103
|
|
|
2
|
|
|
10,000
|
|
|
7,821
|
|
|
282
|
|
|
8,103
|
|
||||||||
Total
|
2
|
|
|
$
|
10,000
|
|
|
$
|
7,821
|
|
|
$
|
282
|
|
|
$
|
8,103
|
|
|
4
|
|
|
$
|
10,411
|
|
|
$
|
8,086
|
|
|
$
|
65
|
|
|
$
|
8,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
September 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
ABS
|
5
|
|
|
$
|
18,301
|
|
|
$
|
14,249
|
|
|
$
|
(2,110
|
)
|
|
$
|
12,647
|
|
|
7
|
|
|
$
|
27,906
|
|
|
$
|
21,723
|
|
|
$
|
(318
|
)
|
|
$
|
19,881
|
|
CMBS
|
1
|
|
|
5,000
|
|
|
4,279
|
|
|
(254
|
)
|
|
4,046
|
|
|
1
|
|
|
5,000
|
|
|
4,279
|
|
|
(254
|
)
|
|
4,046
|
|
||||||||
RMBS
|
3
|
|
|
153,519
|
|
|
1,274
|
|
|
(158
|
)
|
|
1,116
|
|
|
3
|
|
|
153,519
|
|
|
1,274
|
|
|
(158
|
)
|
|
1,116
|
|
||||||||
Total
|
9
|
|
|
$
|
176,820
|
|
|
$
|
19,802
|
|
|
$
|
(2,522
|
)
|
|
$
|
17,809
|
|
|
11
|
|
|
$
|
186,425
|
|
|
$
|
27,276
|
|
|
$
|
(730
|
)
|
|
$
|
25,043
|
|
(1)
|
The realized losses for the
three and nine
months ended
September 30, 2017
exclude foreign currency exchange gains and losses on ABS sales that were hedged with foreign currency forward contracts.
|
(2)
|
Includes unsettled proceeds of
$8.1 million
, received in October 2018, from the sale of
two
CMBS positions during the
three and nine
months ended
September 30, 2018
.
|
|
|
|
|
|
|
|
Equity in Earnings (Losses) of Unconsolidated Entities
|
||||||||||||||||||
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||||||
|
Ownership % at September 30, 2018
|
|
September 30, 2018
|
|
December 31,
2017 |
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
Pelium Capital
(1)
|
80.2%
|
|
$
|
7
|
|
|
$
|
10,503
|
|
|
$
|
50
|
|
|
$
|
54
|
|
|
$
|
(180
|
)
|
|
$
|
(22
|
)
|
RCM Global
|
63.8%
|
|
41
|
|
|
—
|
|
|
(7
|
)
|
|
(61
|
)
|
|
—
|
|
|
(231
|
)
|
||||||
Investment in LCC Preferred Stock
(2)
|
—%
|
|
—
|
|
|
—
|
|
|
411
|
|
|
41,048
|
|
|
411
|
|
|
41,334
|
|
||||||
RRE VIP Borrower, LLC
(3)
|
—%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
44
|
|
||||||
Pearlmark Mezzanine Realty Partners IV, L.P.
(4)
|
—%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
||||||
Subtotal
|
|
|
48
|
|
|
10,503
|
|
|
454
|
|
|
41,047
|
|
|
231
|
|
|
41,290
|
|
||||||
Investment in RCT I and II
(5)
|
3.0%
|
|
1,548
|
|
|
1,548
|
|
|
(829
|
)
|
|
(689
|
)
|
|
(2,359
|
)
|
|
(1,989
|
)
|
||||||
Total
|
|
|
$
|
1,596
|
|
|
$
|
12,051
|
|
|
$
|
(375
|
)
|
|
$
|
40,358
|
|
|
$
|
(2,128
|
)
|
|
$
|
39,301
|
|
(1)
|
During the
nine months ended
September 30, 2018
and
2017
, the Company received distributions of
$10.4 million
and
$13.6 million
, respectively, on its investment in Pelium Capital Partners, L.P. ("Pelium Capital").
|
(2)
|
The Company's investment in LEAF Commercial Capital, Inc. ("LCC") liquidated in July 2017 as a result of the sale of LCC. Earnings for the
three and nine
months ended
September 30, 2018
are related to the receipt of a distribution of funds formerly held in escrow accounts established as part of the sale.
|
(3)
|
The Company sold its investment in RRE VIP Borrower, LLC in December 2014. Earnings for the
three and nine
months ended
September 30, 2017
are related to insurance premium refunds with respect to the underlying sold properties in the portfolio.
|
(4)
|
The Company sold its investment in Pearlmark Mezzanine Reality Partners IV, L.P. ("Pearlmark Mezz") in May 2017.
|
(5)
|
During the
three and nine
months ended
September 30, 2018
and
2017
, distributions from the trusts are recorded in interest expense on the Company's consolidated statements of operations as the investments are accounted for under the cost method.
|
|
Principal Outstanding
|
|
Unamortized Issuance Costs and Discounts
|
|
Outstanding Borrowings
|
|
Weighted Average Borrowing Rate
|
|
Weighted Average Remaining Maturity
|
|
Value of Collateral
|
||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
RCC 2017-CRE5 Senior Notes
|
$
|
158,376
|
|
|
$
|
2,312
|
|
|
$
|
156,064
|
|
|
3.30%
|
|
15.8 years
|
|
$
|
277,156
|
|
XAN 2018-RSO6 Senior Notes
|
397,452
|
|
|
4,990
|
|
|
392,462
|
|
|
3.26%
|
|
16.7 years
|
|
514,225
|
|
||||
Unsecured junior subordinated debentures
|
51,548
|
|
|
—
|
|
|
51,548
|
|
|
6.29%
|
|
17.9 years
|
|
—
|
|
||||
4.50% Convertible Senior Notes
|
143,750
|
|
|
14,313
|
|
|
129,437
|
|
|
4.50%
|
|
3.9 years
|
|
—
|
|
||||
6.00% Convertible Senior Notes
|
70,453
|
|
|
171
|
|
|
70,282
|
|
|
6.00%
|
|
62 days
|
|
—
|
|
||||
8.00% Convertible Senior Notes
|
21,182
|
|
|
295
|
|
|
20,887
|
|
|
8.00%
|
|
1.3 years
|
|
—
|
|
||||
CRE - term repurchase facilities
(1)
|
313,516
|
|
|
3,696
|
|
|
309,820
|
|
|
4.33%
|
|
1.9 years
|
|
452,697
|
|
||||
Trust certificates - term repurchase facility
(2)
|
47,438
|
|
|
319
|
|
|
47,119
|
|
|
6.11%
|
|
2.0 years
|
|
118,780
|
|
||||
CMBS - short term repurchase agreements
(3)
|
245,287
|
|
|
—
|
|
|
245,287
|
|
|
3.46%
|
|
38 days
|
|
341,289
|
|
||||
Total
|
$
|
1,449,002
|
|
|
$
|
26,096
|
|
|
$
|
1,422,906
|
|
|
4.06%
|
|
7.9 years
|
|
$
|
1,704,147
|
|
|
Principal Outstanding
|
|
Unamortized Issuance Costs and Discounts
|
|
Outstanding Borrowings
|
|
Weighted Average Borrowing Rate
|
|
Weighted Average Remaining Maturity
|
|
Value of Collateral
|
||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
RCC 2015-CRE3 Senior Notes
|
$
|
85,788
|
|
|
$
|
396
|
|
|
$
|
85,392
|
|
|
4.50%
|
|
14.2 years
|
|
$
|
149,828
|
|
RCC 2015-CRE4 Senior Notes
|
90,883
|
|
|
407
|
|
|
90,476
|
|
|
3.65%
|
|
14.6 years
|
|
180,066
|
|
||||
RCC 2017-CRE5 Senior Notes
|
244,280
|
|
|
3,493
|
|
|
240,787
|
|
|
2.51%
|
|
16.6 years
|
|
369,534
|
|
||||
Unsecured junior subordinated debentures
|
51,548
|
|
|
—
|
|
|
51,548
|
|
|
5.49%
|
|
18.7 years
|
|
—
|
|
||||
4.50% Convertible Senior Notes
|
143,750
|
|
|
16,626
|
|
|
127,124
|
|
|
4.50%
|
|
4.6 years
|
|
—
|
|
||||
6.00% Convertible Senior Notes
|
70,453
|
|
|
928
|
|
|
69,525
|
|
|
6.00%
|
|
335 days
|
|
—
|
|
||||
8.00% Convertible Senior Notes
|
21,182
|
|
|
466
|
|
|
20,716
|
|
|
8.00%
|
|
2.0 years
|
|
—
|
|
||||
CRE - term repurchase facilities
(1)
|
292,511
|
|
|
1,013
|
|
|
291,498
|
|
|
3.82%
|
|
222 days
|
|
432,125
|
|
||||
Trust certificates - term repurchase facilities
(2)
|
76,714
|
|
|
570
|
|
|
76,144
|
|
|
5.97%
|
|
2.1 years
|
|
214,375
|
|
||||
CMBS - short term repurchase agreements
(3)
|
82,647
|
|
|
—
|
|
|
82,647
|
|
|
2.79%
|
|
14 days
|
|
131,522
|
|
||||
CMBS - term repurchase facilities
(4)
|
27,628
|
|
|
—
|
|
|
27,628
|
|
|
3.05%
|
|
121 days
|
|
38,060
|
|
||||
Total
|
$
|
1,187,384
|
|
|
$
|
23,899
|
|
|
$
|
1,163,485
|
|
|
4.00%
|
|
7.3 years
|
|
$
|
1,515,510
|
|
(1)
|
Principal outstanding includes
accrued interest payable
of
$460,000
and
$534,000
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(2)
|
Principal outstanding includes
accrued interest payable
of
$104,000
and
$203,000
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(3)
|
Principal outstanding includes
accrued interest payable
of
$786,000
and
$279,000
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(4)
|
Principal outstanding includes
accrued interest payable
of
$46,000
at
December 31, 2017
.
|
Securitization
|
|
Closing Date
|
|
Maturity Date
|
|
End of Designated Principal Reinvestment Period
(1)
|
|
Total Note Paydowns Received from Closing Date through September 30, 2018
|
||
RCC 2017-CRE5
|
|
July 2017
|
|
July 2034
|
|
July 2020
|
|
$
|
93,074
|
|
XAN 2018-RSO6
|
|
June 2018
|
|
June 2035
|
|
December 2020
|
|
$
|
—
|
|
(1)
|
The designated principal reinvestment period is the period in which principal repayments can be utilized to purchase loans held outside of the respective securitization that represent the funded commitments of existing collateral in the respective securitization that were not funded as of the date the respective securitization was closed.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Outstanding Borrowings
(1)
|
|
Value of Collateral
|
|
Number of Positions as Collateral
|
|
Weighted Average Interest Rate
|
|
Outstanding Borrowings
(1)
|
|
Value of Collateral
|
|
Number of Positions as Collateral
|
|
Weighted Average Interest Rate
|
||||||||
CRE - Term Repurchase Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wells Fargo Bank, N.A.
(2)
|
$
|
109,039
|
|
|
$
|
170,355
|
|
|
10
|
|
4.21%
|
|
$
|
179,347
|
|
|
$
|
268,003
|
|
|
19
|
|
3.68%
|
Morgan Stanley Bank, N.A.
(3)
|
67,886
|
|
|
113,831
|
|
|
5
|
|
4.76%
|
|
112,151
|
|
|
164,122
|
|
|
9
|
|
4.05%
|
||||
Barclays Bank PLC
(4)
|
132,895
|
|
|
168,511
|
|
|
8
|
|
4.22%
|
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Trust Certificates - Term Repurchase Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
RSO Repo SPE Trust 2015
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
|
26,548
|
|
|
89,121
|
|
|
2
|
|
6.98%
|
||||
RSO Repo SPE Trust 2017
(6)
|
47,119
|
|
|
118,780
|
|
|
2
|
|
6.11%
|
|
49,596
|
|
|
125,254
|
|
|
2
|
|
5.43%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CMBS - Short-Term Repurchase Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
RBC Capital Markets, LLC
|
201,635
|
|
|
266,182
|
|
|
31
|
|
3.46%
|
|
72,131
|
|
|
97,745
|
|
|
6
|
|
2.77%
|
||||
JP Morgan Securities LLC
|
32,718
|
|
|
61,380
|
|
|
12
|
|
3.42%
|
|
10,516
|
|
|
33,777
|
|
|
2
|
|
2.93%
|
||||
Deutsche Bank Securities Inc.
(7)
|
10,934
|
|
|
13,727
|
|
|
10
|
|
3.61%
|
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CMBS - Term Repurchase Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wells Fargo Bank, N.A.
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
|
12,272
|
|
|
14,984
|
|
|
8
|
|
2.45%
|
||||
Deutsche Bank AG
(7)
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
|
15,356
|
|
|
23,076
|
|
|
14
|
|
3.53%
|
||||
Total
|
$
|
602,226
|
|
|
$
|
912,766
|
|
|
|
|
|
|
$
|
477,917
|
|
|
$
|
816,082
|
|
|
|
|
|
(1)
|
Outstanding borrowings include
accrued interest payable
.
|
(2)
|
Includes
$1.9 million
and
$565,000
of deferred debt issuance costs at
September 30, 2018
and
December 31, 2017
, respectively.
|
(3)
|
Includes
$167,000
and
$448,000
of deferred debt issuance costs at
September 30, 2018
and
December 31, 2017
, respectively.
|
(4)
|
Includes
$1.6 million
of deferred debt issuance costs at
September 30, 2018
and
no
deferred debt issuance costs at
December 31, 2017
.
|
(5)
|
Includes
$133,000
of deferred debt issuance costs at
December 31, 2017
.
|
(6)
|
Includes
$233,000
and
$320,000
of deferred debt issuance costs at
September 30, 2018
and
December 31, 2017
, respectively.
|
(7)
|
In May 2018, the facility's term was rolled from a
one
-year basis, with extensions at the buyer's option, to a
three
-month basis. At June 30, 2018, the facility was reclassified from CMBS - term repurchase facilities to CMBS - short term repurchase agreements.
|
|
Amount at Risk
(1)
|
|
Weighted Average Remaining
Maturity |
|
Weighted Average
Interest Rate |
||
At September 30, 2018:
|
|
|
|
|
|
||
CRE - Term Repurchase Facilities
|
|
|
|
|
|
||
Wells Fargo Bank, N.A.
|
$
|
60,183
|
|
|
1.8 years
|
|
4.21%
|
Morgan Stanley Bank, N.A.
|
$
|
46,322
|
|
|
345 days
|
|
4.76%
|
Barclays Bank PLC
|
$
|
34,686
|
|
|
2.5 years
|
|
4.22%
|
|
|
|
|
|
|
||
Trust Certificates - Term Repurchase Facility
|
|
|
|
|
|
||
RSO Repo SPE Trust 2017
|
$
|
71,439
|
|
|
2.0 years
|
|
6.11%
|
|
|
|
|
|
|
||
CMBS - Short-Term Repurchase Agreements
|
|
|
|
|
|
||
RBC Capital Markets, LLC
|
$
|
65,173
|
|
|
37 days
|
|
3.46%
|
JP Morgan Securities LLC
|
$
|
28,828
|
|
|
33 days
|
|
3.42%
|
Deutsche Bank Securities Inc.
|
$
|
2,831
|
|
|
57 days
|
|
3.61%
|
(1)
|
Equal to the total of the estimated fair value of securities or loans sold and
accrued interest receivable
, minus the total of the repurchase agreement liabilities and
accrued interest payable
.
|
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022 and Thereafter
|
||||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
CRE securitizations
|
$
|
555,828
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
555,828
|
|
Unsecured junior subordinated debentures
|
51,548
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,548
|
|
||||||
4.50% Convertible Senior Notes
|
143,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143,750
|
|
||||||
6.00% Convertible Senior Notes
|
70,453
|
|
|
70,453
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
8.00% Convertible Senior Notes
|
21,182
|
|
|
—
|
|
|
—
|
|
|
21,182
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase and credit facilities
|
606,241
|
|
|
245,287
|
|
|
68,052
|
|
|
158,386
|
|
|
134,516
|
|
|
—
|
|
||||||
Total
|
$
|
1,449,002
|
|
|
$
|
315,740
|
|
|
$
|
68,052
|
|
|
$
|
179,568
|
|
|
$
|
134,516
|
|
|
$
|
751,126
|
|
|
|
Non-Employee Directors
|
|
Non-Employees
(1)
|
|
Former Employees
|
|
Total
|
||||
Unvested shares at January 1, 2018
|
|
34,565
|
|
|
419,541
|
|
|
28,967
|
|
|
483,073
|
|
Issued
|
|
27,032
|
|
|
209,355
|
|
|
—
|
|
|
236,387
|
|
Vested
|
|
(33,193
|
)
|
|
(238,792
|
)
|
|
(23,158
|
)
|
|
(295,143
|
)
|
Forfeited
|
|
—
|
|
|
(1,725
|
)
|
|
—
|
|
|
(1,725
|
)
|
Unvested shares at September 30, 2018
|
|
28,404
|
|
|
388,379
|
|
|
5,809
|
|
|
422,592
|
|
(1)
|
Non-employees are employees of C-III or Resource America, Inc. ("Resource America").
|
Grant Date
|
|
Shares
|
|
Vesting per Year
|
|
Vesting Date(s)
|
January 18, 2018
|
|
209,355
|
|
33.3%
|
|
January 18, 2019, January 18, 2020 and January 18, 2021
|
February 1, 2018
|
|
3,727
|
|
100.0%
|
|
February 1, 2019
|
March 8, 2018
|
|
16,302
|
|
100.0%
|
|
March 8, 2019
|
June 1, 2018
|
|
3,493
|
|
100.0%
|
|
June 1, 2019
|
June 6, 2018
|
|
3,510
|
|
100.0%
|
|
June 6, 2019
|
Vested Options
|
|
Number of Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Vested at January 1, 2018
|
|
10,000
|
|
|
$
|
25.60
|
|
|
|
|
|
||
Vested
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Forfeited
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Vested at September 30, 2018
|
|
10,000
|
|
|
$
|
25.60
|
|
|
2.63
|
|
$
|
—
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Restricted shares granted to non-employees
(1)
|
|
$
|
685
|
|
|
$
|
817
|
|
|
$
|
2,166
|
|
|
$
|
2,207
|
|
Restricted shares granted to non-employee directors
|
|
72
|
|
|
78
|
|
|
217
|
|
|
210
|
|
||||
Total equity compensation expense
(2)
|
|
$
|
757
|
|
|
$
|
895
|
|
|
$
|
2,383
|
|
|
$
|
2,417
|
|
(1)
|
Non-employees are employees of C-III or Resource America.
|
(2)
|
Amounts exclude equity compensation expense for employees of Primary Capital Mortgage, LLC ("PCM"), which is included in net income (loss) from discontinued operations, net of tax on the consolidated statements of operations during the
three and nine
months ended
September 30, 2017
.
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income from continuing operations
|
$
|
8,260
|
|
|
$
|
24,745
|
|
|
$
|
17,312
|
|
|
$
|
46,487
|
|
Net income allocated to preferred shares
|
(2,588
|
)
|
|
(6,014
|
)
|
|
(10,385
|
)
|
|
(18,043
|
)
|
||||
Consideration paid in excess of carrying value of preferred shares
|
—
|
|
|
—
|
|
|
(7,482
|
)
|
|
—
|
|
||||
Net loss allocable to non-controlling interest, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
||||
Net income (loss) from continuing operations allocable to common shares
|
5,672
|
|
|
18,731
|
|
|
(555
|
)
|
|
28,640
|
|
||||
Net income (loss) from discontinued operations, net of tax
|
364
|
|
|
(6,087
|
)
|
|
161
|
|
|
(10,832
|
)
|
||||
Net income (loss) allocable to common shares
|
$
|
6,036
|
|
|
$
|
12,644
|
|
|
$
|
(394
|
)
|
|
$
|
17,808
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share - basic:
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding
|
31,229,969
|
|
|
30,857,232
|
|
|
31,186,057
|
|
|
30,810,259
|
|
||||
Continuing operations
|
$
|
0.18
|
|
|
$
|
0.61
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.93
|
|
Discontinued operations
|
0.01
|
|
|
(0.20
|
)
|
|
0.01
|
|
|
(0.35
|
)
|
||||
Net income (loss) per common share - basic
|
$
|
0.19
|
|
|
$
|
0.41
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding
|
31,229,969
|
|
|
30,857,232
|
|
|
31,186,057
|
|
|
30,810,259
|
|
||||
Additional shares due to assumed conversion of dilutive instruments
|
247,429
|
|
|
257,920
|
|
|
—
|
|
|
206,849
|
|
||||
Adjusted weighted-average number of common shares outstanding
|
31,477,398
|
|
|
31,115,152
|
|
|
31,186,057
|
|
|
31,017,108
|
|
||||
Continuing operations
|
$
|
0.18
|
|
|
$
|
0.61
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.92
|
|
Discontinued operations
|
0.01
|
|
|
(0.20
|
)
|
|
0.01
|
|
|
(0.35
|
)
|
||||
Net income (loss) per common share - diluted
|
$
|
0.19
|
|
|
$
|
0.41
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
||||||||
Potentially dilutive shares excluded from calculation due to anti-dilutive effect
(1)
|
14,937,427
|
|
|
12,215,259
|
|
|
14,937,427
|
|
|
10,085,439
|
|
(1)
|
Potentially dilutive shares issuable in connection with the potential conversion of the Company's
4.50%
convertible senior notes due 2022 ("
4.50%
Convertible Senior Notes"),
6.00%
convertible senior notes due 2018 ("
6.00%
Convertible Senior Notes") and
8.00%
convertible senior notes due 2020 ("
8.00%
Convertible Senior Notes") (
see Note 9
) were not included in the calculation of diluted net income (loss) per share because the effect would be anti-dilutive.
|
|
Net Unrealized Gain on Derivatives
|
|
Net Unrealized Gain (Loss) on Investment Securities Available-for-Sale
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||
Balance at January 1, 2018
|
$
|
602
|
|
|
$
|
695
|
|
|
$
|
1,297
|
|
Other comprehensive income (loss) before reclassifications
|
2,428
|
|
|
1,969
|
|
|
4,397
|
|
|||
Amounts reclassified from accumulated other comprehensive income
(1)
|
—
|
|
|
(65
|
)
|
|
(65
|
)
|
|||
Balance at September 30, 2018
|
$
|
3,030
|
|
|
$
|
2,599
|
|
|
$
|
5,629
|
|
(1)
|
Amounts reclassified from
accumulated other comprehensive income
are reclassified to
net realized and unrealized gain (loss) on investment securities available-for-sale and loans and derivatives
on the Company's consolidated statements of operations.
|
|
|
Common Stock
|
||||||||
|
|
Date Paid
|
|
Total
Dividend Paid |
|
Dividend
Per Share |
||||
|
|
|
|
(in thousands)
|
|
|
||||
2018
|
|
|
|
|
|
|
||||
March 31
|
|
April 27
|
|
$
|
1,584
|
|
|
$
|
0.05
|
|
June 30
|
|
July 27
|
|
$
|
3,165
|
|
|
$
|
0.10
|
|
September 30
|
|
October 26
|
|
$
|
4,749
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
||||
2017
|
|
|
|
|
|
|
||||
March 31
|
|
April 27
|
|
$
|
1,568
|
|
|
$
|
0.05
|
|
June 30
|
|
July 28
|
|
$
|
1,567
|
|
|
$
|
0.05
|
|
September 30
|
|
October 27
|
|
$
|
1,566
|
|
|
$
|
0.05
|
|
December 31
|
|
January 26, 2018
|
|
$
|
1,572
|
|
|
$
|
0.05
|
|
|
Series A Preferred Stock
|
|
Series B Preferred Stock
|
|
Series C Preferred Stock
|
||||||||||||||||||||||||
|
Date Paid
|
|
Total
Dividend Paid |
|
Dividend
Per Share |
|
Date Paid
|
|
Total
Dividend Paid |
|
Dividend
Per Share |
|
Date Paid
|
|
Total
Dividend Paid |
|
Dividend
Per Share |
||||||||||||
|
|
|
(in thousands)
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
(in thousands)
|
|
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 26
|
N/A
|
|
N/A
|
|
N/A
|
|
March 26
|
|
$
|
1,480
|
|
|
$
|
0.320830
|
|
|
N/A
|
|
N/A
|
|
N/A
|
||||||||
March 31
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
April 30
|
|
$
|
2,588
|
|
|
$
|
0.539063
|
|
||||||||
June 30
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
July 30
|
|
$
|
2,588
|
|
|
$
|
0.539063
|
|
||||||||
September 30
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
October 30
|
|
$
|
2,588
|
|
|
$
|
0.539063
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31
|
May 1
|
|
$
|
568
|
|
|
$
|
0.531250
|
|
|
May 1
|
|
$
|
2,859
|
|
|
$
|
0.515625
|
|
|
May 1
|
|
$
|
2,588
|
|
|
$
|
0.539063
|
|
June 30
|
July 31
|
|
$
|
568
|
|
|
$
|
0.531250
|
|
|
July 31
|
|
$
|
2,859
|
|
|
$
|
0.515625
|
|
|
July 31
|
|
$
|
2,588
|
|
|
$
|
0.539063
|
|
September 30
|
October 30
|
|
$
|
568
|
|
|
$
|
0.531250
|
|
|
October 30
|
|
$
|
2,859
|
|
|
$
|
0.515625
|
|
|
October 30
|
|
$
|
2,588
|
|
|
$
|
0.539063
|
|
December 31
|
January 30, 2018
|
|
$
|
568
|
|
|
$
|
0.531250
|
|
|
January 30, 2018
|
|
$
|
2,859
|
|
|
$
|
0.515625
|
|
|
January 30, 2018
|
|
$
|
2,588
|
|
|
$
|
0.539063
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investment securities available-for-sale
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
352,778
|
|
|
$
|
352,778
|
|
Derivatives
|
—
|
|
|
2,665
|
|
|
—
|
|
|
2,665
|
|
||||
Total assets at fair value
|
$
|
—
|
|
|
$
|
2,665
|
|
|
$
|
352,778
|
|
|
$
|
355,443
|
|
|
|
|
|
|
|
|
|
||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities available-for-sale
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
211,737
|
|
|
$
|
211,737
|
|
Derivatives
|
—
|
|
|
602
|
|
|
—
|
|
|
602
|
|
||||
Total assets at fair value
|
$
|
—
|
|
|
$
|
602
|
|
|
$
|
211,737
|
|
|
$
|
212,339
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
$
|
—
|
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
76
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
76
|
|
|
CMBS
|
|
ABS
|
|
Total
|
||||||
Balance, January 1, 2018
|
$
|
211,579
|
|
|
$
|
158
|
|
|
$
|
211,737
|
|
Included in earnings
|
2,492
|
|
|
(217
|
)
|
|
2,275
|
|
|||
Purchases
|
159,116
|
|
|
—
|
|
|
159,116
|
|
|||
Sales
|
(8,103
|
)
|
|
(48
|
)
|
|
(8,151
|
)
|
|||
Paydowns
|
(14,132
|
)
|
|
—
|
|
|
(14,132
|
)
|
|||
Capitalized interest
|
—
|
|
|
7
|
|
|
7
|
|
|||
Included in OCI
|
1,826
|
|
|
100
|
|
|
1,926
|
|
|||
Balance, September 30, 2018
|
$
|
352,778
|
|
|
$
|
—
|
|
|
$
|
352,778
|
|
|
|
|
Fair Value Measurements
|
||||||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets of Liabilities (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE whole loans held for investment
|
$
|
1,490,757
|
|
|
$
|
1,501,076
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,501,076
|
|
Legacy CRE loans held for sale
|
$
|
17,000
|
|
|
$
|
17,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,000
|
|
CRE mezzanine loan
|
$
|
4,700
|
|
|
$
|
4,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,700
|
|
CRE preferred equity investment
|
$
|
19,372
|
|
|
$
|
19,545
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,545
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior notes in CRE securitizations
|
$
|
548,526
|
|
|
$
|
556,930
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
556,930
|
|
Junior subordinated notes
|
$
|
51,548
|
|
|
$
|
29,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,200
|
|
Convertible notes
|
$
|
220,606
|
|
|
$
|
235,385
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
235,385
|
|
Repurchase agreements
|
$
|
602,226
|
|
|
$
|
606,155
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
606,155
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE whole loans held for investment
|
$
|
1,284,822
|
|
|
$
|
1,294,664
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,294,664
|
|
Legacy CRE loans held for sale
|
$
|
61,841
|
|
|
$
|
62,841
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,841
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior notes in CRE securitizations
|
$
|
416,655
|
|
|
$
|
420,084
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
420,084
|
|
Junior subordinated notes
|
$
|
51,548
|
|
|
$
|
26,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,574
|
|
Convertible notes
|
$
|
217,365
|
|
|
$
|
235,385
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
235,385
|
|
Repurchase agreements
|
$
|
477,917
|
|
|
$
|
479,383
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
479,383
|
|
|
Asset Derivatives
|
||||||||
|
Notional Amount
|
|
Consolidated Balance Sheets Location
|
|
Fair Value
|
||||
Interest rate swap contracts, hedging
(1)
|
$
|
85,011
|
|
|
Derivatives, at fair value
|
|
$
|
2,665
|
|
|
|
|
|
|
|
||||
|
Liability Derivatives
|
||||||||
|
Notional Amount
|
|
Consolidated Balance Sheets Location
|
|
Fair Value
|
||||
Interest rate swap contracts, hedging
|
$
|
85,011
|
|
|
Accumulated other comprehensive income
|
|
$
|
3,030
|
|
(1)
|
Interest rate swap contracts are accounted for as cash flow hedges.
|
|
Asset Derivatives
|
||||||||
|
Notional Amount
|
|
Consolidated Balance Sheets Location
|
|
Fair Value
|
||||
Interest rate swap contracts, hedging
(1)
|
$
|
41,750
|
|
|
Derivatives, at fair value
|
|
$
|
602
|
|
|
|
|
|
|
|
||||
|
Liability Derivatives
|
||||||||
|
Notional Amount
|
|
Consolidated Balance Sheets Location
|
|
Fair Value
|
||||
Forward contracts - foreign currency, hedging
(2)(3)
|
$
|
3,602
|
|
|
Derivatives, at fair value
|
|
$
|
76
|
|
Interest rate swap contracts, hedging
|
$
|
41,750
|
|
|
Accumulated other comprehensive income
|
|
$
|
602
|
|
(1)
|
Interest rate swap contracts are accounted for as cash flow hedges.
|
(2)
|
Foreign currency forward contracts are accounted for as fair value hedges.
|
(3)
|
Notional amount is presented on a currency converted basis. The base currency notional amount of the Company's foreign currency hedging forward contracts in a liability position was
€3.0 million
at
December 31, 2017
.
|
|
|
Derivatives
|
||||
|
|
Consolidated Statements of Operations Location
|
|
Realized and Unrealized Gain (Loss)
(1)
|
||
Interest rate swap contracts, hedging
|
|
Interest expense
|
|
$
|
(141
|
)
|
(1)
|
Negative values indicate a decrease to the associated consolidated statements of operations line items.
|
|
|
Derivatives
|
||||
|
|
Consolidated Statements of Operations Location
|
|
Realized and Unrealized Gain (Loss)
(1)
|
||
Interest rate swap contracts, hedging
|
|
Interest expense
|
|
$
|
(53
|
)
|
Forward contracts - foreign currency, hedging
|
|
Net realized and unrealized gain (loss) on investment securities available-for-sale and loans and derivatives
|
|
$
|
(1,998
|
)
|
(1)
|
Negative values indicate a decrease to the associated consolidated statements of operations line items.
|
|
|
|
|
|
|
|
|
(iv)
Gross Amounts Not Offset on the Consolidated Balance Sheets |
|
|
||||||||||||||
|
|
(i)
Gross Amounts of Recognized Assets |
|
(ii)
Gross Amounts Offset on the Consolidated Balance Sheets |
|
(iii) = (i) - (ii)
Net Amounts of Assets Included on the Consolidated Balance Sheets |
|
Financial
Instruments |
|
Cash
Collateral Pledged |
|
(v) = (iii) - (iv)
Net Amount |
||||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives, at fair value
(1)
|
|
$
|
2,665
|
|
|
$
|
—
|
|
|
$
|
2,665
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives, at fair value
(1)
|
|
$
|
602
|
|
|
$
|
—
|
|
|
$
|
602
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
602
|
|
(1)
|
The Company posted cash margin of
$1.0 million
and
$1.9 million
related to interest rate swap contracts outstanding at
September 30, 2018
and
December 31, 2017
, respectively.
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
(i)
Gross Amounts of Recognized Liabilities |
|
(ii)
Gross Amounts Offset on the Consolidated Balance Sheets |
|
(iii) = (i) - (ii)
Net Amounts of Liabilities Included on the Consolidated Balance Sheets |
|
Financial
Instruments (1) |
|
Cash
Collateral Pledged |
|
(v) = (iii) - (iv)
Net Amount |
||||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Repurchase agreements and term facilities
(2)
|
|
$
|
602,226
|
|
|
$
|
—
|
|
|
$
|
602,226
|
|
|
$
|
602,226
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
602,226
|
|
|
$
|
—
|
|
|
$
|
602,226
|
|
|
$
|
602,226
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives, at fair value
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76
|
|
Repurchase agreements and term facilities
(2)
|
|
477,917
|
|
|
—
|
|
|
477,917
|
|
|
477,917
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
477,993
|
|
|
$
|
—
|
|
|
$
|
477,993
|
|
|
$
|
477,917
|
|
|
$
|
—
|
|
|
$
|
76
|
|
(1)
|
Amounts represent financial instruments pledged that are available to be offset against liability balances associated with term facilities, repurchase agreements and derivatives.
|
(2)
|
The combined fair value of securities and loans pledged against the Company's various repurchase agreements and term facilities was
$912.8 million
and
$816.1 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
||||||||
Loans
|
$
|
—
|
|
|
$
|
892
|
|
|
$
|
580
|
|
|
$
|
2,682
|
|
Other
|
—
|
|
|
44
|
|
|
13
|
|
|
76
|
|
||||
Total interest income
|
—
|
|
|
936
|
|
|
593
|
|
|
2,758
|
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net interest income
|
—
|
|
|
936
|
|
|
593
|
|
|
2,758
|
|
||||
(Loss) gain on sale of residential mortgage loans
|
—
|
|
|
(1,186
|
)
|
|
(1
|
)
|
|
5,688
|
|
||||
Fee income (loss)
|
280
|
|
|
(197
|
)
|
|
313
|
|
|
3,480
|
|
||||
Total revenues
|
280
|
|
|
(447
|
)
|
|
905
|
|
|
11,926
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Equity compensation
|
—
|
|
|
65
|
|
|
—
|
|
|
286
|
|
||||
General and administrative
|
62
|
|
|
5,590
|
|
|
1,165
|
|
|
21,985
|
|
||||
Total operating expenses
|
62
|
|
|
5,655
|
|
|
1,165
|
|
|
22,271
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
218
|
|
|
(6,102
|
)
|
|
(260
|
)
|
|
(10,345
|
)
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
||||||||
Net realized and unrealized gain on investment securities available-for-sale and loans and derivatives
|
146
|
|
|
97
|
|
|
421
|
|
|
13
|
|
||||
Fair value adjustments on financial assets held for sale
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(500
|
)
|
||||
Total other income (expense)
|
146
|
|
|
15
|
|
|
421
|
|
|
(487
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS BEFORE TAXES
|
364
|
|
|
(6,087
|
)
|
|
161
|
|
|
(10,832
|
)
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
|
364
|
|
|
(6,087
|
)
|
|
161
|
|
|
(10,832
|
)
|
||||
Loss from disposal of discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
TOTAL INCOME (LOSS) FROM DISCONTINUED OPERATIONS
|
$
|
364
|
|
|
$
|
(6,087
|
)
|
|
$
|
161
|
|
|
$
|
(10,832
|
)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Restricted cash
|
$
|
—
|
|
|
$
|
138
|
|
Accrued interest receivable
|
—
|
|
|
67
|
|
||
Loans held for sale
(1)
|
17,000
|
|
|
93,063
|
|
||
Other assets
(2)
|
854
|
|
|
14,450
|
|
||
Total assets held for sale
|
$
|
17,854
|
|
|
$
|
107,718
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
||||
Accounts payable and other liabilities
|
$
|
1,787
|
|
|
$
|
10,283
|
|
Management fee payable
|
—
|
|
|
56
|
|
||
Accrued interest payable
|
—
|
|
|
3
|
|
||
Total liabilities held for sale
|
$
|
1,787
|
|
|
$
|
10,342
|
|
(1)
|
Includes a directly originated middle market loan with a carrying value of
$2.0 million
at
December 31, 2017
. In July 2018 substantially all of the assets of the borrower were sold, resulting in
$2.1 million
of loan repayments.
|
(2)
|
Includes the Company's investment in life settlement contracts of
$5.1 million
at
December 31, 2017
. In 2018, substantially all of the life settlement contracts were sold or matured and there were
no
life settlement contracts remaining at
September 30, 2018
.
|
Loan Description
|
|
Number of Loans
|
|
Amortized Cost
|
|
Carrying Value
|
||||
At September 30, 2018:
|
|
|
|
|
|
|
||||
Legacy CRE loan
(1)
|
|
1
|
|
$
|
25,202
|
|
|
$
|
17,000
|
|
Mezzanine loan
(2)
|
|
1
|
|
—
|
|
|
—
|
|
||
Total loans held for sale
|
|
2
|
|
$
|
25,202
|
|
|
$
|
17,000
|
|
|
|
|
|
|
|
|
||||
At December 31, 2017:
|
|
|
|
|
|
|
||||
Legacy CRE loans
(1)
|
|
5
|
|
$
|
63,783
|
|
|
$
|
61,841
|
|
Mezzanine loan
(2)
|
|
1
|
|
—
|
|
|
—
|
|
||
Middle market loans
(3)
|
|
5
|
|
41,199
|
|
|
29,308
|
|
||
Residential mortgage loans
(4)(5)
|
|
14
|
|
1,914
|
|
|
1,914
|
|
||
Total loans held for sale
|
|
25
|
|
$
|
106,896
|
|
|
$
|
93,063
|
|
(1)
|
Two
legacy CRE loans with amortized costs of
$28.3 million
were reclassified as CRE loans on the consolidated balance sheets at June 30, 2018 as the Company now intends to hold these loans to maturity.
|
(2)
|
The mezzanine loan has a par value of
$38.1 million
and was acquired at a fair value of
zero
as a result of the liquidations of Resource Real Estate Funding CDO 2006-1, Ltd. in April 2016 and Resource Real Estate Funding CDO 2007-1, Ltd. in November 2016. The mezzanine loan is comprised of
two
tranches, maturing in November 2018 and September 2021.
|
(3)
|
Includes a directly originated middle market loan with a fair value of
$2.0 million
at
December 31, 2017
. In July 2018 substantially all of the assets of the borrower were sold, resulting in
$2.1 million
of loan repayments. The loan's fair value was supported by a third party valuation mark prepared at
December 31, 2017
.
|
(4)
|
The fair value option was elected for residential mortgage loans held for sale.
|
(5)
|
The Company's residential mortgage loan portfolio was comprised of both agency loans and non-agency jumbo loans. The fair values of the agency loan portfolio were generally classified as Level 2 in the fair value hierarchy, as those values are determined based on quoted market prices for similar assets or upon other observable inputs. The fair values of the jumbo loan portfolio were generally classified as Level 3 in the fair value hierarchy, as those values are generally based upon valuation techniques that utilize unobservable inputs that reflect the assumptions that a market participant would use in pricing those assets.
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
First mortgage loans, which we refer to as whole loans. These loans are typically secured by first liens on CRE property, including the following property types: office, multifamily, self-storage, retail, hotel, healthcare, student housing, manufactured housing, industrial and mixed-use.
|
•
|
First priority interests in first mortgage loans, which we refer to as A-Notes. An A-Note is typically a privately negotiated loan that is secured by a first mortgage on a commercial property or group of related properties that is senior to a B-Note secured by the same first mortgage property or group.
|
•
|
Subordinated interests in first mortgage loans, which we refer to as B-Notes. A B-Note is typically a privately negotiated loan that is secured by a first mortgage on a commercial property or group of related properties and is subordinated to an A-Note secured by the same first mortgage property or group. B-Notes are subject to more credit risk with respect to the underlying mortgage collateral than the corresponding A-Note.
|
•
|
Mezzanine debt that is senior to borrower's equity but is subordinated to other third-party debt. Like B-Notes, these loans are also subordinated CRE loans, but are usually secured by a pledge of the borrower's equity ownership in the entity that owns the property or by a second lien mortgage on the property.
|
•
|
Preferred equity investments that are subordinate to first mortgage loans and mezzanine debt. These investments may be subject to more credit risk than subordinated debt but provide the potential for higher returns upon a liquidation of the underlying property and are typically structured to provide some credit enhancement differentiating it from the common equity in such investments.
|
•
|
Commercial mortgage-backed securities, which we refer to as CMBS, that are collateralized by commercial mortgage loans, including senior and subordinated investment grade CMBS, below investment grade CMBS and unrated CMBS.
|
•
|
Other CRE Investments: We may invest in other income producing real estate debt and equity investments.
|
|
Identified Assets at Plan Inception
|
|
Impairments/Adjustments on Non-Monetized Assets
(1)(2)
|
|
Impairments/Adjustments on Monetized Assets
(1)(3)
|
|
Monetized through September 30, 2018
(2)
|
|
Net Book Value at September 30, 2018
|
||||||||||
Discontinued operations and assets held for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Legacy CRE loans
(4)
|
$
|
162.2
|
|
|
$
|
(13.1
|
)
|
|
$
|
(17.5
|
)
|
|
$
|
(114.6
|
)
|
|
$
|
17.0
|
|
Middle market loans
|
73.8
|
|
|
—
|
|
|
(17.7
|
)
|
|
(56.1
|
)
|
|
—
|
|
|||||
Residential mortgage lending segment
(5)
|
56.6
|
|
|
(2.0
|
)
|
|
(9.6
|
)
|
|
(43.7
|
)
|
|
1.3
|
|
|||||
Other assets held for sale
|
5.9
|
|
|
—
|
|
|
3.8
|
|
|
(9.7
|
)
|
|
—
|
|
|||||
Subtotal - discontinued operations and assets held for sale
|
298.5
|
|
|
(15.1
|
)
|
|
(41.0
|
)
|
|
(224.1
|
)
|
|
18.3
|
|
|||||
Legacy CRE loans held for investment
(6)(7)
|
32.5
|
|
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|
28.3
|
|
|||||
Investments in unconsolidated entities
|
86.6
|
|
|
—
|
|
|
38.3
|
|
|
(124.9
|
)
|
|
—
|
|
|||||
Commercial finance assets
|
62.5
|
|
|
—
|
|
|
2.1
|
|
|
(64.6
|
)
|
|
—
|
|
|||||
Total
|
$
|
480.1
|
|
|
$
|
(15.1
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(417.8
|
)
|
|
$
|
46.6
|
|
(1)
|
Reflects adjustments as a result of the designation as assets held for sale or discontinued operations, which occurred during the third and fourth quarters of 2016 except as noted in (3) below.
|
(2)
|
Legacy CRE loans include
$600,000
of protective advances to cover operating losses on a legacy CRE loan in the
third
quarter of 2018.
|
(3)
|
The impairment adjustment to middle market loans includes
$5.4 million
of fair value adjustments that occurred prior to the inception of the Plan.
|
(4)
|
Includes
$88.2 million
par value of loans at the inception of the Plan that were not reflected on the consolidated balance sheets until our investment in Resource Real Estate Funding CDO 2007-1, Ltd. ("RREF CDO 2007-1") was liquidated in November 2016.
|
(5)
|
Includes
$2.3 million
of cash and cash equivalents not classified as assets held for sale in the residential mortgage lending segment at
September 30, 2018
.
|
(6)
|
Legacy CRE loans with
$28.3 million
of net book value were reclassified to CRE loans on the consolidated balance sheets at June 30, 2018 as we now intend to hold these loans to maturity.
|
(7)
|
Includes
$30.0 million
par value of loans at the inception of the Plan that were not reflected on the consolidated balance sheets until our investment in RREF CDO 2007-1 was liquidated in November 2016.
|
|
|
Three Months Ended September 30, 2018 Compared to Three Months Ended September 30, 2017
|
|||||||||||||
|
|
|
|
|
|
Due to Changes in
|
|||||||||
|
|
Net Change
|
|
Percent Change
(1)
|
|
Volume
|
|
Rate
|
|||||||
Increase (decrease) in interest income:
|
|
|
|
|
|
|
|
|
|||||||
CRE whole loans
(2)
|
|
$
|
4,445
|
|
|
21
|
%
|
|
$
|
3,332
|
|
|
$
|
1,113
|
|
Legacy CRE loans
|
|
(595
|
)
|
|
(63
|
)%
|
|
(551
|
)
|
|
(44
|
)
|
|||
CRE mezzanine loan
|
|
120
|
|
|
100
|
%
|
|
120
|
|
|
—
|
|
|||
CRE preferred equity investment
(2)
|
|
573
|
|
|
100
|
%
|
|
573
|
|
|
—
|
|
|||
Securities
(3)
|
|
3,556
|
|
|
214
|
%
|
|
3,546
|
|
|
10
|
|
|||
Other
|
|
(246
|
)
|
|
(67
|
)%
|
|
(246
|
)
|
|
—
|
|
|||
Total increase in interest income
|
|
7,853
|
|
|
33
|
%
|
|
6,774
|
|
|
1,079
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Increase (decrease) in interest expense:
|
|
|
|
|
|
|
|
|
|||||||
Securitized borrowings:
(4)
|
|
|
|
|
|
|
|
|
|||||||
RCC 2014-CRE2 Senior Notes
|
|
(916
|
)
|
|
(100
|
)%
|
|
(916
|
)
|
|
—
|
|
|||
RCC 2015-CRE3 Senior Notes
|
|
(1,158
|
)
|
|
(81
|
)%
|
|
(1,431
|
)
|
|
273
|
|
|||
RCC 2015-CRE4 Senior Notes
|
|
(1,014
|
)
|
|
(87
|
)%
|
|
(1,073
|
)
|
|
59
|
|
|||
RCC 2017-CRE5 Senior Notes
|
|
745
|
|
|
50
|
%
|
|
301
|
|
|
444
|
|
|||
XAN 2018-RSO6 Senior Notes
|
|
3,688
|
|
|
100
|
%
|
|
3,688
|
|
|
—
|
|
|||
Unsecured junior subordinated debentures
|
|
139
|
|
|
20
|
%
|
|
—
|
|
|
139
|
|
|||
Convertible senior notes:
(4)
|
|
|
|
|
|
|
|
|
|||||||
4.50% Convertible Senior Notes
|
|
1,240
|
|
|
106
|
%
|
|
1,240
|
|
|
—
|
|
|||
6.00% Convertible Senior Notes
|
|
(409
|
)
|
|
(24
|
)%
|
|
(409
|
)
|
|
—
|
|
|||
8.00% Convertible Senior Notes
|
|
(973
|
)
|
|
(67
|
)%
|
|
(973
|
)
|
|
—
|
|
|||
CRE - term repurchase facilities
(4)
|
|
635
|
|
|
24
|
%
|
|
216
|
|
|
419
|
|
|||
CMBS - term repurchase facilities
|
|
(406
|
)
|
|
(79
|
)%
|
|
(447
|
)
|
|
41
|
|
|||
Trust certificates - term repurchase facilities
(4)
|
|
315
|
|
|
52
|
%
|
|
336
|
|
|
(21
|
)
|
|||
CMBS - short term repurchase agreements
|
|
1,556
|
|
|
100
|
%
|
|
1,556
|
|
|
—
|
|
|||
Hedging
|
|
27
|
|
|
82
|
%
|
|
27
|
|
|
—
|
|
|||
Total increase in interest expense
|
|
3,469
|
|
|
25
|
%
|
|
2,115
|
|
|
1,354
|
|
|||
Net increase (decrease) in net interest income
|
|
$
|
4,384
|
|
|
|
|
$
|
4,659
|
|
|
$
|
(275
|
)
|
(1)
|
Percent change is calculated as the net change divided by the respective interest income or interest expense for the
three months ended
September 30, 2017
.
|
(2)
|
Includes an
increase
in fee income of approximately
$128,000
and
$10,000
recognized on CRE whole loans and the CRE preferred equity investment, respectively, that were due to changes in volume.
|
(3)
|
Includes an
increase
from
net accretion income
of approximately
$714,000
that was due to changes in volume.
|
(4)
|
Includes a decrease of net amortization expense of approximately
$109,000
, and increases of approximately
$223,000
,
$105,000
and
$55,000
on our securitized borrowings, convertible senior notes, CRE - term repurchase facilities and trust certificates - term repurchase facilities, respectively, that were due to changes in volume.
|
|
|
Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017
|
|||||||||||||
|
|
|
|
|
|
Due to Changes in
|
|||||||||
|
|
Net Change
|
|
Percent Change
(1)
|
|
Volume
|
|
Rate
|
|||||||
Increase (decrease) in interest income:
|
|
|
|
|
|
|
|
|
|||||||
CRE whole loans
(2)(3)
|
|
$
|
9,925
|
|
|
16
|
%
|
|
$
|
5,200
|
|
|
$
|
4,725
|
|
Legacy CRE loans
(4)
|
|
(2,241
|
)
|
|
(69
|
)%
|
|
(2,462
|
)
|
|
221
|
|
|||
CRE mezzanine loan
|
|
150
|
|
|
100
|
%
|
|
150
|
|
|
—
|
|
|||
CRE preferred equity investment
(2)
|
|
1,153
|
|
|
100
|
%
|
|
1,153
|
|
|
—
|
|
|||
Securities
(4)
|
|
7,580
|
|
|
143
|
%
|
|
8,555
|
|
|
(975
|
)
|
|||
Other
|
|
(2,203
|
)
|
|
(89
|
)%
|
|
(2,175
|
)
|
|
(28
|
)
|
|||
Total increase in interest income
|
|
14,364
|
|
|
20
|
%
|
|
10,421
|
|
|
3,943
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Increase (decrease) in interest expense:
|
|
|
|
|
|
|
|
|
|||||||
Securitized borrowings:
(5)
|
|
|
|
|
|
|
|
|
|||||||
RCC 2014-CRE2 Senior Notes
|
|
(3,274
|
)
|
|
(100
|
)%
|
|
(3,274
|
)
|
|
—
|
|
|||
RCC 2015-CRE3 Senior Notes
|
|
(3,821
|
)
|
|
(75
|
)%
|
|
(5,353
|
)
|
|
1,532
|
|
|||
RCC 2015-CRE4 Senior Notes
|
|
(2,295
|
)
|
|
(61
|
)%
|
|
(3,126
|
)
|
|
831
|
|
|||
RCC 2017-CRE5 Senior Notes
|
|
4,642
|
|
|
310
|
%
|
|
4,199
|
|
|
443
|
|
|||
XAN 2018-RSO6 Senior Notes
|
|
3,847
|
|
|
100
|
%
|
|
3,847
|
|
|
—
|
|
|||
Unsecured junior subordinated debentures
|
|
347
|
|
|
17
|
%
|
|
—
|
|
|
347
|
|
|||
Convertible senior notes:
(5)
|
|
|
|
|
|
|
|
|
|||||||
4.50% Convertible Senior Notes
|
|
5,993
|
|
|
512
|
%
|
|
5,993
|
|
|
—
|
|
|||
6.00% Convertible Senior Notes
|
|
(2,081
|
)
|
|
(35
|
)%
|
|
(2,081
|
)
|
|
—
|
|
|||
8.00% Convertible Senior Notes
|
|
(4,581
|
)
|
|
(76
|
)%
|
|
(4,581
|
)
|
|
—
|
|
|||
CRE - term repurchase facilities
(5)
|
|
2,236
|
|
|
21
|
%
|
|
249
|
|
|
1,987
|
|
|||
CMBS - term repurchase facilities
(5)
|
|
(1,101
|
)
|
|
(69
|
)%
|
|
(1,335
|
)
|
|
234
|
|
|||
Trust certificates - term repurchase facilities
(5)
|
|
1,872
|
|
|
122
|
%
|
|
1,911
|
|
|
(39
|
)
|
|||
CMBS - short term repurchase agreements
|
|
3,539
|
|
|
100
|
%
|
|
3,539
|
|
|
—
|
|
|||
Hedging
|
|
88
|
|
|
166
|
%
|
|
88
|
|
|
—
|
|
|||
Total increase in interest expense
|
|
5,411
|
|
|
13
|
%
|
|
76
|
|
|
5,335
|
|
|||
Net increase (decrease) in net interest income
|
|
$
|
8,953
|
|
|
|
|
$
|
10,345
|
|
|
$
|
(1,392
|
)
|
(1)
|
Percent change is calculated as the net change divided by the respective interest income or interest expense for the
nine months ended
September 30, 2017
.
|
(2)
|
Includes a
decrease
of fee income of approximately
$287,000
and an
increase
of approximately
$19,000
on CRE whole loans and the CRE preferred equity investment, respectively, that were due to changes in volume.
|
(3)
|
Includes an
increase
of
net accretion income
of approximately
$2.0 million
on our CMBS securities and an
increase
from
net amortization expense
to
zero
of
$2,000
on our CRE whole loans that were due to changes in volume.
|
(4)
|
Includes the change in interest income recognized on two legacy CRE loans reclassified to CRE loans from assets held for sale on the consolidated balance sheets at June 30, 2018.
|
(5)
|
Includes decreases of net amortization expense of approximately
$1.9 million
and
$16,000
, and increases of approximately
$952,000
,
$247,000
and
$134,000
on our securitized borrowings, CMBS - term repurchase facilities, convertible senior notes, CRE - term repurchase facilities and trust certificates - term repurchase facilities, respectively, that were due to changes in volume.
|
|
|
For the Three Months Ended September 30, 2018
|
|
For the Three Months Ended September 30, 2017
|
||||||||||||||||||
|
|
Average Balance
|
|
Interest Income (Expense)
|
|
Average Net Yield (Cost of Funds)
(1)
|
|
Average Balance
|
|
Interest Income (Expense)
|
|
Average Net Yield (Cost of Funds)
(1)
|
||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE whole loans
(2)
|
|
$
|
1,435,254
|
|
|
$
|
25,451
|
|
|
7.03
|
%
|
|
$
|
1,248,669
|
|
|
$
|
21,006
|
|
|
6.67
|
%
|
Legacy CRE loans
|
|
58,567
|
|
|
352
|
|
|
2.39
|
%
|
|
90,881
|
|
|
947
|
|
|
4.14
|
%
|
||||
CRE mezzanine loan
|
|
4,700
|
|
|
120
|
|
|
10.09
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
CRE preferred equity investment
(2)
|
|
19,432
|
|
|
573
|
|
|
11.69
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Securities
(3)
|
|
331,708
|
|
|
5,217
|
|
|
6.24
|
%
|
|
122,693
|
|
|
1,661
|
|
|
5.41
|
%
|
||||
Other
|
|
5,865
|
|
|
123
|
|
|
2.11
|
%
|
|
43,778
|
|
|
369
|
|
|
2.87
|
%
|
||||
Total interest income/average net yield
|
|
1,855,526
|
|
|
31,836
|
|
|
6.78
|
%
|
|
1,506,021
|
|
|
23,983
|
|
|
6.30
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateralized by:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE whole loans
(4)
|
|
861,564
|
|
|
(9,642
|
)
|
|
(4.44
|
)%
|
|
722,853
|
|
|
(7,661
|
)
|
|
(4.21
|
)%
|
||||
CMBS
|
|
186,983
|
|
|
(1,666
|
)
|
|
(3.53
|
)%
|
|
65,472
|
|
|
(516
|
)
|
|
(3.12
|
)%
|
||||
General corporate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unsecured junior subordinated debentures
|
|
51,548
|
|
|
(829
|
)
|
|
(6.29
|
)%
|
|
51,548
|
|
|
(690
|
)
|
|
(5.23
|
)%
|
||||
4.50% Convertible Senior Notes
(5)
|
|
143,750
|
|
|
(2,411
|
)
|
|
(6.56
|
)%
|
|
71,875
|
|
|
(1,171
|
)
|
|
(6.37
|
)%
|
||||
6.00% Convertible Senior Notes
(5)
|
|
70,453
|
|
|
(1,310
|
)
|
|
(7.28
|
)%
|
|
92,726
|
|
|
(1,719
|
)
|
|
(7.25
|
)%
|
||||
8.00% Convertible Senior Notes
(5)
|
|
21,182
|
|
|
(481
|
)
|
|
(8.88
|
)%
|
|
62,874
|
|
|
(1,454
|
)
|
|
(9.05
|
)%
|
||||
Trust certificates - term repurchase facilities
(6)
|
|
55,248
|
|
|
(923
|
)
|
|
(7.01
|
)%
|
|
35,279
|
|
|
(609
|
)
|
|
(6.84
|
)%
|
||||
Hedging
|
|
75,108
|
|
|
(60
|
)
|
|
(0.32
|
)%
|
|
17,461
|
|
|
(33
|
)
|
|
(0.75
|
)%
|
||||
Total interest expense/average cost of funds
|
|
$
|
1,465,836
|
|
|
(17,322
|
)
|
|
(4.68
|
)%
|
|
$
|
1,120,088
|
|
|
(13,853
|
)
|
|
(4.88
|
)%
|
||
Total net interest income/average spread
|
|
|
|
$
|
14,514
|
|
|
|
|
|
|
$
|
10,130
|
|
|
|
(1)
|
Average net yield includes net amortization/accretion and fee income.
|
(2)
|
Includes fee income of approximately
$1.9 million
and
$10,000
recognized on our CRE whole loans and our CRE preferred equity investment, respectively, for the
three months ended
September 30, 2018
and approximately
$1.8 million
recognized on our CRE whole loans for the
three months ended
September 30, 2017
. There was
no
fee income recognized on our CRE preferred equity investment for the
three months ended
September 30, 2017
.
|
(3)
|
Includes
net accretion income
of approximately
$864,000
and
$150,000
for the
three months ended
September 30, 2018
and
2017
, respectively, on our CMBS securities.
|
(4)
|
Includes amortization expense of approximately
$1.9 million
and
$1.9 million
for the
three months ended
September 30, 2018
and
2017
, respectively, on our interest-bearing liabilities securitized by CRE whole loans.
|
(5)
|
Includes aggregated amortization expense of approximately
$1.1 million
and
$881,000
for the
three months ended
September 30, 2018
and
2017
, respectively, on our convertible senior notes.
|
(6)
|
Includes amortization expense of approximately
$99,000
and
$44,000
for the
three months ended
September 30, 2018
and
2017
, respectively, on our trust certificates - term repurchase facilities.
|
|
|
For the Nine Months Ended September 30, 2018
|
|
For the Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
|
Average Balance
|
|
Interest Income (Expense)
|
|
Average Net Yield (Cost of Funds)
(1)
|
|
Average Balance
|
|
Interest Income (Expense)
|
|
Average Net Yield (Cost of Funds)
(1)
|
||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE whole loans
(2)(3)
|
|
$
|
1,378,869
|
|
|
$
|
71,999
|
|
|
6.98
|
%
|
|
$
|
1,268,556
|
|
|
$
|
62,074
|
|
|
6.54
|
%
|
Legacy CRE loans
|
|
70,067
|
|
|
1,012
|
|
|
1.93
|
%
|
|
144,328
|
|
|
3,253
|
|
|
3.01
|
%
|
||||
CRE mezzanine loan
|
|
1,980
|
|
|
150
|
|
|
10.10
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
CRE preferred equity investment
(2)
|
|
13,181
|
|
|
1,153
|
|
|
11.69
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Securities
(3)
|
|
272,996
|
|
|
12,878
|
|
|
6.32
|
%
|
|
107,278
|
|
|
5,298
|
|
|
6.43
|
%
|
||||
Other
|
|
9,658
|
|
|
261
|
|
|
2.71
|
%
|
|
53,454
|
|
|
2,464
|
|
|
6.08
|
%
|
||||
Total interest income/average net yield
|
|
1,746,751
|
|
|
87,453
|
|
|
6.69
|
%
|
|
1,573,616
|
|
|
73,089
|
|
|
6.19
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateralized by:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE whole loans
(4)
|
|
767,401
|
|
|
(25,384
|
)
|
|
(4.42
|
)%
|
|
774,545
|
|
|
(24,048
|
)
|
|
(4.15
|
)%
|
||||
CMBS
(5)
|
|
156,441
|
|
|
(4,038
|
)
|
|
(3.45
|
)%
|
|
71,558
|
|
|
(1,600
|
)
|
|
(2.99
|
)%
|
||||
General corporate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unsecured junior subordinated debentures
|
|
51,548
|
|
|
(2,359
|
)
|
|
(6.03
|
)%
|
|
51,548
|
|
|
(2,012
|
)
|
|
(5.09
|
)%
|
||||
4.50% Convertible Senior Notes
(6)
|
|
143,750
|
|
|
(7,165
|
)
|
|
(6.57
|
)%
|
|
24,222
|
|
|
(1,171
|
)
|
|
(6.37
|
)%
|
||||
6.00% Convertible Senior Notes
(6)
|
|
70,453
|
|
|
(3,926
|
)
|
|
(7.35
|
)%
|
|
107,494
|
|
|
(6,008
|
)
|
|
(7.37
|
)%
|
||||
8.00% Convertible Senior Notes
(6)
|
|
21,182
|
|
|
(1,442
|
)
|
|
(8.98
|
)%
|
|
87,488
|
|
|
(6,023
|
)
|
|
(9.08
|
)%
|
||||
Trust certificates - term repurchase facilities
(7)
|
|
66,785
|
|
|
(3,410
|
)
|
|
(6.83
|
)%
|
|
29,523
|
|
|
(1,539
|
)
|
|
(6.97
|
)%
|
||||
Hedging
|
|
55,090
|
|
|
(141
|
)
|
|
(0.34
|
)%
|
|
6,385
|
|
|
(53
|
)
|
|
(1.10
|
)%
|
||||
Total interest expense/average cost of funds
|
|
$
|
1,332,650
|
|
|
(47,865
|
)
|
|
(4.78
|
)%
|
|
$
|
1,152,763
|
|
|
(42,454
|
)
|
|
(4.90
|
)%
|
||
Total net interest income/average spread
|
|
|
|
$
|
39,588
|
|
|
|
|
|
|
$
|
30,635
|
|
|
|
(1)
|
Average net yield includes net amortization/accretion and fee income.
|
(2)
|
Includes fee income of approximately
$5.3 million
and
$19,000
recognized on our CRE whole loans and our CRE preferred equity investment, respectively, for the
nine months ended
September 30, 2018
and approximately
$5.6 million
recognized on our CRE whole loans for the
nine months ended
September 30, 2017
. There was
no
fee income recognized on our CRE preferred equity investment for the
nine months ended
September 30, 2017
.
|
(3)
|
Includes
net accretion income
of approximately
$2.2 million
and
$254,000
for the
nine months ended
September 30, 2018
and
2017
, respectively, recognized on our CMBS securities. There was
no
net accretion income
on our CRE whole loans for the
nine months ended
September 30, 2018
and
net amortization expense
of approximately
$2,000
on our CRE whole loans for the
nine months ended
September 30, 2017
.
|
(4)
|
Includes amortization expense of approximately
$4.0 million
and
$5.6 million
for the
nine months ended
September 30, 2018
and
2017
, respectively, on our interest-bearing liabilities securitized by CRE whole loans.
|
(5)
|
Includes amortization expense of approximately
$16,000
for the
nine months ended
September 30, 2017
on our interest-bearing liabilities securitized by CMBS. There was
no
amortization expense on our interest-bearing liabilities securitized by CMBS for the
nine months ended
September 30, 2018
.
|
(6)
|
Includes aggregated amortization expense of approximately
$3.2 million
and
$2.3 million
for the
nine months ended
September 30, 2018
and
2017
, respectively, on our convertible senior notes.
|
(7)
|
Includes amortization expense of approximately
$252,000
and
$118,000
for the
nine months ended
September 30, 2018
and
2017
, respectively, on our trust certificates - term repurchase facilities.
|
|
|
For the Three Months Ended
|
|
|
|
|
|||||||||
|
|
September 30,
|
|
|
|
|
|||||||||
|
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percent Change
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Management fees
|
|
$
|
2,813
|
|
|
$
|
4,924
|
|
|
$
|
(2,111
|
)
|
|
(43
|
)%
|
General and administrative
|
|
2,336
|
|
|
4,336
|
|
|
(2,000
|
)
|
|
(46
|
)%
|
|||
Equity compensation
|
|
757
|
|
|
895
|
|
|
(138
|
)
|
|
(15
|
)%
|
|||
Depreciation and amortization
|
|
36
|
|
|
26
|
|
|
10
|
|
|
38
|
%
|
|||
(Recovery of) provision for loan and lease losses, net
|
|
(461
|
)
|
|
(612
|
)
|
|
151
|
|
|
(25
|
)%
|
|||
Total operating expenses
|
|
$
|
5,481
|
|
|
$
|
9,569
|
|
|
$
|
(4,088
|
)
|
|
(43
|
)%
|
|
|
For the Nine Months Ended
|
|
|
|
|
|||||||||
|
|
September 30,
|
|
|
|
|
|||||||||
|
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percent Change
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Management fees
|
|
$
|
8,438
|
|
|
$
|
10,242
|
|
|
$
|
(1,804
|
)
|
|
(18
|
)%
|
General and administrative
|
|
7,943
|
|
|
11,780
|
|
|
(3,837
|
)
|
|
(33
|
)%
|
|||
Equity compensation
|
|
2,383
|
|
|
2,417
|
|
|
(34
|
)
|
|
(1
|
)%
|
|||
Depreciation and amortization
|
|
68
|
|
|
126
|
|
|
(58
|
)
|
|
(46
|
)%
|
|||
Impairment losses
|
|
—
|
|
|
177
|
|
|
(177
|
)
|
|
(100
|
)%
|
|||
(Recovery of) provision for loan and lease losses, net
|
|
(1,260
|
)
|
|
518
|
|
|
(1,778
|
)
|
|
(343
|
)%
|
|||
Total operating expenses
|
|
$
|
17,572
|
|
|
$
|
25,260
|
|
|
$
|
(7,688
|
)
|
|
(30
|
)%
|
|
|
For the Three Months Ended
|
|
|
|
|
|||||||||
|
|
September 30,
|
|
|
|
|
|||||||||
|
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percent Change
|
|||||||
General and administrative:
|
|
|
|
|
|
|
|
|
|||||||
Professional services
|
|
$
|
784
|
|
|
$
|
2,335
|
|
|
$
|
(1,551
|
)
|
|
(66
|
)%
|
Wages and benefits
|
|
724
|
|
|
984
|
|
|
(260
|
)
|
|
(26
|
)%
|
|||
D&O insurance
|
|
286
|
|
|
265
|
|
|
21
|
|
|
8
|
%
|
|||
Operating expenses
|
|
177
|
|
|
223
|
|
|
(46
|
)
|
|
(21
|
)%
|
|||
Director fees
|
|
164
|
|
|
245
|
|
|
(81
|
)
|
|
(33
|
)%
|
|||
Dues and subscriptions
|
|
66
|
|
|
114
|
|
|
(48
|
)
|
|
(42
|
)%
|
|||
Rent and utilities
|
|
87
|
|
|
115
|
|
|
(28
|
)
|
|
(24
|
)%
|
|||
Travel
|
|
44
|
|
|
76
|
|
|
(32
|
)
|
|
(42
|
)%
|
|||
Tax penalties, interest and franchise tax
|
|
4
|
|
|
(21
|
)
|
|
25
|
|
|
119
|
%
|
|||
Total general and administrative
|
|
$
|
2,336
|
|
|
$
|
4,336
|
|
|
$
|
(2,000
|
)
|
|
(46
|
)%
|
|
|
For the Nine Months Ended
|
|
|
|
|
|||||||||
|
|
September 30,
|
|
|
|
|
|||||||||
|
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percent Change
|
|||||||
General and administrative:
|
|
|
|
|
|
|
|
|
|||||||
Professional services
|
|
$
|
2,348
|
|
|
$
|
5,040
|
|
|
$
|
(2,692
|
)
|
|
(53
|
)%
|
Wages and benefits
|
|
2,670
|
|
|
2,745
|
|
|
(75
|
)
|
|
(3
|
)%
|
|||
D&O insurance
|
|
878
|
|
|
758
|
|
|
120
|
|
|
16
|
%
|
|||
Operating expenses
|
|
629
|
|
|
1,005
|
|
|
(376
|
)
|
|
(37
|
)%
|
|||
Director fees
|
|
491
|
|
|
747
|
|
|
(256
|
)
|
|
(34
|
)%
|
|||
Dues and subscriptions
|
|
492
|
|
|
716
|
|
|
(224
|
)
|
|
(31
|
)%
|
|||
Rent and utilities
|
|
249
|
|
|
431
|
|
|
(182
|
)
|
|
(42
|
)%
|
|||
Travel
|
|
190
|
|
|
266
|
|
|
(76
|
)
|
|
(29
|
)%
|
|||
Tax penalties, interest and franchise tax
|
|
(4
|
)
|
|
72
|
|
|
(76
|
)
|
|
(106
|
)%
|
|||
Total general and administrative
|
|
$
|
7,943
|
|
|
$
|
11,780
|
|
|
$
|
(3,837
|
)
|
|
(33
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
|
|||||||||
|
|
September 30,
|
|
|
|
|
|||||||||
|
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percent Change
|
|||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
||||||
Equity in earnings of unconsolidated entities
|
|
$
|
454
|
|
|
$
|
41,047
|
|
|
$
|
(40,593
|
)
|
|
(99
|
)%
|
Net realized and unrealized gain (loss) on investment securities available-for-sale and loans and derivatives
|
|
279
|
|
|
(1,465
|
)
|
|
1,744
|
|
|
119
|
%
|
|||
Net realized and unrealized (loss) gain on investment securities, trading
|
|
—
|
|
|
(9
|
)
|
|
9
|
|
|
100
|
%
|
|||
Fair value adjustments on financial assets held for sale
|
|
(1,588
|
)
|
|
—
|
|
|
(1,588
|
)
|
|
(100
|
)%
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
(10,365
|
)
|
|
10,365
|
|
|
100
|
%
|
|||
Other income (expense)
|
|
57
|
|
|
(690
|
)
|
|
747
|
|
|
108
|
%
|
|||
Total other (expense) income
|
|
$
|
(798
|
)
|
|
$
|
28,518
|
|
|
$
|
(29,316
|
)
|
|
(103
|
)%
|
|
|
For the Nine Months Ended
|
|
|
|
|
|||||||||
|
|
September 30,
|
|
|
|
|
|||||||||
|
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percent Change
|
|||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
||||||
Equity in earnings of unconsolidated entities
|
|
$
|
231
|
|
|
$
|
41,290
|
|
|
$
|
(41,059
|
)
|
|
(99
|
)%
|
Net realized and unrealized gain (loss) on investment securities available-for-sale and loans and derivatives
|
|
569
|
|
|
15,619
|
|
|
(15,050
|
)
|
|
(96
|
)%
|
|||
Net realized and unrealized (loss) gain on investment securities, trading
|
|
53
|
|
|
(970
|
)
|
|
1,023
|
|
|
105
|
%
|
|||
Fair value adjustments on financial assets held for sale
|
|
(6,244
|
)
|
|
58
|
|
|
(6,302
|
)
|
|
(10,866
|
)%
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
(10,365
|
)
|
|
10,365
|
|
|
100
|
%
|
|||
Other income (expense)
|
|
574
|
|
|
(604
|
)
|
|
1,178
|
|
|
195
|
%
|
|||
Total other (expense) income
|
|
$
|
(4,817
|
)
|
|
$
|
45,028
|
|
|
$
|
(49,845
|
)
|
|
(111
|
)%
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
||||||||
Loans
|
$
|
—
|
|
|
$
|
892
|
|
|
$
|
580
|
|
|
$
|
2,682
|
|
Other
|
—
|
|
|
44
|
|
|
13
|
|
|
76
|
|
||||
Total interest income
|
—
|
|
|
936
|
|
|
593
|
|
|
2,758
|
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net interest income
|
—
|
|
|
936
|
|
|
593
|
|
|
2,758
|
|
||||
(Loss) gain on sale of residential mortgage loans
|
—
|
|
|
(1,186
|
)
|
|
(1
|
)
|
|
5,688
|
|
||||
Fee income (loss)
|
280
|
|
|
(197
|
)
|
|
313
|
|
|
3,480
|
|
||||
Total revenues
|
280
|
|
|
(447
|
)
|
|
905
|
|
|
11,926
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Equity compensation
|
—
|
|
|
65
|
|
|
—
|
|
|
286
|
|
||||
General and administrative
|
62
|
|
|
5,590
|
|
|
1,165
|
|
|
21,985
|
|
||||
Total operating expenses
|
62
|
|
|
5,655
|
|
|
1,165
|
|
|
22,271
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
218
|
|
|
(6,102
|
)
|
|
(260
|
)
|
|
(10,345
|
)
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
||||||||
Net realized and unrealized gain on investment securities available-for-sale and loans and derivatives
|
146
|
|
|
97
|
|
|
421
|
|
|
13
|
|
||||
Fair value adjustments on financial assets held for sale
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(500
|
)
|
||||
Total other (expense) income
|
146
|
|
|
15
|
|
|
421
|
|
|
(487
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS BEFORE TAXES
|
364
|
|
|
(6,087
|
)
|
|
161
|
|
|
(10,832
|
)
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
|
364
|
|
|
(6,087
|
)
|
|
161
|
|
|
(10,832
|
)
|
||||
Loss from disposal of discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
TOTAL INCOME (LOSS) FROM DISCONTINUED OPERATIONS
|
$
|
364
|
|
|
$
|
(6,087
|
)
|
|
$
|
161
|
|
|
$
|
(10,832
|
)
|
At September 30, 2018
|
|
Amortized Cost
|
|
Net Carrying Amount
|
|
Percent of Portfolio
|
|
Weighted Average Coupon
|
|||||
Loans held for investment:
|
|
|
|
|
|
|
|
|
|||||
CRE whole loans
(1)(2)
|
|
$
|
1,492,493
|
|
|
$
|
1,490,757
|
|
|
79.04
|
%
|
|
6.37%
|
CRE mezzanine loan
|
|
4,700
|
|
|
4,700
|
|
|
0.25
|
%
|
|
10.00%
|
||
CRE preferred equity investment
|
|
19,372
|
|
|
19,372
|
|
|
1.03
|
%
|
|
11.50%
|
||
|
|
1,516,565
|
|
|
1,514,829
|
|
|
80.32
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|||||
CMBS
|
|
350,179
|
|
|
352,778
|
|
|
18.70
|
%
|
|
4.58%
|
||
|
|
|
|
|
|
|
|
|
|||||
Other investments:
|
|
|
|
|
|
|
|
|
|||||
Investments in unconsolidated entities
|
|
1,596
|
|
|
1,596
|
|
|
0.08
|
%
|
|
N/A
(5)
|
||
|
|
|
|
|
|
|
|
|
|||||
Other assets held for sale:
|
|
|
|
|
|
|
|
|
|||||
Legacy CRE loan
(2)(3)
|
|
25,202
|
|
|
17,000
|
|
|
0.90
|
%
|
|
—%
|
||
|
|
|
|
|
|
|
|
|
|||||
Total investment portfolio
|
|
$
|
1,893,542
|
|
|
$
|
1,886,203
|
|
|
100.00
|
%
|
|
|
At December 31, 2017
|
|
Amortized Cost
|
|
Net Carrying Amount
|
|
Percent of Portfolio
|
|
Weighted Average Coupon
|
|||||
Loans held for investment:
|
|
|
|
|
|
|
|
|
|||||
CRE whole loans
(1)
|
|
$
|
1,290,150
|
|
|
$
|
1,284,822
|
|
|
79.96
|
%
|
|
6.09%
|
|
|
|
|
|
|
|
|
|
|||||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|||||
CMBS
|
|
210,806
|
|
|
211,579
|
|
|
13.17
|
%
|
|
4.35%
|
||
ABS
|
|
259
|
|
|
158
|
|
|
0.01
|
%
|
|
N/A
(5)
|
||
|
|
211,065
|
|
|
211,737
|
|
|
13.18
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Other investments:
|
|
|
|
|
|
|
|
|
|||||
Investments in unconsolidated entities
|
|
12,051
|
|
|
12,051
|
|
|
0.75
|
%
|
|
N/A
(5)
|
||
|
|
|
|
|
|
|
|
|
|||||
Other assets held for sale:
|
|
|
|
|
|
|
|
|
|||||
Legacy CRE loans
(3)
|
|
63,783
|
|
|
61,841
|
|
|
3.85
|
%
|
|
1.64%
|
||
Middle market loans
(4)
|
|
41,199
|
|
|
29,308
|
|
|
1.82
|
%
|
|
5.06%
|
||
Life settlement contracts
|
|
5,130
|
|
|
5,130
|
|
|
0.32
|
%
|
|
N/A
(5)
|
||
Residential mortgage loans
|
|
1,913
|
|
|
1,913
|
|
|
0.12
|
%
|
|
3.92%
|
||
|
|
112,025
|
|
|
98,192
|
|
|
6.11
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Total investment portfolio
|
|
$
|
1,625,291
|
|
|
$
|
1,606,802
|
|
|
100.00
|
%
|
|
|
(1)
|
Net carrying amount includes an allowance for loan losses of
$1.7 million
and
$5.3 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(2)
|
At June 30, 2018, two legacy CRE loans with total amortized costs and net carrying amounts of
$28.3 million
were reclassified to CRE whole loans as we now intend to hold these loans to maturity.
|
(3)
|
Net carrying amount includes lower of cost or market value adjustments of
$8.2 million
and
$1.9 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(4)
|
Net carrying amount includes lower of cost or market value adjustments of
$11.9 million
at
December 31, 2017
.
|
(5)
|
There are no stated rates associated with these investments.
|
Description
|
|
Quantity
|
|
Principal
|
|
Unamortized (Discount)
Premium, net (1) |
|
Amortized Cost
|
|
Allowance for Loan Losses
|
|
Carrying
Value (2) |
|
Contractual Interest Rates
|
|
Maturity Dates
(3)(4)(5)
|
||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE loans held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Whole loans
(6)(7)
|
|
78
|
|
$
|
1,501,076
|
|
|
$
|
(8,583
|
)
|
|
$
|
1,492,493
|
|
|
$
|
(1,736
|
)
|
|
$
|
1,490,757
|
|
|
1M LIBOR plus 2.50% to 1M LIBOR plus 6.25%
|
|
November 2018 to October 2021
|
Mezzanine loan
|
|
1
|
|
4,700
|
|
|
—
|
|
|
4,700
|
|
|
—
|
|
|
4,700
|
|
|
10.00%
|
|
June 2028
|
|||||
Preferred equity investment
(8)(9)
|
|
1
|
|
19,545
|
|
|
(173
|
)
|
|
19,372
|
|
|
—
|
|
|
19,372
|
|
|
11.50%
|
|
April 2025
|
|||||
Total CRE loans held for investment
|
|
|
|
1,525,321
|
|
|
(8,756
|
)
|
|
1,516,565
|
|
|
(1,736
|
)
|
|
1,514,829
|
|
|
|
|
|
|||||
Total loans
|
|
|
|
$
|
1,525,321
|
|
|
$
|
(8,756
|
)
|
|
$
|
1,516,565
|
|
|
$
|
(1,736
|
)
|
|
$
|
1,514,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE loans held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Whole loans
(6)
|
|
70
|
|
$
|
1,297,164
|
|
|
$
|
(7,014
|
)
|
|
$
|
1,290,150
|
|
|
$
|
(5,328
|
)
|
|
$
|
1,284,822
|
|
|
1M LIBOR plus 3.60% to 1M LIBOR plus 6.25%
|
|
February 2018 to January 2021
|
Total CRE loans held for investment
|
|
|
|
1,297,164
|
|
|
(7,014
|
)
|
|
1,290,150
|
|
|
(5,328
|
)
|
|
1,284,822
|
|
|
|
|
|
|||||
Total loans
|
|
|
|
$
|
1,297,164
|
|
|
$
|
(7,014
|
)
|
|
$
|
1,290,150
|
|
|
$
|
(5,328
|
)
|
|
$
|
1,284,822
|
|
|
|
|
|
(1)
|
Amounts include unamortized loan origination fees of
$8.5 million
and
$6.7 million
and deferred amendment fees of
$295,000
and
$268,000
being amortized over the life of the loans at
September 30, 2018
and
December 31, 2017
, respectively.
|
(2)
|
Substantially all loans are pledged as collateral under various borrowings at
September 30, 2018
and
December 31, 2017
.
|
(3)
|
Maturity dates exclude contractual extension options, subject to the satisfaction of certain terms, that may be available to the borrowers.
|
(4)
|
Maturity dates exclude
one
whole loan, with an amortized cost of
$7.0 million
, in default at
December 31, 2017
.
|
(5)
|
Maturity dates exclude
one
whole loan, with an amortized cost of
$11.5 million
, in maturity default and performing with respect to debt service due in accordance with a forbearance agreement at
September 30, 2018
. The loan was classified as an asset held for sale and in maturity default at
December 31, 2017
.
|
(6)
|
Whole loans had
$92.2 million
and
$84.1 million
in unfunded loan commitments at
September 30, 2018
and
December 31, 2017
, respectively. These unfunded loan commitments are advanced as the borrowers formally request additional funding, as permitted under the loan agreement, and any necessary approvals have been obtained.
|
(7)
|
At June 30, 2018,
two
legacy CRE loans with amortized costs of
$28.3 million
were reclassified to whole loans from assets held for sale as we now intend to hold these loans to maturity.
|
(8)
|
The interest rate on our preferred equity investment pays currently at
8.00%
. The remaining interest is deferred until maturity.
|
(9)
|
Beginning in April 2023, we have the right to unilaterally force the sale of the underlying property.
|
|
|
Fair Value at December 31, 2017
|
|
Net Purchases (Sales)
(1)
|
|
Net Upgrades (Downgrades)
|
|
Paydowns
|
|
MTM Change
on Same Ratings |
|
Fair Value at September 30, 2018
|
||||||||||||
Moody's ratings category:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Aaa
|
|
$
|
8,390
|
|
|
$
|
—
|
|
|
$
|
10,965
|
|
|
$
|
(5,783
|
)
|
|
$
|
(196
|
)
|
|
$
|
13,376
|
|
Aa1 through Aa3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
A1 through A3
|
|
1,563
|
|
|
—
|
|
|
4,656
|
|
|
(2,218
|
)
|
|
(8
|
)
|
|
3,993
|
|
||||||
Baa1 through Baa3
|
|
8,432
|
|
|
7,974
|
|
|
(4,157
|
)
|
|
(2,688
|
)
|
|
(156
|
)
|
|
9,405
|
|
||||||
Ba1 through Ba3
|
|
10,866
|
|
|
—
|
|
|
(10,866
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
B1 through B3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Caa1 through Caa3
|
|
426
|
|
|
—
|
|
|
(426
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Ca through C
|
|
191
|
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
||||||
Non-Rated
|
|
181,711
|
|
|
143,631
|
|
|
—
|
|
|
(3,444
|
)
|
|
4,106
|
|
|
326,004
|
|
||||||
Total
|
|
$
|
211,579
|
|
|
$
|
151,605
|
|
|
$
|
—
|
|
|
$
|
(14,133
|
)
|
|
$
|
3,727
|
|
|
$
|
352,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
S&P ratings category:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AAA
|
|
$
|
1,318
|
|
|
$
|
—
|
|
|
$
|
7,243
|
|
|
$
|
(3,788
|
)
|
|
$
|
(41
|
)
|
|
$
|
4,732
|
|
AA+ through AA-
|
|
4,371
|
|
|
—
|
|
|
(3,344
|
)
|
|
(977
|
)
|
|
(7
|
)
|
|
43
|
|
||||||
A+ through A-
|
|
11,593
|
|
|
—
|
|
|
2,281
|
|
|
(4,837
|
)
|
|
(14
|
)
|
|
9,023
|
|
||||||
BBB+ through BBB-
|
|
22,502
|
|
|
7,974
|
|
|
(3,299
|
)
|
|
(69
|
)
|
|
708
|
|
|
27,816
|
|
||||||
BB+ through BB-
|
|
86,259
|
|
|
5,000
|
|
|
(6,298
|
)
|
|
(2,455
|
)
|
|
447
|
|
|
82,953
|
|
||||||
B+ through B-
|
|
—
|
|
|
22,367
|
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
22,295
|
|
||||||
CCC+ through CCC-
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
D
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Non-Rated
|
|
85,536
|
|
|
116,264
|
|
|
3,417
|
|
|
(2,007
|
)
|
|
2,706
|
|
|
205,916
|
|
||||||
Total
|
|
$
|
211,579
|
|
|
$
|
151,605
|
|
|
$
|
—
|
|
|
$
|
(14,133
|
)
|
|
$
|
3,727
|
|
|
$
|
352,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fitch ratings category:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AAA
|
|
$
|
6,482
|
|
|
$
|
—
|
|
|
$
|
8,683
|
|
|
$
|
(4,673
|
)
|
|
$
|
(138
|
)
|
|
$
|
10,354
|
|
AA+ through AA-
|
|
—
|
|
|
—
|
|
|
1,028
|
|
|
(977
|
)
|
|
(7
|
)
|
|
44
|
|
||||||
A+ through A-
|
|
2,881
|
|
|
—
|
|
|
7,024
|
|
|
(1,753
|
)
|
|
21
|
|
|
8,173
|
|
||||||
BBB+ through BBB-
|
|
40,577
|
|
|
33,401
|
|
|
172
|
|
|
—
|
|
|
2,211
|
|
|
76,361
|
|
||||||
BB+ through BB-
|
|
16,712
|
|
|
—
|
|
|
(2,835
|
)
|
|
(370
|
)
|
|
174
|
|
|
13,681
|
|
||||||
B+ through B-
|
|
43,191
|
|
|
19,882
|
|
|
(9,885
|
)
|
|
—
|
|
|
396
|
|
|
53,584
|
|
||||||
CCC
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
CC through D
|
|
191
|
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
||||||
Non-Rated
|
|
101,545
|
|
|
98,322
|
|
|
(4,015
|
)
|
|
(6,360
|
)
|
|
1,089
|
|
|
190,581
|
|
||||||
Total
|
|
$
|
211,579
|
|
|
$
|
151,605
|
|
|
$
|
—
|
|
|
$
|
(14,133
|
)
|
|
$
|
3,727
|
|
|
$
|
352,778
|
|
(1)
|
During the
nine months ended September 30, 2018
, we acquired
$63.6 million
of CMBS, at a cost of approximately
$53.6 million
, with a weighted average spread, based on cost, of
3.70%
over the interpolated interest rate swap curve and
$105.4 million
of CMBS, at a cost of approximately
$105.5 million
, with a weighted average spread, based on face value, of
2.35%
over LIBOR.
|
|
Face Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Coupon Rates
|
||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
||||||
CMBS, fixed rate
(1)
|
$
|
202,207
|
|
|
$
|
132,470
|
|
|
$
|
134,009
|
|
|
2.88% - 8.48%
|
CMBS, floating rate
|
218,065
|
|
|
217,709
|
|
|
218,769
|
|
|
2.54% - 6.08%
|
|||
Total
|
$
|
420,272
|
|
|
$
|
350,179
|
|
|
$
|
352,778
|
|
|
|
|
|
|
|
|
|
|
|
||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
||||||
CMBS, fixed rate
(1)
|
$
|
160,641
|
|
|
$
|
97,204
|
|
|
$
|
97,609
|
|
|
2.88% - 6.66%
|
CMBS, floating rate
|
114,737
|
|
|
113,602
|
|
|
113,970
|
|
|
1.73% - 5.50%
|
|||
Total
|
$
|
275,378
|
|
|
$
|
210,806
|
|
|
$
|
211,579
|
|
|
|
(1)
|
Face value includes $24.9 million, with a total cost basis of $105,000, of CMBS that have been subject to other-than-temporarily-impairment charges at
September 30, 2018
and
December 31, 2017
.
|
|
Fair Value at December 31, 2017
|
|
Net Purchases (Sales)
|
|
MTM Change
on Same Ratings |
|
Fair Value at September 30, 2018
|
||||||||
Moody's ratings category:
|
|
|
|
|
|
|
|
||||||||
Non-Rated
|
$
|
158
|
|
|
$
|
(158
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
S&P ratings category:
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-Rated
|
$
|
158
|
|
|
$
|
(158
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Fitch ratings category:
|
|
|
|
|
|
|
|
||||||||
Non-Rated
|
$
|
158
|
|
|
$
|
(158
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Equity in Earnings (Losses) of Unconsolidated Entities
|
||||||||||||||||||
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||||||
|
Ownership % at September 30, 2018
|
|
September 30,
2018 |
|
December 31,
2017 |
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
Pelium Capital
(1)
|
80.2%
|
|
$
|
7
|
|
|
$
|
10,503
|
|
|
$
|
50
|
|
|
$
|
54
|
|
|
$
|
(180
|
)
|
|
$
|
(22
|
)
|
RCM Global
|
63.8%
|
|
41
|
|
|
—
|
|
|
(7
|
)
|
|
(61
|
)
|
|
—
|
|
|
(231
|
)
|
||||||
Investment in LCC Preferred Stock
(2)
|
—%
|
|
—
|
|
|
—
|
|
|
411
|
|
|
41,048
|
|
|
411
|
|
|
41,334
|
|
||||||
RRE VIP Borrower, LLC
(3)
|
—%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
44
|
|
||||||
Pearlmark Mezzanine Realty Partners IV, L.P.
(4)
|
—%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
||||||
Subtotal
|
|
|
48
|
|
|
10,503
|
|
|
454
|
|
|
41,047
|
|
|
231
|
|
|
41,290
|
|
||||||
Investment in RCT I and II
(5)
|
3.0%
|
|
1,548
|
|
|
1,548
|
|
|
(829
|
)
|
|
(689
|
)
|
|
(2,359
|
)
|
|
(1,989
|
)
|
||||||
Total
|
|
|
$
|
1,596
|
|
|
$
|
12,051
|
|
|
$
|
(375
|
)
|
|
$
|
40,358
|
|
|
$
|
(2,128
|
)
|
|
$
|
39,301
|
|
(1)
|
During the
nine months ended
September 30, 2018
and
2017
, we received distributions of
$10.4 million
and
$13.6 million
, respectively, on our investment in Pelium Capital Partners, L.P. ("Pelium Capital").
|
(2)
|
Our investment in LCC liquidated in July 2017 as a result of the sale of LCC. Earnings for the
three and nine
months ended
September 30, 2018
are related to the receipt of a distribution of funds formerly held in escrow accounts established as part of the sale.
|
(3)
|
We sold our investment in RRE VIP Borrower, LLC in December 2014. Earnings for the
three and nine
months ended
September 30, 2017
are related to insurance premium refunds with respect to the underlying sold properties in the portfolio.
|
(4)
|
We sold our investment in Pearlmark Mezz in May 2017.
|
(5)
|
For the
three and nine
months ended
September 30, 2018
and
2017
, distributions from the trusts are recorded in interest expense on our consolidated statements of operations as the investments are accounted for under the cost method.
|
|
|
Nine Months Ended September 30, 2018
|
|
Year Ended December 31, 2017
|
||||
|
|
Commercial Real Estate Loans
|
|
Commercial Real Estate Loans
|
||||
Allowance for loan losses:
|
|
|
|
|
||||
Allowance for loan losses at beginning of period
|
|
$
|
5,328
|
|
|
$
|
3,829
|
|
(Recovery of) provision for loan losses, net
|
|
(1,260
|
)
|
|
1,499
|
|
||
Loans charged-off
|
|
(2,332
|
)
|
|
—
|
|
||
Allowance for loan losses at end of period
|
|
$
|
1,736
|
|
|
$
|
5,328
|
|
|
|
|
|
|
||||
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
|
Commercial Real Estate Loans
|
|
Commercial Real Estate Loans
|
||||
Allowance for loan losses ending balance:
|
|
|
|
|
|
|||
Individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
2,500
|
|
Collectively evaluated for impairment
|
|
$
|
1,736
|
|
|
$
|
2,828
|
|
Loans:
|
|
|
|
|
|
|||
Amortized cost ending balance:
|
|
|
|
|
||||
Individually evaluated for impairment
|
|
$
|
24,072
|
|
|
$
|
7,000
|
|
Collectively evaluated for impairment
|
|
$
|
1,492,493
|
|
|
$
|
1,283,150
|
|
|
|
|
Risk Rating
|
|
Risk Characteristics
|
|
|
|
1
|
|
• Property performance has surpassed underwritten expectations.
|
|
|
• Occupancy is stabilized, the property has had a history of consistently high occupancy, and the property has a diverse and high quality tenant mix.
|
|
|
|
2
|
|
• Property performance is consistent with underwritten expectations and covenants and performance criteria are being met or exceeded.
|
|
|
• Occupancy is stabilized, near stabilized or is on track with underwriting.
|
|
|
|
3
|
|
• Property performance lags behind underwritten expectations.
|
|
|
• Occupancy is not stabilized and the property has some tenancy rollover.
|
|
|
|
4
|
|
• Property performance significantly lags behind underwritten expectations. Performance criteria and loan covenants have required occasional waivers.
|
|
|
• Occupancy is not stabilized and the property has a large amount of tenancy rollover.
|
|
|
|
5
|
|
• Property performance is significantly worse than underwritten expectations. The loan is not in compliance with loan covenants and performance criteria and may be in default. Expected sale proceeds would not be sufficient to pay off the loan at maturity.
|
|
|
• The property has a material vacancy rate and significant rollover of remaining tenants.
|
|
|
• An updated appraisal is required.
|
|
Rating 1
|
|
Rating 2
|
|
Rating 3
(1)
|
|
Rating 4
|
|
Rating 5
(2)
|
|
Held for Sale
(3)
|
|
Total
|
||||||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Whole loans
|
$
|
—
|
|
|
$
|
1,376,836
|
|
|
$
|
110,808
|
|
|
$
|
4,849
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,492,493
|
|
Mezzanine loan
(4)
|
—
|
|
|
4,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,700
|
|
|||||||
Preferred equity investment
(4)
|
—
|
|
|
19,372
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,372
|
|
|||||||
Legacy CRE loans held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,000
|
|
|
17,000
|
|
|||||||
|
$
|
—
|
|
|
$
|
1,400,908
|
|
|
$
|
110,808
|
|
|
$
|
4,849
|
|
|
$
|
—
|
|
|
$
|
17,000
|
|
|
$
|
1,533,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Whole loans
|
$
|
65,589
|
|
|
$
|
1,040,883
|
|
|
$
|
171,841
|
|
|
$
|
4,837
|
|
|
$
|
7,000
|
|
|
$
|
—
|
|
|
$
|
1,290,150
|
|
Legacy CRE loans held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,841
|
|
|
61,841
|
|
|||||||
|
$
|
65,589
|
|
|
$
|
1,040,883
|
|
|
$
|
171,841
|
|
|
$
|
4,837
|
|
|
$
|
7,000
|
|
|
$
|
61,841
|
|
|
$
|
1,351,991
|
|
(1)
|
Includes
one
whole loan, with an amortized cost of
$11.5 million
, that was in maturity default at
September 30, 2018
. The loan is performing with respect to debt service due in accordance with a forbearance agreement at
September 30, 2018
.
|
(2)
|
Includes
one
whole loan, with an amortized cost of
$7.0 million
, that was in default at
December 31, 2017
.
|
(3)
|
Includes
one
and
two
legacy CRE loans that were in default with total carrying values of
$17.0 million
and
$22.5 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(4)
|
Our mezzanine loan and preferred equity investment are evaluated individually for impairment.
|
|
30-59 Days
|
|
60-89 Days
|
|
Greater
than 90 Days (1)(2) |
|
Total Past Due
(3)
|
|
Current
|
|
Total
Loans Receivable |
|
Total Loans > 90 Days and Accruing
(2)
|
||||||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,516
|
|
|
$
|
11,516
|
|
|
$
|
1,480,977
|
|
|
$
|
1,492,493
|
|
|
$
|
11,516
|
|
Mezzanine loan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,700
|
|
|
4,700
|
|
|
—
|
|
|||||||
Preferred equity investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,372
|
|
|
19,372
|
|
|
—
|
|
|||||||
Legacy CRE loans held for sale
|
—
|
|
|
—
|
|
|
17,000
|
|
|
17,000
|
|
|
—
|
|
|
17,000
|
|
|
—
|
|
|||||||
Total loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,516
|
|
|
$
|
28,516
|
|
|
$
|
1,505,049
|
|
|
$
|
1,533,565
|
|
|
$
|
11,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,000
|
|
|
$
|
7,000
|
|
|
$
|
1,283,150
|
|
|
$
|
1,290,150
|
|
|
$
|
—
|
|
Legacy CRE loans held for sale
|
11,516
|
|
|
—
|
|
|
11,000
|
|
|
22,516
|
|
|
39,325
|
|
|
61,841
|
|
|
—
|
|
|||||||
Total loans
|
$
|
11,516
|
|
|
$
|
—
|
|
|
$
|
18,000
|
|
|
$
|
29,516
|
|
|
$
|
1,322,475
|
|
|
$
|
1,351,991
|
|
|
$
|
—
|
|
(1)
|
Includes
one
whole loan, with an amortized cost of
$7.0 million
, that was in default at
December 31, 2017
.
|
(2)
|
Includes
one
whole loan, with an amortized cost of
$11.5 million
, that was in maturity default at
September 30, 2018
. The loan is performing with respect to debt service due in accordance with a forbearance agreement at
September 30, 2018
.
|
(3)
|
Includes
one
and
two
legacy CRE loans that were in default with total carrying values of
$17.0 million
and
$22.5 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
|
Recorded Balance
|
|
Unpaid Principal Balance
|
|
Specific Allowance
|
|
Average Investment in Impaired Loans
|
|
Interest Income Recognized
|
||||||||||
Loans without a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans with a specific valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
7,000
|
|
|
$
|
7,000
|
|
|
$
|
(2,500
|
)
|
|
$
|
7,000
|
|
|
$
|
—
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Whole loans
|
$
|
7,000
|
|
|
$
|
7,000
|
|
|
$
|
(2,500
|
)
|
|
$
|
7,000
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
|
Net Change
|
||||||
Accrued interest receivable from loans
|
$
|
6,380
|
|
|
$
|
6,096
|
|
|
$
|
284
|
|
Accrued interest receivable from securities
|
1,043
|
|
|
756
|
|
|
287
|
|
|||
Accrued interest receivable from escrow, sweep and reserve accounts
|
43
|
|
|
7
|
|
|
36
|
|
|||
Total
|
$
|
7,466
|
|
|
$
|
6,859
|
|
|
$
|
607
|
|
|
September 30,
2018 |
|
December 31,
2017 |
|
Net Change
|
||||||
Unsettled trades receivable
|
$
|
8,103
|
|
|
$
|
—
|
|
|
8,103
|
|
|
Tax receivables and prepaid taxes
|
3,244
|
|
|
4,286
|
|
|
(1,042
|
)
|
|||
Other prepaid expenses
|
1,120
|
|
|
484
|
|
|
636
|
|
|||
Other receivables
|
648
|
|
|
495
|
|
|
153
|
|
|||
Fixed assets - non real estate
|
117
|
|
|
157
|
|
|
(40
|
)
|
|||
Direct financing leases
|
66
|
|
|
151
|
|
|
(85
|
)
|
|||
Management fees receivable
|
—
|
|
|
2,029
|
|
|
(2,029
|
)
|
|||
Investment securities, trading
|
—
|
|
|
178
|
|
|
(178
|
)
|
|||
Loans held for sale
|
—
|
|
|
13
|
|
|
(13
|
)
|
|||
Total
|
$
|
13,298
|
|
|
$
|
7,793
|
|
|
$
|
5,505
|
|
At September 30, 2018
|
|
Amortized Cost
|
|
Net Carrying Amount
|
|
Percent of Portfolio
|
|
Weighted Average Coupon
|
|||||
Core Assets:
|
|
|
|
|
|
|
|
|
|||||
CRE whole loans
(1)(2)
|
|
$
|
1,464,152
|
|
|
$
|
1,462,416
|
|
|
77.59
|
%
|
|
6.39%
|
CRE mezzanine loan and preferred equity investment
(2)
|
|
24,072
|
|
|
24,072
|
|
|
1.28
|
%
|
|
11.21%
|
||
CMBS
(3)
|
|
350,179
|
|
|
352,778
|
|
|
18.72
|
%
|
|
4.58%
|
||
Total Core Assets
|
|
1,838,403
|
|
|
1,839,266
|
|
|
97.59
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Non-Core Assets:
|
|
|
|
|
|
|
|
|
|||||
Investments in unconsolidated entities
(4)
|
|
48
|
|
|
48
|
|
|
—
|
%
|
|
N/A
(8)
|
||
Structured notes
(5)
|
|
1,000
|
|
|
—
|
|
|
—
|
%
|
|
N/A
(8)
|
||
Direct financing leases
(5)
|
|
801
|
|
|
66
|
|
|
—
|
%
|
|
5.66%
|
||
Legacy CRE loans
(6)(7)
|
|
53,543
|
|
|
45,341
|
|
|
2.41
|
%
|
|
2.35%
|
||
Total Non-Core Assets
|
|
55,392
|
|
|
45,455
|
|
|
2.41
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Total Core and Non-Core Assets
|
|
$
|
1,893,795
|
|
|
$
|
1,884,721
|
|
|
100.00
|
%
|
|
|
(1)
|
Net carrying amount includes an allowance for loan losses of
$1.7 million
at
September 30, 2018
.
|
(2)
|
Classified as CRE loans on the consolidated balance sheets.
|
(3)
|
Classified as investment securities available-for-sale on the consolidated balance sheets.
|
(4)
|
Classified as investments in unconsolidated entities on the consolidated balance sheets.
|
(5)
|
Classified as other assets on the consolidated balance sheets.
|
(6)
|
At June 30, 2018, two legacy CRE loans with total amortized costs and net carrying amounts of
$28.3 million
were reclassified to CRE loans on the consolidated balance sheets as we now intend to hold these loans to maturity.
|
(7)
|
Net carrying amount includes a lower of cost or market value adjustment of
$8.2 million
at
September 30, 2018
.
|
(8)
|
There are no stated rates associated with these investments.
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Restricted cash
|
$
|
—
|
|
|
$
|
138
|
|
Accrued interest receivable
|
—
|
|
|
67
|
|
||
Loans held for sale
(1)
|
17,000
|
|
|
93,063
|
|
||
Other assets
(2)
|
854
|
|
|
14,450
|
|
||
Total assets held for sale
|
$
|
17,854
|
|
|
$
|
107,718
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
||||
Accounts payable and other liabilities
|
$
|
1,787
|
|
|
$
|
10,283
|
|
Management fee payable
|
—
|
|
|
56
|
|
||
Accrued interest payable
|
—
|
|
|
3
|
|
||
Total liabilities held for sale
|
$
|
1,787
|
|
|
$
|
10,342
|
|
(1)
|
Includes a directly originated middle market loan with a carrying value of
$2.0 million
at
December 31, 2017
. In July 2018 substantially all of the assets of the borrower were sold, resulting in
$2.1 million
of loan repayments.
|
(2)
|
Includes our investment in life settlement contracts of
$5.1 million
at
December 31, 2017
. In 2018, substantially all of the life settlement contracts were sold or matured and there were
no
life settlement contracts remaining at
September 30, 2018
.
|
|
Asset Derivatives
|
||||||||
|
Notional Amount
|
|
Consolidated Balance Sheets Location
|
|
Fair Value
|
||||
Interest rate swap contracts, hedging
(1)
|
$
|
85,011
|
|
|
Derivatives, at fair value
|
|
$
|
2,665
|
|
|
|
|
|
|
|
||||
|
Liability Derivatives
|
||||||||
|
Notional Amount
|
|
Consolidated Balance Sheets Location
|
|
Fair Value
|
||||
Interest rate swap contracts, hedging
|
$
|
85,011
|
|
|
Accumulated other comprehensive income
|
|
$
|
3,030
|
|
(1)
|
Interest rate swap contracts are accounted for as cash flow hedges.
|
|
Asset Derivatives
|
||||||||
|
Notional Amount
|
|
Consolidated Balance Sheets Location
|
|
Fair Value
|
||||
Interest rate swap contracts, hedging
(1)
|
$
|
41,750
|
|
|
Derivatives, at fair value
|
|
$
|
602
|
|
|
|
|
|
|
|
||||
|
Liability Derivatives
|
||||||||
|
Notional Amount
|
|
Consolidated Balance Sheets Location
|
|
Fair Value
|
||||
Forward contracts - foreign currency, hedging
(2)(3)
|
$
|
3,602
|
|
|
Derivatives, at fair value
|
|
$
|
76
|
|
Interest rate swap contracts, hedging
|
$
|
41,750
|
|
|
Accumulated other comprehensive income
|
|
$
|
602
|
|
(1)
|
Interest rate swap contracts are accounted for as cash flow hedges.
|
(2)
|
Foreign currency forward contracts are accounted for as fair value hedges.
|
(3)
|
Notional amount is presented on a currency converted basis. The base currency notional amount of our foreign currency hedging forward contracts in a liability position was
€3.0 million
at
December 31, 2017
.
|
|
|
Derivatives
|
||||
|
|
Consolidated Statements of Operations Location
|
|
Realized and Unrealized Gain (Loss)
(1)
|
||
Interest rate swap contracts, hedging
|
|
Interest expense
|
|
$
|
(141
|
)
|
(1)
|
Negative values indicate a decrease to the associated consolidated statements of operations line items.
|
|
|
Derivatives
|
||||
|
|
Consolidated Statements of Operations Location
|
|
Realized and Unrealized Gain (Loss)
(1)
|
||
Interest rate swap contracts, hedging
|
|
Interest expense
|
|
$
|
(53
|
)
|
Forward contracts - foreign currency, hedging
|
|
Net realized and unrealized gain (loss) on investment securities available-for-sale and loans and derivatives
|
|
$
|
(1,998
|
)
|
(1)
|
Negative values indicate a decrease to the associated consolidated statements of operations line items.
|
|
Benchmark Rate
|
|
Notional Value
|
|
Strike Rate
|
|
Effective Date
|
|
Maturity Date
|
|
Fair Value
|
||||
Interest rate swap
|
One-month LIBOR
|
|
$
|
1,435
|
|
|
1.99%
|
|
6/18/2017
|
|
10/18/2025
|
|
$
|
87
|
|
Interest rate swap
|
One-month LIBOR
|
|
3,010
|
|
|
2.02%
|
|
6/18/2017
|
|
1/18/2026
|
|
181
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
2,525
|
|
|
1.94%
|
|
7/18/2017
|
|
10/18/2025
|
|
160
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
3,640
|
|
|
2.15%
|
|
8/18/2017
|
|
3/18/2027
|
|
220
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
4,025
|
|
|
2.09%
|
|
8/18/2017
|
|
10/18/2026
|
|
247
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
13,550
|
|
|
2.09%
|
|
10/18/2017
|
|
9/18/2027
|
|
927
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
7,500
|
|
|
2.20%
|
|
10/18/2017
|
|
9/18/2027
|
|
449
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
2,820
|
|
|
2.77%
|
|
3/18/2018
|
|
3/18/2028
|
|
43
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
2,571
|
|
|
2.86%
|
|
5/18/2018
|
|
3/18/2028
|
|
20
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
3,720
|
|
|
2.86%
|
|
5/18/2018
|
|
11/18/2025
|
|
14
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
7,325
|
|
|
2.80%
|
|
7/18/2018
|
|
1/18/2026
|
|
62
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
4,300
|
|
|
2.80%
|
|
7/18/2018
|
|
1/18/2026
|
|
37
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
2,300
|
|
|
2.85%
|
|
7/18/2018
|
|
2/18/2027
|
|
15
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
4,020
|
|
|
2.76%
|
|
7/18/2018
|
|
7/18/2026
|
|
48
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
4,020
|
|
|
2.76%
|
|
7/18/2018
|
|
7/18/2026
|
|
48
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
4,420
|
|
|
2.89%
|
|
8/18/2018
|
|
7/18/2028
|
|
22
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
7,330
|
|
|
2.85%
|
|
8/18/2018
|
|
12/18/2026
|
|
45
|
|
||
Interest rate swap
|
One-month LIBOR
|
|
6,500
|
|
|
2.72%
|
|
9/18/2018
|
|
7/18/2022
|
|
40
|
|
||
Total interest rate swaps
|
|
|
$
|
85,011
|
|
|
|
|
|
|
|
|
$
|
2,665
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Outstanding Borrowings
(1)
|
|
Value of Collateral
|
|
Number of Positions as Collateral
|
|
Weighted Average Interest Rate
|
|
Outstanding Borrowings
(1)
|
|
Value of Collateral
|
|
Number of Positions as Collateral
|
|
Weighted Average Interest Rate
|
||||||||
CRE - Term Repurchase Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wells Fargo Bank, N.A.
(2)
|
$
|
109,039
|
|
|
$
|
170,355
|
|
|
10
|
|
4.21%
|
|
$
|
179,347
|
|
|
$
|
268,003
|
|
|
19
|
|
3.68%
|
Morgan Stanley Bank, N.A.
(3)
|
67,886
|
|
|
113,831
|
|
|
5
|
|
4.76%
|
|
112,151
|
|
|
164,122
|
|
|
9
|
|
4.05%
|
||||
Barclays Bank PLC
(4)
|
132,895
|
|
|
168,511
|
|
|
8
|
|
4.22%
|
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Trust Certificates - Term Repurchase Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
RSO Repo SPE Trust 2015
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
|
26,548
|
|
|
89,121
|
|
|
2
|
|
6.98%
|
||||
RSO Repo SPE Trust 2017
(6)
|
47,119
|
|
|
118,780
|
|
|
2
|
|
6.11%
|
|
49,596
|
|
|
125,254
|
|
|
2
|
|
5.43%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CMBS - Short-Term Repurchase Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
RBC Capital Markets, LLC
|
201,635
|
|
|
266,182
|
|
|
31
|
|
3.46%
|
|
72,131
|
|
|
97,745
|
|
|
6
|
|
2.77%
|
||||
JP Morgan Securities LLC
|
32,718
|
|
|
61,380
|
|
|
12
|
|
3.42%
|
|
10,516
|
|
|
33,777
|
|
|
2
|
|
2.93%
|
||||
Deutsche Bank Securities Inc.
(7)
|
10,934
|
|
|
13,727
|
|
|
10
|
|
3.61%
|
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CMBS - Term Repurchase Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wells Fargo Bank, N.A.
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
|
12,272
|
|
|
14,984
|
|
|
8
|
|
2.45%
|
||||
Deutsche Bank AG
(7)
|
—
|
|
|
—
|
|
|
—
|
|
—%
|
|
15,356
|
|
|
23,076
|
|
|
14
|
|
3.53%
|
||||
Total
|
$
|
602,226
|
|
|
$
|
912,766
|
|
|
|
|
|
|
$
|
477,917
|
|
|
$
|
816,082
|
|
|
|
|
|
(1)
|
Outstanding borrowings include
accrued interest payable
.
|
(2)
|
Includes
$1.9 million
and
$565,000
of deferred debt issuance costs at
September 30, 2018
and
December 31, 2017
, respectively.
|
(3)
|
Includes
$167,000
and
$448,000
of deferred debt issuance costs at
September 30, 2018
and
December 31, 2017
, respectively.
|
(4)
|
Includes
$1.6 million
of deferred debt issuance costs at
September 30, 2018
and
no
deferred debt issuance costs at
December 31, 2017
|
(5)
|
Includes
$133,000
of deferred debt issuance costs at
December 31, 2017
.
|
(6)
|
Includes
$233,000
and
$320,000
of deferred debt issuance costs at
September 30, 2018
and
December 31, 2017
, respectively.
|
(7)
|
In May 2018, the facility's term was rolled from a
one
-year basis, with extensions at the buyer's option, to a
three
-month basis. At June 30, 2018, the facility was reclassified from CMBS - term repurchase facilities to CMBS - short term repurchase agreements.
|
|
For the Three Months Ended September 30, 2018
|
|
For the Nine Months Ended September 30, 2018
|
||||||||||||
|
Total Amount
|
|
Per Share Amount
|
|
Total Amount
|
|
Per Share Amount
|
||||||||
Common stock book value at beginning of period
(1)
|
$
|
439,932
|
|
|
$
|
14.09
|
|
|
$
|
447,634
|
|
|
$
|
14.46
|
|
Net income (loss) allocable to common shares
|
6,036
|
|
|
0.19
|
|
|
(394
|
)
|
|
(0.01
|
)
|
||||
Change in other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities
|
1,588
|
|
|
0.05
|
|
|
1,904
|
|
|
0.06
|
|
||||
Derivatives
|
824
|
|
|
0.03
|
|
|
2,428
|
|
|
0.08
|
|
||||
Common stock dividends
|
(4,685
|
)
|
|
(0.15
|
)
|
|
(9,369
|
)
|
|
(0.30
|
)
|
||||
Common stock dividends on unvested shares
|
(63
|
)
|
|
—
|
|
|
(129
|
)
|
|
—
|
|
||||
Accretion (dilution) from additional shares outstanding at September 30, 2018
(2)
|
757
|
|
|
0.02
|
|
|
2,315
|
|
|
(0.06
|
)
|
||||
Total net increase (decrease)
|
4,457
|
|
|
0.14
|
|
|
(3,245
|
)
|
|
(0.23
|
)
|
||||
Common stock book value at end of period
(1)(3)
|
$
|
444,389
|
|
|
$
|
14.23
|
|
|
$
|
444,389
|
|
|
$
|
14.23
|
|
(1)
|
Per share calculations exclude unvested restricted stock, as disclosed on our consolidated balance sheets, of
422,592
,
427,591
and
483,073
shares at
September 30, 2018
,
June 30, 2018
and
December 31, 2017
, respectively. The denominator for the calculation is
31,234,828
,
31,229,829
and
30,946,819
at
September 30, 2018
,
June 30, 2018
and
December 31, 2017
, respectively.
|
(2)
|
Per share amount calculation includes the impact of
4,999
and
288,009
additional shares for the
three and nine
months ended
September 30, 2018
, respectively.
|
(3)
|
Common stock book value is calculated as total stockholders' equity of
$560.3 million
less preferred stock equity of
$116.0 million
at
September 30, 2018
.
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||||||||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||||||||||||||||||
|
2018
|
|
Per Share Data
|
|
2017
|
|
Per Share Data
|
|
2018
|
|
Per Share Data
|
|
2017
|
|
Per Share Data
|
||||||||||||||||
Net income (loss) allocable to common shares - GAAP
|
$
|
6,036
|
|
|
$
|
0.19
|
|
|
$
|
12,644
|
|
|
$
|
0.41
|
|
|
$
|
(394
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
17,808
|
|
|
$
|
0.57
|
|
Adjustment for realized gains on CRE assets
(4)
|
(450
|
)
|
|
(0.02
|
)
|
|
—
|
|
|
—
|
|
|
(450
|
)
|
|
(0.02
|
)
|
|
—
|
|
|
—
|
|
||||||||
Net income (loss) allocable to common shares - GAAP, adjusted
|
5,586
|
|
|
0.17
|
|
|
12,644
|
|
|
0.41
|
|
|
(844
|
)
|
|
(0.03
|
)
|
|
17,808
|
|
|
0.57
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Reconciling items from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-cash equity compensation expense
|
757
|
|
|
0.02
|
|
|
895
|
|
|
0.03
|
|
|
2,383
|
|
|
0.08
|
|
|
2,417
|
|
|
0.08
|
|
||||||||
Non-cash (recovery of) provision for CRE loan losses
|
(293
|
)
|
|
(0.01
|
)
|
|
(612
|
)
|
|
(0.02
|
)
|
|
(1,092
|
)
|
|
(0.04
|
)
|
|
379
|
|
|
0.01
|
|
||||||||
Litigation settlement expense
(5)
|
—
|
|
|
—
|
|
|
1,500
|
|
|
0.05
|
|
|
(2,167
|
)
|
|
(0.07
|
)
|
|
1,500
|
|
|
0.05
|
|
||||||||
Non-cash amortization of discounts or premiums associated with borrowings
|
815
|
|
|
0.03
|
|
|
2,450
|
|
|
0.08
|
|
|
2,389
|
|
|
0.08
|
|
|
3,278
|
|
|
0.11
|
|
||||||||
Net loss from limited partnership interest owned at the initial measurement date
(1)
|
—
|
|
|
—
|
|
|
703
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
|
1,073
|
|
|
0.03
|
|
||||||||
Income tax expense (benefit) from non-core investments
(2)(3)
|
—
|
|
|
—
|
|
|
4,464
|
|
|
0.14
|
|
|
(31
|
)
|
|
—
|
|
|
5,938
|
|
|
0.19
|
|
||||||||
Net realized gain on non-core assets
(2)(3)
|
—
|
|
|
—
|
|
|
(39,230
|
)
|
|
(1.26
|
)
|
|
(476
|
)
|
|
(0.02
|
)
|
|
(41,015
|
)
|
|
(1.32
|
)
|
||||||||
Net income from non-core assets
(3)
|
(456
|
)
|
|
(0.01
|
)
|
|
(1,432
|
)
|
|
(0.05
|
)
|
|
(9
|
)
|
|
—
|
|
|
(5,701
|
)
|
|
(0.18
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Reconciling items from discontinued operations and CRE loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net interest income on legacy CRE loans
|
(352
|
)
|
|
(0.01
|
)
|
|
(947
|
)
|
|
(0.03
|
)
|
|
(1,013
|
)
|
|
(0.03
|
)
|
|
(3,252
|
)
|
|
(0.11
|
)
|
||||||||
Realized loss (gain) on liquidation of legacy CRE loans
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
(1,000
|
)
|
|
(0.03
|
)
|
|
(12,489
|
)
|
|
(0.40
|
)
|
||||||||
Operating expenses on legacy CRE loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
||||||||
Fair value adjustments on legacy CRE loans
|
1,588
|
|
|
0.05
|
|
|
—
|
|
|
—
|
|
|
6,260
|
|
|
0.20
|
|
|
—
|
|
|
—
|
|
||||||||
Net loss (income) from other non-CRE investments held for sale
|
2
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
508
|
|
|
0.02
|
|
|
(286
|
)
|
|
(0.01
|
)
|
||||||||
(Income) loss from discontinued operations, net of taxes
|
(364
|
)
|
|
(0.01
|
)
|
|
6,087
|
|
|
0.20
|
|
|
(161
|
)
|
|
(0.01
|
)
|
|
10,832
|
|
|
0.35
|
|
||||||||
Core Earnings before net realized loss on CRE assets
|
7,283
|
|
|
0.23
|
|
|
(13,392
|
)
|
|
(0.43
|
)
|
|
4,934
|
|
|
0.16
|
|
|
(19,518
|
)
|
|
(0.63
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjustment for realized loss on CRE loan
|
(2,332
|
)
|
|
(0.07
|
)
|
|
—
|
|
|
—
|
|
|
(2,332
|
)
|
|
(0.07
|
)
|
|
—
|
|
|
—
|
|
||||||||
Adjustment for realized gain on CRE-related investment
|
282
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
282
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
||||||||
Core Earnings allocable to common shares
|
$
|
5,233
|
|
|
$
|
0.17
|
|
|
$
|
(13,392
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
2,884
|
|
|
$
|
0.10
|
|
|
$
|
(19,518
|
)
|
|
$
|
(0.63
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Reconciling items in arriving at Core Earnings allocable to common shares, adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Realized loss on sale of a previously impaired CRE loan
|
2,332
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
|
2,332
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
||||||||
Loss on redemption of Series B Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,482
|
|
|
0.24
|
|
|
—
|
|
|
—
|
|
||||||||
Litigation settlement expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,167
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
||||||||
Core Earnings allocable to common shares, adjusted
(6)(7)
|
$
|
7,565
|
|
|
$
|
0.24
|
|
|
$
|
(13,392
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
14,865
|
|
|
$
|
0.48
|
|
|
$
|
(19,518
|
)
|
|
$
|
(0.63
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average common shares - diluted
|
31,477
|
|
|
|
|
30,857
|
|
|
|
|
31,186
|
|
|
|
|
30,810
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Core Earnings per common share - diluted
|
$
|
0.17
|
|
|
|
|
$
|
(0.43
|
)
|
|
|
|
$
|
0.09
|
|
|
|
|
$
|
(0.63
|
)
|
|
|
||||||||
Core Earnings per common share, adjusted - diluted
(6)(7)
|
$
|
0.24
|
|
|
|
|
$
|
(0.43
|
)
|
|
|
|
$
|
0.48
|
|
|
|
|
$
|
(0.63
|
)
|
|
|
(1)
|
Initial measurement date is December 31, 2016.
|
(2)
|
Income tax (benefit) expense from non-core investments and net realized loss on non-core assets are components of net income or loss from non-core assets.
|
(3)
|
Non-core assets are investments and securities owned by us at the initial measurement date in (i) commercial finance, (ii) middle market lending, (iii) residential mortgage lending, (iv) legacy CRE loans designated as held for sale and (v) other non-CRE assets included in assets held for sale.
|
(4)
|
Includes a realized gain of
$282,000
, or
$0.01
per common share-diluted, in connection with the sale of CMBS and a realized recovery of CRE loan loss provision of
$168,000
, or
$0.01
per common share-diluted, in connection with the sale of a previously impaired, 2013 vintage CRE loan for the
three and nine
months ended
September 30, 2018
.
|
(5)
|
Includes the payment of the settlement of a securities litigation, previously accrued in
2017
, for the
nine months ended September 30, 2018
and the accrual of settlement expenses for the
three and nine
months ended
September 30, 2017
.
|
(6)
|
Core Earnings, adjusted exclude a realized loss of
$2.3 million
, or
$(0.07)
per common share-diluted, for the
three and nine
months ended
September 30, 2018
in connection with the sale of a previously impaired, 2013 vintage CRE loan.
|
(7)
|
Core Earnings, adjusted exclude a non-recurring charge of
$7.5 million
, or
$(0.24)
per common share-diluted, for the
nine months ended September 30, 2018
in connection with the redemption of our remaining Series B Preferred Stock.
|
|
Identified Assets at Plan Inception
|
|
Impairments/Adjustments on Non-Monetized Assets
(1)(2)
|
|
Impairments/Adjustments on Monetized Assets
(1)(3)
|
|
Monetized through September 30, 2018
(2)
|
|
Net Book Value at September 30, 2018
|
||||||||||
Discontinued operations and assets held for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Legacy CRE loans
(4)
|
$
|
162.2
|
|
|
$
|
(13.1
|
)
|
|
$
|
(17.5
|
)
|
|
$
|
(114.6
|
)
|
|
$
|
17.0
|
|
Middle market loans
|
73.8
|
|
|
—
|
|
|
(17.7
|
)
|
|
(56.1
|
)
|
|
—
|
|
|||||
Residential mortgage lending segment
(5)
|
56.6
|
|
|
(2.0
|
)
|
|
(9.6
|
)
|
|
(43.7
|
)
|
|
1.3
|
|
|||||
Other assets held for sale
|
5.9
|
|
|
—
|
|
|
3.8
|
|
|
(9.7
|
)
|
|
—
|
|
|||||
Subtotal - discontinued operations and assets held for sale
|
298.5
|
|
|
(15.1
|
)
|
|
(41.0
|
)
|
|
(224.1
|
)
|
|
18.3
|
|
|||||
Legacy CRE loans held for investment
(6)(7)
|
32.5
|
|
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|
28.3
|
|
|||||
Investments in unconsolidated entities
|
86.6
|
|
|
—
|
|
|
38.3
|
|
|
(124.9
|
)
|
|
—
|
|
|||||
Commercial finance assets
|
62.5
|
|
|
—
|
|
|
2.1
|
|
|
(64.6
|
)
|
|
—
|
|
|||||
Total
|
$
|
480.1
|
|
|
$
|
(15.1
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(417.8
|
)
|
|
$
|
46.6
|
|
(1)
|
Reflects adjustments as a result of the designation as assets held for sale or discontinued operations, which occurred during the third and fourth quarters of 2016 except as noted in (2) below.
|
(2)
|
Legacy CRE loans include
$600,000
of protective advances to cover operating losses on a legacy CRE loan in the
third
quarter of 2018.
|
(3)
|
The impairment adjustment to middle market loans includes
$5.4 million
of fair value adjustments that occurred prior to the inception of the Plan.
|
(4)
|
Includes
$88.2 million
par value of loans at the inception of the Plan that were not reflected on the consolidated balance sheets until our investment in RREF CDO 2007-1 was liquidated in November 2016.
|
(5)
|
Includes
$2.3 million
of cash and cash equivalents not classified as assets held for sale in the residential mortgage lending segment at
September 30, 2018
.
|
(6)
|
Legacy CRE loans with
$28.3 million
of net book value were reclassified to CRE loans on the consolidated balance sheets at June 30, 2018 as we now intend to hold these loans to maturity.
|
(7)
|
Includes
$30.0 million
par value of loans at the inception of the Plan that were not reflected on the consolidated balance sheets until our investment in RREF CDO 2007-1 was liquidated in November 2016.
|
1.
|
Repurchase Agreements:
Repurchase agreements effectively allow us to borrow against loans and securities that we own. Under these agreements, we sell our loans and securities to a counterparty and agree to repurchase the same loans and securities from the counterparty at a price equal to the original sales price plus interest. The counterparty retains the sole discretion over both whether to purchase the loan and security from us and, subject to certain conditions, the market value of such loan or security for purposes of determining whether we are required to pay margin to the counterparty. Generally, if the lender determines (subject to certain conditions) that the market value of the collateral in a repurchase transaction has decreased by more than a defined minimum amount, we would be required to repay any amounts borrowed in excess of the product of (i) the revised market value multiplied by (ii) the applicable advance rate. During the term of a repurchase agreement, we receive the principal and interest on the related loans and securities and pay interest to the counterparty.
|
|
Execution Date
|
|
Maturity Date
(1)
|
|
Maximum Capacity
|
|
Repurchase Principal Outstanding
(2)
|
|
Availability
|
||||||
CRE - Term Repurchase Facilities
|
|
|
|
|
|
|
|
|
|
||||||
Wells Fargo Bank, N.A.
|
February 2012
|
|
July 2020
|
|
$
|
400,000
|
|
|
$
|
110,793
|
|
|
$
|
289,207
|
|
Morgan Stanley Bank, N.A.
|
September 2015
|
|
September 2019
|
|
$
|
67,936
|
|
|
67,936
|
|
|
N/A
|
|
||
Barclays Bank PLC
|
April 2018
|
|
April 2021
|
|
$
|
250,000
|
|
|
134,327
|
|
|
$
|
115,673
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trust Certificates - Term Repurchase Facility
|
|
|
|
|
|
|
|
|
|
||||||
RSO Repo SPE Trust 2017
|
September 2017
|
|
September 2020
|
|
N/A
|
|
|
47,333
|
|
|
N/A
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
CMBS - Short-Term Repurchase Agreements
|
|
|
|
|
|
|
|
|
|
||||||
RBC Capital Markets, LLC
|
August 2017
|
|
October 2018
|
|
N/A
|
|
|
200,912
|
|
|
N/A
|
|
|||
JP Morgan Securities LLC
|
November 2012
|
|
October 2018
|
|
N/A
|
|
|
32,669
|
|
|
N/A
|
|
|||
Deutsche Bank Securities Inc.
|
March 2005
|
|
October 2018
|
|
N/A
|
|
|
10,920
|
|
|
N/A
|
|
|||
|
|
|
|
|
|
|
$
|
604,890
|
|
|
|
(1)
|
The CMBS - short-term repurchase agreements' maturity dates represent the next interest payment and extension dates. The agreements do not contain defined maturity dates.
|
(2)
|
Excludes
accrued interest payable
.
|
2.
|
Securitizations:
We seek non-recourse long-term financing from securitizations of our investments in CRE loans. The securitizations generally involve a senior portion of our loan, but may involve the entire loan. Securitization generally involves transferring notes to a special purpose vehicle (or the issuing entity), which then issues one or more classes of non-recourse notes pursuant to the terms of an indenture. The notes are secured by the pool of assets. In exchange for the transfer of assets to the issuing entity, we receive cash proceeds from the sale of non-recourse notes. Securitizations of our portfolio investments might magnify our exposure to losses on those portfolio investments because the retained subordinate interest in any particular overall loan would be subordinate to the loan components sold and we would, therefore, absorb all losses sustained with respect to the overall loan before the owners of the senior notes experience any losses with respect to the loan in question.
|
Name
|
|
Cash Distributions
|
|
Overcollateralization Cushion
(1)
|
|
End of Designated Principal Reinvestment Period
|
||||||||||||
|
For the Nine Months Ended September 30, 2018
|
|
For the Year Ended December 31, 2017
|
|
At September 30, 2018
|
|
At the Initial Measurement Date
|
|
||||||||||
RCC 2017-CRE5
(2)
|
|
$
|
18,815
|
|
|
$
|
6,643
|
|
|
$
|
52,944
|
|
|
$
|
20,727
|
|
|
July 2020
|
XAN 2018-RSO6
(2)
|
|
$
|
3,638
|
|
|
$
|
—
|
|
|
$
|
25,731
|
|
|
$
|
25,731
|
|
|
December 2020
|
Apidos Cinco
(3)
|
|
$
|
—
|
|
|
$
|
2,056
|
|
|
N/A
|
|
|
$
|
17,774
|
|
|
N/A
|
(1)
|
Overcollateralization cushion represents the amount by which the collateral held by the securitization issuer exceeds the minimum amount required.
|
(2)
|
The designated principal reinvestment period for RCC 2017-CRE5 and XAN 2018-RSO6 is the period in which principal repayments can be utilized to purchase loans held outside of the respective securitization that represent the funded commitments of existing collateral in the respective securitization that were not funded as of the date the respective securitization was closed. Additionally, the indenture for each securitization does not contain any interest coverage test provisions.
|
(3)
|
Apidos Cinco CDO was substantially liquidated in November 2016.
|
Name
|
|
Cash Distributions
|
|
Liquidation Details
|
||||||||||
|
For the Nine Months Ended September 30, 2018
|
|
For the Year Ended December 31, 2017
|
|
Liquidation Date
|
|
Remaining Assets at the Liquidation Date
(1)
|
|||||||
|
|
|
|
|||||||||||
RCC 2014-CRE2
(2)
|
|
$
|
—
|
|
|
$
|
33,050
|
|
|
August 2017
|
|
$
|
92,980
|
|
RCC 2015-CRE3
|
|
$
|
3,529
|
|
|
$
|
8,672
|
|
|
August 2018
|
|
$
|
80,632
|
|
RCC 2015-CRE4
|
|
$
|
4,487
|
|
|
$
|
8,554
|
|
|
July 2018
|
|
$
|
97,825
|
|
(1)
|
The remaining assets at the liquidation date were returned to us in exchange for our preference share and equity notes in the respective securitization.
|
(2)
|
Cash distributions for the
year ended December 31, 2017
include preference share and equity notes distributions at liquidation of
$25.6 million
for RCC 2014-CRE2.
|
•
|
unrestricted cash and cash equivalents of
$80.0 million
; and
|
•
|
approximately
$189.0 million
of liquidity from available financing of unlevered CRE and CMBS positions.
|
|
Contractual Commitments
|
||||||||||||||||||
|
(dollars in thousands, except amounts in footnotes)
|
||||||||||||||||||
|
Payments due by Period
|
||||||||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More than 5 Years
|
||||||||||
At September 30, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
CRE securitizations
|
$
|
555,828
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
555,828
|
|
Unsecured junior subordinated debentures
(1)
|
51,548
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,548
|
|
|||||
4.50% Convertible Senior Notes
(2)
|
143,750
|
|
|
—
|
|
|
—
|
|
|
143,750
|
|
|
—
|
|
|||||
6.00% Convertible Senior Notes
(3)
|
70,453
|
|
|
70,453
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
8.00% Convertible Senior Notes
(4)
|
21,182
|
|
|
—
|
|
|
21,182
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase and credit facilities
(5)
|
606,241
|
|
|
313,339
|
|
|
292,902
|
|
|
—
|
|
|
—
|
|
|||||
Unfunded commitments on CRE loans
(6)
|
92,181
|
|
|
42,175
|
|
|
50,006
|
|
|
—
|
|
|
—
|
|
|||||
Base management fees
(7)
|
9,066
|
|
|
9,066
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,550,249
|
|
|
$
|
435,033
|
|
|
$
|
364,090
|
|
|
$
|
143,750
|
|
|
$
|
607,376
|
|
(1)
|
Contractual commitments exclude
$33.6 million
and
$34.1 million
of estimated interest expense payable through maturity, in
June 2036
and
October 2036
, respectively, on our trust preferred securities.
|
(2)
|
Contractual commitments exclude
$25.4 million
of interest expense payable through maturity, in
August 2022
, on our 4.50% Convertible Senior Notes.
|
(3)
|
Contractual commitments exclude
$700,000
of interest expense payable through maturity, in
December 2018
, on our 6.00% Convertible Senior Notes.
|
(4)
|
Contractual commitments exclude
$2.2 million
of interest expense payable through maturity, in
January 2020
, on our 8.00% Convertible Senior Notes.
|
(5)
|
Contractual commitments include
$1.4 million
of
accrued interest payable
at
September 30, 2018
on our repurchase facilities.
|
(6)
|
Unfunded commitments on our originated CRE whole loans generally fall into two categories: (i) pre-approved capital improvement projects and (ii) new or additional construction costs subject, in each case, to the borrower meeting specified criteria. Upon completion of the improvements or construction, we would receive additional interest income on the advanced amount. At
September 30, 2018
, we had unfunded commitments on
50
CRE whole loans.
|
(7)
|
Base management fees presented are based on an estimate of base management fees payable to our manager over the next 12 months. Our management agreement also provides for an incentive fee arrangement that is based on operating performance. The incentive fee is not a fixed and determinable amount, and therefore it is not included in this table.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
September 30, 2018
|
||||||||||
|
Interest rates fall 100
basis points |
|
Unchanged
|
|
Interest rates rise 100
basis points |
||||||
Interest rate-sensitive investment securities:
|
|
|
|
|
|
||||||
Fair value
|
$
|
127,935
|
|
|
$
|
124,190
|
|
|
$
|
121,438
|
|
Change in fair value
|
$
|
3,745
|
|
|
$
|
—
|
|
|
$
|
(2,752
|
)
|
Change as a percent of fair value
|
3.02
|
%
|
|
—
|
%
|
|
(2.22
|
)%
|
|||
|
|
|
|
|
|
||||||
Interest rate-sensitive hedging instruments:
|
|
|
|
|
|
|
|
|
|||
Fair value
|
$
|
(3,402
|
)
|
|
$
|
2,665
|
|
|
$
|
8,243
|
|
Change in fair value
|
$
|
(6,067
|
)
|
|
$
|
—
|
|
|
$
|
5,578
|
|
Change as a percent of fair value
|
(228
|
)%
|
|
—
|
%
|
|
209
|
%
|
•
|
monitoring and adjusting, if necessary, the reset index and interest rate related to our borrowings;
|
•
|
attempting to structure our borrowing agreements for our commercial mortgage-backed securities to have a range of different maturities, terms, amortizations and interest rate adjustment periods; and
|
•
|
using derivatives to adjust the interest rate sensitivity of our variable-rate borrowings, which we discuss in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Hedging Instruments."
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
2.1
|
|
|
3.1(a)
|
|
|
3.1(b)
|
|
|
3.1(c)
|
|
|
3.1(d)
|
|
|
3.1(e)
|
|
|
3.1(f)
|
|
|
3.1(g)
|
|
|
3.1(h)
|
|
|
3.2
|
|
|
4.1(a)
|
|
|
4.1(b)
|
|
|
4.1(c)
|
|
|
4.1(d)
|
|
|
4.2(a)
|
|
|
4.2(b)
|
|
|
4.3(a)
|
|
|
4.3(b)
|
|
|
4.4
|
|
|
4.5(a)
|
|
|
4.5(b)
|
|
|
4.6(a)
|
|
|
4.6(b)
|
|
|
4.7
|
|
|
4.8(a)
|
|
|
4.8(b)
|
|
|
4.8(c)
|
|
4.8(d)
|
|
|
4.8(e)
|
|
|
4.8(f)
|
|
|
4.8(g)
|
|
|
10.1
|
|
|
10.2(a)
|
|
|
10.2(b)
|
|
|
10.2(c)
|
|
|
10.3(a)
|
|
|
10.3(b)
|
|
|
10.3(c)
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
12.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
99.1(a)
|
|
|
99.1(b)
|
|
|
99.2(a)
|
|
|
99.2(b)
|
|
|
99.2(c)
|
|
|
99.3(a)
|
|
|
99.3(b)
|
|
|
99.4(a)
|
|
|
99.4(b)
|
|
|
99.5
|
|
|
99.6
|
|
|
101
|
|
Interactive Data Files.
|
(1)
|
|
Filed previously as an exhibit to the Company's registration statement on Form S-11, Registration No. 333-126517.
|
(2)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.
|
(3)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.
|
(4)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013.
|
(5)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on June 26, 2014.
|
(6)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009.
|
(7)
|
|
Filed previously as an exhibit to the Company's Proxy Statement filed on April 16, 2014.
|
(8)
|
|
Filed previously as an exhibit to the Company's Registration Statement on Form S-11 (File No. 333-132836).
|
(9)
|
|
Filed previously as an exhibit to the Company's Registration Statement on Form 8-A filed on June 9, 2014.
|
(10)
|
|
Filed previously as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2010.
|
(11)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on March 2, 2011.
|
(12)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on July 25, 2018.
|
(13)
|
|
Filed previously as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2012 filed on March 18, 2013.
|
(14)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on March 2, 2012.
|
(15)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on June 13, 2012.
|
(16)
|
|
Filed previously as an exhibit to the Company's registration statement on Form 8-A filed on June 8, 2012.
|
(17)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on June 29, 2012.
|
(18)
|
|
Filed previously as an exhibit to the Company's Registration Statement on Form 8-A filed on September 28, 2012.
|
(19)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on September 23, 2014.
|
(20)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on January 13, 2015.
|
(21)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on October 1, 2012.
|
(22)
|
|
Filed previously as an exhibit to the Company Current Report on Form 8-K filed on November 20, 2012.
|
(23)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on April 8, 2013.
|
(24)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on July 25, 2013.
|
(25)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on October 21, 2013.
|
(26)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on November 20, 2014.
|
(27)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
|
(28)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
|
(29)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on September 1, 2015.
|
(30)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on September 16, 2015.
|
(31)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016.
|
(32)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on August 5, 2016.
|
(33)
|
|
Filed previously as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2016.
|
(34)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on June 8, 2017.
|
(35)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.
|
(36)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on August 16, 2017.
|
(37)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.
|
(38)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on December 18, 2017.
|
(39)
|
|
Filed previously as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017.
|
(40)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on April 12, 2018.
|
(41)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on May 25, 2018.
|
(42)
|
|
Filed previously as an exhibit to the Company's Current Report on Form 8-K filed on October 30, 2018.
|
|
|
|
EXANTAS CAPITAL CORP.
|
|
|
|
(Registrant)
|
|
|
|
|
November 7, 2018
|
|
By:
|
/s/ Robert C. Lieber
|
|
|
|
Robert C. Lieber
|
|
|
|
Chief Executive Officer
|
|
|
|
|
November 7, 2018
|
|
By:
|
/s/ David J. Bryant
|
|
|
|
David J. Bryant
|
|
|
|
Senior Vice President
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
November 7, 2018
|
|
By:
|
/s/ Eldron C. Blackwell
|
|
|
|
Eldron C. Blackwell
|
|
|
|
Vice President
|
|
|
|
Chief Accounting Officer
|
|
Nine Months Ended
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||||||
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pretax income (loss) before preferred shared from continuing operations
|
$
|
17,473,205
|
|
|
$
|
56,049,203
|
|
|
$
|
(343,321
|
)
|
|
$
|
12,433,855
|
|
|
$
|
57,717,463
|
|
|
$
|
45,636,957
|
|
Non-controlling interest
|
—
|
|
|
(195,573
|
)
|
|
(229,547
|
)
|
|
6,627,890
|
|
|
965,007
|
|
|
—
|
|
||||||
Equity in earnings of unconsolidated subsidiaries
|
(230,970
|
)
|
|
(38,973,116
|
)
|
|
(5,973,088
|
)
|
|
(2,388,038
|
)
|
|
(4,766,980
|
)
|
|
(949,180
|
)
|
||||||
Cash income received from unconsolidated entities
|
411,244
|
|
|
49,713,376
|
|
|
1,869,247
|
|
|
2,963,499
|
|
|
1,163,805
|
|
|
—
|
|
||||||
Fixed charges
|
47,885,259
|
|
|
55,717,718
|
|
|
53,765,276
|
|
|
56,568,114
|
|
|
43,528,402
|
|
|
60,957,469
|
|
||||||
Total
|
$
|
65,538,738
|
|
|
$
|
122,311,608
|
|
|
$
|
49,088,567
|
|
|
$
|
76,205,320
|
|
|
$
|
98,607,697
|
|
|
$
|
105,645,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest (expensed and capitalized)
|
$
|
40,420,781
|
|
|
$
|
44,290,017
|
|
|
$
|
45,223,899
|
|
|
$
|
48,186,795
|
|
|
$
|
36,729,426
|
|
|
$
|
52,298,502
|
|
Amortized premiums, discounts and capitalized expenses related to indebtedness
|
7,444,983
|
|
|
11,387,378
|
|
|
8,523,738
|
|
|
8,343,513
|
|
|
6,763,854
|
|
|
8,629,755
|
|
||||||
Estimate of interest within rental expenses
|
19,495
|
|
|
40,323
|
|
|
17,639
|
|
|
37,806
|
|
|
35,122
|
|
|
29,212
|
|
||||||
Total
|
$
|
47,885,259
|
|
|
$
|
55,717,718
|
|
|
$
|
53,765,276
|
|
|
$
|
56,568,114
|
|
|
$
|
43,528,402
|
|
|
$
|
60,957,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred stock dividends
|
$
|
10,384,966
|
|
|
$
|
24,057,361
|
|
|
$
|
24,091,021
|
|
|
$
|
24,437,458
|
|
|
$
|
17,175,869
|
|
|
$
|
7,221,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of earnings to combined fixed charges
|
1.37
|
|
|
2.20
|
|
|
—
|
|
(1)
|
1.35
|
|
|
2.27
|
|
|
1.73
|
|
||||||
Ratio of earnings to combined fixed charges and preferred stock dividends
|
1.12
|
|
|
1.53
|
|
|
—
|
|
(2)
|
—
|
|
(2)
|
1.62
|
|
|
1.55
|
|
(1)
|
The dollar amount of the deficiency for the year ended December 31, 2016 was
$4.7 million
.
|
(2)
|
The dollar amounts of the deficiencies for the years ended December 31, 2016 and 2015 were
$28.8 million
and
$4.8 million
, respectively.
|
1.
|
I have reviewed this report on Form 10-Q for the quarter ended
September 30, 2018
of Exantas Capital Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
November 7, 2018
|
/s/ Robert C. Lieber
|
|
Robert C. Lieber
|
|
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q for the quarter ended
September 30, 2018
of Exantas Capital Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
November 7, 2018
|
/s/ David J. Bryant
|
|
David J. Bryant
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 7, 2018
|
/s/ Robert C. Lieber
|
|
Robert C. Lieber
|
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 7, 2018
|
/s/ David J. Bryant
|
|
David J. Bryant
|
|
Chief Financial Officer
|
BUYER
:
|
||
|
|
|
MORGAN STANLEY BANK, N.A., a national banking association
|
||
|
|
|
|
|
|
By:
|
/s/ Anthony Preisano
|
|
Name:
|
Anthony Preisano
|
|
Title:
|
Authorized Signatory
|
|
|
|
|
|
|
|
SELLER
|
||
|
|
|
RCC REAL ESTATE SPE 6 LLC, a Delaware limited liability company
|
||
|
|
|
|
|
|
By:
|
/s/ Michael A. Pierro
|
|
Name:
|
Michael A. Pierro
|
|
Title:
|
Vice President
|
GUARANTOR
:
|
||
|
|
|
EXANTAS CAPITAL CORP., a Maryland corporation
|
||
|
|
|
|
|
|
By:
|
/s/ Michael A. Pierro
|
|
Name:
|
Michael A. Pierro
|
|
Title:
|
Vice President
|