Mortgage Loans

12 Months Ended

Dec. 31, 2022

The Company has invested in Separately Managed Accounts (“SMA1” and “SMA2”), managed by Arena Investors, LP (“Arena”), which is affiliated with The Westaim Corporation (“Westaim”) who, through Westaim HIIG LP (a limited partnership controlled by Westaim), is the Company’s largest shareholder. As of December 31, 2022 and 2021, the Company held direct investments in mortgage loans from various creditors through SMA1 and SMA2.

The Company’s mortgage loan portfolios are primarily senior loans on real estate across the U.S. The loans earn interest at fixed rates, mature in approximately one to two years from loan origination and the principal amounts of the loans range between 40% to 90% of the property’s appraised value at the time the loans were made. Mortgage loan participations are carried at cost adjusted for unamortized premiums, discounts, and loan fees.

The carrying value of the Company’s mortgage loans for the years ended December 31, 2022 and 2021 is as follows:



($ in thousands)	2022		2021
Retail	$	16,516	$	10,593
Commercial	15,309		6,298
Industrial	6,329		6,314
Multi-family	5,593		3,296
Office	3,197		1,691
Hospitality	4,915		1,339
	$	51,859	$	29,531

The Company’s gross investment income for the years ended December 31, 2022 and 2021 is as follows:


	Years Ended December 31,
($ in thousands)	2022		2021
Retail	$	1,255	$	66
Commercial	1,242		151
Industrial	565		90
Multi-family	909		143
Office	385		64
Land	—		451
Hospitality	411		223
	$	4,767	$	1,188

The uncollectible amounts on loans, on an individual loan basis, are determined based upon consultations and advice from the Company’s specialized investment manager and consideration of any adverse situations that could affect the borrower’s ability to repay, the estimated value of underlying collateral, and other relevant factors. When an amount is determined to be uncollectible, the Company writes off the uncollectible amount in the period it was determined to be uncollectible. The were no write-offs for uncollectible amount for the years ended December 31, 2022 and 2021.

As of December 31, 2022 and 2021, approximately $6.4 million and $10.8 million of mortgage loans, respectively, were in the process of foreclosure. The carrying value of the mortgage loans in foreclosure is the lower of cost adjusted for unamortized premiums, discounts, and loan fees or the fair value of the collateral less costs to sell.