Investments In Loans

12 Months Ended

Dec. 31, 2013

Investments In Loans

NOTE 3: INVESTMENTS IN LOANS

Investments in Commercial Mortgages, Mezzanine Loans, Other Loans and Preferred Equity Interests

The following table summarizes our investments in commercial mortgages, mezzanine loans, other loans and preferred equity interests as of December 31, 2013:

	Unpaid Principal Balance			Unamortized (Discounts) Premiums			Carrying Amount			Number of Loans		Weighted- Average Coupon (1)			Range of Maturity Dates
Commercial Real Estate (CRE) Loans
Commercial mortgages	$	792,526		$	(19,257	)	$	773,269			59		6.4	%		Mar. 2014 to Jan. 2029
Mezzanine loans		269,034			(3,273	)		265,761			81		9.6	%		Mar. 2014 to Jan. 2029
Preferred equity interests		54,389			(939	)		53,450			11		8.6	%		May 2015 to Aug. 2025
Total CRE Loans		1,115,949			(23,469	)		1,092,480			151		7.3	%
Other loans		30,625			72			30,697			2		4.3	%		Mar. 2014 to Oct. 2016
Total Loans		1,146,574			(23,397	)		1,123,177			153		7.2	%
Deferred fees		(800	)		0			(800	)
Total investments in loans	$	1,145,774		$	(23,397	)	$	1,122,377

(1) Weighted-average coupon is calculated on the unpaid principal amount of the underlying instruments which does not necessarily correspond to the carrying amount.

The following table summarizes our investments in commercial mortgages, mezzanine loans, other loans and preferred equity interests as of December 31, 2012:

	Unpaid Principal Balance			Unamortized (Discounts) Premiums			Carrying Amount			Number of Loans		Weighted- Average Coupon (1)			Range of Maturity Dates
Commercial Real Estate (CRE) Loans
Commercial mortgages	$	728,774		$	(25,807	)	$	702,967			50		6.4	%		Mar. 2013 to Jan. 2023
Mezzanine loans		275,457			(4,355	)		271,102			83		9.3	%		Mar. 2013 to Nov. 2038
Preferred equity interests		64,752			(1,031	)		63,721			15		9.7	%		Mar. 2014 to Aug. 2025
Total CRE Loans		1,068,983			(31,193	)		1,037,790			148		7.4	%
Other loans		38,600			(30	)		38,570			2		4.9	%		Mar. 2013 to Oct. 2016
Total Loans		1,107,583			(31,223	)		1,076,360			150		7.3	%
Deferred fees		(1,231	)		0			(1,231	)
Total investments in loans	$	1,106,352		$	(31,223	)	$	1,075,129

(1) Weighted-average coupon is calculated on the unpaid principal amount of the underlying instruments which does not necessarily correspond to the carrying amount.

During the year ended December 31, 2013, we did not convert any commercial real estate loans to owned real estate property. During the year ended December 31, 2012, we completed the conversion of two commercial real estate loans with a carrying value of $24,871 to real estate owned property and we recorded a gain on asset of $2,529 as the value of the real estate exceeded the carrying amount of the converted loans. See Note 5 for property acquisitions that did not consist of the assumption of commercial real estate loans.

The following table summarizes the delinquency statistics of our commercial real estate loans as of December 31, 2013 and 2012:

Delinquency Status	As of December 31, 2013		As of December 31, 2012
30 to 59 days	$	0	$	1,974
60 to 89 days		6,441		5,211
90 days or more		2,163		37,130
In foreclosure or bankruptcy proceedings		16,002		9,420
Total	$	24,606	$	53,735

As of December 31, 2013 and 2012, approximately $37,073 and $69,080, respectively, of our commercial real estate loans were on non-accrual status and had a weighted-average interest rate of 6.3% and 8.4%, respectively. As of December 31, 2013 and 2012, 1 Other loan with a carrying amount of approximately $10,487 and $18,462, respectively, was on non-accrual status and had a weighted-average interest rate of 7.2%.

The following table sets forth the maturities of our investments in commercial mortgages, mezzanine loans, other loans and preferred equity interests by year:

2014	$	31,928
2015		90,895
2016		327,416
2017		428,372
2018		57,561
Thereafter		210,402
Total	$	1,146,574

Allowance For Losses And Impaired Loans

The following table provides a roll-forward of our allowance for losses for the years ended December 31, 2013, 2012 and 2011:

	For the Year Ended December 31, 2013			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011
Beginning balance	$	30,400		$	46,082		$	69,691
Provision		3,000			2,000			3,900
Charge-offs, net of recoveries		(10,445	)		(17,682	)		(27,509	)
Ending balance	$	22,955		$	30,400		$	46,082

As of December 31, 2013 and 2012, we identified 10 and 14, respectively, commercial mortgages, mezzanine loans and other loans with unpaid principal balances of $30,143 and $47,394, respectively, as impaired.

The average unpaid principal balance of total impaired loans was $42,680, $67,466, and $125,263 during the years ended December 31, 2013, 2012, and 2011, respectively. We recorded interest income from impaired loans of $45, $149, and $525 for the years ended December 31, 2013, 2012, and 2011, respectively.

We have evaluated modifications to our commercial real estate loans to determine if the modification constitutes a troubled debt restructuring (TDR) under FASB ASC Topic 310, “Receivables”. During the year ended December 31, 2013, we have determined that a modification to three commercial real estate loans constituted a TDR as the borrowers were experiencing financial difficulties and we, as the lender, granted a concession to the borrowers by: (a) extending the maturity date from March 2014 to February 2016 in one of the loan modifications, (b) reducing the interest rate from 10.26% to 0% in one of the loan modifications, and (c) extending the maturity date to August 2018 in one of the loan modifications as it had matured. The outstanding recorded investments were $27,168 both before and after the modifications. As of December 31, 2013, there were no TDRs that subsequently defaulted.